NNBW Mining 2015

201�

When the Central Pacifi c Railroad Company designated Reno as a major station on its new transcontinental railroad line completed

in 1869, town boosters envisioned that the little town would become an important economic hub for the region. They were right. From the beginning, Reno has been an important supply center for Nevada’s mining districts both near, such as the Comstock, and far, such as Austin, Battle Mountain and Elko. After the Nevada Mine Operators Association was established in 1913, the directors logically placed its headquarters in Reno, then the Nevada center of economic and political power. Over the past 100-plus years, the Reno-Sparks area and the mining industry have been through many changes. Yet the Nevada Mining Association (our name since 1952, changed to refl ect the entire mining sector) remains proudly headquartered in Reno because it continues to be a convenient location from which to reach the rest of the state. The mining industry’s presence also continues to be important to the economic vitality of the Truckee Meadows. The association currently represents over 400 member companies and professionals, and nearly a quarter of them are based here in Reno-Sparks. From exploration companies to vendors of mining supplies and services, the mining sector enjoys a strong and positive relationship in northern Nevada.

Unlike the 19th century, however, contemporary northern Nevada does not rely on just one or two economic sectors. Diversity is crucial to the continued growth in this region, and the current focus on developing an advanced manufacturing sector and attracting high-tech companies off ers much promise to these communities. Because manufacturers utilize mining’s products, the success of that sector will depend on a healthy mining industry. With 20 key metals and minerals currently mined in nearly every county in this state, Nevada has the resources to provide northern Nevada manufacturers with the materials that they need. Whether it’s lithium or vanadium for batteries, rare earth elements for smart phones and drones, or barite for equipment, Nevadans produce it. The state’s traditional resources of gold, silver, and copper are also critical for the devices that power our 21st-century lives. For example, the infusion of gold and silver in windows refl ects the desert heat and reduces energy consumption. Even diatomite is important to local economic development. Nevada leads the world in the production of this mineral, which is used to fi lter beer and wine. As such, it is crucial to Reno’s growing craft beverage industry. The mining industry also off ers good jobs for northern Nevadans: miners make double the average salary of the average Nevadan. Mining employees are highly-skilled and compensated accordingly, and they spend a lot of their money in Reno-Sparks, adding yet another dimension to mining’s benefi cial economic relationship with the Truckee Meadows. As Nevada’s original and most enduring STEM industry, mining is also proud that Reno is home to one of the fi nest mining schools in the country. The Mackay School of Engineering and Earth Science at UNR has prepared top-notch mining professionals for over a century. Nearly every graduate — 98 percent of recent classes — receives at least one job off er simultaneously with his or her degree. The Nevada Mining Association is a proud member of the northern Nevada business community. Together, we are all mining for Nevada’s future. ▼

MINING FOR NEVADA’S

FUTUREBY DANA BENNETT

President, Nevada Mining Association

MARCH201�MAGAZINE

Mining for Nevada’s Future 2

Copper Mine Moves Forward 4

Big Projects Readied at Mines 6 Despite Weak Prices

In Mining Country, 7 Industry’s Impact Means a Lot

Mining Goes Airborne 8around the World

Tesla Plant will Use 8Nevada-mined Materials

Newmont Mining Supports 9 Northeastern Nevada Schools

Financing Equipment — 10To Buy or Lease?

Mackay Mine Design Team Competes 11in International Competition

Enrollment is Steady at Mackay School 12

Q&A with Dana Bennett 14

5355 Kietzke Lane, Suite 100 | Reno, NV 89511(775) 770-1173 | www.nnbw.com

General ManagerJames Arden | [email protected]

EditorSteve Sinovic | [email protected]

Contributing WritersAnne Knowles | Duane Johnson | Rob Sabo

Don Vetter | Annie Conway

Graphic DesignerRob Fair | [email protected]

Advertising SalesC. Eli Zeiter | [email protected]

Circulation ManagerKeith Sampson | [email protected]

©2015 Northern Nevada Communcations LLC. All rights reserved. Reproduction in whole or part without written permission is prohibited.

For reprint permission, contact the publisher. MARCH 30, 2015 I MINING 3

Summer interns from Mackay closing abandoned mines for the state through the Nevada Division of Minerals.

