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INTRODUCTION The Prospectors & Developers Association of Canada (PDAC) is committed to supporting our members to responsibly find and produce the minerals and metals that are essential for modern life. PDAC has five main priority areas:

Access to capital

Access to land

Aboriginal Affairs

Responsible exploration

Global competitiveness To better understand how we can support our members to explore and develop mineral resources responsibly, PDAC undertook a series of interviews with junior and mid-tier companies operating around the world (see Figures 1, 2 and 3). The purpose of these interviews was to understand the issues being raised by stakeholders about exploration and mining around each company’s project sites. Going forward, PDAC hopes to use this information to better support its members to improve their performance, develop positive relationships with communities and contribute to sustainable development.

INTERVIEWS Interviews began in May 2015 and concluded in August 2015. In total, 34 companies were interviewed. The 34 companies represented a wide variety of market capitalizations (Figure 1), commodities (Figure 2) and countries of operation (Figure 3).

Supporting Responsible Exploration Globally: Feedback from Companies

Figure 1: Distribution of market cap. of the 34 companies interviewed.

Figure 2: The classification by commodity type being explored for/produced (of the 34 companies interviewed).

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` INTERVIEW FINDINGS Community Concerns – Top Issues Top concerns about their projects, as noted by companies during the interviews: 1. Environment – water quality/quantity 2. Environment – wildlife/biodiversity 3. Socio-economic impacts 4. Loss of agriculture 1. Environment – water (10 of 34) Concerns were raised about water quality in jurisdictions with abundant water and high social expectations for good environmental practice (e.g. Sweden, Finland). Concerns about the quantity of water used were raised to companies operating in dryer climates (e.g. Mexico).

2. Environment – wildlife/biodiversity (6 of 34) In addition to water, other environmental concerns were mentioned by communities, including impacts on land and animals. In some instances, companies felt that these concerns were derived from the legacy of mining in the region, and its impact on public perceptions of the industry. Communities also commonly associated exploration work with mining, believing that drilling would use large amounts of water, or have a large land disturbance footprint for site clearing and pad creation. 3. Socio-economic impacts (5 of 34) Companies noted that communities had raised concerns about the impact of higher incomes and their potential to cause an influx of drugs and alcohol. However, other communities were excited about opportunities for higher incomes (see “economic opportunities” below). Communities in small, tight-knit regions were anxious about the arrival of “foreign” workers. These communities would often associate anyone who did not live in their immediate community as a foreigner. 4. Loss of agriculture (5 of 34)

When local communities were socially and economically based on agriculture, the land owners were concerned a mine would be on their property and decrease the amount of land they were able to cultivate.

Community Concerns - Company Responses Most companies undertook some combination of the following responses:

1. Community engagement

Most companies discussed their engagement practices, which included holding community meetings to discuss

Figure 3: The 34 companies interviewed operated projects in 23 countries

(orange-shaded jurisdictions).

Figure 4: Multiple companies noted that communities were

concerned about levels of water used while drilling. They

often had to explain that mineral exploration and mining

are different, and that drilling uses significantly less water

than mining.

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the project and its potential impacts, as well as company mitigation strategies.

Companies ensured regular, consistent contact with the community. This helped reduce anxiety levels within the community

Companies that reported healthy relationships with their local communities also noted their efforts to involve the community in decision making. One company received input from the community on the design of their open pit and the surrounding waterways. This effectively influenced and changed the design of the open pit in order to avoid sensitive water regions.

2. Partnering with universities

Some companies partnered with local academic institutions to produce environmental studies. This provided independent third-party assurance and credibility for the reports.

These partnerships allowed for the empowerment of the university and its students, and gave the company a trusted source to rely on if communities had doubts about the environmental integrity of projects.

3. Partnering with NGOs

Some companies partnered with NGOs prior to entering, or when they were already working within the community.

Some NGOs had a strong knowledge base of who needed the most help within the community, as well as where and how assistance could be administered.

4. Managing expectations

Managing expectations was a key strategy deployed by companies at the exploration stage. It was important to

avoid promising too many jobs, or too much money for the community.

Many companies also invested in basic educational activities to help communities understand the difference between exploration and mining (and the different impacts of each in terms of water and land).

