Sunday 8th December 2019

Resource Clips


Posts tagged ‘diamonds’

Mining for the future

November 21st, 2019

Saskatchewan Research Council R&D fosters innovation and sustainability

by Greg Klein

Predictably for a jurisdiction so rich in potash and uranium, mining plays a prominent role in the Saskatchewan Growth Plan, a 10-year economic program announced last week. Skeptics, however, might question the goal to extract lithium and rare earths locally and even set a near-precedent in non-Chinese commercial REE separation. But it turns out that some of that work has been underway for years, while other targets have already been in the planning stage. That’s just part of a wide range of mining expertise developed and applied by the Saskatchewan Research Council.

Saskatchewan Research Council R&D fosters innovation and sustainability

SRC employees look over the remediated Lorado mill site
in northern Saskatchewan. (Photo provided by SRC)

SRC figures strongly in the province’s new agenda, whose mining-related initiatives include a continuation of the PST exception on drilling, streamlining permitting, creating a Geoscience Data Management System, boosting annual uranium and potash sales, upgrading and building road, rail, pipeline and power infrastructure, and developing nuclear energy.

If some of the mining-specific plans sound over-ambitious, it’s reassuring to learn how few of them are actually new. “The fact that the projects have been promoted in an integrated growth plan is in some ways new, and some of the projects themselves are fairly new in the public domain,” says SRC president/CEO Mike Crabtree. But a surprising amount of work is well underway at his organization, which plays an integral role in the growth plan, in Saskatchewan industry and, increasingly, on the global mining scene.

A Crown corporation with over 340 employees, 1,400 clients in 23 countries and $75 million in annual revenue, SRC focuses its largest division on mining and energy. Mining-related R&D covers everything from early exploration to remediation, with growing attention to sustainability and innovation.

Saskatchewan Research Council R&D fosters innovation and sustainability

Rare earths solvent extraction helps develop another
source of critical minerals. (Photo provided by SRC)

The SRC boasts the largest potash, uranium and diamonds labs in the world. Most Canadian diamond production and a substantial amount of kimberlite from around the world passes through the Saskatoon facility.

“With uranium we test tens of thousands of ore samples per year, predominantly for Saskatchewan but also on a global basis. In terms of that, we’re very much the largest laboratory in the world and, for very similar reasons, for potash.”

But SRC’s work goes far beyond assays. “We’ve also used those laboratories for designing and modelling mine feasibility, through to diagnostics and optimization of ongoing mine operations, and then monitoring and remediation for closure,” Crabtree explains. “That’s full-cycle mining and minerals, making SRC probably one of the largest integrated testing, research and development facilities for mining, certainly in Canada and possibly in the world.”

One sustainability project focuses on comminution, the highly expensive and energy-consuming practice of breaking, crushing or grinding rock for further processing. SRC’s advanced ore sensor and sorting techniques can greatly reduce the procedure with no loss of production and sometimes even an improvement.

Saskatchewan Research Council R&D fosters innovation and sustainability

The SRC’s mineral processing labs handle extensive
work in addition to assays. (Photo provided by SRC)

“We’re already seeing the opportunity to reduce energy costs and therefore the carbon footprint by anywhere from 20% to 40%. That’s huge given that often 40% of operating costs are in energy. That kind of sustainability and economic optimization really just shows different sides of the same coin.”

Remediation work applies leading edge expertise to former mines through SRC’s Project CLEANS, which takes on the challenge of mitigating some 37 former uranium sites that shut down during the 1960s and earlier.

On another front, Crabtree says SRC oil and gas expertise brings “a lot of synergies” to the development of in-situ mining, a method that’s being tested on potash and uranium projects in Saskatchewan.

As for strategic minerals, the SRC harbours some surprising ambitions: local lithium and rare earths extraction, along with processing in both areas including commercial-scale REE separation. That last goal could give Saskatoon a key role in challenging China’s near-monopoly on rare earths supply chains.

