Monitoring and Evaluation Report 2015 for the Impact...
Transcript of Monitoring and Evaluation Report 2015 for the Impact...
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Monitoring and Evaluation Report 2015
for the Impact Benefit Agreement
in relation to the
AAPPALUTTOQ RUBY- PINK SAPPHIRE PROJECT
GREENLAND
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Prepared by:
True north Gems Greenland Imaneq 33, 5. sal
Postboks 990 3900 Nuuk, Grønland
Table 1
Reporting and Evaluation activity Party/Parties DATE
Final Draft True North Gems Greenland 2016-01-18
Approval Government of Greenland
Kommuneqarfik Sermersooq
2016-01-18
2016-02-15
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Content
1. INTRODUCTION 4
2. TRUE NORTH GEMS GREENLAND (THE LICENSEE) 5
3. ACTIVITIES 5 3.1 Activities in General in 2014/2015 5 3.2 Mine site: Construction activities in 2014/2015 6 3.3 Shipping between Nuuk and Mine site 7 3.4 Activities for the coming years 7
Mine Site and shipping 7 Nuuk facilities 7
4 COOPERATION WITH AUTHORITIES AND IBA-PARTIES 8 4.1 The legal framework for the Rubi Mine at Aappaluttoq 8 4.2 True North Gems exploration and exploitation licenses 8 4.3 The Impact Benefit Agreement 9 4.4 Other approvals 10
5 GREENLAND WORKERS 11 5.1 Origin and gender of employees 11 5.2 Type of Job Categories 11
Foremen 13
6 EDUCATION 13 6.1 Educational activities in 2014/2015 13
Apprenticeships in 2014/2015 13 6.2 Allocated funds 14 6.3 Educational activities in the coming year 14
7 GREENLAND ENTERPRISES AND LOCAL BUSINESSES 15 7.1 Greenland enterprises 15 7.2 Local business opportunities for inhabitants in Qeqertarsuatsiaat 17
Supplies with fish and meet 17 Supplies from the local grocery store in Qeqertarsuatsiaat 17
7.3 Non-Greenlandic Companies 17
8 DEVELOPING GREENLANDIC ENTERPRISES 17 8.1 Contributions to develop other Greenlandic companies in the mining industry 17 8.2 Contributions to development of a gemstone industry in Greenland 18
Sale to local artisans etc. 18 Small scale miners 18 Polishing courses 18 Other potential contributions to the development of a gemstone industry in Greenland 19
9 TAX AND REVENUES FROM ROYALTIES 19 9.1 Public revenues in 2014/2015 19 9.2 Future fiscal benefits for Greenland 20
10 COMMUNICATION, CULTURAL ISSUES, FUNDS ETC. 20 10.1 Communication 20 10.2 Cultural and social fund 21
11 REVISION OF THE CONTENTS IN THE APPENDICES TO THE IBA 22
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1. Introduction The Aappaluttoq Ruby Project is located in southwest of Greenland (inhabitants: 55.984), approximately
150 kilometres south of the capital Nuuk (inhabitants: 16.992) and 20 km southeast of the settlement of
Qeqertarsuatsiaat (inhabitants: 198). The expected life of mine is 9 years and it is expected that the
annual mining rate will be an average of approx. 350,000 tonnes of which approx. 21,000 tonnes will be
ore. The production runs from the beginning of April to the end of November each year.
Figure 1: The Appaluttoq project - 63° o' 39" latitude and 50° 19* 11" longitude
On June 16th 2014 The Minister for Industry and Mineral Resources, The Mayor of Kommuneqarfik
Sermersooq and the Managing Director of True North Gems Greenland signed the Impact Benefit
Agreement (IBA)1 in Qeqertarsuatsiaat. The IBA is an agreement that sets conditions and targets for the
Aappaluttoq Ruby- & Pink Sapphire project to ensure that Greenland, the region and not least the local
community benefits from the project, mainly but not only in form of jobs, business opportunities
together with training and educational offers in relation to the mining industry. The IBA and the efforts
that the Company has put into the project, specifically to achieve the conditions and targets in the IBA,
will be evaluated in an annual report. The annually conducted evaluation will constitute the basis for
discussions concerning whether the appendices to the IBA will need adjustments for the following years
and whether the Company needs to pay special attention to certain subjects. It is the provisions in the
appendices to the IBA that stipulate the lion share of the different targets for the projects use of
Greenland Workers; training and educational activities; contributions to development of Greenland
business activities and companies; and other socio economic and sustainability matters.
This IBA Monitoring Report is the first of its kind for this project and it covers the period from June 2014
to June 2015 and has been drafted in close cooperation with the Ministry of Industry, Labour and Trade.
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http://naalakkersuisut.gl/~/media/Nanoq/Files/Publications/Raastof/ENG/Signed%20IBA%20TNG%20ENG%2016%2006.pdf
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Each section in the report gives an insight on how the project has performed in relation to targets
stipulated in the IBA:
Section 2 gives a short presentation of True North Gems Greenland; Section 3 gives a description of the
main project activities conducted since the initiation of construction in September 2014 (appendix 1 to
the IBA). Section 4 gives a short update on the cooperation with the authorities and the parties to the
IBA. Section 5 gives an account on the project’s use of Greenland workers. Section 6 gives an account of
the conducted training and educational activities. Section 7 and 8 gives an overview of the projects
contribution to Greenland businesses activities. Due to public interest in the Project’s tax contribution
this has been included in section 9. Section 10 describes other socio-economic or sustainability activities
conducted by True North Gems Greenland in the last year or so. Finally, Section 11 describes changes
made in the IBA based on lessons learned from the past Year.
