Saturday 19th October 2019

Resource Clips


Posts tagged ‘Fortune Minerals Ltd (FT)’

Paved with promises

October 7th, 2019

The North’s infrastructure needs get some attention from campaigning politicians

by Greg Klein

This is the first of a two-part series. See Part 2.

Could this be the time when decision-makers finally get serious about Northern infrastructure? With one territorial election just concluded and a deficit-budget-friendly incumbent federal party campaigning for re-election, Yukon, Northwest Territories and Nunavut might have reason to expect definitive action demonstrated by men, women and machinery at work. But while some projects show real progress, much of Canada’s Northern potential remains bogged down in talk and studies.

The North’s infrastructure deficit gets some attention from campaigning politicians

That’s despite some $700 million allocated to the North in Ottawa’s pre-election budget and months of Liberal spending promises since then. Not all that money was intended for infrastructure, however, and even some of the projects labelled that way turn out to be social or cultural programs. Not necessarily new money either, much of it comes out of Ottawa’s $2-billion National Trade Corridors Fund, now two years into an 11-year program that promised up to $400 million for transportation infrastructure in the three territories by 2028.

Yukon, once again home to active mining, has $157 million planned to upgrade the North Klondike Highway from Carmacks up to the mineral-rich White Gold region, where the Dempster Highway branches off towards Inuvik.

The Klondike section slated for upgrades has connections to a new mine and a soon-to-be revived operation. Highway #11 turns east from the Klondike, meeting with a 90-kilometre year-round service road to Victoria Gold’s (TSXV:VIT) recently opened Eagle operation.

The Minto copper-silver-gold mine that Pembridge Resources plans to restart in Q4 has a 20-kilometre access road with seasonal barge service or ice bridge crossing the Yukon River to the Klondike Highway at Minto Landing. From there, the company will ship concentrate to the Alaska Panhandle deep water port of Skagway.

The North’s infrastructure deficit gets some attention from campaigning politicians

With no deep water facilities of its own, Yukon connects
with the Alaskan port of Skagway and, pictured above,
the B.C. port of Stewart. (Photo: Stewart Bulk Terminals)

Intended to increase safety and capacity while addressing permafrost thaw, the North Klondike Highway project gets $118 million from Ottawa and $29 million from the territory. The money will be spent over seven years beginning in 2020.

A July feasibility report for BMC Minerals’ Kudz Ze Kayah polymetallic copper mine foresees concentrate shipment along a 24-kilometre access road to southern Yukon’s Highway #4, part of a 905-kilometre journey to Stewart, British Columbia, the continent’s most northerly ice-free port.

Another project approaching development but more distant from highways, Newmont Goldcorp’s (TSX:NGT) proposed Coffee gold mine calls for a 214-kilometre all-season road north to Dawson City. But with upgrades to an existing service road, the route would require only 37 kilometres of new construction.

In the NWT, work began last month on the Tlicho all-season road to connect the hamlet of Whati with Yellowknife, 97 kilometres southeast. Expected to finish by fall 2022, the $200-million P3 project would replace an existing ice road, giving communities year-round access to the highway system and encouraging resource exploration and development.

[The Tlicho road], which includes Indigenous participation from the Tlicho Government, is great news for our industry and a positive step forward in addressing the infrastructure deficit in the Northwest Territories.—Gary Vivian, NWT and Nunavut
Chamber of Mines president

About 50 kilometres north of Whati, Fortune Minerals’ (TSX:FT) NICO cobalt-gold-bismuth-copper project undergoes studies for a scaled-down feasibility update in light of lower cobalt and bismuth prices. Fortune has already received environmental approval for a spur road to Whati, part of a plan to truck NICO material to Hay River where the territories’ only rail line (other than short tourist excursions in southern Yukon) connects with southern Canada.

A much more ambitious priority of the NWT’s last legislative assembly was supposed to have been the Mackenzie Valley Highway, a Diefenbaker-era dream that would link the territory’s south with the hamlet of Tuktoyaktuk on the Arctic Ocean. The subject of numerous studies, proposals and piecemeal construction for about 60 years, the proposal has received more than $145 million in taxpayers’ money since 2000.

A 149-kilometre stretch from Inuvik to Tuk opened in 2017, linking the ocean with the Dempster route to the Yukon. Now underway are studies for a 321-kilometre route between Wrigley and Norman Wells, where further driving would depend on an ice road. Assuming receipt of environmental approvals, native agreements and an estimated $700 million, the NWT’s last assembly hoped construction on the Wrigley-to-Wells portion would begin in September 2024.

