The. Prospector Perry MacKinnon beats the bushes in search of gold and glory. Cover Story Optimist. You never know what you re in

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1 Cover Story Optimist The Prospector Perry MacKinnon beats the bushes in search of gold and glory By Darren Campbell You never know what you re in for when you drive down these roads, Perry MacKinnon says as we rumble along a rutted gravel track in his dark grey Nissan Xterra. We ve arrived at this remote corner of Guysborough County, Nova Scotia, on an expedition. The 58-year-old prospector has come to this spot on the province s Eastern Shore to comb over claims he picked up in September of The claim is the site of the Lower Seal Harbour gold mine that operated from 1894 until It produced over 34,000 ounces of gold. MacKinnon acquired the claims, and rights to work on it, for $110. Like all prospectors, he s hoping his modest bet will pay off in a big way. We ll beat around here and see what we can see, he says. For the next six hours, MacKinnon will wander around the property looking for old mine shafts, tailings and soil samples. The work allows him to gather information about the Lower Seal Harbour property, and whether there is enough potential here to mine gold at the site one more time. NR12 Natural Resources Magazine / Vol. 18 No

2 It almost always goes unnoticed, but the future of Nova Scotia s mining industry depends on people like MacKinnon. Without prospectors beating the bushes in search of promising mineral finds across the province, new mines won t be built. And without those mines, Nova Scotia s economy will miss out on jobs, tax revenues and business opportunities the sector can provide. The Mining Association of Nova Scotia says the industry provides 5,500 jobs and contributes $420 million to the provincial economy annually. Because most mines are in remote areas like Lower Seal Harbour, many of those jobs occur in rural Nova Scotia communities desperate for economic activity of any kind. Guysborough County s 4,000-plus residents don t realize it, but what MacKinnon is doing today could help bring its struggling economy back to life. The search for Nova Scotia s next gold mine begins at about 11 a.m. on a sunny, hot September day. MacKinnon, who with his shaved head, glasses and goatee bears a resemblance to Walter White, the fictional high school chemistry teacher-turned crystal meth drug lord from the hit TV series Breaking Bad, opens the hatch of his SUV. In it he s got claims maps, plus old reports done on the Lower Seal Harbour property. MacKinnon quickly scans them and formulates his plan. MacKinnon is in a hurry. He has five days to get work done here and file a report with the mineral resources division of Nova Scotia s Department of Natural Resources to keep this claim. The North Sydney resident has 20 mineral claims spread out across mainland Nova Scotia, Cape Breton Island and New Brunswick. We park in the one area that s devoid of trees and foliage. About 50 yards away from the SUV is a concrete foundation that appears to be an old mill for processing ore at the gold mine. Otherwise the property is full of dense bush that to my untrained eyes shows no sign of mining activity or any other kind of activity. MacKinnon isn t fazed by this. Prospectors expect they ll be greeted by little more than weeds and trees on their claims, even in places where a substantial amount of mining once took place. He decides we ll head east towards a ridge that he thinks holds some promise. How does a prospector formulate a plan when setting foot on a claim for the first time? You use a bit of everything, MacKinnon says. Old maps, photographs, and a gut feeling, too. MacKinnon s gut serves him well today. After a half hour of meandering through thick bush, MacKinnon spots something. Geez, is that a hole there? he asks. He s certain he s found a mine shaft, hidden expertly by Mother Nature after nearly 70 years of inactivity. We continue on, with MacKinnon leading the way, and find two more shafts during our travels. MacKinnon explains that finding these shafts is important. When a mining company is interested in optioning or buying a property, it likes to do a site visit first. It looks better for the prospector if he or she knows where things are when they go there. I m really pleased with what I ve done so far, MacKinnon says while eating a sandwich in the front Online extras: naturalresourcesmagazine.com NR13