Photo courtesy Nevada Division of Minerals

Mining engineers of tomorrow

The new year is shaping up to be an eventful one for Nevada Copper. After working since early 2011 to get 10,400

acres of federal land transferred to the city of Yerington, Nevada Copper in mid-December fi nally saw that goal realized. The transfer of land allows Nevada Copper to proceed with plans to develop a large open-pit copper mine on 3,800 acres of former federal land that surrounds the company’s underground copper mine on 1,200 acres. Nevada Copper on Dec. 30 also fi nalized reworking the terms of a loan agreement with Red Kite Mine Finance Fund from 2013 that pushes back repayment of $200 million in funding until 2020 and provides Nevada Copper with additional funds. Nevada Copper will use the funding to complete drilling of a 2,140-foot shaft needed to access copper ore at its Pumpkin Hollow underground mine. As of the fi rst week of January the company had sunk the 24-foot diameter concrete-lined shaft to a depth of approximately 1,600 feet and expects to reach target depth in March or April. Once it hits a depth of 1,906 feet, miners will start lateral drifting of tunnels to create space for underground mining equipment and to conduct further exploration drilling to improve underground mineral reserve estimates. The reworked loan agreement also provides the company with additional liquidity as well as an additional $110 million in fi nancing once Nevada Copper hits certain project milestones. Red Kite already has advanced $90 million in funding to Nevada Copper, which ended 2014 with $10 million in cash on its books. Tim Dyhr, vice president of external and environmental relations for Nevada Copper, said that successful passage of the land transfer bill allows the company to proceed with the state-level permits and mining feasibility study needed to advance the open-pit mine. “It expedites the much bigger Stage 2 project,” Dyhr said. “If we had not gotten the land transfer, we would have to go through a two- to three-year federal permitting process. “The fi nancing allows us to move forward on Stage 1 and gives us the ability to continue developing the property, do engineering and procurement work while we look for fi nancing for Stage 2.

“We are moving Stage 1 forward — one way or another we will be getting positive cash fl ow in a few years.” Despite the positive developments, Nevada Copper still must negotiate some diffi cult conditions in the global commodities markets. Nevada Copper still needs to raise nearly $1 billion to develop the open-pit mine and construct an ore processing facility. However, Dyhr said that passage of the land transfer bill takes a lot of uncertainty about the open pit mine out of the story and signifi cantly improves Nevada Copper’s ability to attract project fi nancing. “It changes the perception of the project in the international market,” he said. “The biggest barrier for mining projects in the U.S. is regulatory uncertainty — can you get permits in a timely fashion? This gives us more leverage and fl exibility in the work we have done for fi nancing.” Still, Dyhr acknowledges that securing that much fi nancing won’t be easy. “We have to confront trying to get $1 billion in this market — it is going to take some time,” he said. “But in today’s mining investment arena, having a major investment house invest $200 million in a rotten market is a good sign. “There is a positive perception of Pumpkin Hollow. It’s a good resource in a good location and Nevada is the best mining jurisdiction in the U.S.” The company, which is based in Vancouver, B.C., expects to mine an average of 75 million pounds of copper each year for the fi rst fi ve years once underground mining begins in 2016 and it expects to mine an additional 221 million pounds of copper annually from the open pit mine. Proven and probable reserves at both mine sites are an estimated 5.2 billion pounds of copper, nearly 1 million ounces of gold and 33 million ounces of silver. Nevada Copper will spend the early part of this year revising its project schedule and also begin construction of a 6,500-ton-per-day mill to process ore mined from the underground operation. ▼

MINING FOR NEVADA’S

FUTURE

4 MINING I NORTHERN NEVADA BUSINESS WEEKLY

BY ROB SABO | Northern Nevada Business Weekly

COPPER MINE MOVESFORWARD

A recently completed land transfer in Lyon County allows Nevada Copper to proceed with plans

to develop an open-pit copper mine.Photo courtesy Nevada Copper

MARCH 30, 2015 I MINING �

Since 1972, KAPPES, CASSIDAY & ASSOCIATES (KCA) has provided process metallurgical services to the international mining industry. KCA specializes in all aspects of heap leach and cyanide processing including laboratory testing, project feasibility studies, engineering design, construction, and operations management. KCA is located in Reno, Nevada USA. Please visit us at www.kcareno.com or call (775) 972-7575

Agnico Eagle La India Gold Mine, Sonora, Mexico.Carbon Columns for 17,500 tpd cyanide heap leach. Each column holds 3.5 tonnes of carbon.

Design, Fabrication and Construction Management by Kappes, Cassiday & Associates (KCA).




BIG PROJECTSREADIED AT MINES

DESPITEWEAK PRICES

Before the year is out, mining industry operators are slated to complete two massive capital projects at two of northeastern Nevada’s largest

mine sites. Barrick Gold and Newmont Mining Corporation each will reap the benefi ts of projects totaling more than $1 billion that were several years in the making. Newmont’s addition of a new vent shaft at its Leeville mine in Eureka County should be operational by the fourth quarter of 2015, said Doug Livermore, Newmont’s regional project director for North America. Construction crews had reached a depth of 1,900 feet at the end of November and expected to hit target depth of 2,050 feet in the fi rst quarter. When the new shaft comes online, it will increase airfl ow for the Leeville underground gold mine, a crucial component of continued mining operations there. “Leeville is a key element of our operations in Nevada and the shaft allows us to maintain our levels of production and increase production on a go-forward basis,” Livermore said. “We need more air to support our workforce and activities underground. This sets us up for future growth for the next 10 years or more.” It also will be a big year for Newmont’s largest exploration project in the state —Long Canyon in the Pequop Mountains between Wells and Wendover. Newmont acquired the property in 2011 and after years of exploration drilling and permitting work, the Long Canyon project team in February will request $300 million in construction funding from the company’s board of directors. “We are looking forward to outcome of that decision,” Livermore said. “If that is approved, the investment would lead to production in the fi rst part of 2017 and establish a new mining district for us in the state.” Newmont still has some permitting work to wrap up at Long Canyon, though the majority of permitting already has been completed. The bulk of the company’s exploration activity in the state will focus on existing mine sites and at Long Canyon. “We anticipate spending very similar amounts in 2015 that we did in 2014,” said Chris Howsen, regional chief fi nancial offi cer. “Nevada is a key exploration area for Newmont.”

