Iron rush hits Nunavut’s Belcher Islands

This Natural Resources Canada photo shows the way Haig Inlet on the Belcher Islands looked back in the 1950s.

After being mothballed for more than 60 years, an iron-rich deposit near the Nunavut hamlet of Sanikiluaq is ready to move ahead again.

Last month, Canadian Orebodies Inc. announced that it has completed the permitting process and was ready to start an “aggressive exploration program” on its Haig Inlet project, located on the Belcher Islands.

The “booming iron ore sector” is behind the move to develop the iron deposit, about 907 million tonnes grading 27 per cent iron, into a mine, said Gordon McKinnon, Orebodies president and chief executive office,r in a news release.

In Haig Inlet’s favour: the mild climate of Sanikiluaq and its less remote location than the Mary River or Roche Bay iron deposits.

Last week drills were being set up on Flaherty Island, where the Haig Inlet property covers 14,180 hectares.

The camp of about 40 includes eight Inuit workers.

“This is what a community needs, a source of income which enables welfare recipients to earn their own means of survival money-wise,” Jonasie Emikotailuk, a bear guard, told Nunatsiaq News.

A “significant amount of exploration work,” including numerous diamond drill holes, was carried out on the property during the 1950’s by Belcher Mining Corp. Ltd., says Canadian Orebodies.

Then, about 20 Inuit workers were employed, but an epidemic of whooping cough hit the islands in 1956, decimating the local population.

Orebodies’ business partners include Nunavut Tunngavik Inc., which holds sub-surface title to the affected lands and would receive royalties from any mineral production.

Orebodies entered into an agreement to acquire a 100 per cent interest over three years in the Haig Inlet property and will pay a $250,000 advance royalty to NTI when the production lease starts or in 2017, the 6th year anniversary of their deal.

NTI will also receive a three per cent royalty “gross overriding royalty” for the period when the mine is in operation.

Mining MarketWatch Journal said the Haig Inlet project “deserves the attention of investors for the fact that it has similarities to other projects of companies which have experienced serious market cap appreciation.”

That’s because Iron ore deposits of this type, which can be easily shipped out, are in high demand, it said.

Chinese steel mills, which consume most of the world’s iron ore production, have been keen to invest in iron projects to allow them to better control iron prices, which have recently risen to near record highs of about $170 a tonne.

Globally, iron is the most used of all metals. Its relatively low cost and high strength make it indispensable, especially in vehicles, the hulls of large ships, and structural components for buildings. Steel is the best-known alloy derived from iron.