North of 60 Mining News - The mining newspaper for Alaska and Canada's North

TMAC Resources Inc. is poised to enter the final stretch for development of its recently acquired Hope Bay gold project in northern Nunavut.

Working with a timetable aimed at initiating gold production from the project's Doris North deposit in the fall of 2015, the company is focused this summer on completing a prefeasibility study begun in July, a surface exploration program undertake for 2013 and a sealift to the project site of main supplies for 2013/2014, equipment, materials and camp return as well as underground equipment.

The project's most recent milestone was a public hearing regarding a water license renewal and amendment for the project, which wrapped up July 17 without opposition. The hearing involved written testimony only, meaning interested parties were invited to submit comments to the Nunavut Water Board for consideration. No responses were submitted by communities or members of the public.

TMAC seeks to amend the project's water license to allow for ocean discharge of Tail Lake water instead of in Doris Creek. The operator also wants to amend and extend terms on the Windy/Patch type B water license to 10 years and to reactivate a phase 2 application to Nunavut Impact Review Board.

The Kitikmeot Inuit Association and Aboriginal Affairs and Northern Development Canada were the only commenters on the water license application and its submissions were made during a pre-conference hearing phase in earlier weeks.

"The KIA has no concerns with aspects of the application for the amendment and renewal of the captioned type A water license for Doris North which seeks a 10-year term," stated the association's senior Hope Bay project officer John Roesch. "KIA respectfully requests that the TMAC license be issued subject to the requirement to address the KIA issues listed (in this letter)."

The association's concerns reportedly focused on potential reporting and monitoring deficiencies.

Aboriginal Affairs and Northern Development Canada makes recommendations on similar topics.

"We concur with the (Aboriginal Affairs and Northern Development) comments and would like to thank AANDC staff for working through the process with us," TMAC Resources CEO Catharine Farrow told the board in a July 8 letter.

"TMAC will continue to involve the Kitikmeot Inuit Association in the review process for updating plans associated with the three Hope Bay water licenses going forward. The company has a productive dialogue with KIA on a number of issues related to surface land management of the (Inuit-owned lands), which forms the vast majority of the Hope Bay surface regime," Farrow added.

Doris North is one of three deposits identified along the 80-kilometer- (50 miles) long by 20 kilometer- (12.4 miles) wide Hope Bay Green Stone Belt and the most developed within TMAC's project. The large land package currently has a NI 43-101-compliant mineral resource of 10.6 million ounces estimated for Hope Bay's previous owner, Miramar Ltd., in 2006.

Once the hearings closed, a three-person panel from the Water Board took on the task of making a decision on the license, which is expected to be issued in September. The Nunavut Water Board will then submit a decision report to the AANDC Minister. The report will contain a draft license if the panel decides to renew the license.

Hope Bay Mining Ltd., the site's previous owner and a subsidiary of Newmont Mining Corp., had started the renewal and amendment process in September. TMAC Resources, a mine company specializing in narrow-vein gold mining, bought the project from Newmont in March. The Nunavut Water Board had determined in October that a full environmental review of the application was necessary under the Nunavut Waters and Nunavut Surface Rights Tribunal Act.

Busy summer/fall schedule

Farrow told participants in the Nunavut Mining Symposium held in Iqaluit in April that privately held TMAC had an extensive to-do list for 2013. The tasks included completing negotiations with KIA for renewal of a commercial land lease for Hope Bay, due in September; and beginning the environmental impact statement process for Hope Bay's Madrid, Patch, Boston deposits and for the core infrastructure in the southern portion of the belt.

The company also planned to carry out in initial public offering in September or October, she said.

Currently, TMAC is controlled by a group of former FNX Mining executives, including Executive Chairman Terry MacGibbon, following successful completion of a private placement in March with Newmont consisting of 1,276,259 flow-through common shares at a price of C$3.40 per share and some 10.22 million common shares at a price of C$3.00 per share for aggregate gross proceeds of C$35 million in March. At the same time, TMAC entered into a C$15 million credit facility with Newmont.

The major retained a 1 percent net smelter returns royalty on the project, and proceeds from the deal are being used for project development.

After the IPO is completed, Farrow said Newmont is expected to own about a 40 percent interest in the junior.

Describing TMAC's efforts as "not just building a mine but Canada's next gold mining district," Farrow said the junior intends to take advantage of the project's tremendous infrastructure and will build on the previous work of Hope Bay's former owners, including BHP Billiton Ltd., Miramar and Newmont. With "step by step" development of the green belt, the junior aims to mine higher grade ore bodies, while preserving the ability to mine lower grade ore at a later date.

She also said the company will use cash flow from initial mines to develop and explore for significant additional belt-wide mineralization.