In May, Newmont will celebrate 50 years of mining on the Carlin Trend. When Newmont’s Carlin operations fi rst began production, the mine had an estimated seven- to 10-year mine life. Barrick Gold Corp., meanwhile, expects to bring back online its autoclave at the Goldstrike complex after implementing a new process to bond gold molecules to resins rather than carbon from ores mined in the region. The autoclave currently is in fi nal commissioning stages and produced its fi rst its fi rst gold from the new process in late November 2014. Once running at full capacity, Barrick expects to once again exceed one million ounces of gold production at its Goldstrike complex. Barrick also will enjoy the culmination of roughly fi ve years of permitting work when construction begins at the South Arturo open-pit gold project near Goldstrike in late 2015. The mine is expected to go into production in 2016 and will be staff ed by surface crews from Goldstrike. The continued falling price of gold is expected to continue to negatively impact junior mining companies operating in the state. Allied Nevada Gold Corp. of Reno, operator of the Hycroft Mine in Humboldt County, continues to struggle with cash fl ow. Allied Nevada stock peaked at $6.39 on March 14 of 2014 but by mid- December had tumbled to 74 cents in the wake of weaker production estimates for the fourth quarter. Veris Gold Corp. of Vancouver, meanwhile, continues to operate the Jerritt Canyon mine complex and mill under bankruptcy protection from Canadian courts. The soft price of gold also means the New Year will remain bleak for development-stage gold companies, which have struggled the past few years to raise capital to advance their projects. “This is a diffi cult climate to operate in, and it’s not going to get any better,” said Joel Schneyer, managing director of minerals, capital and advisory for Headwaters MB, an investment-banking fi rm headquartered in Denver. “It’s pretty tough to be a gold company.” ▼

Barrick Gold expects to return one million ounces of production at Goldstrike in 2015.

Photo courtesy Barrick Gold

MARCH 30, 2015 I MINING 7

Barrick Gold expects to return one million ounces of production at Goldstrike in 2015.

Photo courtesy Barrick Gold

Some dividends don’t end up on the 10-Q, that myopia-inducing legal fi ling that every mining company sends to the Securities and Exchange Commission. Wall Street pours

over this kind of thing each quarter so it can give the company a thumbs up or down. What’s missing from the reports are the subtle, everyday dividends, and the cautionary tales, of living in a mining-based economy. Finding and capitalizing on those dividends is the grail mining towns seek to realize a dependable, vibrant local economy — the foundation for a high quality of life. Residents of Nevada’s “gold belt” (with a lot of copper and silver thrown in) have been living through boom-and-bust cycles related to the activity of the regional mining industry for decades. A community’s challenge is to move away from the historical economy of high peaks and deep valleys and fi nd a holistic, sustainable economic development strategy. The big, obvious benefi ts for counties like Lander, Eureka and Humboldt and Pershing are the net proceeds of mining taxes; half to the state and the other half collected go to the county of mine origin. The volatility of the tax, based upon mineral price, makes it imprudent to dedicate this to a general fund. So you sock it away and hopefully use it strategically. Lander County’s capital coff ers were bolstered enough over the 2000s that it is investing in a series of public works projects aimed at building a better community infrastructure. In concert with this community capacity building is a revitalization program to help local business grow organically. The public projects and improvements in the business core area of Battle Mountain include:

• A $14 million expansion of the Battle Mountain General Hospital.• Construction of a new $20 million Lander County Administration/Courthouse Complex. • A $6.5 million set aside to build a new Community Pool/ Activity Center.• Investing more than $18 million from the Lander County School District to revitalize four campus sites.• A $25 million investment on a new school sports complex to allow regional competitions.• A pedestrian I-80 overpass connecting the sports complex to the Battle Mountain core area, which will be part of a pedestrian/bike path connecting the entire community, represents a $4 million investment.

