KINNGUAK/BATHURST INLET - A major industrial project with the potential to create more than 250 construction jobs and 57 full-time jobs in Nunavut's Kitikmeot region is no longer part of a mining company's plan to develop a base metals project near Kugluktuk.

On Friday, Martin McFarlane, president of MMG Resources, told News/North that, according to a recently-completed pre-feasibility study, the Bathurst Inlet Port and Road Project is too complex and expensive for transporting materials in and out of the company's Izok Lake base metals project, located 250 km southeast of Kugluktuk, its nearest community.

BIPAR would account for 50 per cent of Izok Lake's capital cost, which is more than $1.25 billion, said McFarlane. By comparison, in their draft environmental impact assessment, filed in 2007, the proponents estimated the project would cost $270 million based on a 20-year life.

"We've done a bunch of work this year that indicates that the BIPAR (Bathurst Inlet Port and Road project) road route, because of its length and complexity, is the most challenging for the Izok Lake project," said McFarlane.

"We have to narrow it down to the best road route, so therefore, unless there's someone out there with a substantial amount of money to tip into that BIPAR road route, we have to move forward with focusing on other road routes that we know are going to give the greatest chance of the Izok project (being built)."

BIPAR is the brainchild of the Bathurst Inlet Port and Road Joint Venture Ltd., co-owned by Kitikmeot Corporation and Nuna Logistics Limited.

According to BIPAR's draft environmental impact statement, the project would create 260 construction jobs, with a projected 30 per cent of positions held by Inuit.

Payroll over the three-year construction period is pegged at $40 million, while long-term operations would employ 57 full-time workers, with a yearly payroll of $3.5 million.

Charlie Lyall, a Nuna Logistics board member and president of Kitikmeot Corporation, could not be reached for comment.

"Obviously, it's a disappointment and it's definitely a setback," said Jim MacEachern, Cambridge Bay's economic development officer.

The community will be hosting the 2011 Kitikmeot Trade Show from Feb. 15 to 17.

"The theme of this trade show is transportation, so it definitely isn't good timing, either," said MacEachern.

McFarlane said it was a combination of cost and logistical hurdles that stood against BIPAR.

"The real challenge is Contwoyto Lake sits between Izok and the coast if we go by Bathurst Inlet and crossing that lake makes the total travel distance the longest," he said. "It also adds huge complexity because we've got to, for the summer, have barges and wharfs. In the winter, we've got to run an ice road, which means a different truck fleet carrying lighter weight and slower travelling times.

"The other two road routes (being considered), which are all-weather, direct-to-the-coast road routes, don't have those challenges in front of them."

McFarlane said MMG, a subsidiary of China's Minmetals Corp., considered partnering with other companies to share the cost of the port and road, including Sabina Gold & Silver Corporation, which is developing the Hackett River gold project located 104 km southwest of Bathurst Inlet.

"We took an estimate of what that project could reasonably contribute to the cost of building BIPAR if their project went ahead, and we took the most optimistic view of what that would be," said McFarlane.

"The BIPAR route is still considerably more expensive even allowing for other people's contributions."

A spokesperson for Sabina could not be reached for comment.

Even without BIPAR, the Kitikmeot region still stands to benefit from Izok Lake, said McFarlane.

"We think that the Izok project will deliver significant benefits across Canada and particularly the North in terms of jobs, local business opportunities, royalties to the government, (Inuit Impact Benefit) Agreements, exports for the country - all of those things."

The Nunavut Impact Review Board's technical review of BIPAR - put on hold in late 2008 - remains suspended, said Ryan Barry, a technical director with the review board.

"We've gotten periodic updates from them just to request a continued suspension, and the most recent one has said that they would be looking to get back to us in early 2011," said Barry of the proponents.

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