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Issue 7:

Osisko: A benchmark in responsible mining

Sustainable Development. Two words that mean different things to different entities. For Osisko Mining Corporation’s Canadian Malartic mine, it has meant a series of actions, measures, ideas and details that helped build the project as a balance between the economy, the environment, and the social and community components.

As Osisko begins the countdown to the first gold pour in 2011, the company is more resolved than ever to work with the community and make Canadian Malartic mine a new benchmark in responsible mining.

Communicating openly

The developers of Canadian Malartic mine have some important advice for mining companies thinking of creating a mine in the middle of a town: Communicate. Talk to everyone — frequently, openly and honestly. And keep doing it.

Canadian Malartic developers are the first to admit the many challenges they faced as they began building this large open-pit gold mine in Quebec, Canada — right in the middle of the town of Malartic. They have never hidden any of the challenges from their business partners, their suppliers, the people of Malartic or the media.

“The mining industry has had a bad reputation,” says Mine Manager François Vézina. “Our goal was to change that.”

That push started with the company tagline: A Fresh Outlook on Mining. “This mine itself is quite different and requires a fresh outlook,” says Canadian Malartic General Manager Denis Cimon. “There has been mining in the Malartic region for 80 years. And back then, mining companies didn’t follow all the best practices. We wanted to change the image of mining here.”

The biggest differentiator at Osisko is, of course, the location: in the heart of a community. In fact, it’s because of that challenge that everything else about Osisko has been approached a little bit differently.

“When this mine was in its infancy, the leadership team started communicating with the public,” says Osisko Director of Communications Hélène Thibault. “We knew that getting community support for this project was the most important thing we could do to ensure its success. Mining is different than it was five, 10, 15 years ago. Now there are expectations from people that we have to manage. We must start with them, making sure their expectations are reasonable and not beyond what we can do. We explain where we are and share the challenges. We’re all in this together.”

The creation of a Community Consultation Group helps Osisko listen and respond to residents’ concerns, and a Community Relations Centre, located in the heart of Malartic, opened its doors in March 2008 to facilitate interaction between residents and Osisko representatives.

Other communication activities include public presentations and open houses where residents are invited to tour the site and see progress for themselves. The first open house attracted 400 visitors, the second over 1,400, and the most recent event attracted 2,400 people — a significant number considering the population of Malartic is just over 3,000.

An open pit mine of this size — expected to produce 55000 tonnes (60,627 short tons) a day in an area where 4500 tonnes (4,960 short tons) is typical — is at times incomprehensible to residents. “This mine is going to be seven times bigger than the biggest thing around here,” says Vézina. “There’s no frame of reference for something this big. Even the equipment we’re using is like nothing most of these people have ever seen.”

“From the beginning, we wanted to make sure the town accepted us,” says Thibault. “We inform and we listen; we’re transparent and honest.”

And it has worked. A few years ago the project was barely on the drawing board. With the support of the community, Osisko quickly earned the legal and social license it needed to build, and construction is progressing rapidly. And next year, the project will officially become the biggest open-pit gold mine in Canada.

New subdivision

Relocating a neighborhood

Mines always have an impact on the communities nearby. But not many are like Osisko. About 15 percent of Malartic’s 1,600 homes were located over the old mine workings, which means Osisko had to demolish some homes and buildings, and physically move over 140 to access the precious ore beneath.

The Community Consultation Group interacted with an urban planner hired to develop the new suburb. Residents were surveyed to find where they would like to live and what they wanted to see in the new community. Relocation plans were available at the community relations office for anyone who would like to see them. The collaboration of residents, the town council and Osisko was crucial to the success of the resettlement.

“We could have just bought their houses, but that wouldn’t have been sustainable,” says Thibault. “So we relocated them. It was more expensive, but it was worth it. If we had purchased the houses and demolished them, people would have moved to nearby cities and purchased houses there. Instead they are staying in Malartic and the population is growing.”

Infrastructure work for the new neighborhood north of town was completed in December 2008; the resettlement of the homes and the construction of five institutional buildings were completed in 2010.

“We’ve built a lot of infrastructure,” says Thibault. “And the neighborhood wasn’t just relocated — it was improved. The new school, for example, has the latest technology and is more advanced than many of the schools in the province of Quebec. It has features any school would love to have.”

 A new elementary school

One goal of the resettlement was to reuse as much material from the demolition as possible. A considerable amount of material, such as doors, windows and cabinets, was recovered and sold locally. Some 4500 tonnes (4,960 short tons) of recovered concrete are being used as backfill during construction of a green wall separating the subdivision from the mine site. More than 95 percent of the materials from the demolition of one of the schools and the community center was recycled, and all road surfacing material was recovered and reused during construction work.