3 To be a prospector you need an idea and to be optimistic. To learn about Anaconda Mining and the Point Rousse and Viking Projects, visit AnacondaMining.com TSX:ANX From the ground up. seat of the XTerra during a brief lunch break. It s conceivable we could have come here and with a little less effort not found any of the shafts. Despite being in the middle of nowhere, we have no problem getting cell phone service and wireless internet. After we finish our lunch, I notice MacKinnon staring at his phone. He s just received the results of assays chemical analysis of ore samples that determine its content of precious metals from some claims in central Nova Scotia called Meadowvale. MacKinnon picked up the claims because they had some extremely promising showings of gold. The results from the assays aren t good. Three samples show no gold at all and one has eight parts per billion. A result of 2,000 or 3,000 parts per billion is considered significant, so a score of eight isn t of much interest. I could have done without that information for the rest of the day, says a disappointed MacKinnon. In this business, prospectors have to get used to being disappointed. You pick up claims with some past results that look promising, do more work on them and find little of interest. Or the extra work validates that the claims have potential, but you can t convince a mining company to option them. MacKinnon didn t set out to be a prospector. Raised in Ingonish on Cape Breton s Cabot Trail, MacKinnon enrolled at Acadia University with plans to be a geological engineer. But I found the engineering side of it conflicted with my partying, so I switched to geology after a year and a half, he says. He graduated from Acadia in 1981 and immediately found work with Hudson Bay Mining and Smelting, now known as Hudbay Minerals, in Manitoba. He worked five years for the company, mostly in northern Manitoba. It was with Hudbay that MacKinnon picked up a lot of practical experience that turned him into a prospector. He started out doing field work, much like what he s doing at Lower Seal Harbour, on the company s properties. By his third year he was planning his own exploration drilling programs. He also worked as the chief geologist at Hudbay s Chisel Lake and Ghost Lake zinc mines. While his career with Hudbay was going well, in 1985 he and his ex-wife returned to Cape Breton. The lure of returning home was too great to keep him in Manitoba. I d probably be vice-president of exploration if I d stayed. But it wouldn t have been home, he says. It s tough to make a living at prospecting alone, so MacKinnon did what a lot of Cape Bretoners do to stay there he diversified. Back in Ingonish, he dove into tourism. At different times he ran two restaurants, three craft shops, sailboat charters and a whale watching business. He still prospected on the side, but it wasn t his main focus and he wasn t making any money at it. However, tourism can be just as cruel a profession as prospecting. MacKinnon grew tired of, as he puts it, year-round work for five months of revenue. By 2005, he was back to being a prospector full-time. The return presented challenges. His time away from the profession meant he had lost touch with the industry. He didn t have the contacts other prospectors possess after spending years beating the bushes and hawking their claims to mining companies. But MacKinnon kept at it and slowly started forming a network of his own. As time wore on, not only was he staking claims, working on them and trying to get the odd company to buy them, companies started asking him NR14 Natural Resources Magazine / Vol. 18 No

4 (and paying him) to do exploration work on their own properties. That results in good paycheques when commodity prices are high and investment money is flowing into the mining sector. It s much less lucrative when commodities tank and no one has any capital to do anything. MacKinnon has been there and done that. Take, for example, his work with NSGold Corporation. From , he found steady work as the chief geologist for the Bedford, Nova Scotia-based junior mining company as it pursued the Mooseland Gold project. Located 68 kilometres northeast of Halifax, it s the oldest known gold mine in Nova Scotia. The first recorded gold discovery there was in When MacKinnon signed on with NSGold, the precious metal was selling at approximately US$1,700 an ounce. But the price of gold gradually dropped and was below US$1,200 an ounce by Those prices weren t to NSGold s liking. It mothballed the Mooseland project and hasn t done much of anything since. I m still chief geologist for them, but it s unpaid, jokes MacKinnon. The downturn the past few years in the mining industry has once again tested MacKinnon s ability to be nimble. With mining work drying up, he started focusing more on carving, a long-time hobby of his. For years, MacKinnon had made wood carvings of things