Jan Morrison, the community development director for Lander County, says these are the most visible impacts that the mining world has on the community. Others are subtle, everyday occurrences. The Convention Center in Battle Mountain reports that in the past year it has doubled the amount of meetings it has hosted, nearly 180 total, and most on behalf of local mining companies (many mine safety related). Less measureable impacts are the sandwich shop that gets the order for a 20-person lunch meeting, the mining construction contractors whose trucks needed to be fi lled up every day at the gas station, or expertise that comes with highly skilled workers putting down roots in your community. “We have three mining executives on our economic development board,” Morrison points out. “That’s what we get beyond mining taxes, their expertise and business network. This is work they are doing on company time. It goes beyond net proceeds and its work that will help us weather the lean times.” The workforce lends its skills and its sense of community. For Newmont Mining Co. workers, there is a program that matches local philanthropic donations on a one-to-one ratio. In Lander, more than $2 million has gone to support such things as at-risk youth programs, senior citizens center activities and local search and rescue teams. The “lean times” are in the back of every community’s collective psyche. Ore extraction is an expensive, capital-intensive process. The commodity price determines if it’s worthwhile to stay open, and a lot of folks remember those days when gold dropped below $300 an ounce, shuttering many mines.

Not hosting many of the mines themselves, Elko County is the retail and support center of the third-largest gold production region in the world. Yes. World. The “lean times” backup plan for Elko County is mine centric but in a diff erent way. Northern Nevada is ripe with other minerals, such as barite, used in oil well production, and fl uorspar, a chemical, ceramics and metallurgic process additive — an ingredient needed to make Tefl on. These perhaps are more strategic than gold and a tad less volatile, but even on a good day a new mine takes about 10 years to establish. Any new mine initiative can take advantage of the supply chain services and third-party logistics companies already in place, believes Pam Borda, director of the Northeastern Nevada Regional Development Authority. “We can’t be just supply-chain focused,” Borda said. “There is no reason why we can’t be a manufacturing center for mining products. So, if there is a downturn in gold, we are still manufacturing mining widgets for all the other miners, not just in Nevada, but worldwide.” Bringing that scenario to fruition requires community investment and the City of Elko is putting down nearly $2 million to expand water and sewer services to create the needed industrial land. Five key property easements have already been secured. The other communities along the Gold Belt look to also take advantage of that strategy, hoping to parlay their proximity to a skilled workforce and to major modes of transportation, which can quickly get to products to market. This strategy to smooth out the boom-bust bumps is also being supported by the Governor’s Offi ce of Economic Development and the Nevada Mining Association, which will be taking that message on trade missions in the coming months. Its a story you won’t fi nd in the next 10-Q. Not even in the fi ne print. ▼

Don Vetter is a marketing and public relations professional. His fi rm has partnered with several mining communities in

Nevada to help tell their story and fi nd a sustainable future.

BY DON VETTER

IN MINING COUNTRY, INDUSTRY’SIMPACTMEANS A LOT

Mining taxes help bolster community involvement projects, such as the expansion of Battle Mountain Hospital.

Photo courtesy Don Vetter


Tesla Motors’ giant gigafactory under construction east of Reno is, for now, under a veil of secrecy. But at least one thing is certain: the 10-million-

square-foot facility at the Tahoe-Reno Industrial Center will be built with Nevada-mined materials. Work on the plant’s foundation began late last year. Contractors are working on it under non-disclosure agreements, but a few pieces of information are known. According to Storey County building permits, W.G. Yates & Sons is the general contractor. Reportedly, the foundation concrete is being poured in fi ve blocks and a single block has, to date, been completed and the remaining blocks have yet to go out to bid.

American Ready Mix was the ready mix contractor on the initial pour — the contractor that receives the cement mix and gravel and sand and mixes it on site. “There’s not a lot I can tell you,” said Ken Longballa, president, Sparks-based American Ready Mix, who said he was under non-disclosure on the project. “We did pour a lot of concrete out there.” It was about 60,000 cubic yards, according to Longballa, which is the common measurement used for concrete. In all, the cement, which is the glue that holds together the concrete, will contain some sort of combination of limestone, iron ore, clay for aluminum and gypsum for sulfate. It will be mixed with sand, water and gravel mined here. The multi-million dollar project is expected to employ 3,000 construction workers and be completed and ready for battery production for the company’s Model S and Model X vehicles sometime in 2016, according to the Palo Alto, Calif., electric car maker. According to a fi ling with Securities Exchange Commission, the company had by September 2014 already spent $18.8 million on initial construction and purchasing the factory’s land, which totals about 980 acres at the industrial park. The factory, which will produce lithium ion batteries, is expected to employ 6,500 people and pump $100 billion into the Nevada economy over 20 years.▼

Drones are beginning to take fl ight in the mining industry. The newly adopted technology, which has been utilized for a wide array of mining activities, such as

surveying, seems to be taking another step forward. In a recent article in Mining Global, unmanned aerial vehicles, otherwise known as UAVs, were described as turning the mining sector into an emerging frontier for the new technology. Sure to profi t at some point down the line is Nevada, a coveted base for research and development for the emerging drone aircraft industry. As the industry ramps up in the Silver State, local businesses may be able to supply some of the UAVs used by mining companies in the future. Already in use around the world, UAVs are helping mining operators “fi nd cheaper and safer ways to map deposit sites and explore for minerals via remote control,” according to the article.