2. True North Gems Greenland (the licensee) True North Gems Inc. (TNG) is a public junior exploration company dedicated to the exploration and
Development of colored gemstone deposits. TNG is committed to the realization of shareholder value
through development of the first ethically sourced commercial ruby mining operation, in partnership
with the people of Greenland. The Company’s shares are traded on TSX Venture Exchange (in Toronto,
Canada) under the symbol TGX. Prior to being granted an exploitation permit in March 2014 the
Greenlandic subsidiary, True North Gems Greenland A/S (TNGG) was set up. In 2012 TNG entered into a
Joint Venture with the highly Arctic experienced Norwegian mining company Leonard Nilsen & Sønner
(LNS). The Joint Venture made LNS a partner in the “Aappaluttoq-project” and co-owner of TNGG and at
the same time making the Greenlandic based subsidiary to LNS, which is LNS-Greenland, the operator.
By the end of June 2015, LNS had 7% ownership in TNGG. Once the construction phase has a completion
of 50% LNS will get additional 5%, at 75% a further 5% (total of 10%) and on a completion of 100% LNS
will get another 10% making a total of 27%.
Greenland Venture has also invested in TNGG and by doing so acquired an ownership of 0.66%.
True North Gems Greenland is based in Nuuk. At the moment TNGG runs all planning and administration
from the office in Nuuk. At the moment, the project is in the construction phase. Later this year it is
planned to go into production, and by that time the Company will also have established a Rough
Handling and Cleaning facility and the Administration facility will be prepared to include a Sorting facility.
3. Activities
3.1 Activities in General in 2014/2015 A detailed description of the necessary facilities for constructing the mine and getting it into production
can be found in the Social Impact Assessment, which are available on the Greenland Government and
the company’s web site2 and a short description can also be found in appendix 1 to the IBA.
As it appears in this section, then the activities since September 2014 have been construction activities
at the mine site and shipping activities between Nuuk and the mine site. When the IBA was signed in
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http://naalakkersuisut.gl/~/media/Nanoq/Files/Hearings/2013/TNG%20QEQ/Documents/VSB%20%20endelig%20version%20v52Eng.pdf http://www.truenorthgems.com/ (Choose under ”Greenland Ruby”)
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June 2014, all focus from True North Gems Greenland and LNS-Greenland (JV Partner and operator)
were on the mine site and getting the construction started.
Picture 1: The Camp and Helipad June 2015
3.2 Mine site: Construction activities in 2014/2015 The Operator had done excellent planning and a few days after initiating the construction phase in
September 2014 the operator broke ground at the site. Though late in the season and facing an early –
and very cold – winter, the operator has been able to continue the construction with only minor delays.
The construction phase has been a very busy period and both the Company and the operator have
utilized several suppliers and sub-contractors. In Section 7 all Greenlandic suppliers, sub-contractors and
vendors are listed in Table 13. As it appears in Table 2 most of the facilities are currently (July 2015)
under construction. The only part of the facilities where construction is not initiated is the open pit mine.
Table 2: Status for construction at mine site - July 2015
Installation/facility Status
Pit Construction has not yet begun
Camp
Accommodation for 43 persons Finishing interior Details
Health Clinic Finishing interior Details
Kitchen Finishing interior details.
Applying for approval of Quality Management Program
Canteen Finishing interior
Activity Room Finishing interior
Electric Plant Under construction
Water supply Under construction
Waste Water plant Under construction
Helipad Under construction
Working on having flight site Manual approved
Harbour – Outer Port Under Construction
Roads Work trails established
Applying for approval to complete road constructions
Lowering water level Has begun
Process Plant Construction has begun
Workshop Construction has begun
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3.3 Shipping between Nuuk and Mine site From the time construction began in September 2014, the operator has had to move a considerable
volume of building equipment, machines, tools, fuel and spare parts required for the construction, along
with workforce and supplies for these between Nuuk and the mine site. The operator has prioritized to
ship by sea as much as possible. However, the long and extremely hard winter 2014/2015 meant that
from January to mid-May 2015 it was impossible to access the site by sea, thus the operator had to use
helicopters to bring in/out workers and to sling in supplies and building equipment to the extent
possible. The following local transport operators have been used for logistical tasks in relation to the
project:
Table 3: Local transport operators
Local transport operators
LNS-Greenland
Greenland Boat Charter Royal Arctic Line
Air Greenland
The very comprised construction phase has resulted in a lot of traffic from both helicopters and vessels
arriving/leaving the site. The Company is pleased that this has been possible without causing any
problems for the local hunters and fishers.
3.4 Activities for the coming years Mine Site and shipping
The Company is only planning for a minimal exploration for this season (2015) so the main traffic will be
between Nuuk, Qeqertarsuatsiaat and the Site in relation to finishing the construction phase and going
into production.
The camp is close to being operational and the transition into the production phase is planned to take
place in 3rd Quarter 2015. We do not expect to close down this winter. Later this year and in connection
to commissioning the process facility at the mine site, it is the plan that a test production will be started.
The exact time for this is still not decided as key pieces of the equipment for the Process Line are still
being purchased.
Nuuk facilities
Of the three project facilities in Nuuk, only the TNGG office has been established. At the moment (July
2015) this is placed in the same building as Bank of Greenland. The company is planning to have its
sorting facility in the same building, however the Company is considering plans for a future facility in
Nuuk that will provide a long term solution (over several Years) for the needs of the Company.
The project also operates with a Rough-Handling and HF-Cleaning Facility. Initially this was planned to
take place at the laboratory at NunaMinerals, but given the uncertainty of the future of the company
thus also the building, the Company has found it necessary to plan for an alternative solution. This is
already being looked into coordinated with both the Municipality and with the relevant mineral
authorities.
