Friday 22nd November 2019

Resource Clips


Posts tagged ‘Baffinland Iron Ore Mines Corporation (BIM)’

Paved with promises II

October 9th, 2019

The North’s infrastructure deficit impacts sovereignty, the economy and quality of life

by Greg Klein

The North’s infrastructure deficit impacts sovereignty, the economy and quality of life

The Chinese government’s majority-held Izok Corridor project
would benefit from Canadian infrastructure. (Photo: MMG Ltd)

 

This is the second of a two-part series. See Part 1.

Canada would gain a deep-water arctic port, Nunavut would get its first road out of the territory and mineral-rich regions would open up if two mega-proposals come to fruition. Recent funding announcements to study the Northwest Territories’ Slave Geological Province Corridor and Nunavut’s Grays Bay Road and Port projects could lead to a unified all-season route from a highway running northeast out of Yellowknife to stretch north through the Lac de Gras diamond fields, past the Slave and Izok base and precious metals regions, and on to Arctic Ocean shipping.

In mid-August, as federal and NWT elections neared, representatives from both levels of government announced a $40-million study into a possible 413-kilometre all-season route linking the NWT’s Highway #4 with a proposed Nunavut road. The project would also extend the NWT electrical grid to the Slave region, which straddles both sides of the NWT-Nunavut border.

The North’s infrastructure deficit impacts sovereignty, the economy and quality of life

Isolated Grays Bay could become an arctic shipping hub,
helping fulfill a dream that dates back to John Diefenbaker
and, not exactly a contemporary, Martin Frobisher.
(Photo: Grays Bay Road and Port Project)

That same month the federal and Nunavut governments, along with the Kitikmeot Inuit Association, announced $21.5 million to study a possible 230-kilometre Nunavut section. That proposal includes building a deep-sea port at Grays Bay, about midway along the Northwest Passage. Supporters hope to reach the “shovel-ready” stage in two to three years.

A “champion and proponent” of the project, KIA president Stanley Anablak said, “We know that this is only the first step, but if it is constructed, this infrastructure project will be a game-changer with respect to improved community re-supply, marine safety, arctic sovereignty, regional economic development and international investment.”

KIA perseverance helped revive the proposal after Ottawa refused to provide majority funding for the $527-million estimate in April of last year, 18 months before the federal election.

Another supporter is MMG Ltd, with two advanced base metals deposits in the region: Izok holds 15 million tonnes averaging 13% zinc and 2.3% copper, while High Lake shows 14 million tonnes averaging 3.8% zinc and 2.5% copper.

The North’s infrastructure deficit impacts sovereignty, the economy and quality of life

The Nunavut portion of a grand trans-territorial proposal.
(Map: Grays Bay Road and Port Project)

The Kitikmeot region “hosts some of the world´s more attractive undeveloped zinc and copper resources,” MMG stated. “However, located near the Arctic Circle and with no supporting infrastructure, these resources have remained undeveloped since their discoveries roughly 50 years ago.”

But could a supposed nation-building project become a nation-buster, compromising sovereignty for the sake of another country’s new silk roads? The proposal’s main beneficiary “will be the Chinese government, more so than the government of Nunavut or the government of Canada,” Michael Byers told the National Post in August.

About 26% of MMG stock trades on the ASX. China’s state-owned China Minmetals Corp owns the rest.

Byers, a political science prof and holder of the Canada Research Chair in Global Politics and International Law, “does not see a problem with a Chinese-controlled company operating mines in Canada,” the NP stated, “but he wonders if the company will be allowed to bring in Chinese workers to build the road and if Canadian taxpayers should foot the bill.”

The prospect of a Chinese company importing Chinese workers for a Canadian resource project has already been demonstrated by HD Mining International. In 2012 the company planned to staff underground operations at a proposed British Columbia coal mine exclusively with Mandarin-speaking Chinese. The mine was later put on hold, but not before an 18-month bulk sampling program conducted entirely by Chinese workers.

A new Grays Bay port and 350-kilometre all-season road formed part of the 2012 pre-feasibility study for MMG’s proposed mine. The company has since backed away from the estimated $6.5-billion price tag, calling for collaboration with others to build regional infrastructure.