Community Hopes – Top Issues

Economic opportunity (20 of 34)

Notwithstanding concerns raised about potential negative impacts, most companies reported that communities were interested in receiving new jobs and gaining an economic stimulus. These communities were generally supportive of projects moving forward. In fact, three companies said that communities raised concerns about the slow pace of project progression (due to the downturn). Community Hopes – Company Responses In order to maximize community employment, companies took the following actions:

Using human-powered drills instead of mechanical drills (employing more people).

Establishing the head office in the country of operation, to provide locals with senior employment opportunities.

Assisting in other forms of employment for the community (e.g. host workshops to teach people to properly plant a local crop; bring in crop specialists).

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Company Challenges Throughout the interview process we also heard about the challenges companies were facing with their projects abroad, aside from financing. The top challenges were: 1. Government relations 2. Artisanal miners 3. Managing community expectations 4. Media, community rumours and third party

influences 5. Corruption and bribery 6. An uneven playing field 1. Government relations (17 of 34) These challenges generally referred to slow permit approvals or misaligned permit renewals. Many companies reported challenges with mid-level bureaucrats, or regional authorities. Most companies felt they were not able to influence government processes. 2. Managing community expectations (8 of 34) Communities often believe that Canadian companies have an abundance of money and resources with which they could provide payments to the community people. Companies had to remind the local people to maintain their original livelihoods, as a mine or exploration project would not be able to employ everyone. 3. Artisanal miners (9 of 34)

Of the companies that discussed the practice of artisanal mining on their properties, about half found that their exploration activity could coexist with the artisanal miners. The other half were in the midst of discussions about relocation, which is extremely challenging. 4. Media, community rumours and third party

influences (6 of 34) The media, community rumours and third party influencers (churches, NGO’s and consultants)

became areas of concern for companies. Media and third parties have the power to portray an unbiased opinion to the public which can be beneficial for the mineral exploration and mining industry, however companies often felt they were not listened to by third parties. These companies often felt biased actions or opinions were portrayed to the public. 5. Corruption/bribery (6 of 34) Corruption was encountered both in terms of government officials as well as employees. One company had a mines minister resign due to corruption. Another company had to terminate employees because they discovered the workers were stealing ore from the property and selling it elsewhere. 6. An uneven playing field (3 of 34) A small number of those interviewed raised concerns about the influence of non-Canadian companies, based out of other jurisdictions, that are not held to the same standards of corporate practice. Canadian companies felt at a disadvantage when these international companies were more liberal with payments, both to government officials and neighbouring communities. As a result, Canadian companies, were questioned why they didn’t provide the same level of benefit to the communities where they operated. Often they were asked for more funding, which they were not always able to provide.

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COMPANY LEARNING CULTURE One of the primary goals of this project is to better understand how companies respond to these challenges, and how PDAC can provide tools and resources that fit the industry’s learning culture. Accordingly, we asked companies how they develop their approaches to responsible exploration. The majority of companies relied upon the expertise of staff and their industry peers. Internal company discussions were often used as the foundation for action, combined with attending local conferences to assist in discussions with companies that worked in a similar geographical area. Learning with, and from, the community was also common practice. Some companies used external course work as a way of educating employees, including the PDAC Convention short courses, and other courses conducted geographically close to their exploration site. HOW THE PDAC PLANS TO HELP To support industry leadership in the area of sustainability performance, PDAC currently offers toolkits and resources, such as e3 Plus, our Framework for Responsible Exploration.

e3 Plus outlines: “What Am I Responsible For” as a mineral exploration company; “Recommended Practices” for when a company encounters bribery or corruption; and “Water Use and Conservation” techniques, to name a few topics. PDAC recently launched a new chapter to e3 Plus: “First Engagement – A Field Guide for Explorers”, developed in partnership with world renowned community engagement expert Luc Zandvliet (see Figure 5).

Going forward, companies most often recommended that PDAC produce a series of webinars to provide guidance on specific issues, such as minimizing impacts on water quality and water use. In addition, the vast majority of companies (30 of 34) indicated their interest in participating in some sort of peer-learning network to facilitate information sharing between companies. For more information on this project please contact Anne Belanger, Coordinator, Sustainability and Geoscience Programs (abelanger@pdac.ca). For more information on other activities being undertaken by the PDAC to support responsible exploration and mining, please contact Nadim Kara, Senior Program Director (nkara@pdac.ca).

Figure 5: The PDAC’s newest e3 Plus chapter, First Engagement, was

launched at the IFC Sustainability Exchange in 2015 and aims to

support field workers to develop positive relationships with nearby

communities.

the best practices for community engagement.