At TMAC’s Hope Bay project in western Nunavut, hope never dies
Firm now aims at starting production by 2020
Despite much hoopla surrounding the promise of several advanced mining projects in western Nunavut, none of these Kitikmeot projects have moved successfully into operation yet.
But the team behind TMAC Resources, which acquired the Hope Bay gold mine project from Newmont Gold Corp. in March 2013, hopes to change all that.
TMAC wants to see the Hope Bay complex, located 120 kilometres south of Cambridge Bay on the mainland, operating by 2020.
That’s according to a timeline presented by Alex Buchan, TMAC’s director of community relations, to the Kitikmeot Inuit Association board meeting Sept. 23 in Cambridge Bay.
The presentation shows the mine project entering into an environmental review of mines at Hope Bay’s Doris North and Boston in 2016, with project certification following in 2019.
This new timeline is considerably slower than the first envisioned by TMAC in 2013, which promoted an “aggressive timeline” to get the mine into production in 2015.
Now the plan is to build a mine that will be “multi-generational” — that is, with more gold resources and a longer lifespan than the earlier forecast period of 10 years.
But much remains to do before even that revised timeline can move forward: TMAC is still in talks to finalize its Inuit Impact and Benefit Agreement and long-term surface land lease with the KIA and subsurface land tenure lease agreements with Nunavut Tunngavik Inc.
Meanwhile, this past summer TMAC continued to drill to boost the mine’s known resource estimate.
Exploratory drilling upped those confirmed resources by 1.5 million ounces, which TMAC president Gord Morrison told the KIA is “doing very well.”
TMAC also upgraded the power plant, airstrip and jetty, spending $25 million on contracts, with more than $6 million going to Inuit-owned firms.
And TMAC moved to re-open the Doris North underground portal, worked on its plans for the mill and started a pre-feasibility study.
But while the facilities and potential of the Hope Bay mine appear solid, there’s a big problem: TMAC needs hundreds of millions of dollars to build the project.
TMAC has raised more than $100 million to continue its exploration activities, but a 2013 preliminary economic assessment of the project, said TMAC needs $651 million in capital to get the mine going.
The assessment’s evaluation of the mine’s potential, which it said was “robust,” was, moreover, based on a high gold price of $1,350 US per ounce — that’s now fallen to about $1,220 per ounce.
The project continues to have Newmont — which mothballed the Hope Bay in 2012, as a minority partner.
There’s some speculation around Cambridge Bay that Newmont, which backed out of Hope Bay over a lack of certainty on land tenure, may move back into the project when all the necessary agreements are in place.
After Newmont said it was not be able to develop “a positive pre-feasibility study or business case” for moving ahead, the company wrote off the $1.6 billion of the money it spent developing Hope Bay.