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finAnciAl institutions energy infrastrUctUre, Mining and coMModities trAnsport technology And innovAtion phArmAceuticAls And life sciences

Unearthed
March 2013
A newsletter for clients And contActs of norton rose with An interest in the mining sector

Norton Rose | Unearthed | March 2013

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Norton Rose | Unearthed | March 2013

introdUction

01

introdUction

welcome to the march 2013 edition of unearthed. in this issue, we feature news about recent mining events, legal updates and articles relevant to the global mining industry. contributed by norton rose members around the world, we invite you to read about recent developments affecting the mining industry, including new and proposed legislation, rehabilitation and reclamation of mining sites, latin American mining opportunities, resource nationalism, anticorruption policies and tax developments. on June 1, 2013, Norton Rose will be joining forces with leading U.S. law firm Fulbright & Jaworski L.L.P. to create Norton Rose Fulbright. norton rose fulbright will have 3800 lawyers in 55 offices across the united states of America, europe, middle east, Asia, Australia, canada, Africa, latin America and central Asia. we will be better positioned than ever to provide you with the highest quality legal services seamlessly throughout the world. we are proud to announce that we have recently been awarded Energy and Natural Resources Law Firm of the Year by Islamic Finance News Awards Law Poll. established in 2005, this poll recognizes the best supporting providers to the islamic financial services industry globally as voted by the readers of islamic finance news. islamic financial institutions, investors, corporates and government bodies from around the world are invited to participate by casting their votes.

contents
02 upcoming events 03 recent events 05 recent deAls 06 legAl updAtes, Articles And Briefings

Norton Rose | Unearthed | March 2013

02 neWs

news

new mining partner for norton roses Qubec, canada office february 4, 2013
we are pleased to welcome Jean-Philippe Buteau who has joined our Qubec office as a partner. mr. Buteaus practice encompasses mining, securities and corporate law. carl tremblay, managing partner of the Qubec office, explained we are delighted to welcome Jean-philippe to our team. his skills and experience, particularly in mining and securities law, will add depth to our team, especially in the Qubec office. By joining us, Jean-philippe will now be able to offer his clients all the advantages of our international network.
Jean-Phillipe Buteau

Qubec t +1 418.640.5069 jean-philippe.buteau@nortonrose.com

norton rose Mining group on Linkedin

norton rose has recently launched a Mining Group on LinkedIn to share our knowledge of legal and commercial developments in the global mining industry and to invite discussion of current developments. members are spread across the world, with 23% in Australia, 13% in toronto, 9% in singapore, 7% in russia and others in the uK, germany, spain, uAe, colombia, Brazil, indonesia, hong Kong, Japan, Korea, usA, south Africa, india and france. over the last three weeks, we have seen discussions and articles posted on a range of topics, including Afghan mineral tenders, indonesian resource nationalism, china's iron ore suppliers, seabed mining, ifc performance standards, norton rose's global perspectives, mining profitability and 2013 trends. Click here to join the group and participate in the discussion.

Norton Rose | Unearthed | March 2013

UPcoMing eVents

03

Upcoming events

Legal seminar - Proxy fights: shareholder activist and defense update toronto, canada, 4 March 2013
canada's leading proxy battle and shareholder solicitation experts, norton rose partners Walied Soliman and Orestes Pasparakis will discuss trends and tactics in this busy proxy season. for more information click here.
toronto t +1 416.216.4820 walied.soliman@nortonrose.com

Walied soliman

toronto t +1 416.216.3993 kevin.ackhurst@nortonrose.com

Kevin ackhurst

Legal seminar- foreign investment review in mining transactions toronto, canada, 4 March 2013
foreign direct investment is a significant source of funding for capital-intensive mining projects. however, resource-rich countries such as canada and Australia have erected foreign investment screening laws to protect their national interests. with the rise of investments by state-owned enterprises, both countries have also recently adopted guidelines specific to state owned entity (soe) investments. Derek Burney, o.c., senior strategic Advisor (ottawa), Kevin Ackhurst, partner (toronto), James Stewart, Australia head of infrastructure, mining and commodities (melbourne) and Dawn Whittaker, partner and canadian head of mining and commodities (toronto) will present on the practical realities of navigating the foreign investment approval process in canada and Australia. for more information click here.

