'We don't want a mine that will shut down'

Before moving ahead with mines in Nunavut, some companies plan to continue exploration while they hope for better transportation infrastructure and higher metal prices.

Sabina Silver Corp. wants to find more silver deposits and figure out how it to gain access to a road and port before proceeding with its Hackett River silver-zinc mine, located 75 km southwest of Bathurst Inlet.

The company says it wants to find as many high-grade silver and precious metal deposits as possible to cover the high fixed capital costs of development.

At the moment, those fixed costs also include a port and a road – which could make the mine a money-loser from the start.

Touting Hackett River as one of the "largest underdeveloped silver deposits of its kind," Harvey Klatt, Sabina's vice-president of exploration, said his company is determined to avoid an "unfortunate outcome."

"We don't want a mine that will shut down," Klatt said during last week's Nunavut Mining Symposium in Iqaluit.

Klatt said a solution could be to link up with the Bathurst Inlet port and road project.

The $270-million port facility, known as BIPAR, would include the construction of a dock and a 211-km road to Conwoyto Lake. This road would follow a route that would take it about 100 km from the Hackett River site.

The port would lie on Bathurst Inlet. This means tankers would have to make a sharp – and possibly difficult – turn not far from the community to navigate further down the inlet.

But Klatt likened Bathurst Inlet to the inlet used by ships entering Vancouver's port.

"We feel Bathurst Inlet is a suitable route for ocean-going ships," Klatt said.

When Zinifex, the former owners of the Izok and High Lake project, bowed out of BIPAR last summer, the decision came as a blow to Sabina.

But the project's present owner, Oz Minerals, is now taking a second look at BIPAR.

One thing is certain: Sabina Silver doesn't want to pick up the entire tab for the road and port project, although the company is open to making a "contribution" to BIPAR.

Klatt said Sabina is in the business of developing and operating mines, not building infrastructure.

In 2008, Sabina spent $9 million on exploration and plans to continue drilling this year.

The company will return to Hackett River this summer, to expand its proven reserves of silver, zinc and other precious metals by 20 million more tonnes.