Looking at lithium, Saskatchewan has two potential sources, the continental brines of the southern province, as well as oil and gas-produced waste water.

Starting with lithium levels of 50 ppm to 150 ppm, “SRC has developed technology to concentrate those brines up to maybe 2,500 or 3,000 ppm while excluding the contaminants, which makes processing to lithium hydroxide or lithium carbonate much easier and financially viable,” Crabtree says.

Saskatchewan Research Council R&D fosters innovation and sustainability

SRC oversees the Cowessess First Nation Renewable
Energy Storage Facility. (Photo provided by SRC)

Another possible source of critical minerals from waste comes from the world’s highest-grade uranium resources, which offer rare earths potential from tailings.

Of course with rare earths, the greatest challenge remains processing and separation. SRC plans to develop technology that could be applied to liquid raffinate from waste, or to the bastnasite or monazite minerals often associated with RE deposits.

Phase I begins next year. Working with industrial partners, SRC intends to produce a concentrate of 99.95% mixed rare earths oxides or rare earths carbonate.

Phase II, subject to funding from industry and government, will be to separate the concentrate into individual elements. He foresees “a smaller-scale commercial plant that would demonstrate the commercial viability of that technology. We can see a plant operating within about three years, assuming we can get funding. If no other plant is built by 2003, it would be the first commercial plant in North America.”

And a momentous achievement. Except for the Lynas facility in Malaysia and possibly a small-scale operation in France, there’s currently no commercial RE separation outside China, he points out.

Additionally, “we believe the process will be substantially more economically viable and much more environmentally sustainable than current techniques.”

Saskatchewan’s Growth Plan also calls for nuclear power. By becoming a consumer of its own uranium, the province hopes to drastically cut its dependence on coal and natural gas-fired electricity.

Saskatchewan Research Council R&D fosters innovation and sustainability

Staff operate SRC’s Centre for the Demonstration of
Emissions Reductions Mobile Facility. (Photo provided by SRC)

Again, SRC can offer a range of expertise. “We have experience not only with mining and processing uranium but also with an operational research reactor, which we just de-fueled in September. So we are the only entity in the province that has a nuclear reactor operating licence. In addition, other parts of SRC are highly skilled at environmental assessment and engineering assessment, so we hope SRC will be playing a role in Saskatchewan for small modular reactors.”

What comes up repeatedly in SRC’s work is the convergence of economics and sustainability as researchers find newer, less expensive and greener methods of producing materials that are, in turn, crucial to economic and environmental well-being. Ongoing innovation, of course, plays a vital role.

So it’s not surprising that a growing SRC priority is artificial intelligence—“specifically for industrial and resource processes in Saskatchewan,” Crabtree emphasizes.

“A lot of the processes that we’re talking about, whether it’s rare earths, lithium, sensor-based sorting, in-situ mining, all these things are going to have a significant deep data analytics and artificial intelligence component. That’s something we’re working very closely on.”

Looking ahead, he adds, “It will be difficult to envisage major projects like these in the next five years that don’t have a significant AI component.”

Read more about mining’s role in the Saskatchewan Growth Plan.

Read the Saskatchewan Research Council blog.

Northern challenge

November 8th, 2019

NWT prosperity depends on rebuilding investor confidence, miners warn

by Greg Klein

NWT prosperity depends on rebuilding investor confidence, miners warn

 

What happens when a mining-based economy runs out of mines? The Northwest Territories risks finding out the hard way but the reason won’t be a lack of mineral resources. For too long, investors have been discouraged from backing territorial exploration. That’s the message the NWT and Nunavut Chamber of Mines delivered to the legislative assembly in Yellowknife last month. Now the industry group awaits a response, one backed with action, as the newly elected government prepares for its four-year term.

The territory’s three mines, all diamond operations, have passed peak production, facing closures over the coming decade. The NWT hosts only a few advanced projects, none comparing in potential economic clout with the big three. The problem contrasts with the NWT’s two northern neighbours, where the industry continues to thrive.