toronto t +1 416.216.4815 orestes.pasparakis@nortonrose.com

orestes Pasparakis

melbourne t +61 3 8686 6710 james.stewart@nortonrose.com

James stewart

ottawa t +1 613.780.8657 derek.burney@nortonrose.com

derek Burney

toronto t +1 416.216.1895 dawn.whittaker@nortonrose.com

dawn Whittaker

Norton Rose | Unearthed | March 2013

04

UPcoMing eVents

Upcoming events

Legal seminar - Business ethics and anticorruption: handling a multi-jurisdictional investigation toronto, canada, 4 March 2013
global mining companies operate in countries with a high risk of bribery and corruption. the cost of bribery and corruption ranges from loss of reputation to serious devaluation of a company's share price, and must take into account costly internal investigations, shareholder litigation and regulatory intervention. Richard C. Smith, partner, fulbright & Jaworski (washington), Richard Wagner, senior partner, norton rose (ottawa), Guy Singer, partner, fulbright & Jaworski (new york and washington), Sally Gomery, partner, norton rose (ottawa), Rob Otty, managing director, norton rose (Johannesburg), Glenn Faass, managing partner, norton rose (Bogot) and Janne Duncan, partner, norton rose (toronto) will share their insights on how to deal with bribery and corruption issues in multiple jurisdictions. for more information click here.

Xiaolei (simon) liang, director, chairman of the Board of directors, magindustries corp. Wang Yi, partner, norton rose (Beijing) Richard Lachcik, partner, norton rose (toronto) Avril Cole, Associate, norton rose (toronto) Rob Otty, managing director, norton rose south Africa (Johannesburg) David McIntyre, partner, norton rose (toronto).

norton rose sponsoring mineLatinamerica toronto, canada, 15 november 2013

in canada norton rose will co-sponsoring with the tsX group and Kpmg a full day mineLatinAmerica conference featuring updates from public and private mining companies on their latin American projects, as well as presentations on doing business in latin America's mining industry by expert advisors (including an exploration overview, commodity outlook, financing in challenging times, legal framework, tax issues, etc). norton rose partners Janne Duncan (toronto), Rubn Eduardo Lujn (caracas) and Jorge Neher (Bogota) will be presenting at this event. for more information click here .

african Ministers roundtable: corporate scramble in africa - chinese and canadian experiences with investing in africas Mining sector toronto, canada, 5 March 2013
norton rose will host a roundtable discussion on the current opportunities and challenges in connection with chinese and canadian investment in Africas mining sector. ministers responsible for the administration of the mining sector in various African countries, including south Africa, sierra leone and cameroon, as well as several industry participants, will comment on recent developments affecting the mining industry in this important region. speakers at this event include: the honourable dr. fuh calistus gentry, secretary of state, ministry of mines, industry & technological development, republic of cameroon the honourable Alhaji minkailu mansaray, minister of mines and mineral resources, republic of sierra leone the honourable godfrey oliphant, deputy minister of mineral resources, republic of south Africa

Norton Rose will host a roundtable discussion on the current opportunities and challenges in connection with Chinese and Canadian investment in Africas mining sector.

