Friday 10th July 2020

Resource Clips


Posts tagged ‘saskatchewan’

Belmont Resources to begin summer program on historic southern B.C. gold property

June 23rd, 2020

by Greg Klein | June 23, 2020

Now that data on the new acquisition has been digitized and analyzed, this company’s ready to get boots on the ground, wings in the air and possibly drill bits turning. Since picking up the Athelstan-Jackpot property in southern British Columbia’s Phoenix-Greenwood camp earlier this year, Belmont Resources TSXV:BEA has been busy compiling a GIS database, a process that involved “geo-referencing, digitization and interpretation of various layers of geological data, in addition to a 3D modeling exercise aimed at generating drill targets at several mineralized zones.” As a result, this year’s agenda calls for induced polarization and airborne imagery surveys, with a hoped-for drill program before the season ends.

Belmont Resources to begin summer program on historic southern B.C. gold property

IP would cover some or all of A-J’s nine mineralized zones with 100-metre linespacing reaching depths of about 300 metres to add detail to the 3D geophysical model. Planned for early July, an airborne low-level, high-resolution imagery survey would help locate and detail previous workings, showings and rock exposures over the entire property. Following that, first-pass drilling could test one or more targets.

Although “initially very excited” about the acquisition, president/CEO George Sookochoff said that having completed “the arduous task of digitizing, compiling and reviewing all the historic data, I am only now able to fully appreciate the tremendous potential the A-J property holds for the discovery and development of both near-surface and deeper gold deposits.”

Intermittent operation at the two mines between 1900 and 1940 produced about 6,979 ounces of gold and 8,234 ounces of silver from 38,665 tons of material, according to historic records. Historic, non-43-101 trench intervals from 2003 featured 6.6 g/t gold and 12 g/t silver over 3.7 metres. Other historic 2003 results graded up to 28.4 g/t gold and 166 g/t silver over 0.3 metres.

A-J forms part of the historic Phoenix-Greenwood camp roughly 500 highway kilometres east of Vancouver. Adjacently across the 49th parallel is Washington’s Republic mining district, where Belmont signed an LOI for the Lone Star property. Back on the B.C. side, the company optioned the Come By Chance claims last month, adding them to a regional portfolio that also includes the Glenora, Pride of the West and Great Bear claims, as well as the Pathfinder project.

Belmont also holds a stake in the Crackingstone uranium property in northern Saskatchewan and the Kibby Basin lithium property in Nevada.

Earlier this month the company offered a private placement up to $25,000. In May Belmont closed the final tranche of an over-subscribed placement that totalled $199,665.

Update: Belmont Resources plans to expand portfolio in B.C.’s Greenwood camp, add nearby claims in Washington

May 11th, 2020

Update: On May 11, 2020, Belmont Resources announced a definitive agreement to acquire the Athelstan-Jackpot claims from Forty Ninth Ventures under terms reported in February. Earlier in May Belmont closed the final tranche of an oversubscribed private placement that totalled $199,665.

 

by Greg Klein | February 27, 2020

An international border runs through this historic mining region, but geology knows no such barriers. Two recently signed letters of intent would build Belmont Resources’ (TSXV:BEA) presence in southern British Columbia’s Greenwood camp and extend into Washington’s adjacent Republic area.

Belmont Resources plans to expand portfolio in B.C. Greenwood camp, add nearby claims in Washington

Greenwood gave up plenty of gold despite using, by today’s standards, primitive techniques. Now Belmont hopes more sophisticated analysis will help rejuvenate regional mining. The company’s proposed Athelstan-Jackpot acquisition sits adjacent to the Republic district, where Kinross Gold TSX:K applied newly developed metallogenic models that led to discovery and mining of several epithermal gold deposits. Although a “similar geologic regime” applies to Greenwood, Belmont stated, previous exploration and development on the B.C. side of the border focused on skarn-type copper-gold deposits with little attention to epithermal-type gold.

Bringing impressive credentials for a more contemporary approach, president/CEO George Sookochoff comes from a mining family in Grand Forks, about eight kilometres east of Athelstan-Jackpot, and has an extensive Greenwood background as well as GIS database expertise. He’s spent years building a digital database storing more than a century of Greenwood geoscientific info. This digital library would allow him to assess the probability of regional epithermal gold deposits by searching for characteristics comparable with those in Washington, the company added.