Projections released in July by the Conference Board of Canada call for Nunavut to lead the country in annual economic expansion, with an average 4.6% up to 2025. “Mining will be the main driver of growth, as Agnico Eagle prepares to bring its Meliadine mine and Amaruq satellite deposit into operation, and Sabina works on its Back River project.”

More tepid growth in mining will have repercussions on other areas of the economy, with growth in services-based industries remaining flat for much of the forecast. In all, economic growth in the Northwest Territories is forecast to contract by an average annual pace of 1.6% between now and 2025.—Conference Board of Canada

Yukon “will also experience a boom, with growth of 4.6% this year and 6.2% in 2019,” again thanks to mining. But the NWT faces decline:

“Two new metal mines should help offset some of the losses for the mining sector, but not until after 2020,” the Board stated. “More tepid growth in mining will have repercussions on other areas of the economy, with growth in services-based industries remaining flat for much of the forecast. In all, economic growth in the Northwest Territories is forecast to contract by an average annual pace of 1.6% between now and 2025.”

A lack of exploration spending explains the lack of projects in the pipeline, according to the Chamber of Mines. “The NWT has basically been flat-lining for the last 12 years,” says executive director Tom Hoefer. “That’s a problem because that’s the very investment you need to come up with new mines.”

But it’s a problem industry can’t solve without government help, he emphasizes.

“The government goes to Roundup and other conferences with really good marketing tools and they’re putting out all the right messages, such as: ‘Come unlock our potential.’ But if it’s that easy, why hasn’t the industry picked up?” Hoefer asks.

“Well, it’s because these other things happen.”

His group outlined a number of causes in its presentation to the assembly: high cost of living, relative lack of infrastructure, regulatory uncertainty, unsettled land claims and additional expanses of land (over 30% of the territory) deemed off limits for exploration and development.

NWT prosperity depends on rebuilding investor confidence, miners warn

Benefiting from previously built infrastructure,
NorZinc hopes to begin zinc-lead-silver mining
at Prairie Creek by 2022. (Photo: NorZinc)

Hoefer also mentions “contortions” imposed on companies. As examples he cites some early-stage exploration projects that were sent to environmental assessment, “something that would never happen in southern Canada,” and two companies being required to collect data about lakes from which they might or might not draw water in small amounts for diamond drilling, “a totally new requirement, totally out of step with what happens in the rest of the country.

“What that says to investors is, ‘You’d better be careful when you come up to the NWT because there are these surprises coming out of the woodwork.’”

Convincing the territorial government calls for a different approach than in most of Canada. With no political parties, the Chamber deals with 19 individual MLAs tasked with working on consensus. They put together collective priorities, Hoefer explains, then create a mandate for their four-year term. His group looks forward to seeing the current mandate, expected to be released soon.

“Candidates don’t run on a platform but on a community-by-community basis, saying ‘this is what I would do for our community.’ So the challenge is pulling them all together to serve the entire NWT and try to keep them on that path over the next four years.”

Should problems remain unresolved, however, the territory risks an unfortunate repeat of late 1990s history.

NWT prosperity depends on rebuilding investor confidence, miners warn

Considerable infrastructure remains at the former
Pine Point operation, where Osisko Metals upgrades
Canada’s “largest pit-constrained zinc deposit.”
(Photo: Osisko Metals)

“We were in a similar situation before the first diamond mine opened because the gold mines were winding down. At the same time Nunavut was created, and the new territory pulled a lot of funding away to create a parallel government. The Yellowknife economy really took a dive and housing prices went way down. At the time the government was actually offering $10,000 grants to encourage people to buy homes. We went through a lot of pain then, but I think a lot of people have forgotten that.”

Even Ekati seemed insufficient to buoy the economy. “But when Diavik got its approval the change was palpable. There was this big sigh of relief, money started to flow and the economy turned around.”

Now the challenge is to overturn 12 years of neglect that have made investors “gun shy about the NWT,” he says. “We have to rebuild that trust by showing that things are different now. It’s going to take all of us working together to help make it better.”