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4 Cooperation with authorities and IBA-parties
4.1 The legal framework for the Rubi Mine at Aappaluttoq Starting a mine is a mayor decision and requires years of planning, preparation and work. This section
describes in headlines what is required, who is responsible for preparing material and who is approving
the material.
According to section 2 in the Mineral Resource Act then “the Greenland Self-Government has the right to
control and use mineral resources in the subsoil in Greenland”. This means that since the 1st of January
2010 the Greenland Self-Government has had control of the mineral resources and the subsoil.
Consequently, even though Greenland is still a part of the Danish Realm, then the Danish authorities do
not have not have any influence upon the decision concerning granting an exploration or an exploitation
licence in Greenland.3 In other words and in contrast to other regions in the Arctic then the people of
Greenland or its representative political institutions, Naalakkersuisut (the government) and Inatsisartut
(the parliament), draft and adopt the policy and terms for the mining industry in Greenland. For further
information about Greenland’s mineral policy, please consult “The Oil and Mineral Strategy for 2014 to
2018” issued by the Greenland Government: http://govmin.gl/component/content/article/7-about-
bmp/about-bmp/136-oil-and-mineral-strategy.
Mid-2015 there is three authorities in Greenland, who are responsible for different aspects of Mineral
Resource activities
Table 4: Mineral Resource Authorities
Mineral Resource Authorities (MRA)
Ministry of Mineral Resources (MMR) The MMR and the underlying Mineral Licence and Safety Authority (MLSA) are responsible for the licence administration,
technical and geological matters.
Ministry of Industry, Labour and Trade (MILT) MILT is the appropriate authority for issues concerning Industry and Labour policy including social impact assessments (SIA) and Impact Benefit Agreements (IBA) for mineral resources companies and similar related socio economic matters.
Environmental Agency for Mineral Resource Activities
(EAMRA)
EAMRA is the appropriate authority for all mineral resources environmental issues including Environmental Impact Assessments (EIA).
Kommuneqarfik Sermersooq (the municipality), including the local Council for the Settlement of
Qeqertarsuatsiaat, is not a mineral resource authority. However as mentioned below in section 4.3, then
the municipality is a party to the IBA.
4.2 True North Gems exploration and exploitation licenses In 2004, True North Gems Inc. received Exploration Licenses 2008/01 and 2008/46 by the Bureau of
Mineral and Petroleum (now the MLSA), which allowed the Company to conduct exploration for
minerals south for Qeqertarsuatsiaat. Specifically the Company started exploring for corundum (Rubies
and Pink Sapphires). In 2008 the Company announced that they wanted to submit an application for
Exploitation of Corundum. According to section 76 in the Mineral Resource Act, then when a mineral
resource activity is assumed to have a significant impact on the social conditions then a licence for and
approval of the activity can be granted only when a social sustainability assessment (SSA) has been made
3 The exception, which proves this rule is minerals, which contain radioactive elements such as uranium or thorium.
This is due to that Greenland’s security and foreign policy is still drafted in coordination with the Danish authorities (mainly the “Ministry of Foreign Affairs of Denmark”)
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of the performance of the activity. Consequently, the following years the Company held information
meetings and workshops at Qeqertarsuatsiaat while preparing the required application material.
True North Gems submitted application material for an Exploitation Permit June 14th 2013, this included:
An Environmental Impact Assessment (EIA)
A Social Impact Assessment (SIA)
A Pre-Feasibility Study (PFS)
The framework for these documents is explained in guidelines set out by the Mineral Resource
Authorities (MRA) subordinated the Government of Greenland. Before submitting the actual application,
the Mineral Resource Authorities had to accept the application material to make sure the materiel meet
the requirements.
Subsequently the EIA and SIA were uploaded to the government’s website, www.Naalakkersuisut.gl, and
a public consultation began on the 17th of June and expired on the 12th of September 2013. Prior to the
public consultation period the company held independent community meetings and during the
consultation period the company together with the Minister for Industry and Mineral Resources Jens-
Erik Kirkegaard and the Minister for Housing, Nature and Environment Mette Lynge held official hearing
meetings in Nuuk, Paamiut and Qeqertarsuatsiaat. Minutes were taken from the meetings and the
company as well the Greenland authorities subsequently had to address the orally raised comments
during the meetings as well as the written comments submitted during the public consultation period.
This was done in a White Paper. The White Paper is available in Danish and Greenlandic on the following
webpage: http://naalakkersuisut.gl/da/H%C3%B8ringer/Arkiv-over-h%C3%B8ringer/2013/TNG-QEQ
The White Paper was subsequently used to make a revision of the social impact assessment. Finally, the
White Paper as well as the final version of the SIA were approved by the Government, in connection to
that True North Gems Greenland A/S was granted an exploitation licence on the 3rd of March 2014.
4.3 The Impact Benefit Agreement The final Social impact Assessment was used as the basis for negotiating the IBA, which as mentioned in
section 1 was signed in Qeqertarsuatsiaat in June 2014 between the three parties to the Impact Benefit
Agreement:
Table 5: Parties to the IBA
Parties to the Impact Benefit Agreement
True North Gems Greenland
Kommuneqarfik Sermersooq (the Municipality)
Naalakkersuisut (the Greenland Government)
Prior to the signing of the IBA, the municipality had held meetings with the local Council for the
Settlement of Qeqertarsuatsiaat and the local population. During these council meetings and public
meetings, the municipality had engaged in dialogues to agree on a mandate to negotiate the IBA on
behalf of the local population. The Ministry of Industry and Mineral Resources (now the Ministry of
Industry, Labour and Trade) had held meetings with the union and Employers Association to agree on a
mandate on behalf of the parties from the labour market.