The review would precede recommendations for a 2020 exploration program on Athelstan-Jackpot. Intermittent mining on the property between 1901 and 1940 produced around 33,200 tonnes averaging about 5.4 g/t gold and 6.3 g/t silver for approximately 6,324 ounces of gold and 7,378 ounces of silver, according to historic records. Trenching and sampling took place in 2003, with historic, non-43-101 trench intervals up to 6.6 g/t gold and 12 g/t silver over 3.7 metres. Other historic 2003 grades reached as high as 28.4 g/t gold and 166 g/t silver over 0.3 metres.

Maybe the cross-border geological interest spanning Greenwood and Republic attracted Belmont to a nearby former mine in Washington. Just two days after reporting the proposed Athelstan-Jackpot acquisition, Belmont announced an LOI to pick up Lone Star, in operation from 1897 to 1918 and 1977 to 1978. Using a 1.5% copper-equivalent cutoff, an historic, non-43-101 report from 2007 estimated:

  • indicated: 63,000 tonnes averaging 1.28 g/t gold and 2.3% copper for 2,600 ounces gold and 3.19 million pounds copper

  • inferred: 682,000 tonnes averaging 1.46 g/t gold and 2% copper for 32,000 ounces gold and 30.07 million pounds copper

Should the deal close, Belmont plans to compile a 43-101 resource and prepare an IP survey prior to infill drilling for a potential deposit upgrade.

A 100% interest in Athelstan-Jackpot would cost Belmont 200,000 shares on signing. After a year Belmont would issue another 200,000 shares, and also pay US$50,000 in cash or US$25,000 in cash and the equivalent of US$25,000 in shares. The vendor would retain a 2% NSR, half of which Belmont could buy back for US$500,000.

A 100% stake in Lone Star would call for C$25,000 on signing and 1.5 million shares issued in three installments over two years. An additional C$100,000 payment would follow a major financing to be completed by Belmont.

Other recent Greenwood forays have already strengthened the company’s regional standing. In November the company picked up the 45-hectare Pride of the West and Great Bear claims, following the October acquisition of the 127-hectare Glenora property.

Pathfinder, another Greenwood-area Belmont holding, underwent two sampling programs last year. Assays reached up to 4.999 ppm gold, 35.86 ppm silver, 2.07% copper and 45.1 ppm cobalt, along with other results as high as 29.2 g/t gold.

Greenwood sits about 500 highway kilometres east of Vancouver.

The company’s portfolio also includes a 75% interest in the Kibby Basin lithium project in Nevada and, in northern Saskatchewan, two uranium properties shared 50/50 with International Montoro Resources TSXV:IMT.

Legendary mine finder David Lowell dead at 92

May 6th, 2020

by Greg Klein | May 6, 2020

An axe injury while staking claims in central Saskatchewan helps illustrate the working life of an intrepid geologist in the 1950s. While topping trees David Lowell slashed his hand, but heavy blood loss hardly justified helicopter transport for medical attention. A few days later, as bleeding continued despite application of a rag bandage, a fellow geologist sewed up the cut with black carpet thread.

Legendary mine finder David Lowell dead at 92

Although Lowell admitted the process had him howling with pain, he concluded with stoic simplicity: “This worked fine.” They stayed in the bush for another week before heading back to Lac La Ronge, where a couple of Cree nurses examined the amateur stitch-up with amusement.

Lowell also spent time in Manitoba and the Northwest Territories as well as in British Columbia, where he worked at Highland Valley, Endako, Gibraltar and Craigmont. But the legend who passed away earlier this week was best known for discoveries farther south, starting in his native Arizona. The grandson of an Ontario-born prospector is credited with 17 major discoveries over 50 years in Arizona, Argentina, the Philippines, B.C., Chile, Peru, Ecuador and Paraguay.

Intrepid Explorer: The Autobiography of the World’s Best Mine Finder attributes significant work from others for seven of those achievements, which he categorizes as “maybe-I-was-responsible-for orebodies.” As he added, “there always are many more discoverers than discoveries.”