With no other industries ready to take mining’s place, “we have to encourage companies to come up here and bring their expertise to do what government can’t do, and that’s turn rock into opportunity.”

 

Current and potential mines: Comparing job numbers and durations

 

NWT prosperity depends on rebuilding investor confidence, miners warn

While updating indicated and inferred resources,
Vital Metals sees near-term potential for a short-lived
operation at its Nechalacho rare earths deposits.
(Photo: Avalon Advanced Materials)

Employment numbers reported by the Chamber for the NWT’s existing diamond mines in 2018 show 1,625 workers at Dominion Diamond Mines’ majority-held Ekati, 1,113 at Rio Tinto’s (NYSE:RIO)/Dominion’s Diavik and 527 at De Beers’/Mountain Province Diamonds’ (TSX:MPVD) Gahcho Kué.

Projections for the territory’s four likeliest potential mines show estimated average annual employment of 363 workers at Prairie Creek (for 15 years), 300 at Pine Point (13 years), 225 at NICO (21 years) and 30 at Nechalacho (four years).

The NWT’s next mine will be Prairie Creek, according to NorZinc TSX:NZC. Built to near-completion by 1982 but never operated, the zinc-lead-silver project reached feasibility in 2017. The company hopes to receive its final permit, for an all-season road, this month. Should financing fall in place, NorZinc plans to begin production in 2022.

Having operated from 1964 to 1987, the Pine Point zinc-lead camp retains infrastructure including an electrical substation and an all-season 96-kilometre link to Hay River, the head of Canada’s only industrial railway north of 60. A previous operator reached PEA in 2017 but current owner Osisko Metals TSX:OM has been drilling the property to upgrade a 2018 inferred resource of 38.4 million tonnes averaging 4.58% zinc and 1.85% lead, for 6.58% zinc-equivalent, Canada’s “largest pit-constrained zinc deposit.”

Fortune Minerals’ (TSX:FT) NICO cobalt-gold-bismuth-copper project reached feasibility in 2014 based on a mill production rate of 4,650 tpd for a combined open pit and underground operation. A further study considered but rejected a rate of 6,000 tpd. Fortune now has several other proposals under consideration to improve the project’s economics and “align the development schedule with the expected deficit in cobalt supply in 2022-23.”

The project sits about 50 kilometres north of Whati, which will have an all-season connection to Yellowknife via the Tlicho road now under construction.

Avalon Advanced Materials TSX:AVL brought its Nechalacho rare earths project to feasibility in 2013 but this year divided the property with another company, privately owned Cheetah Resources which was taken over by ASX-listed Vital Metals in October. Under a $5-million property acquisition that closed soon after the takeover, Vital gets two near-surface deposits while Avalon retains the ground below that. Now working on an update to the indicated and inferred resources, Vital says its deposits show near-term “potential for a start-up operation.”

See the Chamber’s PowerPoint presentation to the NWT government.

Related:

Global decline affects exploration in Canada and abroad

October 18th, 2019

by Greg Klein | October 18, 2019

Some optimistic indications are already apparent but 2019 marked a generally disappointing year for exploration spending world-wide. The upturn that began in 2016 slumped in late 2018 and continued to languish through most of this year. That’s the verdict of S&P Global Market Intelligence, which announced the exploration world’s first cumulative budget decrease since 2016 and Canada’s first slip behind Australia since 2001. Commodity prices and U.S.-China trade tensions played a role, but so did corporate mergers, S&P found.

Canadian companies follow global decline in exploration

“Difficult market conditions and high-profile M&A activity have unsurprisingly impacted budgets the most, as the amount of money being raised by companies dropped sharply from November 2018 through February of this year,” said S&P’s Mark Ferguson, who co-wrote the study with Kevin Murphy. “We are encouraged, however, by some positive signs, such as the rising number of active companies, and copper recording a year-over-year increase.”

