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An aerial shot of Dundee Precious Metals' Back River project site in Nunavut, where the company is currently doing studies to determine how much it will cost to construct a mine. - photo courtesy of Dundee Precious Metal

KINNGUAK/BATHURST INLET - Dundee Precious Metals is plowing ahead with plans for its Back River gold project situated 100 km south of Bathurst Inlet.

The 390 km advanced exploration district is now 100 per cent owned by Dundee, which previously only had a 60 per cent interest in the property.

The company is just coming off its most recent summer exploration project, which this year included metallurgical testing and geophysical work.

The total budget this summer was $12.8 million, down from the summer of 2007 when $18 million was spent.

The decrease was due to "a slight change in the scope for the work this year," according to environment co-ordinator Dan Russell. "It doesn't mean a change in the scope of the project as a whole, just a change in the scope of the work we're doing this year."

Dundee is also currently at work on a scoping study, which will help the company determine how much it will cost to build the infrastructure for a future mine - the ultimate goal for Dundee, said Russell.

"We're hopeful for that. Dundee is a mining company," he said. "We also have an operating mine in Armenia and one in Bulgaria. Ultimately, that's the aim of the project."

The scoping study is "not as far as a full mining plan but has an idea of which parts of the ore body you're going to mine first," said Russell.

Once the scoping study and a feasibility study on how to mine the deposit are completed, the permitting process will begin.

Russell said it's too early to delve in the timeline beyond that. How far the company is from the permitting process depends on the results of the scoping study.

Even in the advanced exploration stage, Back River is employing some local people.

"We hire people from Gjoa Haven and Taloyoak," said Russell. "We've had a couple of people working in the core shack (the area where the ore is logged, split and sampled). A large number of them are doing maintenance in the yard, operating heavy equipment."

Russell estimated between 20 and 25 Nunavummiut helped out this summer, which is music to the ears Uriash Puqiqnak, mayor of Gjoa Haven.

Puqiqnak, who said he also knows of people who helped set up the camp at Back River, said a lack of employment opportunities in Gjoa Haven makes Dundee's project a welcome sight.

"I welcome mining exploration in the Gjoa Haven area," said Puqiqnak. "We need more employment in the community."

Puqiqnak added protecting the local wildlife is also key.

"We do end up having caribou come near the property," said Russell. "We've seen muskox within a few kilometres of the property. Grizzly bears."

But Russell said a baseline environmental study is being completed to protect the environment.

"The baseline study tells you the state of the environment as a whole prior to going in to production," he said.