The Community Consultation Group has reported that 85 percent of the population affected by the resettlement feels that it brought one or more improvements to their residential environment. And while the resettlement can be considered a success, it wasn’t easy.

“We’re a mining company. We’re trained to move earth and retrieve the gold,” explains Thibault. “There was no book on how to do a resettlement so we had to learn along the way.”

Maximizing the economic impact

Why would the residents of a small community like Malartic embrace a mine that literally took over their small town? The economy was a major reason. Before Osisko came to town, Malartic was in the midst of an economic depression, with an unemployment rate that stood at more than 40 percent.

“The village was filled with people who worked in previous mines in the rich Abitibi mining region, but there hasn’t been a mine since the mid-1990s,” says Vézina. “The population had decreased and a lot of small businesses were gone.”

Thanks to construction of the new mine, the unemployment rate has dropped to about 15 percent and may fall even lower as Osisko begins producing ore and delivers on its goal to hire 75 percent of its staff from Malartic and the surrounding area.

More than 1,000 people a day have been working during the construction phase, says Cimon, and Osisko is still in the midst of a recruiting phase for mine operations. In June 2009, Osisko held a career day for residents of the region, catering primarily to those from Malartic. More than 400 interviews were conducted, and Osisko built a candidate bank with more than 15,000 applications. The sheer volume of applicants is evidence of the widespread appeal of the project, says Cimon.

Training is already under way for newly hired heavy equipment operators, health and safety workers, and mill employees. Cat dealer Hewitt Equipment Limited, based in Montreal with a facility in nearby Val d’Or, has provided operator training. Caterpillar has also provided trainers as well as Cat Virtual Training simulators.

Training for newly hired heavy equipment operators

“One of their shovel operators came from a fly-in, fly-out mine, and he is one of the most experienced operators in the industry,” says Hewitt Mining Manager William Harvey. “There are also new employees who were working at the local grocery store, and will now have a career in mining. These employees have the ability to work on new, state-of-the-art equipment in a big mine, and still be home every night.”

Osisko estimates the project will bring more than 3,300 new jobs to the region — 908 jobs per year of the construction phase and about 400 jobs per year for the mining operations. Expenditures of US$165 million per year are expected to support these positions, including 300 jobs a year with suppliers in the area.

Along with an increase in employment, Osisko’s “buy local” policy is having a significant impact on area businesses. Many small and medium businesses in Malartic are directly involved in the construction project. In addition to benefiting from the immediate economic spin-offs of this work, businesses were also able to develop specific expertise in the mining and construction sectors.

The mine is helping to bring new businesses to town and is supporting existing companies, as well. “For example, we’re purchasing work boots and clothes for our workers from a store in Malartic,” says Vézina. “We’re also pushing our providers to build their shops and warehouses here — and that’s good for everyone. Our costs are lower when our providers are here, and the community benefits from new jobs and new revenue.” Cat dealer Hewitt, for example, opened a Cat Rental Store nearby to support the mine, and staffs it with local residents.

While Malartic will see the greatest economic benefit, the economic impact of Osisko will be felt throughout Quebec. From the start of the exploration work in 2005 to the complete rehabilitation of the mine once it closes around 2024, Osisko estimates it will have invested a total of US$32 billion — 82 percent of which will be within Quebec. In 2009 alone, Osisko invested more than US$315 million in construction and exploration.

Minimizing the impact on people and their environment

While a large number of homes were moved and some were purchased by Osisko to free the property for mining, Malartic will still have the country’s biggest open-pit gold mine in its backyard. Osisko is committed to doing all it can to minimize that impact.

Reducing carbon footprint

Osisko’s sustainable development program is guided by this motto: Toward a carbon neutral footprint. “Always aware of our responsibilities, and convinced that the industry as a whole will need to become accountable for its greenhouse gas emissions in the near future, we set up projects that will reduce greenhouse gases generated by our operations,” says Vice President of Sustainable Development Jean-Sébastien David.

Osisko will employ conservation measures and the latest technologies to reduce its carbon footprint. The site will use hydro-electric power to reduce the need for fossil fuels. Electric shovels and a new generation of Cat trucks that meet the U.S. Environmental Protection Agency’s Tier 2 standards will lessen carbon emissions during production. A 1.4-kilometer (1-mile) conveyor between the crusher and the processor will reduce the use of fuel.

Another endeavor to reduce carbon footprint is the Osisko Forest project. The project will consist of a reforestation program in the region and will be jointly implemented by officials of the Valleé-de-l’Or regional municipality. The project will involve the landscaping and reforestation of 100 hectares (247 acres) of land each year for nine years.

