Mining drought hits western Nunavut

Executive board members at the Kitikmeot Inuit Association listen to a report from its lands department about the huge challenges facing mine development in western Nunavut. (PHOTO BY JANE GEORGE)

CAMBRIDGE BAY — The decade-long flood of mineral exploration and mining companies into western Nunavut is drying up and has now shrunk to a trickle.

“The more advanced projects, except for TMAC Resources, have scaled back their activities in the region,” Geoff Clark, the director of the Kitikmeot Inuit Association’s lands department, told delegates Oct. 5 at the KIA annual general meeting in Cambridge Bay.

“It is one of the slowest periods for the exploration industry in the Kitikmeot region in 15 years.”

Among the projects that have scaled back or stopped:

• MMG Ltd’s Izok Corridor Project, with its proposed port, road, and two base metal mines, now in care and maintenance;

• Hackett River project and Bathurst Inlet Port and Road project operated by GlencoreXstrata PLC, delayed earlier this year;

• Back River project, Sabina Gold and Silver Ltd: after a feasibility study in May showed that a $695-million, large mine could produce a good return, the company said it would be hard to raise that kind of money, so it’s scaled back the project and has undertaken a new feasibility project.

“This decision by Sabina demonstrates how hard it is to raise money from investors for mining in the current economic climate, ” Clark said to the AGM.

* Jericho diamond mine, after being abandoned by Shear Diamonds in 2008, remains in care and maintenance, and could be reclaimed or re-sold; and,

• Lupin Gold Mine and Ulu camps, owned now by Manadalay Resources, remain in care and maintenance.

Meanwhile, TMAC Resources Inc., which visited Cambridge Bay Oct. 1, continues to advance its Hope Bay project.

Among other agreements, the KIA’s framework agreement with TMAC includes “significant payments to KIA,” if the mine goes into production, Clark said.

The KIA will be paid one per cent of the value of all gold produced at Hope Bay, which is estimated at $960 million over 10 years, through what’s called a “net smelter royalty.”

The KIA also owns 1.13 million shares in TMAC, worth $6 million in August 2016.

The KIA will also receive $1 million a year to offset land management, environment permitting and the implementation of the Inuit Impact and Benefits Agreement.