Production to start April 2010

It's a go for Canadian Royalties' Nunavik nickel mine, which received its environmental certificate of authorization from Quebec last week.

With this document in hand, Canadian Royalties has jumped the last major hurdle before construction and development of the mine.

Makivik Corp. is set to receive $1 million within 60 days of the certificate's issuance, according to the impact and benefits agreement signed in April.

This will be followed by a second $1 million payment when the Nunavik Nickel mine starts operations in 2010.

After that, the mine will start generating an estimated $50 million to $80 million in benefits for Makivik and the three communities nearest the mine, Puvirnituq, Salluit and Kangiqsujuaq, over its estimated 10-year lifespan.

Canadian Royalties' chief executive officer, Richard Faucher, told Nunatsiaq News that the recommendations attached to the permit certificate contained no surprises for the company.

That's because in the impact and benefits agreement signed last month, Canadian Royalties had already agreed to stepped-up monitoring of the Povungnituk River and other measures aimed at allaying community concerns.

The certificate approved the overall plans for the mine's development, which include the construction of port facilities at Deception Bay one kilometre south of Xstrata's existing facility at Deception Bay.

The Nunavik Nickel mine is located only 20 km from the Xstrata Raglan nickel mine in a mineral-rich belt west of Kangiqsujuaq and southeast of Salluit.

However, the Kativik Environmental Quality Commission did attach a recommendation that a single airstrip should serve the Nunavik Nickel mine and Xstrata's Raglan mine.

To date, Canadian Royalties has not been able to strike a deal with Xstrata over sharing airport facilities at the nearby Donaldson airstrip and had planned to construct a second airstrip.

However, the KEQC's recommendation for a single airstrip may pave the way for shared use of Donaldson or even the its transformation into a regional airport.

Next month, construction will start on the infrastructure needed for the mine.

Six additional shiploads of material and equipment are also ready to be loaded on sealift, Faucher said.

The Nunavik Nickel mine's four open pits and underground mines will produce an average of 30 million pounds of nickel, 40 million pounds of copper, one million pounds of cobalt, 15,000 oz of platinum and 80,000 oz of palladium each year after production starts in April 2010.

Norilsk Nickel, the world's biggest producer of nickel and palladium, will buy the nickel concentrates produced by the Nunavik Nickel mine.

Norilsk Nickel also bought a $25 million stake in the project last year.

The entire Nunavik Nickel project is expected to cost $465 million and create 300 jobs during the construction phase and 270 jobs after the start of operations.