Jennifer Pritchett
Northern News Services

RANKIN INLET (Jun 24/98) - The mining company operating a gold exploration camp near Rankin Inlet is delaying the project's next stage pending the location of a larger ore deposit.

Project manager Joe Campbell said the pre-feasibility study, done by a Vancouver-based engineering firm to determine the economic viability of a mine, indicates the company has to find more gold before they can proceed with the project's next phase.

The company's plan to begin a feasibility study that will fine-tune the venture's costs in the next couple of months has been put off until sometime in 1999.

Campbell said the pre-feasibility study revealed that an estimated deposit size of 13 million tonnes is required in order to sustain a mine for 10 years, an amount of ore not yet confirmed to exist at the Meliadine property. He estimates that another 4.5 million tonne must be located before a mine would prove viable.

"That's a lot of ore that has to be found, but we have indications that the ore is there," he said.

Essentially, added Campbell, the price of gold is so low at this stage of the project that the company would have to find a larger deposit and increase production to make a profit.

"The rate of production is lower than expected," he said. "We're really not prepared to state that we have the resource in the ground to sustain the project. In that way, it's a bit of a setback. Now we have to go out and find the resources."

"When we started the project, gold was $400 an ounce, now it's below $300 an ounce. That has had a huge impact," he added.

Rankin Inlet Mayor John Hickes said he is not surprised nor discouraged by the news of the delay, citing the reality of the price of gold.

"I'm encouraged by the fact that they're continuing the exploration of the ore body," he said. "It's not as if they're shutting down until the price of gold goes up. It will probably (only) delay the project by about a year with this announcement."

Despite the news contained within the report, Campbell maintains the project's exploration is moving ahead as planned. WMC has applied to the Kivalliq Inuit Association to allow the company to build an underground road that declines into the ore body. The test ramp or underground road, expected to be 750 metres long and 100 metres below the surface, will enable geologists to better examine the size of the deposit.

If the application is approved, he said, there is a 50 per cent chance that the mining equipment will arrive in Rankin Inlet on the barge this summer and ramp construction will begin in December.