Reducing noise

Reducing noise during the construction phase, and once production begins, has been a high priority for Osisko. The company chose to use electric drills, which are quieter than mechanical drills, during the construction phase. And instead of operating around the clock, drills operate just 12 hours a day, six days a week. Noise levels are constantly monitored.

Noise was also a consideration during the selection of mining equipment. Caterpillar has developed an extra quiet package that will be retrofitted to Osisko’s current fleet of 793F trucks and included from the factory on future 793F orders. Noise reduction was also one of the primary reasons the site selected O&K RH340E electric hydraulic shovels, which are powered by electric motors that are much quieter than diesel engines and better for the environment. The mine also chose smaller drill rigs for the first pit benches to lessen noise.

Once the mining phase begins, more measures will be integrated into the project to reduce noise. The biggest will be a 15-meter-high (49-foot-high) “green wall” designed to reduce noise as well as the visual impact of mining operations. This 1.3-km (0.8-mile) landscaped ridge is a key element in Osisko’s plan to reduce negative impacts on the local population during mine construction and production. Similar ridges that are 4 meters (13 feet) high will be placed along other main circulation routes.

A 15-meter-high (49-foot-high) “green wall” will reduce noise and the visual impact of mining operations

Controlling dust

Keeping dust down and away from residential areas is another priority. The mine will perform continuous monitoring of air quality and employ a number of standard management measures, including keeping several water trucks on site at all times and watering drill holes in the areas nearest the town. Conveyor belts, stockpiles and the crushing complex will all be covered.

For several days in the summer of 2010, a dry spell made it very difficult to manage the dust generated by construction work. Additional water trucks were added to solve the immediate problem, but the situation led the mine to rethink its approach to managing and reducing dust.

“We’re considering installing a line of sprinklers along the road between the crusher and the future pit to improve the system’s efficiency while reducing the need for water trucks,” says Vézina. “The site also will use fog cannons and snow cannons.”

Water truck

Conserving water

Osisko is constructing a pond to avoid taking water from surrounding waterways and to maximize water recycling. The pond will collect rain, snow melt and water pumped from the open pit. With this reserve, Osisko will not need to use clean water for ore processing. Construction of a second basin will reduce the amount of effluent, moving the site closer to its goal of zero net discharge.

“We’ve almost reached equilibrium as far as water is concerned,” says Cimon. “We control every drop of water. That’s what we’ll use to run the mine. We don’t need a water process because we’re not consuming water from the outside.”

Protecting flora and fauna

Osisko has employed consultants to study the effect the Canadian Malartic mine will have on vegetation, wetlands, land and aquatic mammals, waterfowl, birds, amphibians and reptiles. The company will employ whatever means possible to minimize these effects. In addition to minimizing locations that will be devegetated, Osisko plans a one-for-one compensation for these areas. Replanting will be done continuously as the cells become filled.

Enabling Malartic for the future

Osisko’s sustainable development activities cover all the phases in the mine’s life cycle — including the final one. The company has a detailed plan in place for mine closure, from how the site will look to the economic legacy that will be left behind for the residents of Malartic.

Rehabilitating the site

Before Osisko even starts production on the site, reclamation has begun. Osisko signed an agreement to rehabilitate the abandoned East Malartic site with the Quebec government, which had inherited the site and become responsible for the environmental follow-up. Osisko will assume half the government’s financial obligation for the site’s rehabilitation and will use tailings from its new mine to progressively cover the site, rendering it harmless.

Another important choice was to progressively restore vegetation at the mine site rather than waiting until the end of the mine’s life cycle. This process of continuous rehabilitation was made possible by a decision to use thickened tailings technology, which allows indigenous trees to be planted while mining continues.

Thickened tailings, which are achieved by using compression thickeners or a combination of thickeners and filter presses, are dewatered to a point where they form a mass that can be placed layer by layer onto a pile. In addition to allowing continuous rehabilitation, thickened tailings also significantly decrease water usage and reduce the size of the stockpile that will be left behind.

“Thickened tailings also allow us to reduce the size of our pond,” says Cimon. “We’ll use the same size pond when we’re producing 55000 tonnes a day as the original pond, when only 5000 tonnes per day was being produced. We’ll also reduce toxicity prior to sending tailings to the pond.”

Osisko is rehabilitating an abandoned tailings pond with tailings from its new mine to progressively cover the site, rendering it harmless.

Restoration of the vegetation on the site will include a biodiversity research project. Because of the abandoned tailings pond, the site is devoid of vegetation and has been eroded by wind. Osisko is working with experts to choose species that are best adapted to that particular environment.

