NEWS: Nunavut May 15, 2012 - 10:00 am

Newmont visits western Nunavut to discuss Hope Bay’s future

Work force will shrink to 20; 150 Inuit to lose jobs at Newmont


Newmont Mining Corp.‘s decision to mothball its Hope Bay gold mine near Cambridge Bay means the company will shutter its Doris North camp.

And it also means 150 people in the Kitikmeot will be looking for new jobs by the end of the summer.

That’s prompted Chris Hanks, a vice-president of Newmont Mining Corp.‘s Hope Bay Mining subsidiary, to visit Cambridge Bay and other Kitikmeot communities to tell people in the region exactly what lies ahead for the mine and its workers.

While Newmont’s Cambridge Bay meeting, scheduled for May 15 at 7 p.m. in the Kitikmeot Inuit Association boardroom, competes with the community’s Omingmak Frolics, Hanks will share important information about the Newmont decision that affects many in Cambridge Bay, that is, the gold mine giant’s decision to put the Hope Bay mine into “care and maintenance.”

This decision means that after the summer sealift, only a handful of people — maybe 20, Hanks said — will be left at the complex, located south of Cambridge Bay in the mainland.

In late 2011, the camp at Doris North still bustled with activity. Heavy equipment operators prepared a pad for a mill that was never delivered, and underground, miners worked to expand mine shafts.

Hanks will provide a rundown on the mine project’s history in the Kitikmeot, which is now grinding to a halt. This will leave about 150 people in the region — roughly 50 from Kugluktuk, 30 from Cambridge Bay and the balance from Gjoa Haven, Kugaaruk and Taloyoak — looking for new jobs.

Hanks also plans to recap what the development of the Hope Bay mine project did for Inuit and to talk about the efforts that Newmont will put into making sure its employees land other jobs in mining.

Newmont plans to leave everything in good order, Hanks said. All payments due to Inuit through the Kitikmeot Inuit Association are up-to-date.

But many people in the Kitikmeot will feel a financial pinch when the promising mine project goes into “care and maintenance” instead of production.

Since 2009, almost $290 million or 52 per cent of Newmont’s contract spending went to Kitikmeot- and Nunavut-based business.

“We have grown our workforce to 150 Inuit per month in 2011, paying out well over $5 million in salaries in the Kitikmeot last year,” Hanks said. “No Inuk lost time at work due to an injury during our four years of operation.”

And more than 380 Inuit were trained in everything from heavy equipment operation to marine spill response.

Ten students were also hired on last year during the Tail Lake “fish-out,”  when they fished 1,490 lake trout, sending 1,000 fish to Cambridge Bay for food.

Hanks also plans to go over the uncertainties that led to the decision to put the Hope Bay mine into “care and maintenance.”

These include the difficulty of pinning down the 10-million ounces of gold reserves on the 80-km greenstone belt, high operating costs, and unsettled land tenure.

What Hanks calls “key approvals that set conditions for future operations” — such as a new commercial lease for Inuit-owned lands, a new water license and a lengthy new environmental impact assessment —  still “need to be resolved.”

These uncertainties prompted Newmont to decide that there was “no positive business case for Doris North Mine.”

But Hanks is still meeting with the Nunavut Impact Review Board to discuss amendments to its various licenses, with the KIA on surface land tenure, and with Nunavut Tunngavik Inc. on exploration agreements.

“We will honor our existing IIBA, capacity agreement, and water compensation agreement suitable for “care and maintenance,” he said.

But “Phase Two” of Hope Bay, which included expansion of Doris North mine as well as open pit and underground mining at two adjacent deposits, Madrid and Boston, won’t go ahead. 

Instead, this is what will happen, Hanks said:

• all new construction and exploration will stop;

• vehicles, drills, supplies are being sold or removed to save money;

• all buildings, roads, tanks, dams, and fixed equipment will be preserved;

• some older Newmont facilities will be closed and reclaimed;

• Doris North Underground will be blocked for safety; and,

• barges used as floating residences likely are to return to Inuvik.

The KIA has the first chance to buy surplus equipment, the rest will be offered to sale once negotiations with the KIA are done this month.

The goal is “to save infrastructure and options for potential future use, safely and in an environmentally responsible manner,” Hanks said.

Long-term Inuit workers will receive priority for “care and maintenance” jobs.

“We are helping workers seek jobs at other projects including Lupin Mine with Elgin, George and Goose Lake with Sabina, Izok Lake with MMG, Jericho Mine with Shear Diamonds, Ekati Mine with BHP, Alexco and Yukon Zinc,” Hanks said.

“We have made contact with Service Canada, [Nunavut’s] department of Education and Nunavut Arctic College to provide help with Employment Insurance claims, resumé writing, and support training opportunities.”

Meanwhile, the NIRB Phase Two environmental assessment project description is with federal government for approval.

After that’s signed, it will come back to the NIRB to complete the terms of reference for a final environmental impact statement.

But no work will proceed on the Phase Two permitting process until Newmont makes a decision to proceed to a draft EIS.

For that to happen, Hanks said “something” would have to change so that he can go back to Newmont and make a new case for the mine.

Newmont has already written off $1.6 billion of its investment at Hope Bay.

The mine could also be sold to another party or be developed with another partner, Hanks said.

But in any event Newmont wants to keep “the package” ready.

If there’s any lesson to be drawn from Newmont’s decision to back away from the Hope Bay mine, it’s that “doing business in Nunavut is hard,” Hanks said.

Newmont’s May 15 meeting on “what ‘care and maintenance’ means for the Hope Bay project” takes place in Cambridge Bay at the KIA boardroom at 7 p.m..