NORTHWEST TERRITORIES
After gold production tapered off in the '90s, the North got lucky when diamond mines came on the scene at just the right time. But mining industry representatives say further government aid is needed to keep mines booming.
Northtech Drilling Ltd.'s Jonathan Paquin releases drill core collected on TerraX Minerals Ltd.'s Yellowknife City Gold project north of the city. TerraX has put out tenders for winter drilling. Some are saying that diamond and mineral exploration is being discouraged by politics. - NNSL file photo |
David Ramsay, Minister of Industry, Tourism and Investment, spoke of the benefits of the GNWT's mining incentive program and mineral development strategy in the legislative assembly last week.
The program provides financial incentives to exploration as well as a number of government resources for the mining industry.
Last year, the mining incentive program was oversubscribed by almost 200 per cent, with seven exploration companies and two prospectors receiving funding.
"Right now the Northwest Territories produces most of Canada's diamonds and those diamonds have a very good value compared to the average for diamonds worldwide," said Graham Pearson, research professor at the University of Alberta and Canada Excellence Research Chair in Arctic Resources. "Northern Canadian diamonds appear to be of high quality and high value above world averages. That's what makes them attractive exploration targets."
Combine that with Canada's position as the third-highest producer of diamonds by value in the world, it's clear that the industry is integral to not just the North but the country as a whole.
Mines typically have a lifespan of 10 to 20 years and a number of the existing mines are in the last half of their lives so it's especially important now to find new deposits, said Pearson.
"There are large parts of the NWT that are geologically very favourable to hosting economical diamond deposits," he said. "It's a matter of the NWT maintaining and enhancing a political climate that's conducive to attracting businesses to it. We're working with companies to make sure that resources can be extracted in an environmentally sustainable manner but that's not too expensive to make the whole practice non-economic."
And that regulatory danger is high. The federal government has proposed that costs to review new projects be paid by the project's proponents and not the regulatory bodies.
"We at Peregrine would really caution the government on making it any more expensive to explore in the Arctic," said Tom Peregoodoff, CEO and president of Peregrine Diamonds.
"We hope they have a hard look at those proposed changes and revert back to the current structure whereby the government funds those regulatory bodies."
Tom Hoefer, executive director at the NWT & Nunavut Chamber of Mines, said the GNWT's support is welcome because of how exploration in the territory dropped off in the last several years.
When Nunavut and the Yukon boomed in exploration, the NWT declined.
"Talking to our members, we had a lot of people saying it's getting way too complicated up here, the regulatory environment is getting overly complex, investors don't understand it or when they do come up here with our invitation to come and invest in the North, they end up getting mistreated," said Hoefer. "They wouldn't get treated like that anywhere else. It doesn't take them very long to say we're taking our money somewhere else where it's safer."
That's when Hoefer and the chamber approached the GNWT with the idea for a mineral strategy plan similar to what other Canadian provinces already offered.
In his remarks at the legislative assembly, Ramsay spoke of the plan's benefits and said the program would continue to be updated to remain effective.
"This assembly has a vision of a strong, sustainable and prosperous North," said Ramsay. "The mineral development strategy and implementation plan will help us to ensure the mining industry continues to be a key contributor to achieving our vision and the NWT's economic growth."
Pearson's research focuses on developing methods to help diamond exploration in the North, using numerous instruments and analytical devices to characterize diamond indicator minerals.
Kimberlites, a host rock for diamonds, can be rich or poor in diamonds and have different types of diamonds inside them. Pearson's work aims to determine the quality of kimberlite deposits.
"Of all the kimberlites that are found by prospecting, only maybe one in 100 might turn into a mine," said Pearson. "And that's a world average. In Canada's North, it's probably less than that, maybe one in 150."
His research will help companies more confidently make a decision about whether to turn something into a mine.
"A very difficult decision is to try and work out whether a particular deposit is economic or not," said Pearson. "If a kimberlite has diamonds, (we're trying) to improve methodologies for estimating what the concentration is and in particular what the value and size frequency distribution is."
Most of the value in a given deposit is in large, colourless diamonds.
Pearson focuses on key minerals like olivine, garnet and chromite.
"We're looking a ultra-trace metal concentrations in those minerals to help develop this fingerprint of what might be an economic kimberlite and what might not be," he said.
