'The second decade will be a golden one'
In Nunavut, all that glistens really is gold
As mineral exploration in Nunavut drops off and many exploration firms curtail or close their projects, the development of gold mines still forges ahead in Nunavut.
Agnico-Eagle's Meadowbank gold mine near Baker Lake is ramping up for production and plans to start full operations early next year.
"The second decade will be a golden one," predicted Peter Taptuna, Nunavut's economic development minister, at the Nunavut Mining Symposium, which took place last week in Iqaluit.
Nunavummiut may see two gold mines, Meadowbank, and Rankin Inlet's proposed Meliadine mine, operating within a few years.
Meadowbank is so advanced that nothing will prevent the mine from opening, said Guy Gosselin, Agnico-Eagle's director of exploration in Canada.
Agnic-Eagle estimates that it can produce gold at Meadowbank at a cost of about $300 an ounce.
With the current price of gold now sitting above $900 an ounce, Agnico-Eagle, which acquired the mine from Cumberland Resources in 2007, stands to make a lot of money from its three open pit mines at Meadowbank.
Meadowbank's gold reserves are estimated at 3.64 million ounces. The mine is expected to produce 10,000 ounces of gold a day over its nine-year life span.
Five years ago, Meadowbank consisted of a handful of buildings. Today, the company's facilities can house more than 350 workers at any one time.
About 80 per cent of Meadowbank's $620-million infrastructure is now finished. Last year the huge mill building was closed in and concrete forms were laid down for the three 4.4 MW generators which will power the mine.
Recently, the first of many cargo and passenger planes landed at the mine's new airstrip.
The timing of Meadowbank's construction is fortunate. That's because most of the mine's infrastructure, including a 110-km road to Baker Lake, were built before last autumn's credit crisis made it much harder for mining companies to raise cash.
Declining fuel costs, moreover, will help the mine produce gold more cheaply.
And, unlike mines producing zinc, nickel or iron, which require ships to carry out huge bulk shipments of ore, Meadowbank's 10-ounce gold ingots or bars from Meadowbank are cheap to fly out of the site to markets in the South.
To date, the mine's development has already spun $188 million into northern businesses, of which at least $8 million went to the nearby community of Baker Lake, about 80 km south of the mine site.
The mine is also offering good new jobs to hundreds of Baker Lake residents.
About 21 per cent of all the workers hired by Agnico-Eagle and its contractors are Inuit. Of the 253 workers employed directly by Agnico-Eagle, 108, or 42 per cent are Inuit.
The company plans to hire 247 more workers by the end of 2009.
Speaking at the Iqaluit gathering, Baker Lake mayor David Aksawnee credited Agnico-Eagle for "doing its best" to ensure Inuit work at and benefit from the mine.
"So far this mine has been good for Baker Lake," Aksawnee said. "We are happy to have a company like Agnico-Eagle to work with."
The development of the Meliadine gold mine, owned by Comaplex, is also moving ahead, 24 km north of Rankin Inlet.
The company expects to get complete its feasibility study and start the regulatory process up soon, said Mark Balog, vice-president exploration for Comaplex, at the mining symposium.
Comaplex spent $30 million last year at the mine, of which 20 per cent stayed in the region.
When in operation, the $297-millon mine complex will produce more than two million ounces of gold over nine and a half years and it will employ 540 workers.
Meanwhile, Newmont has decided to do more intensive exploration at its Hope Bay gold site near Cambridge Bay.
Newmont spent $82 million last year on infrastructure, but the huge mining company decided to scuttle plans to open the Doris North mine, with an estimated life span of only two and a half years.
Instead, Newmont wants to find enough resources to support a gold mine with at least a 10-year life span.
Before this mine opens, a new environmental assessment will have to be done, postponing the Hope Bay's eventual opening by several years.