KIMMIRUT/LAKE HARBOUR - A Kimmirut man who discovered a sapphire deposit close to town said he hopes the junior exploration company developing the project will return to site this year and provide work for other community members.

Seemeega Aqpik, the Kimmirut man who discovered the Beluga sapphire deposit outside town in 2002, hopes the company developing the project, True North Gems, will return to the site this year, but the company is still looking for cash to fund Beluga and other projects - one month before the start of the summer exploration season. - photo courtesy of True North Gems

But things aren't looking good. The company, True North Gems, has reported a cumulative deficit of $16 million and still hasn't announced its intentions for the summer.

"It helps a lot job-wise," said Seemeega Aqpik of the Beluga Sapphire project. Aqpik originally discovered Beluga in 2002 and guided True North staff by four-wheeler, taking them around the site, for the following four years.

In 2006, the last year Aqpik worked at the site (he has since acquired a job as manager of the local hunters and trappers organization), seven or eight Kimmirut residents worked at Beluga as prospectors and general labourers.

Beyond the hamlet, the Kimlik Coop and the Northern Store, "There are not a whole lot of jobs that are available," he added. "I'm hoping that True North will be able to create more work."

The environment for raising cash to fund exploration projects - plus the fact that True North's first priority is a ruby project in Greenland that is now entering permitting - make it hard to predict whether True North will stage an effort at Beluga, which is still in the early exploration stage and has no resource estimate, said president and CEO Andrew Lee Smith.

"At this moment, I can tell you we won't be able to do anything more than care and maintenance," said Smith. "Once we've completed a financing, we'll be in a better position to judge that."

Smith is keenly aware that time is running out.

"July 1 is typically when we start our summer program. So we need to do something this month."

The company's audited financial statements for 2008 included a telling line about the company's need for cash:

"The Company has limited financial resources, no source of operating cash flow and no assurances that sufficient funding will be available to conduct further exploration and development of its mineral property projects."

"It's pretty challenging," said Smith of fundraising, though he added that several companies have approached True North about the possibility of forming a joint-venture on Beluga.

In that scenario, True North would "bring in another company to fund the exploration work in exchange for an interest in it," he said.

Even though the Greenland project will be the first one to receive money, "if we can ... get some cash flow going, we could use the cash flow to develop the project," said Smith.

"We continue to have strong interest in the Beluga project and think that Baffin Island sapphires represent a significant asset for the company."