Mineral-rich territory seeks explorers

With devolution around the corner and a well-reasoned mineral development strategy in place, government and industry officials in Northwest Territories are making a concerted effort to alert the world to the mineral resource and investment opportunities to be found in Canada's Far North, especially in the jurisdiction that boasts the third-richest diamond resources in the world.

In addition to three operating diamond mines and the sole tungsten producer in the West, NWT currently has six well-advanced mine projects working their way through the permitting process.

Between the efforts of a pro-mining territorial government, led by Premier Robert McLeod, and an active and well-organized chamber of mines, the word is getting out that mining in NWT can be a very smart move.

The Northwest Territories has diverse geology.

Geoscientists have identified eight distinct and diverse geological provinces in the Northwest Territories - the Continental Shelf, Arctic Platform, Bear Province, Churchill Province, Cordilleran Orogen, Innuitian Orogen, Slave Province and the largest by landmass, the Interior Platform.

The territory has produced more than C$60 billion in minerals since the early 1930s across a range of commodities and minerals that includes gold, diamonds and zinc. Those three products alone account for more than 85 percent of the value produced, according to the NWT & Nunavut Chamber of Mines, which is working to spread a strong pro-mineral development message throughout the mining industry.

"There is much more to the mineralization story with other key products, including tungsten, uranium, copper, silver and even radium. When the new mines currently in the approvals phase enter production, that list also will include bismuth, cobalt and rare earth metals, which are minerals found in only a few places worldwide," the chamber said.

"The Canadian North is the next frontier in mining and mineral development and nowhere is this more evident than in the NWT. As the Government of the Northwest Territories (draws) closer to taking over administrative control of our resources from the Government of Canada - a change anticipated through devolution in April, we have never been more serious about addressing our investment challenges and unlocking the mineral potential of our territory," said NWT Industry, Tourism, and Investment Minister David Ramsay.

"The Northwest Territories really is an emerging land of undiscovered opportunity," said Tom Hoefer, executive director of the Chamber of Mines, which is the industry's champion for mining growth in the North.

"Mining is already a significant part of our economy, but given our huge size and remoteness, there is still a great deal of land that has never been explored or at best has seen little mineral exploration. When you factor in the large variety of geological terrains, attractive opportunities lie waiting for intrepid explorers."

Canadian Prime Minister Stephen Harper has even picked up on this theme, declaring, "The North's time has come," during a recent northern tour.

Increasing investment

At a time when mining appeared to be in a slump in most jurisdictions worldwide, investment was up in the NWT in 2013, according to Natural Resources Canada, which estimates mining expenditures in the NWT rose to C$158.6 million, reflecting an increase of C$49.9 million (46 percent) from 2012.

"These are challenging times in the global marketplace for the exploration and mining industry, so we are pleased that there are still projects in both the NWT and Nunavut that are advancing through the approval and regulatory processes. We are hopeful that the marketplace will improve in the coming year, and we will see exploration increase," said Chamber of Mines President Brooke Clements when the figures were released Dec. 12.

Though exploration and deposit appraisal expenditures are up in the NWT, Hoefer said it is due not to increasing grassroots exploration which is suffering as elsewhere, but to projects like Gahcho Kué that are moving forward with some spending as their approval processes advance closer to completion.

"In essence, we are taking advantage of the downturn in the marketplace to improve the investment climate through the NWT Mineral Development Strategy, devolution, and regulatory improvement," he explained.

Substantial mine development

As of September 2013, six companies had acquired the prerequisite permits or were in the process of doing so to bring their mining projects into production in NWT. As these projects advance to construction and operations, they add to a brighter economic future for the Northwest Territories, proponents say.

The proposed Gahcho Kué diamond mine, for example, has probable reserves totaling 31.3 million metric tons grading 1.57 carats per metric ton for 49 million carats in the Tuzo, 5034 and Hearne kimberlites. A 2010 feasibility study demonstrated that an open-pit operation could produce an average of 4.5 million carats per year over an 11-year period, while employing nearly 700 workers during the peak of construction and roughly 400 mine workers once operational. The project, joint venture between De Beers Canada (51 percent) and Mountain Province Diamonds Inc. (49 percent) was approved in fall 2013 to proceed to permitting and licensing.

Avalon Rare Metals Inc.'s Nechalacho Rare Earth Elements project, located at Thor Lake about 100 kilometers (62 miles) southeast of Yellowknife and five kilometers (three miles) from Great Slave Lake, is contemplated as a 2,000-metric-ton-per-day underground mine and concentrator, with a hydrometallurgical secondary processing facility being proposed for the south side of the lake and a refinery located in Louisiana.