Mine owners internationally said they see potential benefi ts across the value chain, from safety and security (search & rescue, monitoring / providing information from dangerous and diffi cult locations) to exploration and development (such as aerial photography and remote sensing) and productivity (stockpile mapping, mine mapping and reconciliation and time lapse photography), just to name a few. The fi rst step in implementing more drones in mining operations is working through the regulatory maze. In the United States, only public agencies can fl y drones and in Canada operators must apply for regulatory waivers. The investment for drones is growing. Australia’s mining industry alone spends roughly $3.7 billion a year on research and development and “the ability to operate more effi ciently in remote regions where drones aren’t likely to be threats to high-density populations is a huge selling point for the technology,” said the article. While still in its infancy, drones are expected to make a major impact in the mining industry in terms of productivity, cost and effi ciency in future years, reports Mining Global. ▼

MINING GOES

AIRBORNEAROUND THEWORLD

BY NNBW Staff

Flirtey CEO Matthew Sweeney and his prototype

drone, which is now being developed at

UNR. Drones are making headway

in the mining industry, a trend

that could benefi t northern Nevada-based companies.

BY ANNE KNOWLES | [email protected]

TESLA PLANT WILL USE NEVADA-MINED

MATERIALS


Newmont Mining Corp recently gifted Communities In Schools of Northeastern Nevada with a $25,000 donation. As a part of the

nation’s leading dropout prevention program, CIS of Northeastern Nevada strives to surround students with a community of support, empowering them to stay in school and achieve in life, according to a statement from the company. “We are honored that Newmont has been such a tremendous partner to CIS of Northeastern Nevada,” said Melissa Aguirre, executive director of CIS. “The community and our students are the ones who truly benefi t from the generosity as they will receive needed assistance to reach graduation.” CIS places site coordinators in schools to serve as mentors to students. Site coordinators act as consistent, caring adults, meeting the needs of students by assisting with grade monitoring and hunger prevention, as well as providing hygiene items, school supplies, clothing and anything else a student may need for success. “Newmont Mining Corporation understands and values the many programs and services that Communities In Schools provides to our local youth,” said Mary Korpi, director of external relations of Newmont Mining Corporation. “Your staff is to be commended for their commitment to providing a better future for numerous students in Elko County. Newmont is pleased to be a partner with Communities In Schools through this donation and our Legacy Fund.”

According to the company, the Newmont Legacy Fund program encompasses a direct, employee giving campaign, a community contributions program and a community endowment fund to assist in meeting future community needs. The employee giving portion allows Newmont employees to allocate personal contributions to organizations that meet the social service needs in local communities. ▼

Permitting Making You Bug Eyed?Enviroscientists Can Help

Celebrating 15 Years in Business

2000 - 2015

Enviroscientists, Inc.Enviroscientists, Inc.

Reno, Nevada

(775) 826-8822

Elko, Nevada

(775) 753-9496www.enviroincus.com

Air Quality Emission InventoriesEnvironmental AssessmentsEnvironmental Impact StatementsToxics Release InventoriesEnvironmental AuditsEnvironmental Compliance

Plans of OperationsReclamation Permits/RCEsArchaeological ServicesBiological ServicesWater Monitoring ServicesAir Quality Assessments and

Modeling

BY NNBW Staff

NEWMONT

MININGSUPPORTSNORTHEASTERN NEVADA SCHOOLS


MACKAY MINEDESIGN TEAMCOMPETES ININTERNATIONALCOMPETITION

For those mining operators considering an equipment acquisition for their businesses, it makes sense to compare the respective benefi ts

of buying or leasing to determine which option is right for your company. Before you buy or lease, give careful consideration to choosing equipment that will fi t your project pipeline, foster productivity and position your business for long-term growth. Evaluate the equipment your organization currently uses. Take time to consider where updating, supplementing or replacing your fl eet of equipment could benefi t your business. Also, determine if there are additional items of new or used equipment that will help your business operate more profi tably or expand its capabilities. New equipment is often more effi cient and may cost less in near term repairs and maintenance. Used equipment may require a lower initial investment. Whether the equipment is new or used, a loan or lease provides the ability to use the equipment’s revenue-generating capacity over time to help pay for it. Rather than tying up cash in a large purchase, loans and leases may help you preserve liquidity for other business needs.

