Mines look post-Meadowbank
Baffinland one year into construction, other projects pending
Walter Strong
Northern News Services
Published Monday, April 28 2014
NUNAVUT
Agnico-Eagle's Meadowbank gold and silver mine is approaching the expected end of its mine life in 2017.
Several mine projects in Nunavut are at advanced stages of exploration and resource appraisal, holding promise of low downtime in the territory.
Limiting a survey of mining projects under development to those engaged with the territories primary regulatory body, the Nunavut Impact Review Board (NIRB), there are six projects to consider with one already under construction.
Baffinland's Mary River iron ore project has almost completed its first year of construction.
The company hopes to be able to make its first open water shipment of ore in 2015.
Mine construction is proceeding under an NIRB-approved early revenue phase amendment to its original larger construction proposal.
Capital cost for the early revenue phase is $750 million, and has employed approximately 300 workers on-site since construction began last spring.
The producing mine is expected to employ approximately 300 workers at a time on a fly-in, fly-out rotation.
After Baffinland's project, Agnico-Eagle's Meliadine project is perhaps the furthest advanced of remaining Nunavut projects.
Located approximately 290 km southeast of their producing Meadowbank gold and silver mine, the Meliadine gold project is in the final phase of regulatory approval with the NIRB.
The board expects the company to submit its final environmental impact statement later next month, triggering five months or more of regulatory proceedings, that will result in an NIRB project certificate assuming a positive assessment.
Exploration at Meliadine is on schedule to deliver a late 2018 mine start-up if market conditions justify investment at the time.
The company has budgeted $42 million dollars for work at Meliadine this year.
Areva's Kiggavik proposed uranium mine, located 80 km west of Baker Lake, is one of the most capital intensive projects proposed for the North with an anticipated capital cost at $2.1 billion. The project includes four open-pit mines, one underground mine, a processing mill, and a Baker Lake dock.
The company expects to submit its final environmental impact statement before the end of September.
"Sometime in 2015, we expect the (NIRB) environmental assessment decision to be made," said Barry McCallum, manager of Nunavut affairs for Areva.
"The company would then (submit) to a final feasibility study and make a development decision."
Since 2007, Areva has spent approximately $100 million on research, appraisal and environmental studies related to the project.
Spending for this year by Areva is budgeted at $11.5 million for exploration, mine, and mineral development and assessment.
Current uranium market prices - approximately $35 USD per pound - are below the threshold for economic viability, but the company is bullish on commodity prospects.
"The price of uranium is too low today," said McCallum.
"But it's anticipated that demand is going to increase over the next few years. By the time we expect to develop the mine, we anticipate a better price."
Current resource definitions give the $2.1 billion project a 14-year mine life, employing approximately 750 people during three or four years of construction and 600 during mine life. But the company believes the final feasibility study will be based on numbers projecting a further 11 years of producing life.
"We have 14 years in the ground now," McCallum said. "But we're assessing for 25. We're looking for the remainder now."
"If everything happened as quickly as it could, mine construction could begin as early as 2018," he said.
MMG Resources Inc.'s Izok zinc and copper mine project is in the first phase of NIRB approval, and in early stages of economic feasibility studies. The company expects to update NIRB before this year on the status of the mine.
The project slowed in 2013 when the company announced it wanted to submit a revised proposal with a less expensive scope of operations, reflecting a slump in commodity market value.
According to MMG preliminary feasibility fact sheets, the project was initially projected to begin construction in 2015 and be operational by 2018. Given the scope of reworking the project, no capital cost estimates for the project are available.
According to Kathleen Kawecki, senior group communications advisor, as of Dec. 31, MMG's total capital spend on the Izok corridor project is $53.3 USD million.
"In 2014, MMG will continue its evaluation of value engineering opportunities identified in 2013, including bulk modularization of the process plant and infrastructure," Kawecki stated in an email. "The evaluations to date indicate significant capital savings compared with previous scenarios."
Planning for 2014 exploration is underway, but no spending estimate was provided.
The Sabina Gold and Silver Corp. is in phase two of the NIRB regulatory process with its Back River gold project, located 80 km south of
Bathurst Inlet.
Sabina submitted its draft environmental impact statement for the project earlier this year.
The company expects to complete the phase two NIRB process and submit a final environmental impact statement by early 2015, with mine production as early as mid to late 2018.
According to Nicole Hoeller, Sabina VP of communications, the company has already spent about $300 million on exploration, deposit appraisal, and acquisition costs. Capital cost for the project is estimated at $605 million.
The company has budgeted $19 million for further drilling and other project-site related costs in 2014.
The final active project in the NIRB process is TMAC Resources Hope Bay/Doris North mine. TMAC acquired the advanced gold project from Newmont mining in 2013 for $50 million. With acquisition TMAC inherited existing NIRB permitting and water licences.
Doris North is a phase 4 project, meaning it is in the NIRB monitoring stage with a project certificate already in place, but the company will apply to the NIRB to amend that certificate for a modified project description.
Catherine Farrow, CEO for TMAC, said the company is optimistic it will conclude financing soon for more than $50 million worth of exploration this summer to further define resources and advance permitting.
Farrow reports that approximately $300 million in capital costs remain to be financed, mostly surrounding the construction of a mineral processing mill.
The company is not ready to commit to a construction timeline at Doris North, but Farrow said they are hoping to arrange financing before the end of 2015.
The project benefits from having substantial infrastructure already in place.
"We've leveraged the value of capital invested by the previous owner," Farrow said. "That changes our economic profile for the positive. We're robust down to $1,000 gold."