After signing the IBA and in order to secure adequate and timed communication between the
Municipality, the local Community and the Company a Work Group at the municipal level has been
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established. This Group has regular meetings and the minutes from the meetings are being made
available on the Municipality’s website. Members of this group are the mayor of Kommuneqarfik
Sermersooq, Director of the Employment Section, other staffs from the municipality, The Chairman of
the Council for the Settlement of Qeqertarsuatsiaat and Kapisilliit, the Foreman for the Local Fishing and
Hunting Organization, the managing director from the Company, a staff member from the Company and
the Project Manager from the Operator in charge of the Project.
4.4 Other approvals Besides, the above-mentioned document an approval of the Production and Abandonment plans
pursuant to section 19 and section 43 in the Mineral Resource Act was granted in August 2014.
Furthermore, since September 2014 the Mineral Licence and Safety Agency (MLSA) has, in accordance
with section 86 in the Mineral Resource Act, granted the approvals of activity plans mentioned in Table
6. The activities mentioned in table 6 cannot be initiated before approval has been obtained.
Naalakkersuisut granted the first approval of the activity plan in September 2014, which allowed the
Company to initiate the construction of some of the infrastructure related to the project.
Table 6: Significant approvals of activity plans since September 2014
Activities Date of Approval
Mobilization 24th
September 2014
First Road approval 7th
October 2014
Harbour and Fuel Depot approval 17th
October
Camp and Second Road approval 20th
November 2014
Explosive Depot and Third Road approval 15th
December 2014
Installation of Camp Modules approval 22nd
December 2014
Lowering Water Level approval 14th
April 2015
Process Plant and Workshop approval 11th
May 2015
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5 Greenland Workers
5.1 Origin and gender of employees According to the IBA, the Company is committed to initiate programs that will help to ensure that a
minimum of 70% of all employees during construction will be Greenlandic Workers. Since the
construction phase started in September 2014 the Company and the operator, have had 100%
Greenlandic Workers hired. In July 2015, a total of 79 workers have been engaged of which 43 workers
are hired at the moment.
For True North Gems Greenland all 5 employees are residents of Nuuk. The operator has also had
success hiring local people. For the operator the main part of all hired people comes from
Kommuneqarfik Sermersooq, followed by Kommune Kujalleq and then Qeqqata Kommunia and
Qaasuitsup Kommunia (see table 7 and 8). A total of 7 people from the nearby settlement
Qeqertarsuatsiaat have been hired to work at the site since the start of construction. Of these 6 persons
are still working on the project. Approx. 9% of all hired people and approx. 14% of the people working at
the site at the moment have been recruited from the nearby settlement. Though these numbers may be
perceived as relatively low numbers, it is the opinion of the operator that this is a success. It is also a
goal for the Company and the operator that the percentages will increase once the project goes into
production.
Table 7 and 8: origin of workers distributed on Municipalities in Greenland (June 2014 to July 2015)
Origin LNSG TNGG Total
Kujalleq 24 0 24
Sermersooq 44 5 49
Qeqqata 5 0 5
Qaasuitsup 1 0 1
Foreign 0 0 0
Total 74 5 79
% LNSG TNGG Total
Kujalleq 32,4 0,0 30,4
Sermersooq 59,5 100,0 62,0
Qeqqata 6,8 0,0 6,3
Qaasuitsup 1,4 0,0 1,3
Foreign 0,0 0,0 0,0
Total 100,0 100,0 100,0
The Company hire solely on qualifications irrespectively of the applicant’s or candidate’s gender. So far
at the Company’s office in Nuuk two out of five are women.
Table 9 and 10: Gender-ratio
Gender LNSG TNGG Total
Men 67 3 70
Women 7 2 9
Total 74 5 79
% LNSG TNGG Total
Men 90,5 60,0 88,6
Women 9,5 40,0 11,4
Total 100,0 100,0 100,0
5.2 Type of Job Categories The Company is right now developing an Organization Chart, covering all positions at the Mine site and
the Nuuk Facilities. It is the intention to use this chart in connection to the monitoring and the annual
evaluation of the activities, which are requirements according to the IBA. Table 11 shows the different
types of Job Categories that already are – or will become – needed for the project. The column to the
right shows if the job category is being used and if so – for how long time has it been activated. The
positions that have been activated reflect that the mine is under construction.
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Table 11: Types of Job Categories
Job category Job period Positions activated
Mine site
Mine Manager 12 months Not yet hire
Camp Manager 12 months 9 months
Engineer 12 months Not yet hired
Geologist 12 months Not yet hired
Supervisors 12 months 9 months
Excavator operators 12 months 9 months
Dozer operators 12 months 9 months
Truck operators 12 months 9 months
Driller 12 months 9 months
Blaster 12 months 9 months
Loader operator 12 months 9 months
Crusher-operator 12 months Not yet hired
Jigs-operator 12 months Not yet hired
Process Plant Sorters 12 months Not yet hired
Mechanics 12 months Not yet hired
Electricians 12 months Not yet hired
Apprentices 12 months Not yet hired
Administrative staff 12 months 9 months
Chef 12 months 9 months
Kitchen staff 12 months 9 months
Cleaning staff 12 months 9 months
Nuuk Facilities
Administrative staff 12 months 12 months
Rough Handlers 12 months Not yet hired
Sorters 12 months Not yet hired
Apprentice 12 months Not yet hired
The success with hiring local people is undoubtedly a consequence of an unfortunately high
unemployment rate within the construction sector in general and specifically in the region of
Kommuneqarfik Sermersooq, and the closure of the Nalunaq Goldmine in South Greenland, combined
with positive interest in the project from the people of Greenland. The Company and operator have
received more than 400 unsolicited applications covering expertise, knowhow and skilled labor in all
branches and on all levels. This clearly signifies the positive interest that the people of Greenland has
shown in the project. As a consequence, there has been no need to apply for skilled labour, yet. Nor has
there been a need to initiate pre-employment programs or to arrange for qualification courses together
with the Naalakkersuisut and/or the Municipality.
