Scott Jobin-Bevans, immediate past-president
of the Prospectors and Developers Association (PDAC), candidly assesses the
political, environmental and technical challenges facing foreign companies
exploring for gold and other minerals on the Caribbean island of Hispaniola.
In this exclusive interview with The Gold
Report, we learn that the majors are paving the way for
junior mining firms on the island, which holds much buried treasure, despite
environmental and political challenges.
The Gold Report: Scott,
you live and work on Hispaniola, which is divided into two countries, Haiti
and the Dominican Republic (DR). The island is bisected by a mountainous
spine of precious metal deposits, with part of the resource in Haiti and part
in the DR. Majescor Resources Inc. (MJX:TSX.V) and Newmont Mining Corp. (NEM:NYSE) are players in the
Haitian space. The biggest player in the DR is a joint venture between
majority partner Barrick Gold Corp. (ABX:TSX;
ABX:NYSE) and Goldcorp Inc. (G:TSX; GG:NYSE). Since 2009, Barrick has been developing the
Pueblo Viejo mine, estimated to hold gold reserves of 23.7 million ounces.
What is the history and significance of Pueblo Viejo?
Scott Jobin-Bevans: In 1975, a private
company called Rosario Dominicana opened up the
Pueblo Viejo mine. It was the largest open-pit gold mine in the Western
Hemisphere. A few years later, the Dominican government bought out Rosario
and ran the mine. The operation went through the oxide cap in the early
1990s. When it hit the sulfide ore, costs became prohibitive. Engineers
didn't have the technology to efficiently process this type of ore. The
government shut down the mine, leaving behind an environmental and political
Even though Pueblo Viejo went dark, there were small operations around the
island, including a number of alluvial miners panning for gold in rivers.
There was also ferronickel. Falconbridge, which is now Xstrata Plc (XTA:LSE), was involved in
nickel laterite production on the island. Alcoa Inc. (AA:NYSE)
was working bauxite in the southwest part of the island. There was not much
hard rock gold mining going on, but there was a fair amount of exploration.
In the early 2000s, things began to take off for the junior gold mining
TGR: What drove the renaissance? Technology?
SJ-B: Geophysics or geochemical soil and rock sampling technologies
are very useful. But the main thing is the amount of virgin ground with great
targets that nobody had systematically explored. I believe it's a highly
prospective and wide-open field for the juniors.
TGR: Why wasn't the space explored systematically before the
SJ-B: I think a lot had to do with the issues around government
stability on the island. In Haiti, there are problems with permitting. The
Haitian government is in disarray; it is difficult to move mining ventures
forward. The DR may be on island time, but it is more advanced than Haiti.
Permitting can be slow, but it gets done. Securing land tenure has been an
issue. Now that land tenure in the DR is clear, systematic exploration using
Canadian experience and know-how can be applied with confidence.
TGR: What is the political climate for mine operators in the DR?
SJ-B: Ask me after May 20th. That's the election date. Pueblo Viejo is
a political card, but overall the desire for mining and exploration in the DR
is positive. I've met with the director of mines and with local political
people whose communities are affected by exploration and mining. They are all
very positive. I think it all comes down to jobs and opportunities for the
communities from a socio-economic point of view. When calculating the
potential royalties from Pueblo Viejo, it's pretty tough for the government
to say that it's against mining.
TGR: How do you win over the locals?
SJ-B: First and foremost is good communication with the affected
communities. By holding community meetings to educate people on what we're
doing we can demystify the exploration and mining processes before negative
perceptions are created. Specific examples might include going into a
community with a drinking water problem and helping it upgrade the drinking
water system or by helping with hospital supplies or schools. Local
philanthropy builds good relationships.
TGR: There have been international press reports of protests about Barrick's proposed use of cyanide refining methods at
Pueblo Viejo. Can you talk about that?
SJ-B: Barrick is not hiding the fact it is
going to be using cyanide. Cyanide is a natural part of most refractory gold
recovery processes. It's very well managed. We've obviously had problems when
things went wrong but it's not to be treated lightly. It's cyanide. It's
poisonous. Cyanide breaks down very quickly under UV light like sunlight and
dissipates within hours. An interesting analogy can be drawn between the
presence of metallurgical cyanide as used in gold extraction and how cyanide
occurs naturally in the environment.
This story comes from a colleague, Hugo Dominguez. Have you heard of cassava
SJ-B: It's made from the yuca plant, which
has cyanide in it. When the Dominicans process the yuca
to make cassava, they remove the cyanide with a water treatment. Where does
that toxified water go? It goes into the drain.