When it’s time to acquire equipment, determine whether buying or leasing is going to serve your long-term interests most eff ectively. Here are just three considerations: • Down payment — Depending on the type of equipment, you may need to provide a cash down payment as part of a loan structure. Recently, however, some types of long-lived assets may be fi nanced at 100 percent of the purchase price. Leases are structured to provide periodic payments based on an agreed-upon or estimated equipment value at the beginning and end of a lease term. • Risk of obsolescence — If you purchase equipment you bear the risk that it could decrease in value as a result of technological advances or changes in the needs of your business. If you lease the equipment, the transaction may be structured so that the risks of obsolescence, devaluation and changing markets are borne by the lessor. Depending on the type of lease structure , there may be no obligation to purchase the asset at the end of the term of a lease. • Expense deductions — With a loan and certain lease structures, the borrower is considered the owner of the equipment for tax purposes and often may claim depreciation expense and interest expense that could reduce a company’s taxable income. With an operating or true lease, the lessee typically claims no asset or liability on its balance sheet with the lease payments treated as an expense deduction on the lessee’s income statement. As part of the evaluation of any lease or loan structure, you should consult with an accountant and tax advisor to be certain of the applicability for your company. Flexible payment terms and interim fi nancing may also be available in lease and loan transactions. A key advantage in leasing equipment is that the lessee decides what to do with the equipment at the end of the lease term. End-of-lease options for the lessee may include (a) purchase the equipment, (b) renew the lease, or c) return the equipment. The option to return the equipment can benefi t a business because disposal of equipment can be uncertain, costly, and time consuming. It also allows a company to focus on its core business versus managing non-core assets. Purchase options can be structured in a wide variety of ways, including fi xed dollar amounts or fair market value. Companies that do not have tax liabilities (because of net operating losses, etc.) may also benefi t by leasing, where depreciation deductions can be taken by the

BY STEVE PRATT | Nevada Territory ManagerWells Fargo Equipment Finance, Construction Group

FINANCINGEQUIPMENT-TO BUYOR LEASE?


The University of Nevada, Reno’s junior Mackay Mine Design Team competed against fi ve other universities from around the world in a recent

competition in Denver hosted by the Society for Mining, Metallurgy and Exploration. This was the fi rst time in three years that a team from the university has made it to phase two of the competition and the fi rst time in four years that a junior team from the university has advanced to phase two. For the competition, the teams were asked to complete a conceptual study on a possible mine site and to recommend if a mining company should invest money in mining a deposit. “The teams are provided with drill hole data, a site layout and other various site information,” Sean Diggins, team captain and junior mining engineering major, said. “The teams never have enough information, just as it

would be in the real world, and must make appropriate assumptions.” The team started the fi rst phase of the competition in October 2014. During the course of 21 days, the team was limited to working 35 hours prior to submitting their report. The team was notifi ed in mid-January that they were selected to advance to phase two. On the day of the phase two competition, the teams were given a new project and had three days to add to their report before presenting their solution to a panel of judges. According to Diggins, this experience broadened his perception of engineering. “I always thought that in the world of engineering there was only ever one correct solution because it was just math and equations,” Diggins said. “But, after fi nishing this project and seeing all of the team’s diff erent solutions I realized there really is a lot of creativity that is put into engineering solutions.” The team did not place in the competition but they are already thinking about how to use this experience for next year. “Fortunately, since we were the junior team the majority of us will be returning next year and will have another chance,” Diggins said. “Most teams that make it to phase two are senior teams and do not often get a second chance.” In addition to Diggins, the team was comprised of sophomore mining engineering major Ralston Pedersen, senior mining engineering major Orgil Norov, senior mining engineering major August Greth, junior mining engineering major Manuel Toledo and junior geologic engineering major John Hartley. The university’s contingent competed against teams from Virginia Tech, the Indian Institute of Technology and three Canadian universities including McGill University, Queen’s University and Université Laval. ▼

MACKAY MINEDESIGN TEAMCOMPETES ININTERNATIONALCOMPETITION

BY ANNIE CONWAY | Writer, UNR Departmentof Natural Resources and Environmental Sciences

lessor, which can be passed on to the lessee in the form of lower rental payments. Leasing may also assist with debt covenant compliance. Loans also off er distinct advantages to companies that need capital equipment. For instance, loan payments can be based on fi xed or fl oating rates, fi xed principal and interest, or fi xed principal plus interest. This allows a company to lock in rates and terms that fi t its long-term capital or fi nancing strategy. Some companies

benefi t from owning assets that are central to their business when the equipment has a useful life beyond the repayment terms of the loan. In such cases, it may make more sense to own the equipment and retain the benefi t of depreciation expenses. Once you’ve determined your equipment needs, talk with a banker who can connect you with an equipment fi nance specialist. Together, they can help you determine which of your fi nancing options – whether it’s a loan or one of many diff erent types of leases – may fi t your needs. An equipment fi nance specialist may also be able to assist with knowledge about equipment vendors or help in the review of competitive bids. Before making a decision about your equipment investment, be sure to consult with your accountant and/or tax advisor. ▼

For more information please visit http://www.wellsfargo.com/

com/fi nancing/equipment-fi nancing/construction.


The mining industry is one of the most competitive industries in the world.