The data comes from a survey of 3,300 public and private companies to determine their spending on non-ferrous exploration within continents and regions or, in the case of top three countries Canada, Australia and the United States, within national borders.

Preliminary data shows an estimated $300-million drop in global nonferrous exploration spending this year, to $9.8 billion (all figures in U.S. dollars). But the decline was hardly uniform. Of those countries that bucked the trend, Australia attracted the highest spending increase within its borders, gaining $199 million while Canada dropped by $134 million.

Despite Latin America’s $117-million decline, the region retained global first place with $2.62 billion in spending. Australia’s $1.53 billion took second place, followed by the Rest of the World category’s $1.44 billion, Canada’s $1.31 billion, Africa’s $1.12 billion, the United States’ $944.8 million and Pacific/Southeast Asia’s $327 million.

Exploration at existing mine sites outpaced grassroots and advanced-stage projects, continuing a trend since the 1990s. This year’s mine site exploration grew by $225.6 million to reach $3.6 billion, compared with reductions of $529.4 million for advanced stage projects and $35.7 million for grassroots work. “This marks the first year that mine site allocations have accounted for the largest share of global exploration at 38.5%, with late stage dropping to 35% and grassroots almost flat at 27%,” S&P stated.

As is normally the case in high-level mergers, the exploration budgets of the combined entities are much lower than the totals budgeted by the individual pre-merger companies, with Newmont Goldcorp Corp [TSX:NGT] and Barrick Gold Corp [TSX:ABX] allocating about $48 million and $54 million less, respectively, than the two pairs of companies did in 2018.—S&P Global Market Intelligence

Among culprits for the overall decline was M&A, “most notably the Newmont-Goldcorp and Barrick Gold-Randgold tie-ups.”

Additional factors included market apprehension about China and the U.S. along with generally disappointing commodity performance. Exceptions were “mostly smaller players.” Despite rising prices in nickel and palladium, the two metals combined attracted less spending than zinc. But thanks largely to copper, base metals exploration overall rose by $191.1 million to $3.23 billion.

Diamonds increased for the second time since 2012, by $75.8 million to $304.6 million.

If gold offered encouragement, it came too late for 2019 budgets. The yellow stuff suffered the worst exploration decrease of any of the survey’s commodities, dropping by $559.4 million to $4.29 billion. Although still a contender for 2020 improvement, “any rise in gold budgets will likely be offset by lower allocations for other commodities.” As a result, S&P predicts next year’s exploration budgets “to remain fairly flat.”

Global spending by Canadian explorers will total about $2.16 billion this year, according to a forecast released by Natural Resources Canada in August (these figures in Canadian dollars). That number compares with $2.3 billion last year. Juniors are expected to pony up about $961 million and seniors another $1.2 billion, marking declines of 4% and 9% respectively from 2018.

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.

New NWT assembly faces economic challenges with resource depletion and exploration cutbacks: Chamber of Mines

October 3rd, 2019

by Greg Klein | October 3, 2019

Even with three candidates winning by acclamation, Tuesday’s Northwest Territories election featured several closely fought contests that left two Yellowknife ridings up for recount. Current standings in the party-less legislative assembly show 12 newcomers out of 19 seats. Former premier Bob McLeod didn’t run and only one cabinet minister, Caroline Cochrane, won re-election.

Mining comprises the jurisdiction’s biggest private sector employer but the three current operations, all diamond mines, face depletion. With no comparable advanced projects to take their place and a drop in exploration spending, the territory faces “impending economic decline,” the NWT and Nunavut Chamber of Mines warned. The group called on the new assembly to strengthen mining and exploration as well as diversify the economy by working with Ottawa to improve road and power infrastructure.

“We are hopeful the 19th Assembly will accept this challenge with gusto,” said Chamber president Gary Vivian. “Our Chamber of Mines looks forward to helping the newly elected Assembly in taking steps quickly to rejuvenate investment and reverse the expected decline in mineral production and its significant benefits to the NWT.”