Arguably, cassava bread processing pumps more cyanide-laced water into
village streets than any mining operation. But the cassava-cyanide water is
ultimately not poisonous, because sunlight breaks down the cyanide. Same with
TGR: You're the immediate past president of a leading mining industry
group, Prospectors and Developers Association of Canada, or PDAC. As
president, you consistently supported socially responsible mining practices.
Can you talk about some of the safety and environmental precautions that are
in place in mines that you have seen on Hispaniola?
SJ-B: Barrick had a problem in the
construction of its tailings ponds, which it has now corrected. It had to do
with high volumes of rain during a freak storm. Luckily, the breach of one of
its dams occurred when there was no production going on. But the engineers
build things to survive failure. It's like NASA; there's redundancy built
into the system.
Most hurricanes do not penetrate the inland region where Pueblo Viejo is located.
But up in the hills, there is another problem: lightning. In addition to
traditional safety systems on the mine, Barrick has
designed and implemented a lightning warning system that alerts workers if
there is danger of lightning in the area. I have never seen this before on a
mine site and it is a credit to the conscientious effort Barrick
is making toward providing a safe work-place.
TGR: How do utility and transportation infrastructures on the island
affect mining costs?
SJ-B: Electricity is expensive. In my home, for instance, we are
penalized for over usage. We start off at approximately $0.08/kilowatt and
very quickly jump up to $0.33/kilowatt. In addition, the electrical
distribution system really needs a lot of work. There are areas on the island
with only 18 hours a day of power so really these are rolling blackouts. But
the government is working very hard to take the whole island to 24/7
electricity. Although there is hydroelectrical
power generation, there is a lot of power generation based on diesel fuel.
That's expensive. I have noticed that the government is seriously looking at
solar power and wind projects.
Barrick's processing facility is power intensive. Barrick bought a power generating station in Santo
Domingo from the government after agreeing to feed a portion of the
electricity back into the grid.
As for transportation, some of the roads are great but some are atrocious.
You can get around most of the country because there is a large network of
toll highways and secondary roads. I have a two-wheel-drive Jeep that gets me
most places. But when I go into the field, I grab a four-wheel drive because
with flash flooding a road can quickly become an off-road situation.
TGR: What about telecommunications?
SJ-B: It seems that everyone's got a cell; landlines are rare. I've
had good cell service at about 95% of the places I've been on the island,
including jungle trekking.
TGR: Barrick is the world's largest gold
producer. How do other firms on the island stack up against Barrick?
SJ-B: In Haiti, the major gold producer is Newmont, which has optioned
projects in the border region from Eurasian Minerals Inc. (EMX:TSX.V). Majescor is not a major company, but it is working in the same neck of the
woods as Newmont, in the northeast region of Haiti. Jumping over the border
into the Dominican Republic, we find Unigold Inc. (UGD:TSX.V) immediately east of
Newmont. Further southeast are GoldQuest Mining Corp. (GQC:TSX.V) and Everton Resources (EVR:TSX.V;
ERV:FSE; EVRRF:OTCQX). I should also mention
that located near Everton is another producer, Perilya Ltd. (PEM:ASX), which operates the Cerro de Maimón
copper-gold mine; it is a very successful operation.
TGR: Did the 2010 earthquake affect mining operations on the island?
SJ-B: The earthquake was centered around
Port-au-Prince. As far as I know, further northeast, Majescor
and Newmont weren't affected. But there are active fault lines everywhere on
the island and mining and exploration companies are quite aware of that. New
buildings are designed with earthquakes in mind and in many cases even core
racks are cemented into the ground, so that they do not topple.
TGR: How does Majescor's SOMINE property in
Haiti compare geologically to the Pueblo Viejo operation in the Dominican
SJ-B: There is a mineralized belt that runs through the Cordillera
Central, the big mountains in the middle of the island. In Haiti, it looks as
though Majescor and Newmont are dealing with
copper-gold porphyry systems. But as we move southeast into the Dominican
Republic, we find epithermal systems that appear to be more related to
volcanogenic massive sulfide or VMS systems, although there is the chance for
porphyry discovery. Either way the region is highly prospective for gold and
TGR: Do these geological differences require different mining
SJ-B: If the deposits are narrow vein, it's usually not economic to do
an open pit. In Haiti, Majescor has broad
intercepts of very nice grade mineralization. It is working its way toward a
porphyry open-pit scenario, maybe underground long term. Mining sulfide ore
at Pueblo Viejo requires a very large open pit.
TGR: What work is your geological consulting firm, Caracle
Creek International Consulting, doing for Everton in the DR?