The Company is aware that initiatives are being done politically to mitigate the high unemployment rate
and will be ready to implement programs when indications show the need for such in order to maintain
the high percentage of Greenland workers.
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Persons who are hired during the construction phase at the mine site will be offered positions for the
production phase at the mine site.
Foremen
According to the IBA the Company is responsible for initiating measures to enable the Greenlandic
workforce to obtain positions on foreman-level. As mentioned above there has been no need to initiate
special measures for this purpose. 100% of the workforce are Greenlandic, this also include formen and
managers on all levels.
For TNGG the plan has been to hire an administrative leader during 2015. This happened in February.
This person has been fully engaged in finding systems and routines for the office.
6 Education
6.1 Educational activities in 2014/2015 Through the construction phase the Operator has had workers on different courses. These have
primarily been HSE-Related:
6 persons have taken Course in Arctic First Aid and Fire (Danish language)
8 persons have taken Course in Arctic First Aid and Fire (Greenlandic language)
3 persons have taken Course in Work Safety Coordinator
6 persons have taken Course in Medicinkiste-B
4 persons have taken Maintenance Course in Blasting.
Over the last 12 months TNGG have had staff members on:
1 person has taken Course in Arctic First Aid and Fire (Greenlandic language)
3 Persons have taken Course in ISO-9001
In addition to this 1 person has started the Gemology Education, GEM-A, which takes 2 Years.
Apprenticeships in 2014/2015
Through the IBA the Company is committed to hire 5 apprentices, starting in the construction phase and
continuing through the production phase. 4 of them shall be in connection to the mine site.
An unfortunate consequence of the comprised construction phase (see section 1) has been that the
operator hasn’t succeeded in establishing 4 apprenticeships though a Construction Machine Mechanic
Apprentice finished his apprenticeship at the project in December 2014. Neither has True North Gems
Greenland succeeded in establishing 1 apprenticeship. Several factors have resulted in difficulties
fulfilling this requirement. One of them is that the construction phase has been comprised. This means
that different professions have been on site for short periods. Another is that the winter 2014/15
started early resulting in slow progress for preparing roads and camp area. Consequently, the staff
worked the whole winter and only living in few tents. It was only possible to provide accommodation for
19 people at the site leaving no room for apprentices. Finally, the operator has had a period of time
where they have had to adjust their activities and organization (not affecting the Ruby Project) which
prevented them for moving apprentices around between different projects.
Also, the Company didn’t hire a person to be in charge of the administration until February 2015. This
person is now working on getting the office approved for apprenticeship.
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Even though the abovementioned reasons are considered as legitimate explanations for not fulfilling the
requirement, then TNGG still finds it problematic. The hiring of apprentices will therefore be given a very
high priority going into the production phase.
Through the construction phase the operator has had two internships for engineer students coming
from Artek, Sisimiut.
6.2 Allocated funds According to provision 10.3 in the IBA the Company must allocate 250.000 kr. each of the first and
second project year for educational purposes, of which half of that amount can be used to educate
employees employed by the Company and it’s operator.
The table below shows the amount that the Company has use on education in 2015. The courses are
listed under section 6.1. Far most of the courses have been executed by branch schools and have taken
place here in Greenland.
Table 12: Educational funds
Educational funds 2015
True North Gems Greenland 102,748 DKK
LNS-Greenland 377,615 DKK
Total 492,862 DKK
6.3 Educational activities in the coming year Prior to starting the production at the mine site ISS-Greenland and True North Gems Greenland will
initiate a special training program for the security staff. True North Gems Greenland will also coordinate
and initiate a training program for the people who are going to work at the Nuuk facilities as rough-
handlers, lab-assistants and sorters.
The operator will also start recruiting for people to work at the site. These will be given special training
and instructions if – and when – needed. Some positions require certain skill-sets. It is the opinion of the
Company and the operator that most of these are already available here in Greenland. Some can be
acquired by initiating special educational programs (coordinated with the municipality and the
Government) and a few number of positions will initially be hired from outside Greenland (See section
8). When hiring foreign workers, because of the requirement for special skills, it is the plan for the
Company and operator, to execute a program that will enable the organization to transfer knowledge
and skills from the foreign worker to local workers. The Canadian Process Engineer, hired by TNGG,
responsible for designing the Process Line will be in charge of implementing the process line, instruct
and train the operators and make sure that all required know-how will be transferred to the operating
company. It is expected that the Process Engineer will be on site for 3-4 months, however this obviously
depends on the success of getting the process line up and running.
Prior to entering the production phase both the Company and the operator in charge of production will
hire and train the required workforce. To the extent required this will be coordinated with the
Municipality, The Mining School and other relevant Branch Schools. Special focus will be on the Process
Plant at the Mine site and the Rough-handlers and Lab-assistants at the Cleaning facility and Sorters at
the Sorting facility in Nuuk.
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The Company will – in good time – coordinate screening and recruitment of applicants for the Rough-
handling-, Cleaning- and Sorting facilities in order start educating these. The Canadian gemologist who
has developed the sorting matrix and made the educational curriculum will be in charge of executing the
training program for these assisted by the Company’s own Process Engineer. The training will take place
in Nuuk. The training program consists partly of a 2-3 weeks course followed by on-the-job training,
supervised by the Canadian gemologist and the Company’s Process Engineer.
