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KANGIQLINIQ/RANKIN INLET - The president of exploration company Starfield Resources - which is developing its nickel-copper-cobalt Ferguson Lake mine 240 km west of Rankin Inlet - said the project is well-positioned for advancement despite the current global economic crisis.

Rendal Clarkson, left, and Trevor Derlago work a rig at Starfield Resources' Ferguson Lake project, located 240 km west of Rankin Inlet. - photo courtesy of Starfield Resources

"Obviously we're in tenuous times," said Andre Douchane of the exploration industry. "Nobody's quite certain on how the markets are going to come out ... but you have to believe in the future. You have to be optimistic."

Despite Douchane's rosy outlook, the company is cutting back on spending this year, although Douchane maintained the reduction is a reflection of where the project is in its development cycle.

Last year, Starfield spent $18 million constructing a new landing strip, updating a camp and drilling.

This year the company will likely spend a maximum of $7 million, he said.

"Are we going to spend as much this year as we did last year? The answer is no. But it really isn't economy-dependent; it's dependent on the work we have to do," he said.

"Last year we did quite a bit of drilling on Ferguson Lake simply because we needed to ... upgrade the resource."

At this point, Starfield has confirmed 15 million tonnes of confirmed resource, but it needs an additional 15 to 20 million ounces for a feasibility study, which Douchane hopes to have ready by 2010.

The additional resources have been drilled; they just haven't been 100 per cent confirmed, he said.

"We're hoping to have that resource calculated by some time in May," he said, adding that timeline would give the company enough time to plan for additional drilling on-site if needed.

For now, Starfield's two-pronged 2009 program will consist of additional exploration at an outlying area 10 to 11 km from Ferguson Lake, plus testing of its power-generation plan for the mine.

The discovery of a small blue diamond in the outlying area means more exploration is needed there, said Douchane.

"It's in perfect shape, so it wasn't transported very far from where we found it," he said. "That warrants following up on."

Under the power-generation plan, ore will be crushed on site and mixed into a liquid slurry, then piped to a process plant where the metals will be extracted. The process will also result in the creation of sulphuric acid, which will then be used to fire an electricity co-generation plant and the mine. Some electricity may be left over for possible resale.

"With two million tonnes of processed ore (every year), we can actually generate an excess of 40 megawatts of power, which is more power than Nunavut uses in a year," Douchane previously told News/North.

The mine's green practices will make Ferguson Lake stand out from other projects in development in Nunavut, said Douchane.

"We feel that could very well revolutionize the mining industry," he said, adding it won't be an easy sell due to its sheer infancy.

The company will test the process this year at a pilot plant likely in Montreal, he added.

Meanwhile, Douchane is confident his project will survive the current doom-and-gloom economic forecasts.

"As I look back historically at where something like this might have sat before, I really settled in on the big silver bust in the late 1890s, which really spawned a deep depression and then of course spawned the roaring '20s," he said.

"I believe, at some juncture, that we're going to come out at the other side of this some time in the next two years with prices rising quite steeply, quite quickly. And I'd like to be in a position to have Starfield ready to take advantage of that."