Norton Rose | Unearthed | March 2013

UPcoMing eVents

05

Upcoming events

washington, d.c. t +1 202 662 0200 rcsmith@fulbright.com

richard c. smith

Bogot t +57 1.746.4608 glenn.faass@nortonrose.com

glenn faass

toronto t +1 416.216.4090 david.mcintyre@nortonrose.com

david Mcintyre

new york / washington t +1 212 318 3353 gsinger@fulbright.com

guy singer

toronto t +1 416.202.6715 janne.duncan@nortonrose.com

Janne duncan

caracas t +58 212.276.0013 rubeneduardo.lujan@nortonrose.com

rubn eduardo Lujn

ottawa t +1 613.780.8632 richard.wagner@nortonrose.com

richard Wagner

Beijing / Africa t +86 (10) 6535 3128 yi.wang@nortonrose.com

Wang Yi

Bogot / caracas t +57 1.746.4607 / +58 212.276.0005 jorge.neher@nortonrose.com

Jorge neher

ottawa t +1 613.780.8604 sally.gomery@nortonrose.com

sally gomery

toronto t +1 416.202.6711 richard.lachcik@nortonrose.com

richard J. Lachcik

Johannesburg t +27 (0)11 685 8710 rob.otty@nortonrose.com

rob otty

toronto t +1 416.202.6744 avril.cole@nortonrose.com

avril cole

Norton Rose | Unearthed | March 2013

06 recent eVents

recent events

canadian international Law student's conference toronto, canada, 26 January 2013.

Janne Duncan, partner in our toronto office, was a panellist at this years canadian international law student's conference that took place at the university of toronto, faculty of law. the aim of the conference was to give participants from across the country, the united states and abroad a better understanding of canada's international and domestic performance as a member of the international community, governed by international law. Janne duncan presented on mining the legal terrain of corporate social responsibility, opening the north-west passage and international investment law: state owned enterprises. for more information click here.

trends in natural resources London, U.K., 30 January 2012

norton rose hosted a breakfast briefing that covered some of the current trends in the natural resource sector. with commodity prices moderating, dynamics in the natural resources sector have been changing with an associated impact on the ability of parties to close deals. this briefing focused on some of the key themes driving m&A and ecm activity in the sector as well as some of the headline deals during 2012 together with key issues and trends during the period and what to expect in 2013.

they meet monthly from september to June, usually over lunch, sometimes with a speaker, sometimes just to chat on a selected topic. for more information click here.

norton rose at indaba cape town, south africa, 4 february 2013

norton rose hosted cocktails over the harbour during mining indaba 2013 in cape town, Aouth Africa. the event was held at cape town's newest, ocean-front shimmy Beach club and attracted over 600 mining industry representatives who joined our mining and resources team for a relaxed evening of drinks and industry discussion.

Women in Mining Monthly Lunch series toronto, canada, 13 february 2013

norton rose sponsors the women in mining toronto monthly lunch series. the series is a lively and informal group of more than 400 women who work across the spectrum of the mining industry.

Norton Rose | Unearthed | March 2013

recent deaLs

07

recent deals

norton rose canada is representing ArcelorMittal in connection with an agreement pursuant to which a 15% joint venture interest in Arcelormittals flag ship iron ore mine located in the labrador trough of Quebec, canada, together with associated rail and port infrastructure, will be acquired by a consortium of investors led by Koreas posco and including taiwans china steel corporation for proceeds of us$1.1 billion. As part of the deal, posco and china steel corporation will enter into long-term iron ore supply agreements with the joint venture which will continue to be controlled by Arcelormittal with an 85% joint venture interest. Arcelormittal is the worlds leading steel company.

the Quebec iron ore mining, rail and port operations are currently held by Arcelormittals wholly-owned subsidiary, Arcelormittal mines canada. the mining operations include two open pit mines and produce about 40% of canadas iron ore output. completion of the sale and the formation of the joint venture is expected to close in two tranches in the first and second quarters of 2013. norton rose Australia acted for Heilong, a chinese company, on its subscription for A $30 million new shares of international Base metals limited (iBml),an Australian based mining company with assets in Australia and namibia, and related legal due diligence Australia and namibia

and firB notification requirements. the december 2012 agreement is subject to certain conditions to closing and expected to be completed in June 2013. norton rose Australia acted for Haohua Energy International (Hong Kong) Resource Co. Limited (hei), a subsidiary of Bejing Haohua Energy Resource Co., Limited, in relation to the placement of 23.6% issued share capital in coal of Africa limited to hei to raise us$100 million. norton rose assisted the negotiation and closing of the subscription the Aim listing. the initial placement was completed in January 2013 and second tranche placement was completed in february 2013.