that he was familiar with and saw regularly in Cape Breton whales, seals, sailboats, birdlife and the like. Considering his background in mining, odds were good MacKinnon would someday look to rocks as a way I m still chief geologist for them, but it s unpaid. to express his artistic side. In 2005, after attending a stone carving symposium in the picturesque Cape Breton village of Inverness, he made the switch from wood to stone. He hasn t carved a piece of wood since. In fact, MacKinnon uses only Cape Breton marble in his carvings now and it s developed into a strong business for him, strong enough that he estimates he s currently spending only 20 per cent of his time prospecting. I ve sold some pieces I ve done in a day for $500. I ve also sold some for a bit less, but it s still good money, MacKinnon says. The takeaway here is a prospector needs a plan B, and sometimes a plan C, to pay the bills during the mining industry s lean times. It looks like we re about to hit the beach. MacKinnon isn t joking. After walking down a path for half a kilometre in the mid-afternoon sun, we come to a tree-lined area that leads to a short bank. When we reach the top of that bank, we re greeted by an Ask how your company can benefit from our RiskIQ program. wedgwoodinsurance.com Online extras: naturalresourcesmagazine.com NR15

5 NR16 We offer engineering, project management, inspection, quality assurance, and consulting services to a diverse list of clients in the telecom, energy and infrastructure sectors. From asset integrity services for infrastructure, to the engineering of telecommunication projects across Canada, our team provides solutions that exceed our clients needs. Tiller Engineering Inc. 119 Springdale St., St. John s, NL Tel: Toll-Free: contact@tillereng.ca Natural Resources Magazine / Vol. 18 No enormous sand bar plunked right in the middle of the woods. You wouldn t want to sunbathe here, though. What we ve found is the tailings area for the Lower Seal Harbour mine, over 500,000 tonnes of crushed rock and effluents that were generated in a mill processing plant decades ago. Tailings are often the messiest legacy left behind by mining operations and contain all sorts of stuff you don t want to be exposed to for very long heavy metals, minerals, and chemicals. This tailings area is about two football fields long and a football field wide, the waste product left over when miners extracted those 34,000 ounces of gold. Five hundred thousand tonnes of rock crushed into fine sand and laid out over a metre thick spreads out over a long way, MacKinnon notes as we walk through the tailings. There s still a lot of gold trapped in these tailings, MacKinnon figures $4-5 million worth, and companies have been able to turn a profit processing it in other places. But MacKinnon thinks that s unlikely here. Records show these tailings contain about 0.6 grams of gold per tonne, which makes it uneconomical to produce. It will cost more to get the gold out of the pit than a company could make selling it. If these tailings had one or 1.5 grams of gold per tonne in them they would be of more interest. Unfortunately for MacKinnon, this tailings area won t add to the value of his Lower Seal Harbour claims. Still, this kind of grunt work is necessary if a prospector hopes to strike it rich someday. By combing over a claim, rediscovering old mine shafts, collecting soil samples that get analyzed and could show promising indications of minerals, a prospector can promote it in hopes of optioning it to a mining company. If the claim is good enough, I ll start beating the bushes to find a firm with the cash to do exploration on it, MacKinnon says. Hopefully they will option it from me and then hire me to do more work on it. These are the two ways a prospector can make money. Ore deposits are hard to find and advanced exploration is expensive. It isn t something prospectors have the cash to do. By striking an option deal with a mining company, the prospector receives cash, company shares, or both, in exchange for the company gaining an interest in the property and having the right to explore on it. The deals usually include some sort of royalty arrangement, where if a mine is built, the prospector earns a certain percentage of the profits from production at the mine. MacKinnon says during his prospecting career he s optioned claims for tens of thousands of dollars. But this year he may have snagged something bigger. He tells me he s struck a million dollar option deal with an unnamed company from Vancouver involving four of his properties in the province. The deal had yet to be finalized as MacKinnon scoured the Lower Seal Harbour claim, but he says the