Finally, as briefly mentioned previously, the Company is now in contact with the local Business School in
order to make a contract for an office apprenticeship of one (1). It is the plan that this apprenticeship
can start up in 3rd Quarter 2015. In relation to the production, the Operator will establish four (4)
apprenticeships.
7 Greenland Enterprises and local businesses
7.1 Greenland enterprises It has been a part of the Company’s strategy from the beginning, to make this project beneficial for all of
Greenland. A way to do this is to make sure that local Greenlandic companies are allowed to benefit
from the project as well.
As a consequence of this strategy a Joint Venture Partnership was entered with LNS-Greenland (See
section 2). By making this local company (with Norwegian owners) a partner, we made sure that we had
a local operator who will be responsible for the construction and the production.
During the construction phase TNGG has among others made contracts with two subcontractors: ISS-
Greenland. This contract makes ISS-Greenland responsible for the security setup with both hardware
and manpower, both on site and in Nuuk-facilities. This contract is expected to generate 10-12 jobs, all
Greenland workers. ISS-Greenland will earn revenue on several million DKK over the lifetime of the mine
subsequently contributing to the taxation system. All Greenland workers will be educated, so they will
possess the necessary skills.
Secondly, True North Gems has made contract with Blue Water Shipping Greenland. This contract makes
Blue Water Shipping Greenland responsible for transportation of all material and machines required for
the Process-Line at the site from distant parts of the world to the Aappaluttoq site. This contract doesn’t
generate new jobs, as it is a short-time project that will be solved within the already existing
organization. The revenue will be moderate but will benefit Greenland.
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Finally, several other Greenland companies have been used. Table 13 shows a list of Greenlandic
companies who has been used by the Company and/or our operator since the IBA was signed in June
2014.
Table 13: List of sub-contractors, suppliers and vendors
AES Grønland CSR Greenland IF-Forsikring Plan2Move/Culture Crosing
Malling & Hansen Damm Deloitte Inuplan Polar Oil
Air Greenland Departementet for Råstoffer Inu:IT Polar-EL
Arctic Import Dot.gl ISS-Greenland Pon-Cat Grønland
Arctic Logo Godthaab Bryghus K K Engros Rambøll
Arcti Umiaq Line Godthåb Olietransport Larsen og Co. Royal Arctic Line
Arssarnerit Godthåb Skibsentreprenør LNS-Greenland Sermitsiaq AG
Bang.gl Greenland Boat Charter MDC-Data Siunnersortit-IT
Bidstrup Consulting Greenland Venture Mittarfeqarfiit Stark
Blue Water Shipping Grønlands Bådcenter Nukissiorfiit Sømandshjemmet I Nuuk
Boman Qujan Grønlands Erhverv Nunaminerals Tele-Post Greenland
Brugsen Grønlands Kontorforsyning Nuna Advokaterne Transparency Greenland
Brøndum Grønland Grønlands Revisionskontor Nuuk Forsamlingshus Qalut Voning Grønland
Café Esmaralda GrønlandsBanken Nuuk Transport Usissat
Café Chili HJ-Tek O.S.Electronic Vejle-Rejser
Café Mik Hotel Hans Egede Orsiivik Vinslottet
Café Prego Hotel Nordbo Pilersuisoq Willis
Comby HP Entreprenør Maskiner Pisiffik Yamatek
The table shows that at least 72 Greenlandic companies have been used since the IBA was signed in June
2014. As the project has developed the Company has entered contracts with some of the service-
providers and suppliers.
Table 14 shows contracts that have been entered with Greenlandic Enterprises and contract packages
that the Company consider making contracts for.
Table 14: Contracts relevant to the project.
No. Contract package Greenland Enterprises
awarded contracts
Joint
venture
Other
contract
1 Construction LNS-Greenland X
2 Civil Engineering LNS-Greenland X
3 Mine Operation LNS-Greenland X
4 Security ISS-Greenland X
5 Boat Charter N/A1)
Not yet
6 HF-Cleaning Process N/A Not yet
7 Fuel Polar Oil Not yet
8 Transport by sea Blue Water Shipping X
9 Transport of gem-stones Mittarfeqarfiit2)
Not yet
10 Transport by air Air Greenland X
11 Tele Communication Tele Greenland X
1) Tender will be prepared by 3rd quarter 2015. 2) Mittarfeqarfiit operates as local agent for G4Si
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7.2 Local business opportunities for inhabitants in Qeqertarsuatsiaat Most of the companies mentioned in section 7.1 are based in Nuuk. Even though the settlement of Qeqertarsuatsiaat by all standards has a very small population (198 inhabitants on the 1st of January 2015) then there are some services, which the inhabitants are able to provide:
Supplies with fish and meet
The Company, the Work Group and the Local Fishing and Hunting Organization have held meetings in order to establish the ground for future cooperation on buying/selling supplies of fish, birds and meet from animals for the people working at the site. Everybody agrees that this is possible and a good idea. Meetings including the operator to finalize an agreement are eminent.
Supplies from the local grocery store in Qeqertarsuatsiaat
It has been a request from the local settlement that supplies for e.g. the kitchen at the camp could be done through the local grocery store (Pilersuisoq), however this is not yet possible. In the construction phase the fluctuation of workers coming/going through the Camp have changed on a weekly basis. Also, buying the quantity required for running the camp makes the price level very relevant and so far Pilersuisoq has not been competitive on price level.
7.3 Non-Greenlandic Companies Due to no Greenland company is able to provide services regarding designing, producing and delivering
Electrical Board and control Units for the Process Plant, this will be provided by the Denmark based
Automatic Syd A/S.