Norton Rose | Unearthed | March 2013

08

recent deaLs

recent deals

norton rose canada is advising AuRico Gold Inc. in connection with a modified dutch auction. issuer bid to purchase for cancellation up to 36 million common shares for an aggregate purchase price not exceeding c$300 million. fulbright & Jaworski llp are providing us tax advice. norton rose canada advised Gran Colombia Gold Corp. a canadian-based, colombia-focused gold and silver exploration, development and production company, on its offering of us$100 million aggregate principle amount of units, each unit consisting of one us$1,000 face amount secured, 10% gold-linked note and 250 common share purchase warrants. the net proceeds of the offering will be used as project financing for the pampa verde project at the companys segovia operations in colombia, which includes the construction of a 2,500 tpd mill, the development of a new mechanized underground mine to access new vein deposits as well as improve access to the existing mines, additional capital expenditures relating to the pampa verde project and interest payments on the notes. norton roses Jakarta office is advising Killara Resources in relation to the acquisition of three coal mines. norton rose Australia advised Industrea Limited, an Australian mining services company, on a cash offer by us conglomerate, general electric company (ge) by way of scheme of arrangement. ge has offered to acquire 100% of industreas issued shares at A$1.27 cash per share. the acquisition price represents a 48% premium to the previous close and implies a fully diluted value for industrea of approximately A$470 million. in addition, the industrea Board has negotiated the ability to sell industrea mining services (ims) separately, in which case industrea shareholders will be entitled to receive any net proceeds from the sale of the division above an agreed value in addition to the $1.27 per share offered by ge. norton rose Australia advised Washington H. Soul Pattinson and Company on its bid for exco resources.

norton rose canada advised Weather Investments II S. r.l. in its c$502 million friendly all-cash acquisition of la mancha resources inc., a canadian headquartered international gold producer with four mines in Australia and Africa. norton roses london office has advised Tizir Limited (a joint venture between mineral deposits ltd and eramet sA) on the issuance of a us$150 million nordic Bond and the related intercreditor aspects in relation to future funding. the financing will be used towards the partial funding of the construction of tizir group's mineral sands mining facility and associated infrastructure in senegal. norton roses london office acted for Standard Bank in relation to cost overrun facilities being provided alongside a nordic Bond for the northland groups Kaunisvaara iron ore project in sweden. norton rose canada acted as counsel to a syndicate of underwriters led by dundee securities ltd. in connection with the July 2012 private placement of c$57.5 million of 6.0% convertible unsecured subordinated debentures and the november 2012 private placement of c$69 million of 7.5% convertible unsecured subordinated debentures of Kirkland Lake Gold Inc., an intermediate emerging market gold producer with properties located in the southern Abitibi gold belt of ontario.

Norton Roses London office acted for Standard Bank in relation to cost overrun facilities being provided alongside a Nordic Bond for the Northland Groups Kaunisvaara iron ore project in Sweden.

Norton Rose | Unearthed | March 2013

LegaL UPdates, articLes and Briefings

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Legal updates, atricles and briefings

Undermining our mining industry? canada's proposed foreign affiliate dumping rules
this article originally appeared in the canadian mining Journal on december 1, 2012
adrienne oliver and glenn Hines

affecting the mining industry in indonesia and discusses the impact of the numerous new mining policies, laws, regulations, exemptions and rulings in the context of resource nationalism.

Yukon court of appeal confirms that open-entry mining system does not preclude the application of the duty to consult
January 2013
Jocelyn Kearney and Pierre-christian Labeau

seabed mining still lacks ground rules

Article appeared in the northern miner on January 23, 201
Wylie spicer

canadas leading position for the formation and listing of mining companies with worldwide assets may be in jeopardy as a result of proposed new foreign affiliate dumping rules released by the department of finance (canada) in August 2012 and modified in october 2012. since being introduced in the 2012 federal Budget, these rules have been criticized by both the tax and business communities. Although the modifications released in october alleviate some of the harsh and unintended results of the rules, the current proposals still go far beyond the perceived mischief the rules are intended to prohibit. Read the article.

indonesian nationalism - the countrys mining industry rocked by recent developments

