Diamond-seekers file on 64 million acres

The long, cold line-ups in front of the mining recorder’s office in Iqaluit paid off this week as mining companies received their much-coveted prospecting permits.

This past November, warmly dressed diehards stayed on 24-hour rotation until Dec. 1, the day Indian and Northern Affairs Canada would accept the first permit applications for exclusive rights to look for gems, diamonds and other precious metals on Crown land in Nunavut.

For 2004, INAC received approximately 2,500 permit applications, and this week, it issued 1,518 prospecting permits – a huge jump from 2003’s modest tally of 190.

“There’s been some good announcements on diamond kimberlite finds in the Kivalliq area and the majority of our permits this year were issues in the Kivalliq, East Kitikmeot and North Baffin,” said Carl McLean, supervisor of INAC’s mining recorders’ office in Iqaluit.

“There were companies looking for the last couple of years in these areas so maybe they found something. Hopefully, they did.

“There’s a huge increase in numbers, that’s for sure, so there must be something worthwhile for them to get out there and look for.”

INAC is responsible for the management of subsurface rights on Crown land in Nunavut, with McLean’s office processing applications for prospecting permits, prospecting licences, mineral claims and mineral lease.

Mineral exploration, it turns out, is also a bit of a gold mine for Nunavut.

“In 2003, the estimate is that there was $82 million spent on exploration in Nunavut, and we figure that 20 per cent remains in Nunavut in salaries, contracts, and purchases,” McLean said.

“Last year was actually a record year.”

And, due to the boom in permits, 2004 looks even better, he added.

The 2004 permits cover a total 64 million acres of Crown land – about the size of Baffin Island.

The majority of permits were issued to DeBeers Canada Exploration, which received 633 permits for 28 million acres, BHP Billiton Diamonds, which received 94 permits for 16.3 million acres, and Stornoway Ventures, which received 154 permits for 5.5 million acres.

“By looking at the companies, most of them are after diamonds, although that’s not what these permits are for – they’re for mineral exploration in general,” McLean said.

Companies didn’t receive a prospecting permit if they didn’t meet the guidelines. For example, where there were three or more applicants for the same permit area, no permit was issued.

“The idea of issuing prospecting permits is to encourage exploration in remote areas. Obviously, if there are three or more individuals or companies interested in the same area, you probably don’t have to encourage them to go look.

For that reason, we leave the ground open, and it’s up to them to go out and stake claims to the property, to physically go out and stick posts in the property, so actually it generates exploration that way,” McLean said. “If there are three companies that are interested, maybe three of them will actually go out and stake claims.”

Any individual or company with a valid prospecting licence can apply for a prospecting permit. It costs $25 for an application plus a deposit of 10 cents an acre. Deposit fees range from approximately $3,000 to $7,500 dollars per permit.

“We received approximately $6.4 million in deposits for the 2004 permits,” McLean said. “They’re required to do [a certain amount of] work and if they do that, the deposit is credited.”

Each permit gives the permit holder exclusive rights to prospect for minerals within a permitted area. Around Iqaluit, that’s roughly equal to 15,000 to 20,000 acres.

Permit holders have exclusive rights to prospect for three one-year periods below the 68 degree parallel or for two two-year periods plus one one-year period above the 68 degree parallel, which runs north of Qikiqtarjuaq and through Kugluktuk.

“The further north you go, the more expensive it is, so you get more time,” McLean said.

A few permits were handed out this year on southern Ellesmere Island, not far from Grise Fiord.