Newmont prepares to sell Nunavut’s Hope Bay gold project

Colorado gold giant will hold interest in new firm


Inside the underground shaft at Hope Bay's Doris North component. (FILE PHOTO)

Inside the underground shaft at Hope Bay’s Doris North component. (FILE PHOTO)

The Newmont Mining Corp. is preparing to sell its mothballed Hope Bay gold property in the Kitikmeot to a privately-held firm that hopes to bring the dormant project back from suspended animation.

A new privately-held firm called TMAC Resources Inc. signed a letter of intent with Newmont Dec. 17 to acquire Hope Bay prior to a deadline of March 31, 2013.

Under the deal, Newmont will become a major shareholder in TMAC, which it views as the best vehicle for moving Hope Bay into production.

“We look forward to developing a strong, long-term partnership as a significant shareholder of TMAC,” said Randy Engel, Newmont’s executive vice president for strategic development.

TMAC Resources Inc. is made up of former senior executives from a company called FNX Mining Co. Inc.

It’s headed by Terry MacGibbon, the executive chairman, and Catherine Farrow, the CEO.

In a news release, Engel said “TMAC is the right partner to improve prospects for near-term development of the Hope Bay project.”

Newmont hit the brakes on Hope Bay this past February, putting its completed infrastructure into care and maintenance and sending a big shock wave through the Kitikmeot’s fragile economy, which lost about 150 jobs.

Between 2009 and 2011, Newmont spent about $290 million on Kitikmeot and Nunavut based businesses, many of them partners or subsidiaries of the Kitikmeot Corp. or the Nunasi Corp.

By the fall of 2012, work on the company’s small underground Doris North mine had ground to a halt and numerous vehicles, drills and supplies were being sold or removed.

Newmont wrote off $1.6 billion worth of its investment in the Hope Bay project and announced it would give priority to other projects within its global collection of mining properties.

The Hope Bay project, which covers an 80-kilometre greenstone belt, is believed to hold at least nine million ounces of gold.

An application to the Nunavut Impact Review Board for an environmental review on Phase II of Hope Bay, which would see the development of the big Boston and Windy deposits to the south of Doris North, is frozen at the moment.

The company was to have taken Phase II through the development of guidelines but planned on stopping short of producing a draft environmental impact statement until after a decision to resume development of Hope Bay.

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