Global financial turmoil likely a factor in decision
Newmont postpones Hope Bay gold mine
CAMBRIDGE BAY – Newmont Mining has postponed plans to start mining gold at Hope Bay, 160 kilometres southwest of Cambridge Bay.
The opening of a gold mine at Doris North in 2009 has been put on hold indefinitely, said Alex Buchan, Newmont's representative in the Kitikmeot region.
"We made that decision recently," Buchan said.
The Doris North was originally to be in operation by 2008, providing 150 jobs during its two-year lifespan.
Newmont now wants to continue exploration and drilling around Hope Bay with the goal of developing a mega-mine that would have at least a 10-year lifespan and employ about 700.
The complex would include open pit and underground mines at its Doris North, Madrid and Boston properties with a processing mill in the middle.
No start-up date has been set, and, before any mining starts, the new gold mine project will have to undergo another complete environmental review, Buchan said.
Newmont will continue building infrastructure at Hope Bay, which will eventually include a 900-metre all-weather airstrip, 16-kilometre road, 118-bed residence and five-million litre fuel storage facility.
The airstrip is already finished and the residence is nearly completed, Buchan said.
"Regardless of the larger plan, this infrastructure is needed," he said.
The continuing construction will provide plenty of work for Inuit-owned companies such as Braden Bury Expediting, Nuna Logistics, Nunasi Ryfab and Securecheck.
"The amount of activity that our companies are doing is the same. It's just that we're not producing any gold," Buchan said.
Although Buchan did not elaborate on all the reasons behind the delay of the mining start-up, the global financial crisis and ricocheting oil prices likely played into its decision.
Newmont, the second largest gold producer in the world, paid $1.5 billion, for Miramar Mining Corp., the junior mining company that owned Doris North.
Newmont was nearly "100 per cent sure" it wanted to go into production there, John Mudge, the regional director of environment and social responsibility for Newmont, said last October during a visit to Cambridge Bay.
Otherwise, Newmont wouldn't have paid $1.5 billion for Miramar's properties, Mudge said.
Looking on the positive side of the delay, Buchan said the Kitikmeot would now have more time to prepare its workforce for jobs in the new, larger gold mine.
"Let's do a solid lead up to the larger project," he said.
The Kitikmeot Inuit Association wants to know when seven beneficiaries who recently finished a diamond drilling course in Corona College in Newfoundland will get the on-the-job experience they need.
Buchan said "glitches" this year made it hard to bring the novice drilling students to Hope Bay.
A need for trained tradesmen reduced Inuit employment at the worksite this summer, he said.
But Buchan promised that over the longer term Newmont would top Inuit employment records at other northern mines.