Douglas Morrison, President and Chief Executive Officer, CEMI – the Centre for Excellence in Mining Innovation - Speaker at the marcus evans Global Mining Summit 2016 held in Las Vegas, NV

1. 08/02/2016
1
through Commercialization
INDUSTRY CRISIS: INNOVATION & PERFORMANCE IMPROVEMENTS
Presented to:
Marcus Evans
February 1-2, 2016
CENTRE FOR EXCELLENCE IN MINING INNOVATION
Preparing for the other side: zero interest rate environment
o Significant Change in funding exploration
o Significant Change in Operational Performance
- productivity, mine environment & decision-process
o Significant Change in Environmental Management
- tailings dam failures, water mgt., final closure
o Significant Change in Community Involvement
Centre for Excellence in Mining Innovation
© CEMI 2016
Industry Crisis: Innovation & Performance Improvements

2. 08/02/2016
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Vision
To be the leading source of innovation for the global mining industry.
Mission
To advance the innovation that the mining industry will use to:
 find more ore,
 mine ore more effectively and safely,
 generate more value from mines,
 have a more benign impact on the environment and,
 a more beneficial impact on communities.
Established 2007, Not for Profit Corporation, Sudbury, Ontario
Centre for Excellence in Mining Innovation
© CEMI 2016
National & Global Partnerships
Centre for Excellence in Mining Innovation
129
Projects
28
Research
Institutions
Mining
Companies
Governments
SMEs
© CEMI 2016

3. 08/02/2016
3
5 Strategic Themes: Industry-focused Programs
VALUEMINE: Integrated Mine Engineering
Increase Mine Productivity, NPV, ROCE & ROI
DEEPMINE: Mining Deep
Reduce Risk: High Rock Stress, High Temperature
FINDMINE: Exploration
Increase Discovery Rate, Reduce Cost
SUSTAINMINE: Environment & Sustainability
Improve Environmental Performance & Social Impact
BIZMINE: Mining Business
Deliver Business Cases & Commercialization Services
Centre for Excellence in Mining Innovation
© CEMI 2016
© CEMI 2015
Innovation & Prosperity Office
Commercial Agreements - Licenses, Royalties
(CEMI & UDMN projects)
Financial Impact Studies
MICA – self-sustaining investment model
Business case for Innovation

4. 08/02/2016
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Centre for Excellence in Mining Innovation
© CEMI 2015
Top-down Case
NPV vs Tonnes per Day
-500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
-$100,000
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
0 1 2 3 4 5 6 7
TonnesPerDay(MovingAverage)
NetPresentValue$(x1000)
NPVvs. Tonnes Per Day
NPV - Fan Drill, Bot-Up, 6 Trucks NPV - Parallel Drill, Bot-Up, 5 Trucks
NPV - Parallel Drill, Bot-Up, 10 Capsules NPV - Parallel Drill, Top-Down, 10 Capsules
NPV - Parallel Drill, Top-Down, 5 Trucks Average TPD - Fan Drill, Bot-Up, 6 Trucks
Average TPD - Parallel Drill, Bot-Up, 5 Trucks Average TPD - Parallel Drill, Bot-Up, 10 Capsules
Average TPD - Parallel Drill, Top-Down, 10 Capsules Average TPD - Parallel Drill, Top-Down, 5 Trucks
Conventional
Approach
Innovative Approach
Business Case: Innovation
Improve Performance:
Investment-Return Profile
– up and to the left
Lower capital
Higher NPV
Lower Risk
Innovation ≠ Research; CEMI focuses on Innovation
The Mining Innovation Niche
Centre for Excellence in Mining Innovation
VALUEMINE: Integrated Mine Engineering
Increase Mine Productivity, NPV, ROCE & ROI
DEEPMINE: Mining Deep
Reduce Risk: High Rock Stress, High Temperature
FINDMINE: Exploration
Increase Discovery Rate, Reduce Cost
SUSTAINMINE: Environment & Sustainability
Improve Environmental Performance & Social Impact
© CEMI 2016

5. 08/02/2016
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© CEMI 2015
UDMN
BL-NCE
IPO
CEMI
Innovation ≠ Research; CEMI focuses on Innovation
Centre for Excellence in Mining Innovation
The Mining Innovation Niche
CEMI BoD
MIRARCO
Research New Knowledge
Innovation New Business
UDMN BoD
© CEMI 2015
UDMN
BL-NCE
IPO
CEMI
Research New Knowledge
Innovation New Business
= New Knowledge
+ Old Knowledge
+ Practical Ingenuity
+ Business Acumen
Innovation ≠ Research; CEMI focuses on Innovation
Centre for Excellence in Mining Innovation
The Mining Innovation Niche
SME
Innovators

