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HAY RIVER - Tamerlane Ventures will delay the financing search for construction and development at its Pine Point Mine project in Hay River, hoping for an upswing in metal prices later this year.

Wolf Schleiss, senior geologist for Tamerlane Ventures, displays lead-zinc core samples from Pine Point. The company will delay construction on the mine until healthier metal prices allow for better financing opportunities. - NNSL file photo

"In order to begin construction and development at Pine Point, we need to do significant project financing and that certainly is being affected by the current economic environment," said Brent Jones, manager of investor relations at Tamerlane.

The cost for constructing infrastructure for the initial mine, set to take 15 to 18 months, is estimated at $120 million, with yearly operating costs pegged at $250 million.

Tamerlane, headquartered in Blaine, Washington, gained 100 per cent interest in Pine Point in 2006. The 7,500-acre property was first mined in 1965 by Cominco Ltd. The company extracted more than 64 million tonnes of ore, at a grade of seven per cent zinc and 3.1 per cent lead, before the project folded in 1987.

Tamerlane is hoping for similar success. But first, they play the waiting game for market prices to look healthier.

"Right now zinc is at 49 cents a pound and lead is at 51 cents a pound. Those are significantly lower than they were a year a year and a half ago," said Jones. "Until those metal prices increase, we won't be able to finance the project."

Jones said the company will keep a close eye on metal prices - he expects they'll rebound later this year - and approach banks when it makes better business sense to do so.

"Obviously, (if) the prices for lead and zinc hadn't fallen so much, I'm sure we'd be much farther along in terms of financing," he said.

"We can't go out to a bank and do the financing with metal prices where they are." he added.

Jones added the slowdown in construction is a sign the North's geographic position will not shelter it from the recession.

Everything is connected, he said, with the decreased demand for metals in the auto manufacturing and construction sector driving the drop in metal prices.

While Tamerlane waits for those prices to rise, the company will continue on with the work it can, working through the planning and regulatory processes, like securing licensing.

Hay River Mayor Jean-Marc Miltenberger said the delay in Tamerlane's construction timeline will not have a major impact on the town as a whole.

"It's been expected and anticipated and we are working closely with (Tamerlane)," he said.

Like Jones, he said he does not think the North's isolation will provide shelter in the economic storm.

"The magnitude of this is going to have a pretty broad sweeping effect in the Northwest Territories," he said.

Business owners he's spoken to, not only in Hay River, but in Yellowknife as well, have "never seen the likes of an economic slowdown," he added. "We will be impacted."

But it's not all doom and gloom. Miltenberger said businesses should adopt recession planning "bordering on depression planning, and to focus on the solution.

"Be optimistic. Plan for the future."