Iqaluit (Feb 27/06) - Huge tracts of Northern land are being scoured for mineral potential, but the number of parties joining the fray has fallen dramatically in 2006.

Baker Lake's Charlene Mannik is seen here prospecting on Cumberland Resources' Meadowbank gold property. The number of prospecting permits issued for Nunavut and the NWT was 299, much lower than last year's 449 permits. - photo courtesy of Gordon Davidson

In Nunavut, 161 prospecting permits were issued this year. Those permits encompass 6.4 million acres. That's a far cry from the 1,136 licences and 47.6 million acres accounted for in 2005.

In the NWT, only 138 permits covering 6.1 million acres were granted this year. Last year, the figures amounted to 449 permits spanning 19.5 million acres.

What led to such a major decline? There could be a couple of explanations, according to Mike Vaydik, general manager of the NWT/Nunavut Chamber of Mines. For one, much of the prime prospecting territory was likely spoken for during the staking rush of the past few years, he suggested.

"It may be just that the industry needs a little breathing space to do some work on what it's got," said Vaydik.

Secondly, with commodity prices having risen steadily, he noted that there is greater competition from southern mines. Economic activity in B.C., Ontario and Quebec is heating up once again.

"The market is very buoyant right now. There's lots of money in the market," he said. "There's lots of excitement."

While permit numbers slipped, Nunavummiut are starting to see the pay-offs from mine development.

Tahera's Jericho diamond mine is in the final stages of construction and has reportedly produced its first rough gems.

With a goal of 60 per cent Inuit hires in five years, the firm's Inuit Impact Benefit Agreement also requires a minimum of four trades apprenticeships for the Kitikmeot to be available at all times, as well as one management trainee job. In the same region, Miramar's proposed Hope Bay gold mine is the hands of the Nunavut Impact Review Board. The deal Miramar has with Nunavut Tunngavik Inc. means Inuit would receive about $40 per ounce of gold mined based on the current price and Canadian-U.S. exchange rate.

The gold at Doris North, which would be developed during the mine's first two years of operation, is estimated at 311,000 ounces.

In the Kitikmeot, Cumberland Resources is preparing for final hearings on its Meadowbank gold project near Baker Lake.

"Many of the benefits for Nunavut will be detailed in our Inuit Impact Agreement with the Kivalliq Inuit Association," said Gordon Davidson, Cumberland's exploration manager.

While those negotiations are still ongoing, he did offer some projections on what the mine would mean for the young territory:

Ae $1.4 billion direct contribution to Nunavut's economy over the 12 years of construction, production and reclamation;

Ae Increase of average annual earnings in Baker Lake to $50,000, a 20 per cent jump from 2001;

Ae and, up to 70 full-time jobs for Kivalliq residents during eight years of production, paying about $30 million in total wages.