We know that this is only the first step, but if it is constructed, this infrastructure project will be a game-changer with respect to improved community re-supply, marine safety, arctic sovereignty, regional economic development and international investment.—Stanley Anablak,
president of the
Kitikmeot Inuit Association

Certainly other companies would benefit too, as would the communities represented by the KIA. And as for sovereignty, neglecting infrastructure would cause the greater setback. That’s the perspective of a Senate report issued in June that called for several measures to expand the northern economy and enhance its culture. “The impact of federal under-investment hits hardest on the Arctic’s greatest asset, Indigenous youth,” the committee emphasized. “Opportunities for nation-building can no longer be missed.”

Among the senators’ priorities were energy and communications, as well as transportation, for the benefit of communities and industry. The committee recognized that mining comprises “the largest private sector employer in the Arctic, contributing to 20% to 25% of the GDP of the northern territories and supporting about 9,000 jobs directly, or one in every six jobs.”

The report also noted “growing global interest in the Arctic and rising international rivalry outside of the Arctic. Several non-arctic states in Europe and Asia have developed arctic policies or strategies.” Canada’s sovereignty over the Northwest Passage and other arctic waters depends on the principle of use it or lose it, the committee suggested.

The Northwest Passage route to Asia had been an alternative considered by Baffinland Iron Mines, the Nunatsiaq News reported last month. With ambitious infrastructure proposals of its own, the Baffin Island company currently relies on  trans-Atlantic routes to Europe and has also used Russia’s Northern Sea Route to reach Asia.

As part of its Phase II plans to increase production, Baffinland has applied for permission to build the territories’ second railway, which would run north from the Mary River mine to the company’s Milne Inlet port, now reached by a 100-kilometre freight road. The new track would precede a 150-kilometre southern rail extension to a port the company would build at Steensby Inlet. The Steensby route and facilities received environmental approvals in 2014.

This is the second of a two-part series. See Part 1.

Related reading: Reaching arctic mines by sea.

Nunavut art, Nunavut gold celebrate Nunavut anniversary numismatically

June 26th, 2019

by Greg Klein | June 26, 2019

A bit late for the April 1 birthday but an impressive work just the same, the Royal Canadian Mint has unveiled its latest collector coin commemorating Nunavut’s creation. The gold comes from two territorial mines and the design from a Nunavummiuq artist.

Nunavut art, Nunavut gold celebrate Nunavut anniversary

The most recent coin displays
Germaine Arnaktauyok’s work.

“The Mint is passionate about honouring Canadian talent and celebrating our exceptional cultural diversity through beautifully crafted coins,” said president/CEO Marie Lemay. “We are proud to honour Germaine Arnaktauyok’s artistic legacy, in pure Nunavut gold, to wish the people of this important territory a happy 20th anniversary.”

With one-tenth of an ounce of 99.99% yellow metal from Agnico Eagle Mines’ (TSX:AEM) Meadowbank and TMAC Resources’ (TSX:TMR) Hope Bay mines, the coin has a face value of $20 but sells for $359.95 in a limited edition of 1,500. The piece depicts an Inuit drummer that Arnaktauyok created for a circulating toonie struck in 1999 on the new territory’s birth. The flip side portrays the Queen.

Nunavut art, Nunavut gold celebrate Nunavut anniversary

A 2018 coin featured Andrew Qappik’s images.
(Photos: Royal Canadian Mint)

It’s the second coin in a year featuring Nunavut gold and artistry. In June 2018 the Mint released a $20 piece using Meadowbank and Hope Bay gold as the canvas for Andrew Qappik’s images of a walrus, ptarmigan, polar bear, bowhead whale and narwhal.

By far Nunavut’s largest private sector employer, the industry now has four territorial mines in operation, including Baffinland Iron Mines’ Mary River and Agnico Eagle’s Meliadine, which achieved commercial gold production just last month. Agnico Eagle also has Amaruq, a satellite project 50 kilometres northwest of Meadowbank, slated for commercial production in Q3.

At Hope Bay, TMAC hopes to begin production on its Madrid and Boston gold deposits in 2020 and 2022 respectively, adding to current output from the Doris operation.

Baffinland currently has community consultations underway as part of a Nunavut Impact Review Board process for two railways that the company proposes building to expand Mary River output.

Among Nunavut’s other promising projects are Sabina Gold and Silver’s (TSX:SBB) Back River gold project, which has received all major permits since reaching feasibility in 2015, and De Beers’ Chidliak project, subject of the giant’s buyout of Peregrine Diamonds last year.

Read more about the Royal Canadian Mint.