6. 08/02/2016
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Innovation & Prosperity Office: 2014-2015
Successful Commercial Agreements
CEMI Canopy – Nordic Mine Steel
Improve Advance Rates
Sample digestion: 2 hours/sample
10 minutes/sample
10x faster + automate (x10) = 100 x
Leading Mining Innovation in Canada
Centre for Excellence in Mining Innovation
Addressing Industry Challenges:
• MITIGATE TECHNICAL RISK
• DECREASE CAPITAL DEMAND
• IMPROVE RATE OF RETURN
• REDUCE ENVIRONMENTAL
IMPACT

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Addressing Industry Challenges:
• MITIGATE TECHNICAL RISK
• DECREASE CAPITAL DEMAND
• IMPROVE RATE OF RETURN
• REDUCE ENVIRONMENTAL
IMPACT
Leading Mining Innovation in Canada
Centre for Excellence in Mining Innovation
CORE
INNOVATION
Continuous Improvement
ADJACENT
INNOVATION
Adopt Existing Technology
DISRUPTIVE
INNOVATION
Radically New Approach
BUSINESS PERFORMANCE OBJECTIVE:
200-300% PRODUCTIVITY GAINS
Disruptive
Change
Sustaining
Change
Disruptive
Change
• IMPLEMENTATION & COMMERCIALIZATION (I&C)
• SHORT TERM & LONG TERM PROJECTS
• PROGRAM MANAGEMENT
CEMI Strategic Approach
CEMI’s Approach to Innovation: R&D + I & C

8. 08/02/2016
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CORE
INNOVATION
Continuous Improvement
ADJACENT
INNOVATION
Adopt Existing Technology
DISRUPTIVE
INNOVATION
Radically New Approach
Research & Development
Technical Invention and Design
Conventional Approach to Mining Research
Implementation
Simulation, Pilot-scale Demonstration & Modification
CEMI’s Approach to Mining Innovation
Commercialisation = Operational Integration
Cost: manufacturing & maintenance; Operations: acceptance / incentives;
Legal: patents & licensing; Marketing & Promotion: sales & support
CEMI-IPO-UDMN Focus on Commercialization
CEMI’s Approach to Innovation: R&D + I & C
StretchCEMI Strategic Approach
© CEMI 2015
Innovation ≠ Research; CEMI focuses on Innovation
The Mining Innovation Niche
Centre for Excellence in Mining Innovation
VALUEMINE: Integrated Mine Engineering
Increase Mine Productivity, NPV, ROCE & ROI
DEEPMINE: Mining Deep
Reduce Risk: High Rock Stress, High Temperature
FINDMINE: Exploration
Increase Discovery Rate, Reduce Cost
SUSTAINMINE: Environment & Sustainability
Improve Environmental Performance & Social Impact
Mine Productivity
below 2.5km
$46 million Program
© CEMI 2016

9. 08/02/2016
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Mine Productivity
in extreme conditions
Conditions in Sudbury mines
2.5km below surface
HELP INDUSTRY ADOPT
COMMERCIALLY VIABLE R&D RESULTS
&
ACCELERATE DEPLOYMENT of PROVEN
INNOVATIVE TECHNIQUES & TECHNOLOGIES.
Ultra-Deep Mining Network
28projects
45network
members
$46million in
private & public
funds
Mine Productivity
in extreme conditions
Conditions in Sudbury mines
2.5km below surface
Ultra-Deep Mining Network
Federal
Government
34%
Industry
Operations 27%
Research
Organizations
14%
Service &
Supply SMEs
25%
Total Investment 2015 = $ 7,500,000
2016 = $13,250,000

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UDMN Members
Ultra-Deep Mining Network
Purpose: Use hydraulic fracturing in underground
in high stress zones to dissipate stress

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Ultra-Deep Mining Network
Purpose:
Demonstrate possible solution
for localized chilling in deep mines
Hydraulic Air Compressor
Purpose:
Demonstrate a cheap source
of fresh compressed air.
Alternative Power systems:
Electric, Battery, other…
Ultra-Deep Mining Network
Increase Advance Rates
- multiple or single headings
0
5
10
15
20
25
30
35
40
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
RateofAdvance(m/day)
Industry Average 2001
Records for advance per day
trend of 1% improvement per year
1968 Target rate
7.2m/day, 2001
3.8m/day, 2011
1% improvement/yr
pneu. mechanised elec-hydr. automation
Current Development Process. Sequential Activities (4 re-entries) 16 hr cycle.
Future Development Process: Parallel Activities (1 re-entry) 10 hr cycle x 2
Activity 1. Mucking process
Activity 2. Face-advance process – face drilling, charging & ground support

