Emerging green mining innovation

1. Emerging green mining innovation 2013 11 07 Dallas Kachan Managing Partner Kachan & Co. +1 415-390-2080 x.5 dallas@kachan.com This document is confidential and intended solely for the information and use of client companies and others as assigned.It is part of a working review and presentation and is incomplete without accompanying verbal comments.

2. Agenda • Overview of report findings – 50 mins • Discount code for Kachan green mining report • Q&A – 10 mins NOTES • Audio is over your computer speakers • Can also dial in to +1 (415) 655-0063, access code: 760-618-291 • Questions submitted by text chat • Recording of webinar and slides made available on Kachan website

3. About Kachan & Co. • Research & analysis • Reports • Analysis subscription service • Advisory/consulting services • Cleantech sourcing • Corporate strategy • Product definition • Marketing • Principal former MD of Cleantech Group www.kachan.com

4. About the report • Emerging Green Mining Innovation • Managing risk and profiting from new mining technology breakthroughs • September 2013 • 52 pages • 104 footnotes • 15 tables, charts & figures • 47 companies profiled • Executive summary 5 • Defining mining cleantech 5 • Mine life cycle summary 7 • Mining operations 8 • State of the art in mining technology today 9 • Cleaner mining technology market sizing 12 • Sector profiles and leading emerging companies 14 • Power reduction 14 • Fuel and maintenance reduction 20 • Toxicity reduction 29 • Emissions reduction 33 • Water reduction 36 • Shortcomings & potential challenges 44 • Recommendations 45 • Conclusions 48 • Methodology & bibliography 48

5. Mining hasn’t changed much in 100 years

6. Definitions • Mining - extracting metals or minerals from the earth, includes finding the material, extracting the ore, separating the desired metal from the rock, refining or processing the metal to its final state, and reclaiming the land once the mine is closed. • Technology - methods, tools and knowledge used to perform a specific function or improve the performance of an existing system. Physical machines, proprietary methods and information, and services. • Cleantech (clean technology) - new technologies and business models to provide solutions to climate, resources, or efficiency challenges, while offering competitive returns for customers and investors. Strive to simultaneously provide superior performance at lower cost, and reduce or eliminate negative ecological impacts, thereby making productive use of the world’s natural resources in a responsible manner.

7. Cleantech in mining • Mining cleantechdescribes innovative technologies in the mineral and mining sector that demonstrably enhance the sustainability of the practice while serving as efficient, cost effective and productive solutions for the industry • The following criteria have been used to differentiate cleantech developments from generic mining innovations: • Improved efficiency of resource use • Reduced waste production and toxicity • Enhanced profitability • Smaller carbon footprint

8. Mine life cycle summary

9. Excavation and Handling Loading and Hauling Bulk Products (Coal, gravel, etc.) Size Reduction (Comminution) Separation and Concentration Refined Products (Iron, gold, etc.) Waste Rock or Tailings Processing and Refining Mining operations Figure : Stages of a mine operation. Source: Kachan analysis

10. Drivers of mining industry’s interest in new clean technology • Market volatility • Rising operational costs and falling commodity prices • Decreasing productivity and efficiency • Abrupt policy changes • Resource nationalism • Societal scrutiny Some companies are experimenting with clean technologies in mining. But most are reluctant. In 2012, investment in innovation by the mining industry was only 0.2% of revenue.

11. Three clean mining technology case studies

12. Kachan taxonomy of green mining innovation

13. Comminution efficiency Crushing and grinding to transform run-of-mine materials into smaller particles for further downstream processing • Sandvik – Vibrocone • Can be used to replace rod mills, commonly used in the grinding process of comminution, or to perform the first steps of the grinding process without water consumption • By improving size reduction during crushing processes, savings can be achieved downstream in more expensive grinding stages • According to Sandvik, the crusher can achieve 30% energy savings in downstream processing

14. Low power separation Extraction of valuable minerals from waste rock and other materials. Common processes include gravity separation, flotation, and chemical separation, which often use toxic chemicals such as mercury or cyanide. • OrbiteAluminae • Canada’s OrbiteAluminae’s patented extraction process is able to pull both smelter-grade and high-purity alumina (HPA), as well as rare earth metals from the same aluminous clay feedstock • Orbite’s extracted materials have a diverse and large market including use for lighting, industrial and high-tech components, and fiber-optic communications

15. Hydrometallurgical processes Extraction of desired metal from ore using water solutions or solvents. Operate at much lower temperatures and therefore consume less power. • MetaLeach • UK-based, claims its process, “AmmLeach,” is environmentally friendly and cost effective • Primarily for extraction of copper, nickel, gold/copper and silver/zinc • Ammonia reagent that the company claims is largely recycled in the process and, heaps can also be washed and ore put back in the ground and the residual ammonia can be used for vegetation regrowth • Copper-cobalt mine in the Democratic Republic of Congo using system • Significant annual reductions in capital costs (around 30%) vs. sulphuric acid and operating cost savings US$29-51m (around 42%) • Recent non-exclusive royalty licence agreement with Metalvalue to build another commercial copper and cobalt processing plant in the DRC • Company claims to have signed numerous confidential and test work agreements with other large and small mining co’s