That said, companies in the U.S. and around the world expect potential employees to have qualifi cations relevant to the resources industry, if not a deep level of expertise. The U.S. is home to some of the most prestigious mining and engineering schools in the world. Of the more than a dozen operated by American institutions, one of the oldest is the Mackay School of Earth Sciences & Engineering at the University of Nevada, Reno. While the prices of metals aff ects the industry and hiring plans and staff levels wax and wane, Mackay continues to see steady growth, to the tune of an eight percent enrollment gain year-over-year for most of the past decade. “It’s defi nitely going up,” said Russ Fields, director of the school, where mining has been part of the curriculum since 1908. The fracking and shale boom clearly prompted strong demand for students graduating in geophysics and involved in shale development. In high demand, some of them went to work in the oil and gas industry in North America’s booming energy patches. “Some of our students go into industrial minerals — sand and gravel, silicon chips, limestone,” said Fields. “These materials are required by modern society to build things like roads,” said Fields, describing the varied career paths taken. “Graduates (in all programs) are still in high demand,” said Fields, although they aren’t encountering the heated hiring scene 2-3 years ago, perhaps refl ecting a slowdown in the extraction of certain mineral categories.

“Back then, a person with a bachelor’s degree in mining had 2-3 off ers,” observed Fields. “Now they are happy to get one solid off er,” he said of the recent crop job seekers. Undergraduate enrollment at Mackay stood at 240 students in 2009. Five years later, that fi gure is now 345 undergrads studying in various disciplines: geology, geography, geophysics, geological engineering, hydrogeology and mining engineering (with options in underground and quarry mining). The number of advanced degrees conferred in 2014 was 48. However, not every declared major makes it to the end of the program. “We constantly measure how many are making it through to the end of the program,” said Fields of the rigorous academics. “We conferred 56 degrees in the last academic year.” Close ties with industry leaders provide students with exclusive opportunities for summer jobs and internships. This means hands-on industry experience, giving them the leading edge to jump-start careers. Ninety-eight percent of recent Mackay graduates have job off ers upon graduation, said Fields. “Our career development program director, Katia Albright, works hard to put companies with students to fi ll internships,” said Fields. “It’s not required for graduation, but a background as a paid intern rounds out a resume and makes a graduate look more attractive” to companies looking to hire on a permanent basis.

ENROLLMENTIS STEADY ATMACKAY SCHOOL

The Mackay Mines Building on the campus of the University of Nevada, Reno.

Photo courtesy Brenden Georg, student in Geological Engineering and Mining Engineering

BY STEVE SINOVIC | [email protected]

New mining students are welcomed to campus.Photo courtesy Katia Albright


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“Alums end up in many places,” he said. “We produce professionals for the industry in Nevada. But many also end up going to foreign venues. “Mining is truly an international industry,” he added. Mackay has one of the largest endowments in the nation supporting mineral industry-related academic fields and has the largest undergraduate scholarship program at UNR. Fields estimated the school has 35 faculty members. Recruitment is ongoing to backfill the number of professionals in engineering and geological sciences leaving the field for other careers or reaching retirement age, said Fields. “We are recruiting in high schools constantly,” said Fields, especially targeting kids showing good performance and desire in sciences and math.” He said the school has “great success” recruiting in rural Nevada, a place where many mining operations are located. “The nation needs more scientists and engineers and we’re meeting the challenge,” said Fields. “We offer one of the best returns on investment in the country and prospective students and their parents value that more than ever now,” said Fields. ▼

The Mackay Mines Building on the campus of the University of Nevada, Reno.

Photo courtesy Brenden Georg, student in Geological Engineering and Mining Engineering New mining students are welcomed to campus.

Photo courtesy Katia Albright


MINING IN NEVADA BY THE NUMBERS

Nevada Jobs

of America’s Mineral Production

MORE THAN

Comes from Nevada

The average American will need more than

MillionPoundsof minerals in a lifetime.

GOLDBrakes, airbags,

smartphones, computers.

SILVERMedical equipment,

photography, insulation.

COPPERAir conditioners, renew-

able energy, construction equipment.

DIATOMITEFertilizer, toothpaste,

filters for beer and wine.

GEOTHERMAL ENERGYEnough to power more than 250,000 homes.

Mining Companies Work With

Nevada-basedbusinesses

and generate more thanReal Estate AccomodationsRetailGovernment

MiningHealth CareFinance

The average miner earns

Per year.

for Nevada’s EconomyOf Nevada’s Eco

nom

y

Nevada’s 5th-Largest Economic Sector

have employer- paid health insurance

And mining students are the highest-paid in the country after graduation.

in donations every year for schools, scholarships, and community groups.

