SOMBA K’E/YELLOWKNIFE
Of the seven mining projects often cited as being under development in the NWT, only the De Beers Canada/Mountain Province Diamonds Gahcho Kue project is under construction.

Tom Hoefer: The NWT and Nunavut Chamber of Mines executive director gave a snapshot of the state of mine development in the NWT on April 19. Many jobs are on the line, but most projects await financing. - Walter Strong/NNSL

Commodity markets and hesitant investors have put the brakes to other projects standing as potential replacements for the labour impact the territory will feel when existing NWT mines reach the end of their productive lives.

All four of NWT’s producing mines are expected to expire within 15 years: Ekati in 2020, Diavik before 2024, Cantung in 2015 and Snap Lake before 2030, although Ekati and Cantung may see their operating lives extended.

NWT Chambers of Mines executive director Tom Hoefer told delegates at the 2014 NWT Chamber of Commerce business conference,that if Ekati closes as scheduled in 2020, it will mean a loss of 1,400 jobs.

Totaling employment projections surrounding the four ‘leading projects’ in the NWT (NICO, Nechalacho, Prairie Creek, Gahcho Kue) amount to 1,306 mine jobs, less than what will be lost if Ekati closes on schedule.

Gahcho Kue’s 380 mine jobs seem to be on track to materialize, but quick survey shows most project proponents -- despite having made significant investments already -- are waiting for markets to shift before being able to proceed.

Fortune Minerals’ NICO mine project - a gold-cobalt-bismuth-copper mine - 160 km northwest of Yellowknife, has a projected 20 year mine life, would employ 300 people during construction, and employ between 150 and 200 during its productive life.

Fortune has environmental approvals in hand for NICO, as well as permitting for an associated cobalt processing plant in Saskatchewan.

“Where we are now,” said Troy Nazarewicz, Fortune Minerals investors relation manager, “is advancing negotiations for project financing.”

“If successful, we’d hope to start construction later this year, with full-blown construction activity next year.”

To date, Fortune has spent more than $110 million on developing NICO. Total financing required for the mine and Saskatchewan processing facility is $589 million ($347 million for the NICO mine, $242 million for the processing facility).

“We’re optimistic we’ll have the funds in place this year,” Nazarewicz said.

Seabridge Gold Inc., which holds 100 per cent of the Courageous Lake gold project and is well-financed, is distracted these days by its KSM copper/gold mine project in northwest B.C.

“Last year we made what is probably one of the most significant copper/gold discoveries on a Canadian project,” said Rudi Fronk, Seabridge CEO. “It’s right off Hwy. 37 where they (the province of B.C.) have extended the Northwest transmission line, so cheap power is available.”

This doesn’t mean Seabridge has lost interest in Courageous.

“We think of it as a core project with a lot of merit,” Fronk said. “There are not many 6 million ounce reserves sitting in Canada anymore.”

What Courageous needs, Fronk added, is $1,600 per ounce gold.

“At $1,600 you show reasonable returns on existing reserves.”

Seabridge shifted focus to its Walsh Lake gold deposit near the Courageous project. The reason is that Walsh Lake holds the promise of a higher mineral grade with lower milling costs, translating into a better return on investment.

But Walsh Lake is not on the development radar in the short term, and Courageous won’t see much spending this year.

“I wouldn’t say it’s on hold,” Fronk said of Courageous. “We’re still going to spend over a million dollars there this year on our programs, but not as much as we have in the past.”

“It’s also a function of what we have going on in BC with KSM.”

Seabridge has spent approximately $50 million to date on Courageous.

Canadian Zinc Corporation’s Prairie Creek zinc-lead-silver mine is an anomaly in that much of the physical infrastructure for the mine is already in place. The mine site has essentially been complete since 1982. A drop in zinc prices at the time precluded going into production, forcing then-owner Cadillac Resources into bankruptcy.

A winter road and mine site upgrades need to be done before mine hiring can be considered.

“The target, all things going well, is late 2015,” said Earl Hope, investor relations manager with Canadian Zinc. “There’s a lot of work we can do all summer long to prepare for production.”

Canadian Zinc recently issued tenders for work related to mine site upgrades and the construction of a winter road, but financing for those tenders is not in-pocket. Company management has been canvasing for investors for what has been reported as a need for approximately $200 million to open the mine. If the company is able to raise funds, it could begin winter-road work as early as this May.

Tyhee’s Yellowknife Gold project, less than 100 kms north of Yellowknife, would be a 15-year mine, projected to employ approximately 265 workers.

With feasibility study in hand, the project is ready to move forward, if it had the financing.

“We continue to be committed to advancing it as best we can,” said Greg Taylor, Tyhee Gold manager of investor relations. “However, given the challenging equity markets, it’s been very difficult to raise the larger sums of money required to do all the work. We’re just not able to push forward as quickly as we want to.”

Although Tyhee continues to work on the permitting process, without a significant capital investment, Yellowknife Gold -- like many other mineral projects in the NWT -- is at a standstill.

“We’re still hoping we can begin construction within the next two years,” Taylor said. “But permitting and financing are the major milestones we need to deal with.”

In a recent presentation to the NWT Chamber of Commerce, Avalon Rare Metals president Don Bubar described their NWT Nechalacho rare earth metal project as waiting for financing.

With more than $95 million already spent on the project and federal environmental approval in hand, the company continues to consult with area First Nations, but does not expect major spending this year on the property.

Tamerlane Venture’s Inc., owner of the Pine Point lead/zinc project, is in receivership and management did not return calls for comment.