ARTICLE - HISPANIOLA GOLD

HISPANIOLA GOLD: SCOTT JOBIN-BEVANS
(MineWeb) - By Peter Byrne

The challenges facing foreign companies exploring for gold and other minerals on the Caribbean island of Hispaniola - Interview with The Gold Report

TORONTO -

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. The Pueblo Viejo mine in the DR is 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 mess.

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. 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 firms.

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 millennium?

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 the use of cyanide refining methods at Pueblo Viejo. Can you talk about that?

SJ-B: 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 bread?

TGR: Sure.

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 mine wastes.

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: One company 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, this company 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 they are 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.

Most processing facilities are power intensive. One company 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: Did the 2010 earthquake affect mining operations on the island?

SJ-B: The earthquake was centered around Port-au-Prince. 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 the SOMINE property in Haiti compare geologically to the Pueblo Viejo operation in the Dominican Republic?

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 companies 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 copper mineralization.

TGR: Do these geological differences require different mining techniques?

SJ-B: If the deposits are narrow vein, it's usually not economic to do an open pit. Mining sulfide ore at Pueblo Viejo requires a very large open pit.

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 Dominican Republic.