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Ultra-Deep Mining Network
Development Cycle Time: discrete event simulation.
(5m x 5m – 3.5m advance). End-of-shift blasting.
Sequential Activities = 16 hrs (8 hrs lost) < 3.0m/day
3 Canopies = 12 hrs (12 hrs lost) ≈ 3.0m/day
+ Cont. Mucking = 10.5 hrs (x2) = 7.0m/day
Increase Advance Rates
- multiple or single headings
Ultra-Deep Mining Network
Traditional PPE: hard-hat, boots & coveralls.
Augmented by hearing & eye protection,
+ optional dust protection + occasional comm.
Ultra-deep Conditions: >2.5km, > 50 deg. C
1) Conventional vent approach
- prohibitively expensive
2) Heat stress – work-rest regimes – 20/60 mins
Integrated Suit/Helmet
physical & heat protection + data transfer
Re-direct impact to shoulders (from neck)
Protection: impact/hearing/sight/dust
LED lamps - integrated batteries
Continuous GPS
Full audio/visual telecomms, hands-free.
Cooling (various options) - up to 5°C
Heat resistant clothing.
And a new image for mining in 21st Century.

13. 08/02/2016
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Ultra-Deep Mining Network
LED Cap Lamp and
Integrated Camera
RFID Tracker or
GPS
Wearable
Computers
Heat Stress: work-rest regimes.
Personnel condition monitoring
& intervention communication
5 Strategic Themes: Industry-focused Programs
VALUEMINE: Integrated Mine Engineering
Increase Mine Productivity, NPV, ROCE & ROI
DEEPMINE: Mining Deep
Reduce Risk: High Rock Stress, High Temperature
FINDMINE: Exploration
Increase Discovery Rate, Reduce Cost
SUSTAINMINE: Environment & Sustainability
Improve Environmental Performance & Social Impact
BIZMINE: Mining Business
Deliver Business Cases & Commercialization Services
Centre for Excellence in Mining Innovation
© CEMI 2016
Mine Productivity
below 2.5km
$46 million Program

14. 08/02/2016
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Innovation in Waste Management
• Water
• Physical availability or cost to access supply
• Competition from other demand sources
• Changing weather patterns
• Subaqueous Deposition of Tailings
• Dam to retain water and tailings
• Cover to prevent tailings oxidation & dust
• Water Reduction & Recovery
• Development of Paste Tailings – for underground backfill
• Application of Paste Tailings for Surface Deposition
• Development of Densified Tailings Deposition – critical stability issues
• Tailings Paste Backfill
• Tailings Paste Surface Deposition
• Densified Tailings – research into critical stability
issues
Innovation in Waste Management

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Innovation in Waste Management
• New Approach to Tailings Management
• Alternatives to Subaqueous Deposition
• Develop effective cover mechanism to prevent oxidation – Acid Drainage
• Physical Covers – difficult long-term maintenance
• Plant Cover – creates a reducing zone & agriculture
• Agricultural Cover Alternatives
• Crops for ethanol fuels
• Crops for food – with barriers to chemical take-up
• Crops for phyto-remediation – metal/mineral recovery
• Secondary Processing of Tailings
• Reduce oxidation potential by encapsulation of acid producing minerals
• Remove acid producing minerals - additional value recovery
• In-pit deposition of tailings and waste – Footprint Reduction
VALUEMINE: Integrated Mine Engineering
Improve Mine Production Rate, ROCE & ROI
DEEPMINE: Mining Deep
Reduce Risk: High Rock Stress, High Temperature
Centre for Excellence in Mining Innovation
FINDMINE: Exploration
Increase Discovery: Geology, Geophysics & Geochemistry
SUSTAINMINE: Environment & Sustainability
Reduce environmental impact, Improve social impact
5 Strategic Themes: Industry-focused Programs
BIZMINE: Mining Business
Business Cases, Commercialization Support Services

16. 08/02/2016
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Preparing for the other side: zero interest rate environment
o Significant Change in funding exploration
o Significant Change in Operational Performance
- productivity, mine environment & decision-process
o Significant Change in Environmental Management
- tailings dam failures, water mgt., final closure
o Significant Change in Community Involvement
Centre for Excellence in Mining Innovation
© CEMI 2016
Industry Crisis: Innovation & Performance Improvements
Thank You
CEMI
935 Ramsey Lake Rd
Sudbury, Ontario
P3E 2C6
www.cemi.ca
Contact
Shannon Katary
Director of Marketing and Community Relations
skatary@cemi.ca
Mobile: 705-507-4842