Far more ambitious proposals for the NWT and Nunavut took initial steps forward with funding announcements made just prior to the federal election campaign’s official start. Part 2 of this series discusses the Slave Geological Province Corridor and Grays Bay Road and Port projects.

B.C. buys coal licences to resolve aboriginal dispute

May 5th, 2015

by Greg Klein | May 5, 2015

In an effort to placate a native band, Fortune Minerals TSX:FT and POSCO Canada have sold their British Columbia coal licences to BC Rail, a provincially owned railway company without a railway. Announced May 5, the $18.3-million sale of 61 claims totalling 16,411 hectares in northwestern B.C. contains a 10-year buy-back option should the Tahltan First Nation agree to development of the Arctos anthracite project.

B.C. buys coal licences to resolve aboriginal dispute

A 2013 company photo shows environmental field work underway.
As project operator, Fortune continues with land reclamation at Arctos.

Calling the deal a good outcome in the current market, Fortune president/CEO Robin Goad said the joint venture “invested significant funds” to try to resolve the band’s concerns. “Mining is a cyclical industry and, considering the weak metallurgical coal prices at the present time, it was considered prudent to step back from Arctos and focus our efforts on our near-term production assets.”

A PwC report on B.C. mining, also released May 5, noted that steelmaking coal now trades around $100 per tonne, “a considerable drop from its record price around $330 in 2011.” The report quotes Don Lindsay of Teck Resources TSX:TCK.A and TCK.B saying prices can’t recover without further production cuts around the world.

Fortune and the South Korean steel producer subsidiary will divide the proceeds evenly, with Fortune allocating its share to working capital and debt repayment. The company operates the Revenue silver mine in Colorado and holds the proposed NICO gold-cobalt-bismuth-copper mine in the Northwest Territories, along with exploration projects in the NWT.

CN TSX:CNR took over BC Rail’s railway system in 2004 in a highly controversial $1-billion deal that the province insisted was a lease, not a sale. Once the deal was complete, the BC Liberal government acknowledged the lease would run for 990 years. Corruption allegations and a police raid on B.C.’s legislature followed. In 2010 the province paid $6 million in legal bills for two government aides who pleaded guilty to corruption-related charges.

Although BC Rail no longer has a railway to run, the government kept the Crown corporation intact with management, board of directors and staff responsible for maintenance of a 40-kilometre spur line and property sales.

“It’s a new NWT”

October 7th, 2014

Miners welcome the Northwest Territories’ plans to encourage investment

by Greg Klein

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His tone sounded taunting, if only slightly so. While attending a meeting of resource politicos in Sudbury last August, Northwest Territories minister of Industry, Tourism and Investment David Ramsay told the Globe and Mail that the NWT’s “Ring of Ice” has resources to rival Ontario’s Ring of Fire. The huge difference, of course, is that the Ring of Fire remains all but inaccessible while the NWT’s riches have already been opened up. Now the territory has taken specific measures to emphasize it’s open for business.

That came through in the first annual implementation plan of the NWT’s Mineral Development Strategy. And the plan drew praise in an October 6 announcement from the NWT and Nunavut Chamber of Mines. The organization sees last April’s devolution of federal responsibilities for land, water and resources to the territory as a turning point for the industry. “The legislature has said mining development has big consequences for our government now,” chamber executive director Tom Hoefer tells ResourceClips.com. “So it’s saying we’re going to be more nimble on our feet, we’re going to encourage economic development.”

Miners welcome the Northwest Territories’ plans to encourage investment

The NWT has done so by setting ambitious goals, some with established budgets and target dates, on a number of fronts including energy, transportation and a “new leading edge Mineral Resources Act.” That marks a major departure from past practice, according to Hoefer.

“We’ve suffered a loss of reputation over probably the last seven years. If you look at our exploration figures during that period you can see our investment just flatlined. We saw Yukon, Nunavut and the rest of the world getting huge investment. We languished.”

Indeed, last year’s Fraser Institute Policy Perception Index placed the NWT nearly halfway down a list of 112 jurisdictions globally and sixth on a list of 12 Canadian jurisdictions.

“A big piece of this was the regulatory front,” Hoefer explains. “It was getting very complex, in part because we had a number of different land claim groups and that created a number of different regulatory boards. So the federal government launched a northern regulatory improvement initiative in 2009 and that culminated in amendments to the Mackenzie Valley Resource Management Act.” That was completed shortly before last April’s devolution milestone.

The NWT considers those amendments a starting point for a new regulatory environment. But the government’s not promising rapid reform. Calling this a “time of transition and learning,” the territory has come up with the slogan “devolve then evolve.” Still, it’s stated intentions to provide clear, concise documentation and to guide companies through regulatory processes and aboriginal engagement.

