The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North of 60 Mining News - November 8, 2024
Known as the "Hub of the North," Hay River is home to around 3,200 residents and has served as a vital logistical and economic center in the Northwest Territories even before its official incorporation in 1963.
In a move set to reshape the economic landscape of the Hub of the North, Pine Point Mining Limited (PPML) and the Town of Hay River have signed a memorandum of understanding to advance the revival of the historic Pine Point zinc-lead project, establishing a framework for sustainable development and local opportunity in the Northwest Territories.
Located along the southern shore of Great Slave Lake, between Hay River and Fort Resolution, the Pine Point project has been a prominent source of zinc and lead since its initial development in the 1960s.
Historically, the site played a vital role in the Northwest Territories' economy, with Cominco Ltd. (now Teck Resources) establishing a mining town that peaked at nearly 2,000 residents and produced around 14 billion pounds of zinc and 4 billion lb of lead over 24 years, supported by a dedicated railroad extension and power infrastructure.
Following its closure in the late 1980s, Pine Point lay dormant until Osisko Metals acquired it in early 2018 with plans to revive its historical productivity. The company's early initiatives included definition drilling, re-evaluating historical data, and mapping out the remaining zinc and lead mineralization.
This foundational work allowed the company to better understand the ore body and regional geology, positioning the project for significant redevelopment.
In December 2018, Osisko Metals reported an initial inferred mineral resource estimate of 38.4 million metric tons averaging 4.58% zinc (3.88 billion pounds) and 1.85% lead (1.56 billion pounds). Subsequent drilling expanded the resource in 2020 to 52.4 million metric tons averaging 4.64% zinc (5.36 billion pounds) and 1.83% lead (2.11 billion pounds).
By mid-2022, an updated preliminary economic assessment (PEA) refined Osisko's projections for Pine Point, estimating the potential for it to become one of the top ten zinc-lead producers globally, with an annual average output of 329 million pounds of zinc and 141 million pounds of lead over a 12-year mine life.
The assessment underscored Pine Point's economic viability even amid inflation, projecting an after-tax NPV of C$602 million and a 25% IRR.
The latest MRE, released in June, elevated a significant portion of the resource to the indicated category, now totaling 49.5 million metric tons of indicated resource averaging 4.22% zinc (4.6 billion lb) and 1.49% lead (1.6 billion lb), and 8.3 million metric tons inferred at 4.18% zinc (700 million lb) and 1.69% lead (300 million lb), marking a 214% increase in indicated resource from the previous assessment.
"We are very happy to have met a critical milestone with this MRE (mineral resource estimate) that successfully converted the majority of the mineral resources to the indicated category," said Osisko Metals CEO and Chairman Robert Wares during the announcement in June. "With our partner Appian Capital Advisory LLP, we can now rapidly advance Pine Point to the feasibility stage following finalization of trade-off studies."
With a robust resource base established and a series of promising assessments reinforcing Pine Point's potential, Osisko began exploring options to accelerate development and leverage industry expertise. This strategic approach ultimately led to a partnership aimed at advancing Pine Point toward modern production.
In early 2023, Osisko entered into a joint venture (JV) with Appian Capital Advisory LLP, a private equity firm specializing in the mining sector, to advance the Pine Point project.
Under the terms of the agreement, Appian committed to investing up to C$100 million (US$74 million), securing a pathway to earn up to a 60% interest in Pine Point Mining Limited (PPML), the new joint entity responsible for developing the project.
This investment was designated to fund critical stages of the project, including further exploration drilling, environmental assessments, and feasibility studies.
By combining Osisko's established groundwork with Appian's extensive development experience, the partnership aimed to position Pine Point as a leading zinc-lead producer, reinforcing its strategic role in the Northwest Territories.
With established highway access, a nearby railhead, and over 100 kilometers (62 miles) of haulage roads, Pine Point's location offers Osisko and Appian a strategic advantage, significantly lowering development costs.
This robust infrastructure, coupled with PPML's continual resource modeling and assessment efforts, has created a foundation poised for potential long-term mining operations. Recognizing the opportunity to drive sustainable growth for the Northwest Territories, especially for Hay River and surrounding communities, the JV pursued a formal MOU to foster collaboration with local stakeholders.
This agreement, which brings together corporate objectives and community needs, aims to maximize the economic potential of Pine Point for the region.
"Pine Point Mining Ltd. is committed to fostering positive and constructive relationships with communities with the aim of facilitating a positive impact from our mine development project and potential future mining operations for long-term sustainable growth for all communities impacted by our Project," said PPML CEO Jeff Hussey.
To foster transparency and build community trust, PPML has initiated a series of town hall meetings to engage with local communities.
Led by Hussey and PPML Sustainability Manager Veronica Chisholm, along with other company representatives, these sessions will cover essential aspects of the project, including mining operations, processing methods, tailings management, water management, and ongoing environmental studies.
The meetings aim to provide updates, address community questions, and gather feedback on the project's progress to date.
"The Pine Point mine presents an exciting opportunity to significantly benefit residents and businesses of Hay River," said Hay River Mayor Kandis Jameson. "Our Town Council looks forward to working closely with Pine Point Mining Ltd. to maximize the economic potential of the project while thoughtfully considering all aspects of community impact."
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