Saturday 6th June 2020

Resource Clips


Open and shut cases: North

How do the territories’ mine openings compare with closures for 2019 and 2020?

by Greg Klein

This is Part 1 of a four-part series.

  • See Part 2, covering the western provinces.
  • See Part 3, covering Ontario.
  • See Part 4, covering Quebec and Atlantic Canada.
  •  

    One indication of the state of mining involves the vital statistics of births and deaths—the new mines that arrived and the old mines that left. To that end we survey each Canadian region for some of the major gains and losses that occurred over the past year or are expected for the next. The first of this multi-part series looks at the country’s three northern territories, with each distinct jurisdiction contributing to a study in contrasts.

    Yukon

    Yukon without mining? That might surprise people better acquainted with the territory’s past than its present. But such was the case for nearly a year, following the suspension of Minto, Yukon’s sole remaining hardrock mine up to 2018. Nevertheless operations returned to this fabled mining region in September as Victoria Gold TSXV:VIT celebrated Eagle’s debut. By late November the company reported 10,400 ounces of gold and 1,600 ounces of silver from the heap leach operation.

    How do Canada’s mine openings compare with closures in 2019 and 2020?

    Victoria Gold finished construction a month early on
    Yukon’s largest-ever gold mine. (Photo: Victoria Gold)

    Less than two weeks later the company unveiled an updated feasibility study raising the annual production target for the territory’s largest-ever gold mine from 200,000 to 220,000 gold ounces, based on a 20% increase in proven and probable reserves for the Eagle and Olive deposits. Victoria expects to reach commercial production in Q2 2020.

    By mid-October Minto came back to life under LSE-listed Pembridge Resources. Capstone Mining TSX:CS had placed the underground mine on care and maintenance in 2018, after about 11 years of continuous operation, as acquisition negotiations with Pembridge stalled. But the companies sealed the deal last June. Within weeks of restart Pembridge reported 1,734 dry metric tonnes of copper-gold-silver concentrate. Proven and probable reserves totalling 40,000 tonnes copper, 420,000 ounces silver and 45,000 ounces gold give Minto an estimated four more years of production.

    Among the most advanced Yukon projects is BMC Minerals’ Kudz Ze Kayah, a zinc deposit with copper, lead, gold and silver. The privately owned UK-based company reached feasibility in June and hopes to begin at least nine years of mining in 2021.

    Environmental/socio-economic reviews continue into Newmont Goldcorp’s (TSX:NGT) Coffee gold project and Western Copper and Gold’s (TSX:WRN) Casino polymetallic project. Should Casino make it into operation, the copper-gold-silver-molybdenum operation would be by far the territory’s largest mine.

    Read more about Yukon mining.

    Northwest Territories

    Confidence in the territorial economy fell last October when Moody’s downgraded a $550-million bond issued by Dominion Diamond. “There’s no plan in place to extend the mine life at a time when the debt is coming closer and closer to coming due,” the credit ratings agency’s Jamie Koutsoukis told CBC. “We continue to see a contraction in the time they have to develop this mine plan.”

    Part of the Washington Group, Dominion holds a majority stake in Ekati and 40% of Diavik, where Rio Tinto NYSE:RIO holds the remaining 60%. Along with De Beers’/Mountain Province Diamonds’ (TSX:MPVD) Gahcho Kué, the three diamond operations comprise the territory’s largest private sector employer.

    How do Canada’s mine openings compare with closures in 2019 and 2020?

    Agnico Eagle once again laid claim to Arctic riches with the
    Amaruq satellite deposit, over 300 kilometres west of Hudson Bay.
    (Photo: Agnico Eagle)

    In an October presentation before the territory’s newly elected legislative assembly, the NWT and Nunavut Chamber of Mines urged the government to safeguard the economy by improving investor confidence in the mining industry.

    An election year in the NWT and Canada-wide, 2019 brought optimistic talk and initial funding for the NWT’s Slave Geological Province Corridor and Nunavut’s Grays Bay Road and Port, two transportation proposals that would offer enormous potential for mineral-rich regions in both territories.

    Nunavut

    “Whispers could be heard throughout the room as intervenors turned to their colleagues. Members of the audience turned their heads, looking for Baffinland’s reaction to what was unfolding. Baffinland officials sat stone-faced, sometimes crossing their arms and looking down at the table as [Nunavut Tunngavik Inc. president Aluki] Kotierk spelled out the motion.”

    That was the scene described by the Nunatsiaq News as the Nunavut Impact Review Board abruptly suspended hearings into Baffinland Iron Mines’ $900-million Phase II expansion plans for Mary River. The proposals, already accepted by Ottawa, include building a railway to replace a 100-kilometre road north to the company’s Milne Inlet port and doubling annual production to 12 million tonnes iron ore. The new railway proposal comes in addition to a previously approved but un-built 150-kilometre southern rail link to a harbour that had been planned for Steensby Inlet.

    The company maintains that expanded production and a northern rail line will be crucial to the existing operation’s viability. Responses at public hearings ranged from support to skepticism and outright opposition. Within weeks of the hearings’ suspension and a month ahead of a scheduled layoff, Baffinland let go 586 contractors who had been working on expansion preparations.

    How do Canada’s mine openings compare with closures in 2019 and 2020?

    About 290 kilometres southeast of Meadowbank, Agnico
    Eagle celebrated Meliadine’s first gold pour in February.
    (Photo: Agnico Eagle)

    Despite all that, operations continue at Mary River and Nunavut remains a bright spot in Canadian mining.

    That’s largely due to Agnico Eagle TSX:AEM, which brought two new operations to the territory. Meliadine began commercial production months ahead of schedule in mid-May, followed by Amaruq in late September.

    As a satellite deposit, Amaruq brings new life to the Meadowbank mine and mill complex 50 kilometres southeast. With the latter mine wrapping up its ninth and last year of operation, Amaruq’s open pit offers an estimated 2.5 million ounces up to 2025. Should hoped-for permitting come through in late 2020, a Phase II expansion could broaden the lifespan. Meanwhile drilling seeks to upgrade the project’s underground resource.

    Meliadine began with underground production but has an open pit scheduled to come online by 2023. Combined open pit and underground reserves of 3.75 million gold ounces give the operation a 14-year life.

    TMAC Resources’ (TSX:TMR) expansion plans moved forward in October as construction began on an underground portal to Madrid North, a fully permitted deposit that could enter production by late 2020. The new operation’s probable reserves of 2.17 million gold ounces far overshadow the company’s other three Hope Bay deposits, which total 3.59 million ounces proven and probable.

    By comparison, the current Doris operation hosts 479,000 ounces proven and probable. Hope Bay has updated resource/reserve and prefeas studies scheduled for Q1 2020.

    This is Part 1 of a four-part series.

  • See Part 2, covering the western provinces.
  • See Part 3, covering Ontario.
  • See Part 4, covering Quebec and Atlantic Canada.

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