Baffinland Iron Mines sets high Arctic high volume shipping record

November 8th, 2018

by Greg Klein | November 8, 2018

Competing with northern European coal and its own past performance, Baffinland Iron Mines claims the largest shipping program by volume for the Canadian and Scandinavian high Arctic. During an 86-day season that ended October 17, some 71 voyages carried an average 71,750 tonnes of iron ore each from the company’s Milne Inlet port at 71.25 degrees latitude. Destinations included continental Europe, the UK and, in a first for iron ore bulk transport, two trips along the Russian coast to Taiwan and Japan.

Total tonnage came to about 5.1 million, surpassing the previous 4.1-million-tonne record set by Baffinland in 2017. The ore comes from Mary River, 100 kilometres by road from the port.

Baffinland Iron Mines sets high Arctic high volume record

This year’s season included the world’s first two bulk transports
of iron ore through the Northern Sea Route to Asia.
(Photo: Baffinland Iron Mines)

President/CEO Brian Penney attributed “a successful, safe and responsible shipping season” to employees and shipping partners, as well as the support of northern Baffin Island communities and the Qikiqtani Inuit Association.

The Mittimatalik Hunters and Trappers Organization support an onboard monitoring program “to ensure no adverse environmental impacts or impacts on Inuit shipping vessels,” the company stated. “These programs combined scientific and traditional Inuit knowledge. No health and safety or environmental incidents occurred during the shipping program.”

An application before the Nunavut Impact Review Board proposes to replace Baffinland’s tote road with a railway linking the mine with Milne Inlet. Following community consultations, NIRB expects to make its recommendation in June, Baffinland communications officer Jason Leite tells ResourceClips.com. The federal cabinet decision should follow in 30 to 90 days.

The company also hopes to lay track south to a proposed Baffin Island port at Steensby Inlet. The Steensby route and facilities were approved in 2014, although market conditions prompted the company to scale its plans down radically to an Early Revenue Phase.

“The plan to go south to Steensby is still on the horizon and it’s part of our expanded growth outlook over the next decade, or even 15 to 20 years,” Leite says. “We’re taking a tiered approach to our expansion programs.”

The company’s eventual goal is 30 million tonnes per year. Last month Baffinland received federal approval to increase annual production from 4.2 million to six million tonnes despite a negative NIRB recommendation.

Held jointly by Nunavut Iron Ore and ArcelorMittal, Baffinland credits Mary River with “the highest grade of direct shipping iron ore in the world.”

Read more about Canadian arctic shipping.

Inuit org launches legacy fund for $24 million in mine royalties

October 5th, 2016

by Greg Klein | October 5, 2016

A Nunavut Inuit organization has collected more than $24 million from a mine that’s been in operation for two years, the Nunatsiaq News reported. The Qikiqtani Inuit Association gets the money from Baffinland Iron Mines under an Inuit Impact and Benefit Agreement for the Mary River iron ore mine, which began operations in September 2014. The QIA represents over 14,000 people.

Inuit org launches legacy fund for $24 million in mine royalties

Photo: Qikiqtani Inuit Association

“All of the Mary River project IIBA royalties have been sitting in a separate QIA account accumulating interest,” the paper quoted organization president P.J. Akeeagok speaking at an AGM on October 4. “The current value of that account is $24.2 million, to March 31, 2016.”

On October 5 the organization announced a legacy fund to deliver programs as well as guard the money for future generations. “We will want to hear from Inuit in our region what they would like to see done in terms of programming or projects with the Inuit money,” Akeeagok stated.

Early last month the group launched arbitration proceedings against the northern Baffin Island miner, claiming the company owed advance royalties of $6.25 million plus interest. “QIA is aware that the Mary River project has experienced financial pressures, but QIA negotiated substantial financial participation payments in the IIBA as compensation for the impact to Inuit of BIMC mining activities on Inuit Owned Lands,” the organization stated. “As such it is imperative to QIA that the objectives and intent of all IIBA provisions be complied with to the greatest extent possible.”

The dispute goes to a three-person panel in Vancouver on October 25 and 26.

Baffinland is held 50/50 by Iron Ore Holdings and ArcelorMittal, with the latter acting as project operator. Unprocessed ore is trucked 100 kilometres north to Milne port, from where it’s shipped to European customers.