The territory already leads Canada in at least one respect, Hoefer maintains. “I’d say we’re probably a leader in the country for settling land claims. That helps provide more certainty.”

Devolution also brings the territory 50% of the royalties that once went solely to the feds. Aboriginal groups that signed onto the devolution agreement get 25% of the territory’s share, Hoefer says.

With grants announced just last week, a new mining incentive program has awarded a total of $396,000 to two prospectors and six exploration companies.

“A new and easier-to-use web portal for discovery and dissemination of geoscience information” will get $1.3 million over two years.

But that’s small change compared to price tags for infrastructure. Although money hasn’t been allocated yet, the NWT’s talking about a three-year, $31-million energy program and a 10-year, $200-million transportation plan.

None of the territory’s four existing mines connect to the grid. Only North American Tungsten’s (TSXV:NTC) CanTung operation has year-round road access—and that links to the Yukon.

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Territorial ambitions

July 31st, 2013

Four Northwest Territories projects reach regulatory milestones

by Greg Klein

It might be called a blip, a surge, a spike or a spurt but it more likely resulted from long periods of painstaking work. Just recently four Northwest Territories projects moved closer to development thanks to regulatory advancements. Fortune Minerals TSX:FT, De Beers Canada/Mountain Province Diamonds TSX:MPV, Avalon Rare Metals TSX:AVL and Canadian Zinc Corp TSX:CZN all reported significant progress over a three-week period.

On July 19 Fortune announced its proposed NICO gold-cobalt-bismuth-copper mine and mill received federal, territorial and native approval. By accepting the positive environmental assessment released by the Mackenzie Valley Review Board in January, three levels of government have allowed NICO to move towards water licensing, as well as land use and construction permitting. Given further approvals, not to mention financing, Fortune hopes to start construction next year on an open pit/underground operation 160 kilometres north of Yellowknife that could last nearly 20 years.

Four Northwest Territories projects reach regulatory milestones

Although surrounded by a wildlife reserve, Canadian Zinc’s development
has progressed through the NWT’s regulatory regimen.

Also recommended for approval by the Mackenzie Valley Environmental Impact Review Board was Gahcho Kué, described by its proponents as “the world’s largest and richest new diamond mine development.” Located 280 kilometres northeast of Yellowknife, it’s a 51%/49% joint venture of De Beers Canada and Mountain Province. The board’s recommendation, however, comes with conditions to prevent potentially adverse environmental effects. The federal minister of Aboriginal Affairs and Northern Development makes the final decision. In a statement accompanying the JV’s July 22 news release, De Beers COO Glen Koropchuk said his company’s reviewing the measures and follow-up programs recommended by the board. “We look forward to proceeding to the next stages in the regulatory approval process,” he added.

One week later Avalon announced it too received the MVEIRB’s recommendation, again subject to certain conditions “to mitigate the predicted impacts so that they are no longer significant.” In April the company’s Nechalacho rare earth elements project, about 100 kilometres southeast of Yellowknife, achieved the “first feasibility-level study to be completed on a major heavy rare earth project outside of China,” the company stated. Avalon maintained its resources might support 90 years of production “if the mining rate is unchanged and mineral resources are converted to mineral reserves at the same conversion rate experienced” in the feasibility. Applications for a water licence and land use permits continue, as do “efforts to finalize its aboriginal agreements, secure product off-take agreements, identify strategic partners and secure project financing.”

On July 8 Canadian Zinc announced the Mackenzie Valley Land and Water Board had recommended approval of a Type A water licence, “the key regulatory permit needed for the construction, development and operation” of its Prairie Creek zinc-lead-silver mine. Located about 500 kilometres west of Yellowknife, the project has been surrounded by the Nahanni National Park Reserve since the park’s six-fold expansion in 2009. Prairie Creek received environmental approval in June 2012. Already in place are a 1,000-tonne-per-day mill, five kilometres of underground workings, a surface fleet and an airstrip.

The four announcements were welcomed by the NWT & Nunavut Chamber of Mines. In a July 27 statement chamber president and De Beers director of external and corporate affairs Cathie Bolstad said, “While the minerals industry is currently facing significant financial and commodity price challenges globally, the continued advancement of these and other significant northern projects helps invite investment to the Northwest Territories and Nunavut. This will help sustain and grow our industry, which is a significant provider of economic opportunities and benefits to northern residents and Canada.”

Effective April 2014, responsibility for NWT onshore resource development will shift from the federal to the territorial government. Public land ownership will also be transferred, while resource royalties will be shared. At last count the territory’s population stood at 43,407.