KEN Storkøkken, based in Denmark, has been in charge of designing the kitchen and providing the
kitchen equipment. The kitchen for a camp of this size requires a kitchen of industrial size and quality,
which is not available in Greenland.
Novus Engineering has been in charge of the process design for the HF-Facility in Nuuk and the Process
Plant at the site. Novus has been chosen for this assignment because they have the knowledge,
expertise and experience in designing gem-stone production lines.
Novus has also been in charge of procuring the process equipment from all around the world. The
procuring of this equipment outside Greenland has been necessary because these kinds of equipment
are not available in Greenland.
8 Developing Greenlandic Enterprises
8.1 Contributions to develop other Greenlandic companies in the mining industry So far, the Company has prioritized Greenlandic companies as JV-partners, subcontractors and suppliers
when Greenlandic companies have been able to provide the required product/services (see section 7).
The main priorities for finding subcontractors are as follows:
Price
Quality
Time for deliverance
Consistency and supply
Jobs for Greenlandic workers
Apprenticeships in Greenland
Other benefits for Greenland
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Other requirements or standards, either which shall be fulfilled or which the company encourages it
potential suppliers to fulfill are:
ISO9001
ISO14001
ISO18001
Technical equipment shall be CE-Certified
Chartering vessels shall be certified by the Danish Maritime Authority
It is the opinion of the Company that we have fulfilled the goals to develop Greenlandic Enterprises in
full both by entering a Joint Venture with the Greenlandic company, LNSG, and also by entering a
contract with ISS-Greenland and other Greenlandic companies. To some extend this will have significant
impact on these companies ability to provide new products in Greenland and to become attractive to
other mining projects in the future.
Yet an example of transfer of knowledge is the symbiosis between the company Novus, in charge of
designing the production processes and the Greenlandic company, Inuplan. Novus are specialized in
making production processes within gemstones, but have no knowledge or experience in setting up a
production line in Greenland, where everything have to be adjusted to Danish/Greenlandic and/or EU-
Standards. Therefor we have had Novus designing the process components and then Inuplan has made
sure, that their design was adjusted to standards and regulations here in Greenland.
8.2 Contributions to development of a gemstone industry in Greenland Sale to local artisans etc. According to provisions in the IBA, TNGG will work together with a local approved selling agent to
facilitate the sale of corundum to local artisans and individuals, who wish to purchase material produced
from the Aappaluttoq deposit. Due to the project is not in the production yet, this cooperation has not
started yet, but the company is considering different strategies for establishing this cooperation.
Small scale miners
Also, the Company has established contact to several small scale miners in Greenland. This is not organized in the same way as with the Municipality, mostly because the small scale miners are not represented in one – or more – organization(s). It is recommended that efforts are made to establish some kind of forum where dialogue between the different parties can take place. The Company is open to dialogue and coorporation between the different parties and will continue engaging in constructive dialogues with the small-scale miners.
The Company acquired a new Exploration Licence near Manniitsoq. This resulted in some confusion among some small-scale miners. The misunderstandings were identified and dialogues were initiated between the MLSA, the Company and the small-scale miners. This resulted in establishing a constructive dialogue between some of the small-scale miners and the Company.
Polishing courses
As part of the IBA the Company is requested to arrange for two annual polishing courses at the Polishing Facility in Qeqertarsuatsiaat. In June 2015 the 1st course was planned and executed. The Canadian instructor, Brad Wilson, who also held the very first courses back in 2008 was responsible for running the course. The course had been arranged and planned together with the Municipality and the local council for the Settlement. The courses are established to inspire locals to engage in activities related to the project. To give locals the basic knowledge to start up on their own and to show them techniques and provide knowledge and tools for them to develop from. There were 5 local people taking part in the
19
course and it is the opinion of the Company that the course was a success. The course had a lot of positive attention from the local community and it was requested by several locals that similar courses would be arranged.
Other potential contributions to the development of a gemstone industry in Greenland
Finally, the company is aware that the Ministry of Industry, Labour and Trade together with Ministry of
Mineral Resources have drafted but not yet finalized “A statement concerning social perspectives on the
development of a Greenlandic gemstone industry”. The draft was submitted for public consultation in
the first half of 2015.
TNGG looks forward to the publication of the final version of the statement and is open for contributing
to the different measures in the statement including the aforementioned sale to local artisans and the
annually held polishing courses.
9 Tax and revenues from royalties
9.1 Public revenues in 2014/2015 The Company is still not in the production phase and no sale hasn’t been approved yet. This also means
that the Company still hasn’t begun paying any royalties as the royalty is based on the turnover of a sale.
However, since the IBA was entered in June 2014, the project has generated the following personal
income tax from people working for the Company or the Operator.
Table 15: Personal income tax paid to Greenlandic Municipalities from July ’14 to June ’15
July 2014 to June 2015 TNGG
(Thousands)
LNSG
(Thousands)
Total
(Thousands)
Personal Income Tax 1,048 5,379 6,427
AMA4 0,025 0,125 0,150
Total 1,073 5,504 6,577
4Social security contributions
The Table doesn’t show personal income tax derived from the construction phase or value added to the
Greenlandic Society by using a vast majority of Greenlandic sub-contractors and suppliers.
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9.2 Future fiscal benefits for Greenland In February, the Company announced the new Pre-Feasibility Study. The Pre-Feasibility Study shows the
potential of the Project throughout the lifetime of the mine (9 Years). The Feasibility Study shows new
numbers and also a considerable increase in the Government Take for Greenland. Table 16 shows key
numbers from the new Feasibility Study.