Peregrine welcomes Nunavut port proposal, but few other mineral projects would benefit

July 31st, 2015

by Greg Klein | July 31, 2015

With a Canadian federal election call anticipated any day now, cynics are calling the Conservative government spending announcements “Christmas in July.” But one potential miner welcomes the plan to build a deep water port in the Nunavut capital of Iqaluit. Following the July 30 announcement by Nunavut MP and Minister of the Environment Leona Aglukkaq, Peregrine Diamonds TSX:PGD noted the Baffin Island facility would “dramatically” improve efficiency and costs for its flagship Chidliak project, 120 kilometres north. The company has a preliminary economic assessment planned for next year.

Peregrine welcomes Nunavut’s new port, but few other mineral projects would benefit

Although a deep sea port at Iqaluit would serve Baffin Island, this map shows most of Nunavut’s advanced stage projects located on the mainland.
(Image: NWT and Nunavut Chamber of Mines)

While Baffin Island’s only operating mine already has its own port, most Nunavut projects are on the mainland. Baffinland Iron Mines trucks iron ore from its Mary River mine to Milne Inlet, 100 kilometres away. The Nunavut Impact Review Board is currently reviewing Baffinland’s application to expand shipping from three summer months to 10 months a year.

As is the case for most of the territory’s exploration and development projects, Nunavut’s other mine sits on the mainland. Agnico Eagle’s (TSX:AEM) largest gold producer, Meadowbank, links to the hamlet of Baker Lake via an all-weather, 110-kilometre road. The mine “depends on the annual, warm-weather sealift by barge from Hudson Bay to Baker Lake for transportation of bulk supplies and heavy equipment,” the company states.

The feds offer to pay 75% of the Iqaluit port’s estimated $84.9-million price tag. The deal depends on the territorial government funding the rest, environmental approvals and, judging by her remarks, Aglukkaq’s re-election.

“What I can say is that if I’m re-elected, I’m going to make sure that the funding remains here,” the CBC quoted her. “And I’ve committed to it, I’ve announced it today, and that it is my commitment to delivering on this project.”

Feds sidestep Nunavut Planning Commission as Baffinland proposal goes to enviro review

July 14th, 2015

by Greg Klein | July 14, 2015

In a decision sure to stir controversy, Ottawa has exempted a Baffinland Iron Mines proposal from the Nunavut Planning Commission. Despite the NPC’s opposition, the plan moves on to the Nunavut Impact Review Board, which will conduct an environmental and socio-economic study prior to recommending a pass or fail.

Feds sidestep Nunavut Planning Commission as Baffinland proposal goes to environmental review

After radically scaling back plans for its Mary River mine,
Baffinland now wants to expand arctic shipping.

The company’s Phase II proposal would expand shipping its Baffin Island port to 10 months a year, requiring icebreaking facilities. The NPC opposed the plan out of concern for wildlife harvesting, traditional activities and community travel routes. In May Baffinland asked Ottawa’s Minister of Aboriginal Affairs and Northern Development for an exemption from the NPC decision. That was granted in a July 13 letter from Minister Bernard Valcourt.

He stressed that Baffinland must meet the requirements of the environmental impact assessment, otherwise “the project proposal will of course fail at that stage.”

Although Inuit groups argued against the proposal, Nunavut Premier Peter Taptuna “stressed the importance of 260 jobs, millions of dollars of wages and benefits as well as other future benefits that might flow from this project proposal,” Valcourt stated. “Premier Taptuna was concerned that any delay might put these benefits at risk. This concern is particularly acute if, as suggested by Baffinland, the economic viability of the existing Baffinland project depends on the Phase II project proposal. We must consider not only the risks of proceeding, but also the risks of not proceeding.”

We must consider not only the risks of proceeding, but also the risks of not proceeding.—Bernard Valcourt, Minister of
Aboriginal Affairs and
Northern Development

The operation is owned 50/50 by Iron Ore Holdings and project operator ArcelorMittal. Baffinland drastically downsized its Mary River plans in January 2013, just weeks after getting environmental approval for what would have been a $4-billion project. The company began mining in September the following year, trucking its first load of iron ore 100 kilometres to a port under construction at Milne Inlet. The original plan called for shipping to Europe year-round, the revised plan for three summer months and now Phase II proposes 10 months.

Following the NIRB review, the board will recommend Valcourt approve or reject Baffinland’s proposal.

Last week AREVA Resources Canada and its joint venture partners asked Valcourt to disregard the NIRB’s negative review of the proposed Kiggavik uranium mine near Baker Lake.