Lowell’s boots hit ground over much of the world but he also delivered university lectures in several countries and published widely. A longstanding collaboration with John Guilbert brought fame for the duo, better understanding of geology and many new mines through the Lowell-Guilbert Porphyry Copper Model, first published in 1970.

The model led to Lowell’s first discoveries, Kalamazoo and Vekol in Arizona, “which were remarkable at the time given the lack of visible copper mineralization at surface,” said a May 5 statement from Solaris Resources. Those finds were followed by Bajo Alumbrera in Argentina, to which Lowell acknowledged the contribution of others.

“David went on to discover the world’s largest copper deposit, La Escondida, in Chile in 1981,” Solaris pointed out. “This came from recognizing how the signature of his porphyry copper model would be modified in an extremely arid environment by a process known as ‘super leaching,’ which five prior companies exploring the property previously had failed to recognize.

“Likewise, in Peru, David identified the Northern Peru Gold Belt after library study, regional mapping, reconnaissance and sampling in a region that was not thought to be prospective. This work allowed him to narrow his focus and make the Pierina gold discovery in 1996, which was acquired by Barrick Gold for over $1 billion later that year.

“With Peru Copper, David took what was a known but under-appreciated deposit in Toromocho, relogged the existing drill core and completely reinterpreted the geology to lay the foundation for an exploration program that would increase its size by more than an order of magnitude. The project was acquired in 2007 for over $800 million.”

His last discoveries included Mirador in Ecuador, which began operation last year under a Chinese consortium, and Solaris’ flagship project Warintza in Ecuador, along with Lowell’s participation in finding Alto Parana in Paraguay. Lowell remained a Solaris consultant and strategic partner until his passing.

“Up until the very end of his life, David was busy designing programs to test his vision for the future of discovery in the Americas,” the company stated. “Innovation and ingenuity were constants throughout his legendary career.”

Maintaining essential service

April 14th, 2020

As Quebec mining resumes, Canadian companies make open-or-shut decisions

by Greg Klein | April 14, 2020

As Quebec mining resumes, Canadian companies make open-or-shut decisions

A COVID-19 outbreak put Impala’s Lac des Iles on lockdown.
(Photo: Impala Canada)

 

With additional health standards in place and encouraged by a surging gold price, Quebec miners have been given a back-to-work go-ahead. On lifting a three-week suspension, the province allowed ramp-up procedures to begin April 15. A ban on non-essential industrial activities, including mineral exploration, has been extended to May 4.

Mine restarts announced so far include Eldorado Gold’s (TSX:ELD) Lamaque mine, IAMGOLD’s (TSX:IMG) Westwood operation, Agnico Eagle Mines’ (TSX:AEM) LaRonde complex and Goldex mine, and the Agnico Eagle/Yamana Gold TSX:YRI Canadian Malartic JV.

Glencore stated it’s “analyzing options” to restart its Raglan nickel and Matagami zinc operations in Quebec.

As Quebec mining resumes, Canadian companies make open-or-shut decisions

Agnico Eagle and Yamana Gold were quick to announce
Canadian Malartic’s ramp-up. (Photo: Canadian Malartic JV)

New measures mandated by the government and its health and workplace standards agencies require physical distancing, additional protective equipment, health monitoring and enhanced sanitation. The new regimen also calls for additional training and in some cases longer stints in job site accommodations to reduce travel.

But market forces aggravated by the pandemic will keep Stornoway Diamond’s Renard mine on care and maintenance. Prior to the March 24 government-ordered suspensions, Renard operated only through the support of creditors.

“We will continue to monitor the market conditions for improvements which would allow for a restart of mining activities,” said Stornoway president/CEO Patrick Godin. The diamond industry has been hit by broken supply chains as well as plunging prices.

Also on April 14 McEwen Mining TSX:MUX announced restarts of its Black Fox mine in the Timmins camp, along with the San Jose operation in Argentina. Although the Ontario government exempted mining and exploration from its list of suspensions, the company paused Black Fox for two weeks while implementing new policies and procedures.

“Our miners and teams are overwhelmingly supportive of returning to work with the new safety measures,” the company stated.

In northwestern Ontario, Implats subsidiary Impala Canada suspended its Lac des Iles palladium mine on April 13 after learning that a worker tested positive for COVID-19. By April 14 the company announced seven confirmed cases connected with LDI. 

