NORTHWEST TERRITORIES / NUNAVUT
Federal approval of a multi-billion dollar open pit iron ore mine in Nunavut, changes in diamond fortunes and excitement over a glut of oil and gas in the Sahtu highlighted a year of remarkable mining and exploration developments in the North in 2012, with projects picked up, dropped, advanced, and changing hands.
A helicopter lifts a sample bag from the 33.5-tonne mini-bulk sample of the CH-28 kimberlite earlier this year at Peregrine Diamonds' Chidliak project on Baffin Island. - photo courtesy of Peregrine Diamonds Ltd. |
On Dec. 3, John Duncan, Minister of Aboriginal Affairs and Northern Development Canada, signed approval of Baffinland Iron Mines Corp.'s $4-billion to $6-billion Mary River Project, located 160 km south of Pond Inlet, giving the green light for permitting and licensing the mine, a road and a 149-kilometre railway to a port at Steensby Inlet.
"It's not necessarily the first mining project that Pond Inlet has been involved in, but it is the first one that we're involved in at this scale with this being such a large project," said economic development officer Colin Saunders.
"This is an opportunity for some of the High Arctic communities to help develop their communities' economically and it's an opportunity that I really don't think people should turn up."
The advancement of Mary River came as very welcome news to the territory, which was still reeling from the shutdown of the promising Hope Bay project in the Kitikmeot region.
In February, Newmont Mining Corp. had announced without a solid business case, Hope Bay had not been added to the international mining company's strategic plan for future gold production.
"We knew that announcement was coming," remarked Kitikmeot Corporation chair Wilf Wilcox at the 2012 Kitikmeot Trade Show where the announcement was made by executive Chris Hanks. "Maybe there will be more things to happen. Like (Hanks) said, there's a lot of gold there."
In a surprise Dec. 17 announcement, it was revealed that private mining exploration company TMAC Resources Inc., has signed a binding Letter of Intent to acquire Newmont's Hope Bay Project.
The belt is said to contain potential of 10-million ounces of gold.
As investors continued exploring the mineral potential of Nunavut and the NWT in 2012, spending steady exploration and development dollars, the oil and gas potential of the North, particularly in the Beaufort Sea-Mackenzie Delta Basin and the Canol shale oil play in the Sahtu region.
With barges full of drill rig components, bulldozers, dump trucks, and more equipment for the 2011-12 winter drilling programs around Norman Wells and Tulita, the activity brought excitement, and most importantly, jobs, to the communities.
"We're seeing quite a few jobs within the region," said Chris Buist, president of the Norman Wells and District Chamber of Commerce, adding the spinoff employment from the activity includes medical staff, logistical support, transport, airlines, grocery stores, and hotels.
"Everybody's getting a little bit of spinoff from the increase in activity," he said.
MGM Energy Corp., the smallest of the major energy companies with work commitments of more than $630 million on the Central Mackenzie Valley leases, got the go-ahead to drill a vertical well and use a variation of the controversial fracturing - or fracking - extraction method, on one of its leases.
The company, however, later withdrew a joint application with Shell Canada to drill a horizontal well on one of its leases after the application was referred to an environmental assessment by the Sahtu Land and Water Board.
Pending environmental approvals, other companies who also won bids on land parcels in the region including Shell Canada, Imperial Oil Resources Ventures Ltd., and ConocoPhillips Canada Resources Corp., are expected to advance exploration activity next winter.
In September, Premier Bob McLeod promoted the territory's resource potential, tourism attractions and trade opportunities during a Council of the Federation trade mission to China.
Meanwhile, diamonds, the backbone of the NWT economy, got a rough ride this year as depressed diamond prices prompted Shear Diamonds Ltd., the Toronto-based company that had been processing diamonds from tailings left by the former operators of the Jericho Diamond Mine in Nunavut, to suspend production of Jericho diamond stockpiles, and Harry Winston Diamond Corp., owner of a 40-per-cent stake in the Diavik Diamond Mine, to withhold diamonds from sale in the soft diamond market.
The daunting diamond market did not deter De Beers Canada, operator of the Snap Lake Diamond Mine, to snap up interest in Peregrine Diamonds' Ltd.'s advanced Chidliak project, on Baffin Island, announced in October.
In January, Peregrine had gained 100 per cent ownership of the exploration project after announcing it would buy mining company BHP Billiton out of its 51 per cent stake in Chidliak for $9 million, as BHP reviewed its diamond assets.
In the air, months of speculation over a possible sale of First Air to Canadian North, or a merger between the two was brought to an end by First Air parent company Makivik Corporation in an announcement it had concluded a "review of its strategic options" and will keep its 100 per cent ownership stake in the airline.
The announcement also came with the resignation of First Air president and CEO Kris Dolinki, who led the months-long review.
The following month, Canadian North president Tracy Medve announcement her resignation, effective Dec. 31.
Steve Hankirk, Canadian North vice-president of operations, charter and cargo, is to be appointed president in the new year.