The Chamber polled candidates during the campaign for responses on mining-related questions. In another document distributed to candidates, the Chamber offered recommendations on seven mining-related issues:

New NWT legislative assembly faces economic challenges with resource depletion and exploration cutbacks

  • access to land

  • insufficient infrastructure

  • high Northern costs

  • regulatory costs and delays

  • Indigenous governments’ expectations and demands

  • public awareness of the industry

  • a strategy to improve investment confidence

Last year’s Fraser Institute survey of mining companies showed the territory climbing to 10th place from #21 on the Investment Attractiveness Index, which rates a region’s geological bounty as well as government policies. But the NWT languished at #42 on the Policy Perception Index, which focuses on government treatment of the industry.

Data quoted by the Chamber attributes over 40% of territorial GDP to mining and exploration, and 1,540 jobs in 2018 to diamond mining. As of January 1 the territory’s population came to 44,598 people, according to a Statistics Canada estimate.

In a system that recognizes no political parties, the MLAs will meet on October 25 to choose a premier and six-member Executive Council that acts as the government’s decision-making body.

Almod Diamonds opens a cutting and polishing facility in Yellowknife

September 25th, 2019

…Read more

Osisko Gold Royalties continues expansion with Barkerville Gold Mines takeover

September 23rd, 2019

by Greg Klein | September 23, 2019

Already holding around 32.6% of the target company, Osisko Gold Royalties TSX:OR intends to grab the rest of Barkerville Gold Mines TSXV:BGM. The definitive agreement follows a PEA released last month for Barkerville’s Cariboo gold project. Osisko also announced creation of the North Spirit Discovery Group, described as a resource development and finance company that will work with JV partners and/or private equity firms.

Osisko Gold Royalties continues expansion with Barkerville Gold Mines takeover

The takeover offers new expertise and
financing to help revive an historic mining region.

Noting benefits to the takeover target, Osisko said it would provide technical expertise and greater access to financing to develop the central British Columbia project.

Pending approvals, the deal would exchange each Barkerville share for 0.0357 of an Osisko share, representing a 44% premium, the companies stated. The implied price comes to $338 million fully diluted, including the Barkerville shares already held by Osisko. The transaction would leave current Osisko and Barkerville shareholders with about 91% and 9% of Osisko shares respectively.

The companies anticipate closing in November.

Cariboo’s PEA forecast an after-tax IRR of 28% and NPV of $402 million for 11 years of underground mining producing an average 185,000 gold ounces a year. Initial capex would require $305.5 million. Processing would take place at Barkerville’s QR mill, about 140 kilometres by road.

The updated resource gives three main zones and a satellite zone a total of 2.27 million ounces indicated and 1.91 million ounces inferred. Two additional zones bring the totals to 2.44 million ounces measured and indicated, along with 1.92 million ounces inferred.

Drilling continues, with more funding to come through a $7-million bridge loan from Osisko.

Sean Roosen, CEO of Osisko and chairperson of both companies, said Osisko “expects to fund planned work through available liquidity, future revenue from royalties and streams, project debt, as well as outside private equity and joint venture capital through the creation of the North Spirit Discovery Group.”

Earlier this month Osisko signed an LOI to take over Quebec’s Renard diamond mine. The deal would keep the mine operating as Stornoway Diamond TSX:SWY entered creditor protection.

Osisko’s participation also helped finance Victoria Gold’s (TSXV:VIT) Eagle mine into production, following an unexpectedly higher capex for the Yukon project.

Osisko holds over 135 royalties, streams and offtakes including a 5% NSR on the Agnico Eagle TSX:AEM/Yamana Gold TSX:YRI Canadian Malartic, Canada’s largest gold mine, 19.9% of Falco Resources TSXV:FPC and 16.4% of Osisko Mining TSX:OSK. Osisko Mining currently holds 16% of Barkerville.