Impala told all employees to go into isolation until April 27, during which time they’d get a $100-a-day bonus on top of base pay for the entire month. The company also arranged free hotel rooms and meals during the isolation period.

As Quebec mining resumes, Canadian companies make open-or-shut decisions

McEwen Mining lifted the voluntary suspension
of its Black Fox operation. (Photo: McEwen Mining)

Industrial operations face numerous challenges in adapting to new health protocols. Last week the Globe and Mail reported concerns about conditions at Teck Resources’ (TSX:TECK.A/TSX:TECK.B) southeastern British Columbia coal operations.

A local resident “alleged that shortages of protective equipment, crowded commuter buses, packed site vehicles and ‘an absolute impossibility to self-distance because of the nature of the work,’ are fostering an environment where the virus could spread,” the paper stated.

The company had previously announced precautionary measures including “a temporary slowdown of operations and reduction of crews by up to 50%” at its B.C. mines.

According to the G&M, “Stephen Hunt, director of United Steelworkers union, which represents almost all of Teck’s B.C. workforce, said some members are satisfied the company’s mines are safe, while others are worried. He said Teck has made decent strides to reduce the risk for employees, including staggering shift start times to reduce congestion at the mine site as well as removing some of the seating on buses to ensure people are sitting at least six feet apart. Despite these precautions, he’s still on edge.”

On April 13 Cameco Corp TSX:CCO announced that the suspension of its 50%-held Cigar Lake uranium mine in Saskatchewan’s Athabasca Basin would continue indefinitely. Orano Canada also lengthened the suspension of its 70%-held McClean Lake mill, which processes Cigar Lake ore.

The global challenges posed by this pandemic are not abating—in fact, they are deepening.—Tim Gitzel,
Cameco president/CEO

“The precautions and restrictions put in place by the federal and provincial governments, the increasing significant concern among leaders in the remote isolated communities of northern Saskatchewan, and the challenges of maintaining the recommended physical distancing at fly-in/fly-out sites with a full workforce were critical factors Cameco considered in reaching this decision,” the company stated.

President/CEO Tim Gitzel added, “The global challenges posed by this pandemic are not abating—in fact, they are deepening.”

As Quebec allows mining to resume, Canadian companies make open-or-shut decisions

April 14th, 2020

This story has been expanded and moved here.

Policy or geology?

February 28th, 2020

What’s behind Canada’s plunging reputation among miners?

by Greg Klein | February 28, 2020

If you think that’s bad news, be glad the poll ended when it did. The Fraser Institute Survey of Mining Companies 2019 imposed a November 8 deadline on respondents. Shut Down Canada didn’t really gain momentum until a bit later.

Even so, for the first time in a decade no Canadian jurisdiction made the top 10 for the survey’s main list, the Investment Attractiveness Index (IAI). Media coverage played up the role of provincial and territorial governments in jeopardizing what was—until recently and at least by Canadians—generally considered the world’s pre-eminent mining country. In doing so, reporters followed the institute’s commentary which, in keeping with its advocacy purpose, emphasized politicians’ ability to help or hinder the industry. But a closer look suggests miners and explorers gave other concerns higher priority.

What’s behind Canada’s plunging reputation among miners?

(Image: Fraser Institute)

The survey bases the IAI on two other indices, Policy Perception and Mineral Potential. The first is determined by company responses to government actions or in-actions affecting the industry. The second (assuming an un-interfering nirvana of “best practices” by those governments) considers companies’ appraisals of geology. The survey provides separate ratings for policy and geology, but also weighs them 40% and 60% respectively to compile the IAI. The 40/60 split reflects institute intel about how companies make investment decisions.

Despite Canada’s disappearance from the IAI top 10, three provinces rated highly for Policy Perception. Alberta, Newfoundland and Saskatchewan rated sixth, eighth and ninth in the world respectively. Five Canadian jurisdictions showed Policy Perception improvements over the previous year. Moreover, the most dramatic declines from 2018 appeared in the Mineral Potential index.

“We know there’s not a lot that policy-makers can do about the geology in particular areas,” says Fraser Institute senior policy analyst Ashley Stedman. “But when we see declines on the policy index, that’s something policy-makers should be paying attention to.