SJ-B: André Audet, who is the head of
Everton Resources, also started Majescor in Haiti
years ago, but he has been working on the DR side for 10 years. Everton has a
nice property package, including a concession named Ampliacion
Pueblo Viejo, which is immediately west and northwest of Pueblo Viejo. The Ampliacion team is headed by Hugo Dominguez, a past
president of the Geological Society of the Dominican Republic. He knows the
geology; he's well connected. We are working with him on 3-D modeling,
database management and targeting. We are also hoping to utilize Caracle Creek's proprietary geophysical system, EarthProbe. It's exciting because all of the fundamentals
have been done and we believe we are at the stage where discoveries are just
around the corner.
TGR: Let's talk about recovery of gold from tailings.
SJ-B: PanTerra Gold Ltd. (PGI:ASX) [previously EnviroGold] is recycling tailings and extracting gold and
silver as part of cleaning up the environment around Pueblo Viejo. The
company is applying the Xstrata-owned Albion process, which is a brand name
for a metallurgical and processing recovery system that basically re-grinds
the tailings and then uses cyanide to produce gold from tailings. PanTerra has about half a million ounces of gold and some
silver outlined, which will carry it for six or seven years of production.
TGR: Do you have any stock picks for investors interested in exploring
opportunities in Haiti and the Dominican Republic?
SJ-B: There are three junior explorers that I really like and all
three have the potential to define gold and/or copper resources in the near
term and make multiple new discoveries. Unigold,
which was languishing around $0.09 less than six months ago, is now upward of
$0.29 with intraday high of some $0.47 in mid-January on the back of some
impressive drill results that included 73 meters at 2.36 grams per ton gold
from the Lomita Piña project next door to its Candelones
deposit. Unigold then raised $11 million (M) on a
bought deal, a lot of which will be spent on its projects in the northwest.
Everton Resources also has numerous highly prospective projects in epithermal
gold-copper and also in volcanogenic massive sulfide ore deposits (Cu-Au-Zn).
GoldQuest could be on the verge of defining a
million-ounce gold resource in the next few months. It announced the start of
a drilling program in late February aimed at upgrading and updating its
resources at the La Escandalosa property. All three
of these companies are bargains but especially Everton and GoldQuest.
The Chinese-Australian company Perilya has a base metal mine called Cerro de Maimón near Pueblo Viejo. It bought this property
for next to nothing from GlobeStar Mining Corp.
(GMI:TSX) and paid it back within the first year of
production. It's not huge, but it's got a number of productive years left. On
the island, a capital expenditure of $50–75M can develop a small mine
with a 10- to 15-year production life. This presents a great opportunity for
a company like Everton Resources that has a number of projects similar to the
Cerro de Maimón mine.
TGR: If Barrick is successful at Pueblo
Viejo, will the island's mining infrastructure evolve to make it easier for
SJ-B: Infrastructure is already building up from the service/supply
side. Chemicals and other mining products, like drill rods, drill bits, muds,
vehicles and portable shelters, are being imported into the country. That is
good for exploration. The bottom line is that once Barrick
starts producing a million ounces a year, the DR will get the notice it
deserves and the whole island will be a hot bed for exploration and
TGR: Thanks for your time.
SJ-B: Thank you.
Dr. Scott Jobin-Bevans has more than 22 years in mineral exploration with
public company experience as a director, officer and technical advisor. He
has expertise in project evaluation and in leading multi-million dollar
projects from generative stage through advanced exploration and into
development. Jobin-Bevans is a member of the board
of directors for a number of public and private companies and is the past
president and director of the Prospectors and Developers Association of
Canada. He is a co-founder of Caracle Creek
International Consulting and was managing director from 2001 to 2008. In
2008, Jobin-Bevans stepped down as managing
director and became part of the founding management team of TSX-listed
Treasury Metals Inc., where he served as president, CEO and a director until
April 2011. He returned to Caracle Creek in May
2011 as director of corporate development and is currently leading the
Dominican Republic operations for Caracle Creek
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1) Peter Byrne of The Gold Report conducted this interview. He
personally and/or his family own shares of the following companies mentioned
in this interview: None.
2) The following companies mentioned in the interview are sponsors of The
Gold Report: Goldcorp Inc., Majescor Resources
Inc. and Unigold Inc. Streetwise Reports does not
accept stock in exchange for services.
3) Scott Jobin-Bevans: I personally and/or my
family own shares of the following companies mentioned in this interview:
Everton Resources, Unigold Inc. and GoldQuest Mining Corp. I personally and/or my family am paid by the following companies mentioned in this
interview: Caracle Creek International Consulting
and Everton Resources. I was not paid by Streetwise Reports for participating
in this story.