Article appeared in the mining Journal on december 21, 2012
rick Beckmann and Kresna Panggabean

in their december 21, 2009 article in the mining Journal, rick Beckmann and Kresna panggabean suggest that indonesias mining law of 2009 foreshadowed that mining concession holders would be required to conduct processing and refining activities. the article considers the legal developments

in an article that appeared in the northern miner on January 23, 2013, wylie spicer discussed the lack of ground rules surrounding seabed mining. in his article, he explains that the mining industry is now actively investigating the recovery of ore bodies from the ocean floor. minerals recoverable from seabed mining include coal, copper, lead, zinc, gold, silver, manganese, cobalt and nickel. rare earth metals also occur in these deposits. these metals are available from seabed mining in higher grades than are obtainable through mining operations on land. the deposits occur in the territorial waters of a number of nations and also are present on the seabed in international waters. higher commodity prices, better technology and robotics, and the promise of stable legal frameworks within which to operate has brought this industry to a place where we can reasonably expect that it will start to take a prominent role in satisfying the world's increasing need for these metals in the near future. At the moment the desire of the industry to begin producing is compromised by the fact that both within territorial and international waters the legal framework for exploitation and production is lacking. it is difficult to carry on business without certainty about the ground rules.

in december 2012, a three-judge court of Appeal for yukon decided unanimously that the recording of a mineral claim by the mining recorder, pursuant to yukons Quartz mining Act (the Act), triggers the duty to consult. furthermore, the court held that merely providing notice of recorded claims to affected first nations was not necessarily sufficient to discharge the governments obligation to consult. the decision has significant implications for the mining and prospecting system in yukon, and potentially for other open or free-entry systems in canada. Read the full update.

striking an effective balance between the resources, agriculture and urban development sectors in Queensland
January 2013
amelia gaulton and robert Milbourne

changes to the strategic cropping land regime look set to deliver much needed clarification to the use of strategically important land in Queensland, Australia. miners, farmers and developers have been clashing over the use of land in Queensland for some time, prompting the Queensland government to readjust policy settings and implement changes to the management of competing land claims. these changes will clarify the

Norton Rose | Unearthed | March 2013

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LegaL UPdates, articLes and Briefings

Legal updates, atricles and briefings

extent to which the strategic cropping land (scl) regime operates by specifically excluding certain areas and industries from its operation, and make the assessment process for certain resource activities easier and less costly. Read the article.

australias new Mining rehabilitation fund what you need to know

february 2013
Liz allnutt and Jeanne-Mar van der Merwe

a regional perspective for mining companies

this article originally appeared in the canadian mining Journal on January 1, 2013

rubn eduardo Lujn and Patricia Prato casado

latin America is one of the most popular destinations for exploration and mining activities in the world. this article examines what the key issues are for mining companies investing in the region. Read the article.

on 5 november 2012, the western Australian parliament passed the mining rehabilitation fund Act 2012 (wA) (mrf Act). the mrf Act substantially reforms the states long-standing bond-based mining securities regime by establishing a mining rehabilitation fund (fund). the fund has been designed to secure the rehabilitation obligations of tenement holders by requiring them to pay an annual levy into the fund. these payments are then used for future rehabilitation of abandoned mine sites and other land affected by a tenement holders mining operations. Read the full update.

Beefing up canadas anticorruption legislation

february 2013
stephen nattrass and alison g. fitzgerald

changes to the rules for the rehabilitation and restoration of mining sites in Quebec
february 2013
Jean-Philippe Buteau, amy gauthier, Pierre-christian Labeau and Jean Piette

on february 13, 2013, the Quebec government tabled a draft regulation to amend the rules for financial guarantees set out in the Regulation respecting mineral substances other than petroleum, natural gas and brine. Read the full update.

on february 5, 2013, broad amendments to the corruption of foreign public officials Act (cfpoA) were tabled in the senate through Bill s-14, which will effectively bring canadas anticorruption regime more closely in line with the us foreign corrupt practices Act (fcpA) by creating a books and record offence, and the uK Bribery Act by eliminating facilitation payments. Bill s-14 may move quickly through both the senate and the house of commons if the bill is given priority by the senate. Read the full update.