“In particular we saw significant declines in Saskatchewan, which dropped from third the previous year to 11th, and that was largely the result of concerns about policy factors including taxation, regulatory duplication and inconsistencies, and trade barriers. And in Quebec we saw a decline from fourth to 18th, with uncertainties about environmental regulations and about the administration or enforcement of existing regulations. We can see from both these jurisdictions and a number of other Canadian jurisdictions that regulatory issues are escalating and this should be a serious concern for policy-makers.”

What’s behind Canada’s plunging reputation among miners?

But while Saskatchewan’s Policy Perception rating fell from first place to ninth, the province’s Mineral Potential rank fell farther, from seventh to 21st. Quebec dropped from 10th to 21st in Policy Perception but plummeted from sixth to 25th in Mineral Potential.

Other dramatic Mineral Potential declines included Manitoba (from 11th to 26th), New Brunswick (49th to 72nd), Newfoundland (18th to 50th), the NWT (fourth to 29th), Nunavut (fifth to 16th) and Yukon (10th to 22nd).

Four provinces—Alberta, B.C., Nova Scotia and Ontario—did show improvements. Still, the question remains: What the hell happened to Canadian geology?

Some causes might be resource depletion, recalcitrant commodity prices or (talk to enough CEOs and this seems very possible indeed) confusion about how to answer survey questions.

Stedman suggests another likelihood. Discoveries in some jurisdictions might dampen enthusiasm for others. “We do have to keep in mind that this is a relative ranking, so if other places are seen as more attractive, that can have an impact on other jurisdictions as well.”

Although policy factors affect just 40% of a jurisdiction’s IAI ranking, “our write-up focuses on the policy rankings as an area that policy-makers can pay attention to,” Stedman explains. In some cases governments do respond to the survey’s findings. “Reporters will often ask policy-makers to comment on the rankings.”

As for other countries, “we do get quite a bit of interest globally for this survey and we’ve seen a lot of countries and jurisdictions ask us questions about the rankings. There’s quite a lot of interest in this publication in particular.”

Confidentiality, however, prevents her from divulging how many respondents are based in Canada.

The survey provides “a policy report card for governments on areas that require improvement and areas where certain jurisdictions are performing well,” she adds.

In general we see that investment dollars will flow to jurisdictions with attractive polices, and governments need to focus on adopting competitive policies to attract valuable investment dollars that will ultimately create jobs.—Ashley Stedman,
senior policy analyst
for the Fraser Institute

With geology beyond the reach of government power, policy improvement would be Canada’s only means of re-entering the IAI’s global top 10. “In general we see that investment dollars will flow to jurisdictions with attractive polices, and governments need to focus on adopting competitive policies to attract valuable investment dollars that will ultimately create jobs.”

Whether the pre-PDAC week timing will cast a pall on the Canadian industry’s biggest annual bash remains to be seen. COVID-19 has cast a bigger pall on travel while, at time of writing, there seems nothing to stop Shut Down Canada from turning its attention to airports, hotels and convention centres.

The following charts show the global IAI top 10, Canada’s IAI top 10, Canada’s top 10 for Policy Perception and Mineral Potential, and—consoling for its lack of Canadian content—the global bottom 10.

With fewer responses this time, the 2019 survey covers 76 jurisdictions compared with 83 the previous year. Here are the global IAI rankings for 2019, with 2018 spots in parentheses.

  • 1 Western Australia (5)

  • 2 Finland (17)

  • 3 Nevada (1)

  • 4 Alaska (5)

  • 5 Portugal (46)

  • 6 South Australia (8)

  • 7 Irish Republic (19)

  • 8 Idaho (16)

  • 9 Arizona (8)

  • 10 Sweden (21)

All Canadian jurisdictions except Ontario, Alberta and Nova Scotia fell in the IAI. Here’s the list for Canada, with global numbers provided for 2019 and 2018:

  • 11 Saskatchewan (3)

  • 16 Ontario (20)

  • 18 Quebec (4)

  • 19 British Columbia (18)

  • 23 Yukon (9)

  • 26 Nunavut (15)

  • 28 Newfoundland and Labrador (11)

  • 30 Alberta (51)

  • 34 Manitoba (12)

  • 35 Northwest Territories (10)

  • 52 Nova Scotia (57)

  • 60 New Brunswick (30)

Here’s Canada’s Policy Perception ratings. Alberta, Newfoundland, Ontario, B.C. and Nunavut improved their standings.

