Two projects could generate over $60 million in Kivalliq
Doug Ashbury
Northern News Services
Yellowknife (Nov 20/00) - Over $60 million in wages and contracts could be generated annually in Kivalliq if two promising gold projects become operational.
Stressing the numbers are preliminary and will be better defined during feasibility studies, Kerry Curtis, senior vice-president of Cumberland Resources, said if Meadowbank and Meliadine gold properties were operating mines, they would generate $12.1 million in direct wages and $5.7 million in indirect wages.
Curtis spoke last Tuesday at the Nunavut Mining Symposium in Rankin Inlet.
Cumberland is 100 per cent owner and operator of Meadowbank near Baker Lake. The company also owns 50 per cent of Meliadine East and 22 per cent of Meliadine West. Meliadine is near Rankin Inlet.
"There could be great business opportunities for people in the community," he adds.
He listed services and potential annual contract values for the two properties, including:
These potential contracts add up to $43.5 million per year. Add wages and it's just over $61 million annually.
Hundreds of jobs
The two properties would employ about 600 people, added Kerry Curtis.
After three years of operation, Curtis said the local workforce can reach 30 per cent of the total.
"These are significant numbers. These numbers are in the early stage with a range of 20 per cent plus or minus," he said.
"As we move these projects toward feasibility, the numbers will be better defined."
Curtis said there is currently an average of 38 people from the region employed at the Meliadine site. Meadowbank is averaging 11 jobs annually for regional residents.
When it comes to commodity price requirements, Meliadine and Meadowbank fit into the $300-$350 US gold price range. Meadowbank's cash operating costs are projected to be $196 US an ounce; about $25 US an ounce above the per ounce global cost of production in first half 2000.
"That ($196) can compete," he said. We need reasonable to average gold prices because we are looking at super deposits."
The two resources host about seven million ounces of gold.
More expensive North of 60
Alan Sexton, WMC International's district geologist of group ventures, also spoke at the symposium. WMC is a joint-venture partner and operator on the Meliadine West project.
Sexton put the Northern environment in financial perspective when it comes to mining.
The cost to explore and build a mine is 200 to 300 per cent higher than normal in the North, he said. As well, operating costs are 150 per cent higher, he said.
When it comes to sales, or return on investment, companies must have higher grades and easier access when it comes to Northern ore bodies. Both Meliadine and Meadowbank are close to tide water.
Meliadine West has a healthy grade of 4.7 grams per tonne for five million ounces. Meliadine East boasts 6.9 grams per tonne for 400,000 ounces.
Meadowbank's resource is estimated at 2.1 million ounces grading 5.73 grams per tonne. These figures do not include the recent Vault deposit which returned excellent grades, one drill hole returned a 7.93 grade.