1% 6.1% 7.4%OF NEVADA’S WORKFORCE

OF NEVADA’S ECONOMY

OF NEVADA’S GENERAL FUND REVENUES

Nevada Mines Produce 20 Essential Minerals

SOURCE: APPLIED ANALYSIS, “ROLE OF THE STATE’S MINING INDUSTRY”,USA TODAY, MINERALS EDUCATION COALITION

Q&AWITH DANA BENNETTBY DUANE JOHNSON | [email protected]

Name/position/organization: Dana R. Bennett, PhD, President, Nevada Mining AssociationNumber of years at position: Since December 2014Number of years in profession: I have worked around the Nevada Legislature in some capacity for 25 yearsEducation: PhD in history from Arizona State University; M.A. in history from State University of New York at Binghamton; B.A. in history from Boise State University; Reno High School graduateLast book read: “Treasure Hill: Portrait of a Silver Mining Camp.” It’s a classic history about the rapid growth and decline of a 19th century mining town in NevadaFavorite music: Depends on my mood. Sometimes classic country or cutting edge jazz, classical, music from the 70s, or cocktail lounge music such as Frank Sinatra or Dean Martin.Spouse, kids, or pets: Husband, Shannon Jackson; Dog, Payson

Northern Nevada Business Weekly: Tell us about the Nevada Mining Association and the duties of your position.Dana Bennett: The Nevada Mining Association is one of the oldest trade associations in Nevada and has more than 400 members statewide. We represent all aspects of the mining industry from exploration to construction to operation to suppliers of mining goods and services. We work on issues that aff ect the entire industry, such as workforce development and legislative and regulatory policies. We also sponsor award-winning educational programs for teachers and communicate with the public about mining’s impact on daily life. Essentially, my job is to fi nd ways for the industry to work together toward the mutual goals of safe and responsible mining and to communicate with the public and policymakers about the importance of this industry to the state. NNBW: How did you get into this profession?Bennett: I went to work at the Nevada Legislative Counsel Bureau and got involved with mining policy by staffi ng the Public Lands Committee. Mining is an

interesting area because it is such a multi-faceted industry. It’s also great way to talk about both history and the future in Nevada, so it really appeals to me.NNBW: What do you fi nd most interesting about your job?Bennett: Working with a diverse group of people. I get to spend time in Reno, Las Vegas, and rural Nevada. It’s a wonderful reminder of why Nevada is such a good place to live.NNBW: What aspects of your job present the most challenges?Bennett: The complexity of the industry. Our members actively mine 20 metals and industrial minerals across the state with employees in every county. Exploration is key to the industry’s future, and the types of vendors are numerous. There is always something new to learn.NNBW: Have any advice for someone who wants to get in the profession?Bennett: I would suggest that people who are interested in the mining profession look at the Mackay School of Mines at the University of Nevada, Reno. It’s a terrifi c asset in this community.NNBW: What was your fi rst job?Bennett: I did fi ling at my Dad’s bookkeeping business in downtown Reno. We lived in the Old Southwest, and it was fun to walk home from work with him and hear stories about Reno’s history.NNBW: What did you want to be when you were growing up?Bennett: I’ve always been interested in history and in writing, so I always thought that I would do work that would combine the two. NNBW: If you had one memory either professionally or personally that can be as fresh as when it happened what would it be?Bennett: It probably would be as a kid walking home from school with friends at Mount Rose Elementary. Those are happy memories for me. Reno was such a great place to grow up and still is.NNBW: Last concert or sporting event attended?Bennett: We went to the NV150 Reno Philharmonic where they performed their new arrangement of “Home Means Nevada.” That was fantastic!NNBW: What is your ideal vacation spot:Bennett: The little town of Midas, Nev. That would be a good place to start if anybody ever needs to look for me. It’s a quiet place. A lot of wonderful people hang out there.NNBW: Why did you choose a career in Northern Nevada? What do you like about living/working here?Bennett: It’s home to me. I grew up here and now it serves as a great base to get out and visit the rest of the state.▼

MINING IN NEVADA BY THE NUMBERS

Nevada Jobs

of America’s Mineral Production

MORE THAN

Comes from Nevada

The average American will need more than

MillionPoundsof minerals in a lifetime.

GOLDBrakes, airbags,

smartphones, computers.

SILVERMedical equipment,

photography, insulation.

COPPERAir conditioners, renew-

able energy, construction equipment.

DIATOMITEFertilizer, toothpaste,

filters for beer and wine.

GEOTHERMAL ENERGYEnough to power more than 250,000 homes.

Mining Companies Work With

Nevada-basedbusinesses

and generate more thanReal Estate AccomodationsRetailGovernment

MiningHealth CareFinance

The average miner earns

Per year.

for Nevada’s EconomyOf Nevada’s Eco

nom

yNevada’s 5th-Largest Economic Sector

have employer- paid health insurance

And mining students are the highest-paid in the country after graduation.

in donations every year for schools, scholarships, and community groups.

1% 6.1% 7.4%OF NEVADA’S WORKFORCE

OF NEVADA’S ECONOMY

OF NEVADA’S GENERAL FUND REVENUES

Nevada Mines Produce 20 Essential Minerals

SOURCE: APPLIED ANALYSIS, “ROLE OF THE STATE’S MINING INDUSTRY”,USA TODAY, MINERALS EDUCATION COALITION

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NNBW Mining 2015

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