payments would be made over a three-year period and he would be retained as a consultant by the buyer, resulting in even more income. It s the kind of development that can motivate a guy like MacKinnon to drive three hours from his North Sydney home, spend another six hours in the thick, unforgiving bush of Guysborough County, and then drive another three hours back to North Sydney. The motherlode could be out there on one of his 20 claims, waiting to be found. I ask MacKinnon if he enjoys doing this field work. No, it s kind of monotonous. But it s also kind of exciting. You go over an ore body and the results could show mining was off a bit. This work could give us a better idea of where to spend future exploration dollars. Our last task on this day is to take soil samples, what prospectors refer to as dirtbagging, that will be sent away for analysis to see if they show signs of gold in them. He charts a course parallel to where the mining was done decades ago, hoping to find indications of a gold strike previous miners missed. It s tedious work. The holes MacKinnon digs are 20 metres apart, and the six-foot-two prospector must first dig out a hole removing the layer of hummus (black soil made up of organic material like rotting leaves), then a grey layer of sandy clay, before reaching the brown soil he will collect in plastic zip lock bags for samples. After each soil sample he jots down observations in a notebook the tree life, underbrush, and weather conditions anything that might play into the results of the soil sample if they come out as anticipated. It takes about 30 to 35 minutes to dig each hole and move to the next one. MacKinnon will

6 collect 11 soil samples on this day. I really like these rusty rocks, he says enthusiastically as he collects one sample. MacKinnon, wearing a Tilley hat, a faded red vest and beat-up beige cargo pants, explains that the rust colour is due to oxidizing iron rich minerals, usually pyrite (fool s gold) and pyrrhotite, and often the gold is associated with these minerals. But as he found out when the assay results came in on his Meadowvale claims, high hopes can be dashed quickly in the prospecting business. To be a prospector you need an idea and to be optimistic, MacKinnon says. You have to be optimistic or else you would be depressed a lot. After collecting our 11th, and final, soil sample, it s almost 5 pm and MacKinnon calls it a day. Walking back to his SUV, I ask him if he s ever heard of Chuck Fipke, the B.C. prospector who, along with partner Stewart Blusson, discovered diamonds in Canada at Lac de Gras, Northwest Territories back in Having lived in the N.W.T. for 14 years, I know Fipke s story well. But most Canadians have never heard of If the claim is good enough, I ll start beating the bushes to find a firm with the cash to do exploration on it. him or know that his discovery almost singlehandedly created the largest staking rush in North America since gold was discovered in the Klondike. Fipke also had an idea, that there were diamonds in Canada s Arctic. It took him 10 years and countless hours out on the N.W.T. s Barren lands to prove it, but Fipke s idea paid off handsomely. The Ekati mine was built in 1998 on the claim where he had discovered diamonds, and Fipke sold most of his interest to BHP Billiton for US$687 million. He also retained a 10 per cent ownership in the mine, worth another US$1 billion. In 2014, Fipke sold his remaining stake in the mine for US$67 million. Fipke s exploits have made him a living legend in prospector circles, so MacKinnon has heard of him. Fipke never stopped believing in his idea and he worked extremely hard. He became a very wealthy man and made history as a result. MacKinnon wouldn t mind making a little history himself someday. Perhaps Lower Seal Harbour is where it will happen. He s an inspiration, MacKinnon says of Fipke. He found the motherlode. Maybe I have it here, too, and I just don t know it. nrm FEEDBACK * dcampbell@naturalresourcesmagazine.com #TheOptimist Our success is in the quality of our products and the knowledge and service of our people. We realize that our customer s success is our success; therefore, we strive to constantly supply the highest quality products at competitive prices with the best service and technical support in the industry. Sandale Utility Products provide services in mining, municipal and aquaculture markets around Atlantic Canada. Our supplies include high density polyethylene pipe, fittings, valves, and fusion equipment. WE HAVE ACCESS TO THOUSANDS OF PRODUCTS THROUGH OUR MANUFACTURING PARTNERS. 18 Bruce Street, Mount Pearl NL A1N 4T4 Phone Fax Online extras: naturalresourcesmagazine.com NR17