Norton Rose | Unearthed | March 2013

LegaL UPdates, articLes and Briefings

11

Legal updates, atricles and briefings

toronto t +1 416.216.1854 adrienne.oliver@nortonrose.com

adrienne f. oliver

Brisbane t +61 7 3414 2617 robert.milbourne@nortonrose.com

robert Milbourne

perth t +61 8 6212 3214 liz.allnutt@nortonrose.com

Liz allnutt

Jakarta t +62 21 2924 5008 rick.beckmann@nortonrose.com

rick Beckmann

caracas t +58 212.276.0013 rubeneduardo.lujan@nortonrose.com

rubn eduardo Lujn

perth t +61 8 6212 3469 jeanne-mare.vandermerwe@nortonrose.com

Jeanne-Mar van der Merwe

calgary t +1 403.267.8339 wylie.spicer@nortonrose.com

Wylie spicer, Qc

caracas t +58 212.276.0059 patricia.prato@nortonrose.com

Patricia Prato casado

ottawa t +1 613.780.1544 stephen.nattrass@nortonrose.com

stephen nattrass

toronto t +1 416.216.4076 jocelyn.kearney@nortonrose.com

Jocelyn Kearney

Qubec t +1 418.640.5069 jean-philippe.buteau@nortonrose.com

Jean-Phillipe Buteau

ottawa t +1 613.780.8667 alison.fitzgerald@nortonrose.com

alison g. fitzgerald

Pierre-christian Labeau Qubec t +1 418.640.5008 pierre-christian.labeau@nortonrose.com

Qubec t +1 418.640.5162 amy.gauthier@nortonrose.com

amy gauthier

amelia gaulton Brisbane t +61 7 3414 2631 amelia.gaulton@nortonrose.com

montral

Jean Piette

jean.peitte@nortonrose.com

t +1 514.847.4584

Norton Rose | Unearthed | March 2013

FINANCIAL INSTITUTIONS ENERGY INFRASTRUCTURE, MINING AND COMMODITIES TRANSPORT TECHNOLOGY AND INNOVATION PHARMACEUTICALS AND LIFE SCIENCES

contacts

dawn P. Whittaker partner, lawyer norton rose canada tel +1 416 216 1895 dawn.whittaker@nortonrose.com

James stewart head of infrastructure, mining and commodities norton rose Australia tel + 61 3 8686 6710 james.stewart@nortonrose.com

Jeff Kron co-head of infrastructure, mining and commodities norton rose south Africa tel +27 (0)11 685 8873 jeff.kron@nortonrose.com

Martin Mccann head of infrastructure, mining and commodities norton rose tel +44 (0) 20 7444 3573 martin.mccann@nortonrose.com

Jackie Midlane co-head of infrastructure, mining and commodities norton rose south Africa tel +27 (0)11 685 8678 jackie.midlane@nortonrose.com

norton rose
norton rose is a leading international legal practice. with more than 2900 lawyers, we offer a full business law service to many of the worlds pre-eminent financial institutions and corporations from offices in europe, Asia, Australia, canada, Africa, the middle east, latin America and central Asia. we are strong in financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and pharmaceuticals and life sciences. on June 3, 2013 norton rose will join forces with leading u.s. law firm fulbright & Jaworski l.l.p. to form norton rose fulbright. with 3800 lawyers and 55 offices, including 11 in the usA, norton rose fulbright will be one of the largest global legal practices, with significant depth of expertise in the worlds leading business and financial centres.
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norton rose is the business name for the international law firm that comprises norton rose llp, norton rose Australia, norton rose canada llp and norton rose south Africa (incorporated as deneys reitz inc) and their respective affiliates (norton rose entity/entities). the purpose of this publication is to provide information as to developments in the law. it does not contain a full analysis of the law, nor does it constitute an opinion of norton rose on the points of law discussed. you must take specific legal advice on any particular matter which concerns you. if you require any advice or further information, please speak to your usual contact at norton rose. no individual who is a member, partner, shareholder, director, employee or consultant of, in or to any norton rose entity (whether or not such individual is described as a partner) accepts or assumes responsibility, or has any liability, to any person in respect of this publication. Any reference to a partner or director is to a member, employee or consultant with equivalent standing and qualifications of, as the case may be, norton rose llp or norton rose Australia or norton rose canada llp or norton rose south Africa (incorporated as deneys reitz inc) or of one of their respective affiliates.