Week in review

January 11th, 2013

A mining and exploration retrospect for January 5 to 11, 2013

by Greg Klein

Next Page 1 | 2

A rescue plan for the juniors

What started as a routine update from MacDonald Mines Exploration TSXV:BMK quickly became a cri de coeur about the state of the juniors. But the company’s Wednesday news release blamed more than economic uncertainty. President/CEO Kirk McKinnon took on high-frequency traders, banks that discourage exploration investment and politicians who seem not to know or care.

He went on to make some recommendations: Ban high-frequency trading, disallow TSX trading credits for placing bids, ease the way for bank customers to allocate a small portion of their portfolio to junior explorers, require bank analysts to rate individual juniors, increase flow-through tax credits and stop short-selling stocks valued under $1.

Pointing to “dire predictions that over half of the junior mining companies will disappear within the next few years,” McKinnon warned that Canada could face higher unemployment while driving out expertise that’s “recognized as the world’s best” in a sector that stimulates the wider economy.

According to Friday’s Financial Post, “McKinnon’s comments have generated excitement, including many e-mails applauding his statements but wondering why they hadn’t been made in the past. One market participant, not a shareholder of MacDonald Mines, noted: ‘This guy is bang on about the HFT, flowthroughs [given that the low-hanging fruit has been harvested], banks’ non-participation, bid credits and no liquidity or capital in the junior markets.’”

In December Kaiser Research Online editor John Kaiser said algorithmic short-sellers could drive juniors from the TSXV to the Australian Securities Exchange.

Arctic iron mega-project suddenly slashed

Baffinland Mary River camp in Nunavut

Days before Nunavut regulators approved the original $4-billion
Mary River proposal, Baffinland directors decided on a
significantly more modest revision.

The announcement came as a “bolt from the blue,” the Nunatsiaq News reported on Thursday. Just weeks after receiving environmental approval for the largest mining project in the Canadian Arctic, Baffinland Iron Mines asked Nunavut regulators for permission to downsize and delay aspects of its Mary River iron ore project.

Under the revised proposal, Baffinland would put off building a 150-kilometre railway and deep-sea port, cut shipping from year-round to a three-month season and slash production from 18 million to 3.5 million tonnes a year.

The company blamed financing difficulties. “This same effect is being felt by many major projects around the world,” Baffinland stated. “Additionally, the risks associated with large capital developments are magnified during tight financial markets.”

Baffinland decided on the revision just before Christmas, the News reported. The Nunavut Impact Review Board approved the original proposal just after Christmas.

Baffinland said it’s still committed to the entire $4-billion plan. But the company didn’t set a date for full implementation.

Baffinland is owned 50/50 by ArcelorMittal and Iron Ore Holdings. Last October the Financial Times reported that ArcelorMittal was considering the sale of 30% of its Canadian operations.

Meanwhile “volatile iron ore prices in 2013 should prompt Chinese firms to continue investing in Canadian development projects,” stated a Canadian Press story in Wednesday’s Victoria Times Colonist. The news agency said Chinese bought into five Canadian iron projects last year, including the 15% acquisition of ArcelorMittal Mines Canada by China Steel and South Korea’s POSCO for $1.1 billion. Desjardins Capital Markets analyst Jackie Przybylowski told CP she thinks investments will continue on “an opportunistic basis.”

Click here for a Globe and Mail infographic showing Baffinland’s original proposal.

Next Page 1 | 2

Baffinland Iron Board recommends acceptance of $590M Takeover Bid

January 17th, 2011

The Board of Directors for Baffinland Iron Mines Corporation BIM:CA has recommended that the company’s securityholders accept the joint offer to acquire Baffinland Iron for $590 million made by Nunavut Iron Ore Acquisition Inc and ArcelorMittal. The joint offer is to aquire all outstanding common shares of Baffinland Iron for $1.50 per common share and 2007 common share purchase warrants for $0.10. The joint offer represents a 36% premium on ArcelorMittal’s original offer of $1.10 for all common shares and an 80% premium on the original Nunavut offer of $0.80 per share.

Baffinland Iron is a publicly-traded junior mining company that is focused on its wholly-owned Mary River iron ore deposits located on Baffin Island, Nunavut Territory, Canada.

View Company Profile

Contact:
Phoenix Advisory Partners
416.385.6020
or 800.503.9445

by Ted Niles