Inuit-owned mine planned for Nunavik

By 2010, the Raglan South mine will be churning out tonnes of nickel and copper ore in Nunavik, if a company called Canadian Royalties meets its goals.

“Within five years we would really hope to be in production, definitely. We’re all confident,” said Glenn Mullan, chairman of the Val-d’Or-based company.

Mullan said Raglan South would produce ore from open pits at the same scale as Falconbridge’s nearby Raglan mine, that is, about 2,500 tonnes a day, over a period of eight to 12 years, and employ between 200 and 400 workers.

Located about 90 kilometres west of Kangiqsujuaq, and just south of Raglan’s Kattiniq operations, Raglan South would share existing infrastructure, such as roads, the Deception Bay port, and Donaldson airport.

But unlike Raglan, Raglan South would be the first Inuit-owned mine for base metals: Mullan’s short-term goal for Canadian Royalties is to bring on Inuit from Nunavik as major shareholders in the publicly-owned mining venture.

“We definitely want them to be on the same side of the table as us,” Mullan said.

Makivik Corporation and the Landholding Corporations are among the Inuit-owned enterprises the company hopes to collaborate with.

Mullan said Canadian Royalties has been working closely with the local landholding corporation, which represents the interests of Inuit residents in Kangiqsujuaq, to recruit local workers.

Last year, 16 people from Kangiqsujuaq landed jobs with Canadian Royalties.

“It is not our intention to have a bunch of labourers. We’re teaching them about geological services and prospecting, being a geological technician, mapping, doing geological surveys, laying out grids. They’re working with helicopters, they’re grabbing rock samples: they’re involved in everything we’re doing,” Mullan said.

“We know that most of the people in a small town of 500-odd people don’t have the skills. We just want them to come. We have people coming back now for the third year in a row.”

Of the $18 million Canadian Royalties has spent over the past four years, Mullan said a good portion has remained in the region.

“We make an effort to make sure there’s a significant component that stays in Nunavik,” Mullan said. “Air Inuit is our primary contractor for airline services to the tune of several million dollars.”

This year, Canadian Royalties has four exploration camps with more than 60 employees.

And, based on the positive exploration results, Canadian Royalties is laying the groundwork for mining feasibility studies, with activities such as environmental baseline studies, metallurgical studies, and preliminary scoping studies.

The company holds extensive mineral rights in the area known as the South Trend, over about 1,500 square kilometres. Its ownership ranges from 70 per cent to 100 per cent. The company also has interests and rights in over 200 other properties in Quebec and Ontario.

Last week, Canadian Royalties announced that its exploration efforts had confirmed metal deposits of at least 10.5 million tonnes, which Mullan said is the “magic” amount the mine needs to be viable.

Nickel, copper, platinum, palladium and cobalt have all been found in the four deposits explored to date.

The highest-grade Mesomax deposit, which has about 2,000 tonnes of more than two per cent nickel and copper, will shoulder the estimated $200-million capital costs of building the stand-alone mining operation.

“That’s what we’ll build the operation with and the other deposits will together furnish the tonnage that’s required,” Mullan said. “It certainly allows for, in the short-term, that there will be another stand-alone operation in Nunavik, and that’s what our goal is.”

Falconbridge’s Raglan mine, which is based on about 20 million tonnes of ore, averaging about three per cent nickel, took $700 million to develop,

“Because we don’t have to build the road, the airport, the seaport, etc. our capital costs will be significantly less,” Mullan said.

A future joint venture with the mining giant Inco is also a possibility as Raglan South moves ahead. Canadian Royalties also expects to continue receiving financial support from Quebec, which has pumped hundreds of thousands of dollars into mining exploration in northern Quebec over the past few years.

“It would look awfully good to Quebec’s credit to have a second nickel-copper producer, to have two that are spawned in a very short time,” Mullan said.

But, first Canadian Royalties needs to produce a bankable feasibility study on Raglan South.

Mullan also wants to firm up the local community support. He’s been meeting local officials several times a year, and worked hard to convince locals that the mine exploration does not mean opening mining pits at the edge of the Puvirnituq River.

“The stars are aligned, but there’s a long way to go,” Mullan said. “We know we need the local communities on side.”