  • 6 Alberta (14)

  • 8 Newfoundland and Labrador (18)

  • 9 Saskatchewan (11)

  • 13 New Brunswick (9)

  • 18 Nova Scotia (11)

  • 21 Quebec (10)

  • 24 Ontario (30)

  • 32 Yukon (24)

  • 36 British Columbia (44)

  • 44 Nunavut (45)

  • 50 Northwest Territories (42)

  • 53 Manitoba (33)

Mineral Potential showed Canada’s most dramatic downfalls, although Alberta, B.C., Nova Scotia and Ontario managed to move upwards.

  • 10 British Columbia (13)

  • 16 Nunavut (5)

  • 18 Ontario (20)

  • 21 Saskatchewan (7)

  • 22 Yukon (10)

  • 25 Quebec (6)

  • 26 Manitoba (11)

  • 29 Northwest Territories (4)

  • 50 Newfoundland and Labrador (18)

  • 54 Alberta (74)

  • 61 Nova Scotia (79)

  • 72 New Brunswick (49)

And finally the global IAI bottom 10:

  • 67 Nicaragua (81)

  • 68 Mali (50)

  • 69 Democratic Republic of Congo (67)

  • 70 Venezuela (83)

  • 71 Zambia (45)

  • 72 Dominican Republic (76)

  • 73 Guatemala (80)

  • 74 La Rioja province, Argentina (75)

  • 75 Chubut province, Argentina (69)

  • 76 Tanzania (66)

Download the Fraser Institute Survey of Mining Companies 2019.

Read about last year’s survey.

Mike Crabtree outlines the Saskatchewan Research Council’s innovative work in mining-related R&D

February 26th, 2020

…Read more

Belmont Resources signs LOI for additional property in B.C.’s Greenwood camp

February 25th, 2020

This story has been updated and moved here.

The Saskatchewan Growth Plan recognizes mining’s importance to the province’s economic future

December 23rd, 2019

…Read more

Open and shut cases: West

December 20th, 2019

A look at the western provinces’ mine openings and closures for 2019 and 2020

by Greg Klein

A look at the western provinces’ mine openings and closures for 2019 and 2020

Western Potash began Saskatchewan’s first solution mining operation for this commodity in July.
(Photo: Western Potash)

 

This is Part 2 of a four-part series.

The Exxon Valdez of Canadian mining went into dry dock at the end of May, as Imperial Metals TSX:III put its Mount Polley copper-gold operation on care and maintenance. The company that traded above $16.50 prior to the August 2014 tailings dam failure spent most of 2019 well below $3. Now holding two suspended mines, the company’s operational portfolio has dwindled to a 30% stake in B.C.’s Red Chris copper-gold open pits. In August Imperial sold the other 70% to ASX-listed Newcrest Mining for US$775 million.

But if human error can dump eight million cubic metres of tailings muck into the waterways, human ingenuity can respond. As the five-year anniversary approached, Geoscience BC founding president/CEO and Imperial’s former chief scientific officer ’Lyn Anglin offered her perspective on the $70-million clean-up program, which continues during the mine’s suspension.

 

Maybe its status as Canada’s largest diversified miner leaves Teck Resources TSX:TECK.A/TSX:TECK.B open to greater diversity in downturns. The company blamed global economic uncertainties for “a significant negative effect on the prices for our products, particularly steelmaking coal.” But the company attributes its most recent coal mine closures not to market forces but to depletion. That was the verdict for the mid-year shutdown of B.C.’s Coal Mountain and for Alberta’s Cardinal River, scheduled to follow in mid-2020.

A look at the western provinces’ mine openings and closures for 2019 and 2020

Some depleted mines notwithstanding, Teck Resources
has over four decades of B.C. coal reserves.
(Photo: Teck Resources)

Although Teck warned employees in September of layoffs, noting a price drop from about $210 to about $130 per tonne over the previous weeks, further mine closures weren’t specified. Depletion hardly concerns Teck’s four remaining Kootenay-region coal operations. The company says there’s enough steelmaking stuff to keep Line Creek, Greenhills, Elkview and Fording River busy for 18, 28, 38 and 43 years respectively.

