The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Largely under-explored territory offers attractive mining opportunities
Nunavut's exploration and mining opportunities consistently have attracted the attention of the major global producers. Natural Resources Canada determined that C$422 million was spent on exploring for minerals in Nunavut in 2012, and estimates that C$313 million will be spent in 2013. Exploration is underway for many minerals in Nunavut and much of the territory remains largely under-explored. These realities suggest that Nunavut's mineral production will increase substantially in the next decade.
Nunavut has one operating mine, several properties considered potential mines, and several projects advancing toward development or feasibility. These advanced properties could be mines within this decade.
Five projects in Nunavut are progressing well through the regulatory process. They are:
Mary River, a high-grade iron ore project on northern Baffin Island;
Kiggavik uranium project in the Thelon Basin of central Nunavut;
Meliadine gold project in central Nunavut;
Back River gold project in western Nunavut; and,
Hope Bay gold project in western Nunavut.
Additionally, the western region of Nunavut has two advancing projects - the Hackett River base metal project owned by Glencore Xstrata and the Izok Corridor (Izok and High Lake) base metal project owned by MMG Resources.
Agnico-Eagle Mines Ltd.'s Meadowbank gold mine is expected to continue producing through 2018. The Meadowbank mill processed a higher throughput in the second quarter of 2013, and overall mine site costs are lower in the 2013 period due to increased volume compared to 2012, improved productivity and multiple cost-reduction initiatives.
The global economics for commodities continues to be fickle. AEM is reviewing all aspects of its business. This review could affect both the Meadowbank mine and Meliadine. Other companies, particularly the juniors, either had reduced exploration programs or did not conduct any programs in 2013. The Hope Bay gold project was owned by Newmont Mining Corp., until it was sold recently to TMAC Resources Inc. We are pleased that TMAC Resources has completed this deal as this project could provide important economic growth for Nunavut.
The Back River gold project is owned by a well-financed mid-tier junior, Sabina Gold & Silver Corp. This project is at the advanced exploration and environmental assessment stage. Significant and encouraging results are being returned for Back River, suggesting further resource growth.
Exploration in the Qikiqtaaluk (Baffin) region is focused on diamonds and iron. The largest project in the region is Baffinland Iron Mines Corp.'s Mary River iron project. This high-grade iron-ore project consists of five significant deposits and four additional iron prospects. BIMC revised its original development proposal into two stages: an "Early Revenue Phase" and a later production stage. The early stage proposes shipping 3.5 million metric tons yearly during open-water season, in which case production could commence by 2015-16. The project could be fully operational within five years, and could have a mine-life of at least 21 years.
On southern Baffin Island at the Chidliak diamond project, Peregrine Diamonds Ltd. completed a bulk sampling program. The Chidliak project is subject to an option agreement with De Beers Canada Inc. Our department enjoys a strong working relationship with Peregrine and looks forward to developing a similar relationship with De Beers if it becomes the operator.
In the Kivalliq (Hudson Bay) region, gold and uranium are the main exploration commodities. In addition to owning Meadowbank, AEM acquired the Meliadine gold project in July 2010. Meliadine is one of AEM's largest gold projects in terms of resources and recent drilling has returned significant results.
AREVA Resources Canada Inc. continues work at the Kiggavik uranium project in the Thelon Basin near Baker Lake. Kiggavik is the most advanced uranium project in the territory. With the present regulatory timeline, construction may begin at Kiggavik by 2015 and the mine could be operational by 2019.
The minerals industry is experiencing a period of protracted and significant market volatility, with declining commodity prices and global economic uncertainty.
Nunavut is a leading mineral investment destination. We are committed to working hard to remain a competitive and attractive jurisdiction with predictable and transparent structures, rules, and processes. With the number of projects advancing through Nunavut's regulatory process, Nunavut's mines and mineral production will increase and be robust in the upcoming years.
Robert Long is deputy minister of Economic Development & Transportation for Government of Nunavut.
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