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UMINGMAKTUUQ - Newmont Mining Corporation is proceeding cautiously with the development of its Hope Bay gold project in the wake of the global economic crisis, according to Chris Hanks, director of environment and social responsibility for Newmont.

Pictured here is an aerial view of a camp on the Hope Bay belt owned by Newmont Mining Corporation. In light of the economic slowdown, Newmont is cautiously planning the development of Hope Bay on a six-month basis, with on-ground staff expected to decline this year. - photo courtesy of Newmont Mining Corporation

At least one infrastructure project is being put on hold until 2010 and the amount of on-site staff will be significantly lower than last year at the site, 75 km northeast of Umingmaktuuq.

"Everybody's slowed down a little bit," he said. "What Newmont has simply done is decide to take it by six-month blocks. At the moment, we're planning to drill through June."

As for what the company will do after mid-year, he said "We haven't made the decision yet."

"We'll evaluate it and either stop or go forward. Even if we decide to stop drilling in June, we'll still be in the belt because we'll be doing environmental baseline work."

The primary focus of this year's campaign will be to drill several deposits on the belt to bring the project's reserves to proven or probable status in order to begin the permitting process.

"We're continuing to do exploration drilling at the Madrid and Boston deposits and probably some of Doris to make sure we fully understand the resource," said Hanks.

Last year, between on-site construction and drilling, a total of 230 people worked on site, including people from the communities of Kugluktuk, Cambridge Bay, Gjoa Haven and Taloyoak who worked as core splitters and helped with camp construction.

This year there will only be about 100 people on site due to a change in direction for the program, said Hanks.

"Whereas last year we had a lot of construction works and not a lot of drilling, this year the drilling's going to be more of a priority," he said.

The company is also pushing ahead with plans to replace a sewage treatment plant at one of the Hope Bay deposits.

But the construction of a 10-km all-weather road between the Doris North deposit and the Madrid deposit is being pushed back to 2010, said Hanks.

"Are we moving quite as fast as we would have moved if what happened in October didn't happen? No. We'll be a little more cautious," he said.

He said another reason the road was deferred was because project engineers indicated the road would not meet the needs of a long-term mining plan for Hope Bay.

Newmont has been able to proceed with most of its plans given its position as a worldwide mining company, said Hanks.

"Because we have producing properties, we're not just dependent on the stock market. We have cash flow, so we will be able to continue with development," he said.

The prudent approach undertaken by Newmont was forecasted in a report released last week by the Nunavut Economic Forum, a broad group of organizations with an interest in the territory's economic development.

The report, "The 2008 Nunavut Economic Outlook," concluded the economic outlook for Nunavut - much of whose economy is dependent on spending by mining companies - is grim in the wake of the crumbling economy.

"In the span of a few weeks, world liquidity seized, negatively impacting anyone looking for investors including the world's largest corporations," the report stated. "Nunavut will not escape the effects of this crisis. It would be safe to assume at this point all large-scale mining projects in the territory are

being re-evaluated by their respective owners based on an entirely new set of input prices and revenue schedules."