While the company now focuses on its Quebrada Blanca Phase 2 copper development project in Chile and its JV at the port of Vancouver’s Neptune terminal, Teck’s $20-billion proposal for Alberta might serve as an affront to the great cause of our time. In July Teck managed to get a recommendation of approval from a joint federal/provincial environmental review panel for its Frontier oilsands project. Media reports, however, suggest Environment and Climate Change Minister Jonathan Wilkinson and his cabinet might reject the panel’s recommendation.

 

Whether it brought relief or astonishment to local supporters, in July Western Potash finally began building its long-delayed Milestone potash project in southern Saskatchewan.

A look at the western provinces’ mine openings and closures for 2019 and 2020

A determined-looking Western Potash group
celebrates a milestone in Saskatchewan mining.
(Photo: Western Potash)

Expectations had risen and fallen a few too many times since at least 2015, when the company announced it had secured funds sufficient for a scaled-down capex. But in October Western began solution mining, the first application of this method for potash in Saskatchewan. The innovative operation will also be “the first potash mine in the world that will leave no salt tailings on the surface, thereby significantly reducing water consumption.”

Now a subsidiary of Western Resources TSX:WRX, the company plans “hot mining” early in the new year to pump brine containing potassium chloride into a crystallization pond at surface, leaving unwanted sodium chloride underground. By Q3 2020 a newly built plant will process the potash for an off-take agreement covering all Phase I production. Phase II calls for expanded operations to support an average 146,000 tpa output over a 12-year life.

 

Yet the mine starts up amid cutbacks and shutdowns elsewhere. The province’s big three potash producers, Nutrien TSX:NTR, Mosaic NYSE:MOS and K+S Potash Canada, all reduced output in 2019. Between them, Nutrien and Mosaic suspended four operations, at least one indefinitely.

In August workers at Mosaic’s Colonsay operation learned of an indefinite layoff, reportedly to last anywhere from six months to a matter of years. Further discouragement came in November when the United Steelworkers confirmed that the company was moving equipment from Colonsay to its Esterhazy operation, itself subject to reduced output.

A look at the western provinces’ mine openings and closures for 2019 and 2020

Saskatchewan’s tallest structure stands over a shaft reaching
more than a kilometre underground at Mosaic’s Esterhazy K3.
(Photo: Mosaic)

Esterhazy’s ambitious K3 expansion project, however, continues unfazed by current market conditions. With construction started in 2011, commissioning begun in December 2018 and full production not scheduled until 2024, the new underground operation will replace Esterhazy’s K1 and K2 mines, keeping the K1 and K2 mills busy at the world’s largest potash mining complex.

In September Nutrien announced it would “proactively” suspend its Allan, Lanigan and Vanscoy potash mines. Workers at the first two got December 29 recall notices, but Vanscoy’s resumption has yet to be revealed.

Nevertheless, company bosses expressed optimistic 2020 foresight. It will be “a strong year for crop input demand for which we are well-positioned to benefit,” predicted Nutrien president/CEO Chuck Magro. His Mosaic counterpart Joc O’Rourke expects “a very strong application season in Brazil and North America, and a better supply and demand balance in 2020.” .

 

That year or the next just might be momentous for Saskatchewan potash. BHP Group NYSE:BHP’s board of directors has until February 2021 to decide whether to complete Jansen, a $17-billion project that would challenge the province’s potash protocol.

The threat of competition might take an unexpected turn, however. As reported in the Financial Post, at least two analysts say rival companies could attack pre-emptively by boosting production to lower prices and discourage new mine development.

 

Holding top positions globally are Saskatchewan as potash-producing jurisdiction and Saskatoon-headquartered Nutrien as potash miner. The province also boasts world stature for uranium but has no new U3O8 operations expected during this survey’s time frame. Even so, industry and investors watch with interest as Denison Mines TSX:DML, NexGen Energy TSX:NXE and Fission Uranium TSX:FCU each proceed with advanced large-scale projects.

This is Part 2 of a four-part series.