16. Equipment route optimization • RungePincockMinarco • RPM’s product HAULNET allows engineers to build complex 3D haul networks and produces visualizations allowing users to analyze haulage options based on the designated destination • Determines the most efficient use of trucks by highlighting the fastest and shortest routes • Minimizes haulage costs and emissions, overall benefitting the operations’ bottom lines • Management team of miners

17. Fuel additives/filters • FiltaGreen • Develops bypass fuel and oil filter systems that remove contaminants and particles • Claims its oil filter system can increase engine life by as much as five lifetimes and hydraulic life spans by 50 times. • Has also introduced a fuel additive that uses borate particles to protect engines and reduce coating. Claims it can increase fuel efficiency by 5 to 15%. • PT Pamapersadahas apparently saved 5% on fuel costs and doubled the length of time between engine overhauls from 12,000 hours to 24,000 hours, decreased downtime by over 38% and increased productivity of the fleet from 70% to 93%, and doubled the useful life of the equipment. • Past clients include Newmont Mining, Gold Barrick, Gold Strike, Rio Tinto and Green Corp.

18. Electric vehicle conversion/electric vehicles • Atlas Copco • Massive Swedish equipment supplier Atlas Copco offers a leading line of trucks and loaders powered by electricity • Claims to double the productivity of diesel trucks in the capacity range. In addition • Trucks are said to reduce energy use by up to 70% and decrease cost of ownership by up to 50% • Equipped with regenerative braking, meaning 30% of energy consumed moving up the ramp is regenerated going back down

19. Training simulators • ThroughTec • Simulators that replicate conditions at a mining operation for both surface and underground mining operations, hard rock and soft rock. Able to replicate a mine’s entire working fleet. • Operator’s movements are recorded and monitored; including reporting of the user’s economic performance • Achieved simulation of complex mining operations drawing from the company’s 50+ year military simulation industry experience. • Simulates equipment from many major manufacturers • Used by companies like Anglo-American, BHP Billiton, Rio Tinto, Vale, Newmont

20. Other fuel reduction approaches • Rail-Veyor Technologies • Canadian co. has developed an electrically powered remotely operated, light-rail system • Eliminates loaders, trucks and conveyor belts and reduces tunnel size and infrastructure. • Automatic operation that runs on GPS and sensor technologies and can operate 24/7; requires one operator above ground, yielding safer operations and reduced labor costs. • Zero diesel emissions • Installed and working in Sudbury, Ontario for 2 years

21. Carbon sequestration • Calera • Process that captures CO2emissions from coal or gas-fueled power facilities and turns it into calcium carbonate for building materials • Claims the process also removes minerals from water to produce fresh water • Working with Peabody Energy and China Huaneng Group on a green coal energy project in Mongolia • Significant funding from high profile sources: $15 million from Peabody Energy, and $50 million from KhoslaVentures

22. AMD/ARD remediation • BioteQ • Vancouver-based co. using sulfide precipitation tailored for each site to recover valuable metals and remove metal contaminants, sulphates and silica from large flows of water • Can eliminate residual sludge waste and contaminants including lead, arsenic, and mercury to help companies reduce potential sources of acid mine drainage and meet stringent discharge limits • Produces commercial grade metal concentrates that can be sold to refineries and create a revenue source • According to BioteQ, its processes remediate water to levels that can be reused in the mining operation or released into the environment • Projects in Canada, US, Mexico, Australia and China

23. Tailings remediation • BacTech Environmental Corporation • Bioleaching process using bacteria to remediate toxic tailings from abandoned mining operations • Can also neutralize sources of potential acid mine drainage while recovering metals such as gold, silver, cobalt and nickel • Uses naturally occurring bacteria that are harmless to both the environment and human health • Can break down sulphidesin 5 to 6 days, in contrast to 20 years that would be required under natural conditions. • Revenues can be generated from the recovery of the metals found in tailings. By recovering valuable materials from the tailings, BacTech is able to offer the mine remediation services to governments at no charge • Used at sites in Armenia, Guatemala, Chili, Mexico and the U.S. • Currently anticipating commissioning a $22 million plant in Manitoba, Canada to remediate arsenic tailings

24. Shortcomings & potential challenges • Proof of commercial viability of vendors • Proof of return on investment • Assurance of vendor longevity • Continued depressed capital markets

25. Conclusion • Many green mining technologies are now able to effectively compete with conventional products • Majority of companies have yet to adopt newer processes; leading companies have recognized the need to invest in new technologies as a response to the shifting industry • With increasing operational costs and environmental expectations, demand for cleaner technologies by the mining industry is expected to grow at an accelerated pace

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