In April, Avalon announced the completion of a comprehensive feasibility study that confirmed strong economics with a 22.5 percent pre-tax internal rate of return and average annual revenues of C$645.8 million, with initial production projected for the second half of 2017.

Avalon is presently doing process optimization work to improve REE recoveries, reduce costs and enhance project economics.

A proposed new process could result in the hydromet plant being located elsewhere due to additional infrastructure requirements.

This work is expected to be completed in January.

Total capital requirements estimated for the feasibility study are C$1.575 billion and more than 200 new jobs are expected to be created in the NWT, mainly at the Nechalacho site.

The Nico gold-cobalt-bismuth-copper deposit of Fortune Minerals Ltd. is located 160 kilometers (100 miles) northwest of Yellowknife, and only 85 kilometers (53 miles) north of the major highway to the capital.

Construction of an all-weather road is proposed to allow metal concentrates to be trucked to southern markets.

A 2012 Front End Engineering and Design Study outlines pre-production capital costs estimated at C$441million for a vertically integrated project with a mine and mill in the Northwest Territories and a refinery planned for Saskatchewan.

The study indicated life-of-mine average operating costs of mine at C$61.97 per metric ton of ore processed.

The Tlicho and federal governments have given the go ahead for the NICO mine and mill with permitting and financing requiring completion prior to the commencement of mine construction.

The proposed mine site boasts reserves of 33 million metric tons containing gold, cobalt, bismuth and copper with a projected mine life of 20 years.

Fortune Minerals has begun site preparations for construction at NICO that is targeted to begin in 2014.

Canadian Zinc Corp.'s Prairie Creek Project comprises a partially developed underground mine and plant that was constructed in the early 1980s.

The plant was three months away from operations but was never put into use.

The existing mining-related equipment includes a 1,000-metric-tonne-per-day mill.

The company has proposed an underground mine operation with the capacity to mine 1,300 tpd of zinc, lead and silver.

In June of 2012, Canadian Zinc Corp. released a pre-feasibility study projecting an 11-year mine life based on a measured and indicated mineral reserve estimate of 5.43 million metric tons of zinc, lead and silver with a mill rate of 1,000 tpd.

Inferred resources encompass another 6.2 million metric tons of the three metals, which have the potential to double the life of the mine.

On Sept. 18, the federal minister responsible for northern mining approved the project.

Near-term, Canadian Zinc intends to focus on pre-construction optimization activities with site construction potentially beginning in 2014.

The company is currently seeking funding to bring the mine into production with the potential for first shipment of concentrate south in 2016.

The Yellowknife Gold Project, Tyhee Gold Corp.'s flagship property, is located 90 kilometers (56 miles) north of Yellowknife and covers 12,635 hectares over five zones of gold mineralization. A feasibility study released in August 2012 estimated pre-production capital costs of C$193 million with an estimated mine life of about 15 years based on a production rate of 4,000 tpd at an average grade of 2.03 g/t gold. Proven and probable reserves are estimated at just over 1.3 million ounces of gold. The project owners are working to raise financing to advance the project through the approvals process.

Tamerlane Ventures Inc.'s Pine Point Project builds on a historical base metal mining area on the south side of Great Slave Lake, where the original Pine Point mine produced zinc and lead for 25 years.

Tamerlane has received approval to mine the R190 zinc-lead deposit utilizing an innovative combination of basic and technical mining methods.

It would be simplified by the large amount of existing infrastructure including: existing hydro power, paved road access to southern Canada, and a rail head at the community of Hay River, only 42 kilometers (26 miles) away.

Developing the R190 deposit first could pave the way for full-scale mining of the other known base metal deposits in close proximity to the R190 deposit on the 175-square kilometer (67.6 square miles) property.

Enhancing economic development

The Northwest Territories is planning for a prosperous future by enhancing economic development. Through several new strategies - mineral development, economic opportunities, and energy action - the territorial government is positioning itself as a strong supporter of development for the future prosperity of the Territories.

Last fall, Premier McLeod announced planning was underway on a multimillion-dollar investment in hydropower that would provide energy to communities and mining projects.

In the spring, Minister Ramsay released "Corridors for Canada III: Building for Prosperity," which proposes C$600 million in strategic transportation infrastructure investments that will support communities and resource development across all regions of the NWT.

Said Ramsay: "The NWT can't go it alone and is seeking funding from the federal government for roads, airports, bridges and other infrastructure improvements that will "lay a foundation for the economic growth and prosperity of the NWT."