Resource World Magazine

32 www.resourceworld.com a p r i l / m a y 2 0 1 5 Morien Resources concentrates on collecting royalties by Jennifer S. Getsinger, PhD, PGeo Morien Resources Corp. [MOX-TSXV], based in Nova Scotia, is a Canadian junior mining and exploration company with an unusual strategy: rather than aiming toward operating a mine or selling out to a senior, they plan future income from long-term royalties. According to President and CEO, John Budreski, in a recent interview, "Morien is a story of surfacing value for share- holders." In his role as visionary and deal-maker, he believes in "surfacing the assets" of a company by making them more vis- ible, and negotiating partnerships that result in mutual win-win situations. Budreski is proud that this strategy has resulted in three potentially lucrative arrangements in as many years, and that Morien Resources remains in a strong cash position. In 2012, the company spun off from Erdene Resources Development Corp., which divided into a group of hard rock gold and copper explorationists in Mongolia, and another group originally concentrating on bulk commodities (industrial miner- als), which has since become Morien Resources. The three royalty projects Morien has going are the Donkin Coal and Black Point Aggregate projects in Nova Scotia and the Yellow Giant gold proj- ect in British Columbia. An aerial view of Port Morien, east of Sydney and Glace Bay on Cape Breton, Nova Scotia, shows a low, scalloped sandstone peninsula jutting into the Atlantic Ocean. Underlying this rugged coastline are Carboniferous strata, in the Avalon (Mira) Terrane, containing layers of coal, historically the site of one of the first coal-mining areas in North America, and currently planned to be mined by Kameron Collieries ULC, an affiliate of The Cline Group LLC (private mining company), one of Morien's partners. The Donkin coal project, mining high-energy thermal coal, with nearly 500 million tonnes of resources, is expected to last more than 30 years with an anticipated annual royalty for Morien in the range of $4-7 million. Advantages of this project include the convenience to shipping infrastructure (deep-coastal property location), a local workforce, and permitting already in place. The Donkin coal mine was previously owned and operated by the Canadian federal gov- ernment, then the Nova Scotian provincial government and then taken over by XStrata Coal, now Glencore. In 2014, Glencore sold its 75% interest to the private mining company The Cline Group LLC, headed by Chris Cline, originally from West Virginia, and successful in Illinois coal mining. Morien sold its 25% working interest to Cline in return for long-lasting royalty interests. Coal mining royalty payments are expected as soon as 2016. After selling a dormant Georgia (US state) kaolin property, and adding his own personal investment, Budreski led Morien to invest in Nova Scotia's Black Point aggregate project, part- nering with the large US aggregate producer, Vulcan Materials Company [VMC-NYSE]. Also located along the Atlantic coast (on south shore of Chedabucto Bay, east of Guysborough and west of Canso, NS, with potential for ice-free, deep-water port), the Black Point property contains enough granite to quarry a homo- geneous aggregate product for 50 years at up to 5 million tonnes of aggregate annually. The Devonian granite is geologically part of the Meguma Terrane. The project is currently in the environmen- tal permitting stage, having submitted its environmental impact statement (EIS) on March 4, 2015. With production scheduled to begin in 2019 or so, Morien anticipates annual royalties of $250,000 to $750,000. Granitic aggregate is used to build roads and make concrete. On the opposite coast of Canada, perhaps more remote and rugged than Nova Scotia, lies Banks Island in British Columbia, the location of Morien Resources Corp.'s third mineral property, Yellow Giant Gold. Partner Banks Island Gold Ltd. [BOZ-TSXV] began including Morien in royalty payments in 2014 (Morien holds 1.5% NSR on "marketable metal, ores, minerals, and con- centrates", through its previous incarnation as Advanced Primary Minerals Corp.), with anticipated annual rate of some $200,000. The Banks Island Yellow Giant Gold property, 110 km south of Prince Rupert and across Hecate Strait from Haida Gwaii, trends along inland lakes on an east-west lineament through the Jurassic to Tertiary Coast Plutonic Complex. Gold sulphide mineraliza- tion is structurally controlled and in some places associated with faulted plutonic contacts with Alexander Terrane metasedimen- tary rocks. This property recently became a new gold producer. See Banks Island article page 62. In addition, Morien holds a variety of interests in several industrial minerals properties, mostly in the US. The company appears to be in a win-win situation by helping to fund mining operations and receiving long term royalties for its efforts. n The Donkin tunnel, one of two, 3.6-km long by 7.8 metres wide access tunnels to the target coal seam at the Donkin coal project, Cape Breton, Nova Scotia. Photo courtesy Morien Resources Corp. MINING

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