Renard continues operations as Stornoway Diamond gets creditor protection

September 9th, 2019

by Greg Klein | September 9, 2019

After less than three years of operation, Quebec’s only diamond miner asked a court to ward off creditors while the company sorts out its finances. Although the Renard mine remains in operation, Stornoway Diamond TSX:SWY stopped trading pending a delisting. “There is and will be no recoverable or residual value in either Stornoway’s common shares or convertible debentures,” the company stated.

Renard continues operations as Stornoway Diamond gets creditor protection

Renard began operations as an open pit
in October 2016 but faced difficulties
during the transition to underground mining.

Stornoway warned of such an outcome in its Q2 report released last month.

Blaming disappointing prices and “a variety of other factors and circumstances,” the miner failed to provide working capital and meet debt payments during 2019. The disastrous year showed in the company’s stock, which closed September 6 on two cents, one-twentieth of its 52-week high a year ago.

But the price had been falling almost steadily after reaching an apex of $1.32 in October 2016, days after Renard’s grand opening celebration.

Under an LOI signed last weekend, creditors headed by Osisko Gold Royalties TSX:OR would take over assets of the company and its subsidiaries, as well as their debts and liabilities, according to terms announced in June and July. Creditors have agreed to provide an initial $20 million in working capital, with the possibility of more money to follow, allowing Renard to continue operating and demonstrating their “strong support” for the mine during the restructuring process, Stornoway added.

Osisko holds a 9.6% stream on Renard’s production.

Osisko’s more than 135 royalties, streams and offtakes include a 5% NSR on Canadian Malartic, the Agnico Eagle TSX:AEM and Yamana Gold TSX:YRI partnership on Canada’s largest gold mine. Other Osisko assets include a 32.6% stake in Barkerville Gold Mines TSXV:BGM, 16.4% of Osisko Mining TSX:OSK and 19.9% of Falco Resources TSXV:FPC.

Diamond beneficiation returns to NWT as Yellowknife plant revived

August 14th, 2019

by Greg Klein | August 14, 2019

Delays and missteps notwithstanding, Yellowknife once again has a diamond cutting and polishing facility in operation. On August 13 Almod Diamonds announced its Crown of Light factory had transformed a first batch of rough stones into jewelry. The parent company of Diamonds International specializes in its proprietary 90-facet Crown of Light cut, marketed largely through tax- and duty-free retailers in the Caribbean and other cruise ship destinations.

Diamond beneficiation returns to NWT as Yellowknife facility revived

Almod reintroduces cutting and polishing to one of the
world’s most important diamond-mining jurisdictions.
(Photo: Almod Diamonds)

The YK operation takes place under the Northwest Territories’ amended Diamond Policy Framework, which seeks to expand benefits from diamond mining, by far the territory’s largest private sector employer. The policy seeks to have 10% of NWT-mined diamonds cut and polished within the territory, with experienced staff training local workers.

Currently the sole company taking part, Almod stated that increasing demand for its patented cut “created the need for this factory to invest in building a skilled team to cut the Crown of Light. The goal is to continue skills transfer and career development.”

The company hopes expanded operations will lead to a grand opening tentatively scheduled for next year.

Almod has planned a YK operation since buying the Laurelton factory in 2016 but failed to meet its 2017 opening target. Despite government incentives, previous attempts to encourage NWT diamond beneficiation have failed. Laurelton Diamonds and Arslanian Cutting Works shut down their local operations in 2009. In 2013 Deepak International vowed to revive the industry. But by 2017 RCMP were looking for president Deepak Kumar, alleging he fraudulently used storage containers full of junk as collateral for a loan of more than $1 million.

As a De Beers sightholder, Almod gets its NWT rough from Gahcho Kué, a 51%/49% JV that the global giant shares with Mountain Province Diamonds TSX:MPVD. The territory’s other two diamond producers are Ekati (majority-held by Dominion Diamond Mines) and Diavik (Rio Tinto NYSE:RIO/Dominion).

Almod also runs cutting and polishing facilities in New York, Namibia and Ukraine.

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.