Table 16: Government take in life of mine
(Over 9 Years) US$
(Million)
DKK
(Million)
Turnover 573 3,134
Operating Costs 94 514
Capital Expenditures 27 148
Free Cashflow before Tax 452 2,472
Company Tax/Royalties 170 930
Free Cashflow after Tax 282 1,542
Personal Income Tax 17 93
Total Government Take 187 1,023
The table shows a considerable increase in the Government Take for the Project compared to the
previous PFS, where the Company Tax/Royalty was estimated to DKK 90 mio. The increase is largely
explained by new conservative prices for the Greenlandic rough stones, based on valuations from 2015.
10 Communication, cultural issues, funds etc.
10.1 Communication It has been part of the Company’s Communication Strategy to be as open and transparent as possible in
order to mitigate rumours and doubts and instead contribute to the discussions of the mineral resources
in general and to this project in specific by always being available and focusing on telling facts. Being a
new company operating within this new growing sector in Greenland there will always be room for
improvements, though it should be said, that we have tried very hard within a small organization.
Being available, open and transparent has been necessary on all levels. The company believes that the
fact that we have a headquarter based in Nuuk, assisted by a very dedicated, specialized parent
company, with a very small staff, in Vancouver, Canada, has helped and made the result possible.
Though the Company has only 5 persons hired, these are all locals. They are all dedicated, well educated,
experienced and skilled and they all have very detailed knowledge of the project meaning, which make
them all capable of informing about the project. Within this small organization both Greenlandic, Danish
and English are spoken. This has enabled us to use both Greenlandic and foreign medias and to start our
own Facebook-profile allowing everybody to ask questions to be answered.
(https://www.facebook.com/truenorthgems?fref=ts)
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TNGG has held Information-meetings about the project for:
Table 17: Information-meetings and Presentations until June 2015
Information-meetings until June 2015
Political Parties: Siumut, Atassut, Demokraatit, Inuit Ataqatigiit, Partii Naalaraq.
Grønlænderhuset in Aalborg, Denmark
Public Meeting in Qeqertarsuatsiaat (April 30
th 2015)
Department of Mining and Geological Engineering, Alaska
The Committee of Mineral Resources of the Greenland Parliament
ICC ISS-Greenland LV72, Round Table, Lion’s Club
The Committee of Finances and Taxes of the Greenland Parliament
Inutek Greenland Business Association
Staff association at the Hospital in Nuuk
Ambassador of Canada to Denmark (visit in Greenland)
German Trade Delegation
Sermersooq Police
Within the same period meetings have been held with the Joint Group (Municipality, Local Board and
Company) and with different offices within the Municipality.
The Following media corporations have been given interviews for articles:
Table 18: Given interviews for articles until June 2015
Given interviews for articles until June 2015
Sermitsiaq/ Oil & Minerals (Greenlandic newspaper)
Nuuk TV KNR (Greenlandic Broadcasting Coperation – TV)
KNR (Greenlandic Broadcasting Coperation – Radio)
Politiken (Danish newspaper)
Mandagsavisen France-2 TV-2 (Denmark)
DR (Danish Broadcasting Coperation)
Suluk Magazine UNA Business New York Times
Time Magazine The Finnish Journal of Foreign Affairs
Several International Free-Lance Journalists
GEO-Magazine
10.2 Cultural and social fund Pursuant to provision 12.3 in the IBA, the Company is requested in 2015 to allocate 100.000 DKK for social and cultural purposes. The Company ended up using 102.748 DKK on cultural activities. The funds were used to run a polishing course in Qeqertarsuatsiaat, where 5 participants received instructions and training for a week. The experiences learned during this course will be used when planning for the next polishing course, which the Company expects will take place in Qeqertarsuatsiaat during the spring 2016.
Table 19: Social and Cultural fund
Social and cultural funds 2015
True North Gems Greenland 102,748 DKK
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11 Revision of the contents in the appendices to the IBA On the Basis of the annual Draft for a Monitoring Report and Evaluation Report, the parties shall
subsequently hold meetings to determine the targets (contents) in the appendices for the subsequent
year. Due to the project is still in the construction phase the parties have seen no reason to make
significant changes to the contents of the appendices. The changes made are mainly due to that the
mine is expected to go into production soon and due to the appendix (appendix 3) concerning reporting
has been phrased so it also covers more than just the construction period. The changes in the contents
of the appendices to the IBA are listed in table 19 and the updated appendices will be uploaded on the
following webpage: www.Naalakkersuisut.gl.
Finally, for the benefit of facilitating the monitoring and the evaluation of the IBA all the provisions in the
appendices have been numbered. However, this has not caused any change in the contents of the
appendices (i.e commitments) and has therefore not been considered as such.
Table 19: Changes in the appendices for the following year
Changes in contents of the appendices to the IBA
The relevant
appendix/appendices in 2014
No. Description of change of contents in the appendices
Appendix 1 1 Updated so it includes the production and processing activities
for the coming years.
2 A reference for drafting a study for possible further processing
activities in Greenland has been added.
Appendix 2 3 One provision has been rephrased to give a more accurate
description of how the company engage in an open dialogue
with the citizens of Qeqertarsuatsiaat.
4 A provision has been deleted due to that the type of courses
are already provided by the government or/and the
municipality
Appendix 3 5 Has been updated so TNGG will include in royalties, corporate
tax and income tax in the annual report
6 Has been updated so it is explicitly stated that TNGG also will
report on Mineral resource activities in the annual monitoring
and evaluation report.
7 The wording of the appendix has been updated to cover the
life of mine and not only the construction phase
8 It has been clarified that the licensee only has to submit
documentation on request from any of the other parties to
the agreement.
Appendix 7 9 Table A 7.1.1 has been updated
10 Table A.7.1.2 has been updated