“We’re excited by the prospect of continuous reclamation,” says Cimon. “Residents will see grass in year four instead of year 15. At the end of the mine’s life, we’ll already be 65 percent done with reclamation.”

The community will participate in what happens to the site after the mine is gone. All the equipment will be gone and buildings dismantled; what remains will be a hill and a water reservoir. The property will be given to the ministry of natural resources unless a developer has a plan for use.

“People are already dreaming and envisioning what can be here in the future,” Cimon says. “There is talk of a ski hill or a resort. Anything is possible.”

Leaving a legacy

In March 2008, Osisko announced a first-of-its-kind sustainable development fund to ensure a lasting heritage for future generations in the town of Malartic. The fund is intended to improve the quality of life for residents today, promote community growth, and enable long-term economic success long after the mine is gone.

“We’re very proud to initiate the creation of this fund,” said Osisko’s Sean Roosen when he announced the FEMO: Fonds Essor Malartic Osisko. “Our mining project will definitely generate major spinoffs for Malartic, but we intend to contribute even more so that we leave a sustainable legacy for the people of Malartic.”

Osisko plans contributions in cash and stock that could amount to more than US$4 million in the next several years. Roosen and other management personnel donated 25,000 of their own Osisko shares to FEMO.

The fund is the first of its kind for Quebec and the Canadian mining industry. Priority is given to projects most likely to leave a heritage for future generations. Projects must promote the economic, social and culture development of Malartic; encourage and support activities that promote youth development; promote the development of knowledge by supporting school studies, including scholarships; promote arts and culture; and support a good quality of life and personal development for Malartic citizens.

Serving as a benchmark

Osisko has embraced the challenges of developing Canadian Malartic and is hoping to serve as a benchmark for other mining companies on sustainable development issues. “We worked alongside the people where the mine is located, and we worked as a team,” says Cimon. “We’re all in this together. That’s how we approached this project, and we would recommend that any other company do the same. We’re taking the best of what other companies have done and hopefully becoming an example for other mining companies.”

Canadian Malartic: Osisko’s flagship property

Osisko Mining Corporation’s flagship property is the 100-percent-owned Canadian Malartic gold property, located in the heart of Quebec’s prolific Abitibi Gold Belt, immediately south of the town of Malartic and about 20 kilometers (12.4 miles) west of the town Val d’Or. The property covers 230 square kilometers (89 square miles) and includes four underground mines that produced over 5 million ounces of gold from 1935 to 1983.

Osisko acquired a 100 percent interest in the Canadian Malartic property in November 2004, and initiated a detailed compilation of the extensive historical database in January 2005, including data from over 5,000 surface and underground drill holes. Osisko commenced its drilling program on the property in March 2005 and has drilled over 750000 meters (2.5 million feet) since then.

The deposit is an Archean porphyry gold system, consisting of a widespread shell of disseminated gold and pyrite mineralization hosted by diorite porphyry and altered metasediments. The Canadian Malartic deposit is part of a 3000-meter-long (9,800-feet-long), contiguous, east-west striking mineralized system that was historically mined by several underground operations.

Osisko received the final authorizations and mining permit from the Quebec Government in August 2009 and has been building the Canadian Malartic open-pit mine since. Commercial production is expected to begin in the second quarter 2011. The company expects to produce an average of over 600,000 ounces of gold annually over a 12.2-year mine life.

Current reserves are about 9 million ounces, plus an indicated resource of 2.2 million ounces and an inferred resource of 0.5 million ounces. An 80000-meter (262,500-foot) drilling program is under way on several mineralized zones and high potential exploration targets on the property.

History

The Canadian Malartic deposit was discovered in 1926; underground development began two years later. From 1935 to 1965, the mine produced over 1 million ounces of gold from almost 10 million tonnes (11 million short tons) of ore. The site remained idle for 15 years until its purchase by Lac Minerals, which explored the property from 1980 to 1988 with the objective of finding a near-surface deposit amenable to open pit mining. This exploration uncovered five near-surface gold zones forming a resource of about 8.2 million tonnes (9 million short tons) of ore at 1.98 grams per tonne.

The project was shelved in the early 1990s when Lac Minerals was acquired by Barrick Gold Corp., which sold the property to McWatters Mining in 2003. McWatters declared bankruptcy in 2004, and later that year Osisko purchased a 100 percent interest in the property. The purchase initially included six claims and one mining concession; today, Osisko has successfully acquired additional claims and the property now comprises 104 claims and one mining concession with a total surface area of 4442 hectares (10,976 acres).

ARTICLE TAGS:
GOLD / NORTH AMERICA / Community / Environment
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