Low world prices scare prospectors away from Nunavut
IQALUIT — Mining exploration activity in Nunavut is expected to decline again this summer, as low world prices for minerals continue to keep investors away.
“I think the answer is simple,” Mike Vaydik, executive director of the NWT Chamber of Mines said. “It’s commodity prices and the stock market. Base metal prices are down — gold is in the toilet… So, it’s pretty hard to get a lot of interest on the stock market for gold or base metals these days, and that’s affecting junior exploration companies’ ability to raise money.”
Only two advanced gold exploration projects in Nunavut are planned for the 1998 summer season: the Meliadine project north of Rankin Inlet, which belongs to WMC International, and Cumberland Resources Ltd.’s Meadowbank project, which lies 100 kilometres north of Baker Lake.
At both sites, the type and volume of activity is expected to be reduced from 1998 levels.
But Jason Sharp, district geologist for the Churchill Geological Province, which comprises most of mainland Nunavut, said these two projects still appear to be economic, even with low gold prices.
“In both cases a fair bit of the gold is located near the surface, where they can open-pit mine it, and that’s a very cheap way of mining compared to the underground mines in Yellowknife,” Sharp said.
At Nowyak Lake, northwest of Arviat, Sharp said the junior mining company Navigator Resources plans to continue a summer program of prospecting and geological mapping this year — the so-called “grassroots” exploration work.
And a company called Starfield Resources is looking at a known nickel-copper deposit due west of Rankin Inlet, near Ferguson Lake.
“They’ll also be checking to see if the same site contains platinum-containing metals, which were never examined and could be present and could make a real difference in the economics of that deposit,” Sharp said.
Meanwhile, the nickel-mining giant Inco has indicated it will suspend work at a very large nickel-copper deposit called Heninga lake, southwest of Arviat in the Keewatin, Sharp said.
Rubicon Resources, which had been exploring for nickel near Kimmirut, has indicated it will not return to Nunavut this summer, and will instead focus on its properties in Ontario.
“It sounds like Baffin Island’s going to be pretty quiet,” Sharp said, “except possibly around Nanisivik [Mines], by either Nanisivik itself or other companies in the area looking to find some lead-zinc deposits. There was some prospecting last year. I don’t know if there’ll be any this year or not.”
The diamand-mining company BHP, which opened Canada’s first diamond mine last fall in the Northwest Territories, will continue to suspend further exploration at its Boston gold mine project near Umingmaktok in the Kitikmeot region this summer.
Tahera Inc. recently filed its proposal for the Jericho diamond mine project in the Kitikmeot region.
The company has indicated it will carry out more test drilling at its site near Contwoyto Lake, 20 kilometres north of Echo Bay’s Lupin gold mine operation, which was suspended last November.
Total investment in exploration activity across the Northwest Territories last year was on the order of $150 million, but much of that was concentrate on advanced-level exploration for diamonds, according to Rob Johnstone, a senior policy advisor with the federal Department of Natural Resources’ minerals and metals sector said.
“The future for mining in Nunavut is in diversifying the mining economy,” Johnstone said.
Although the Tahera diamond project looks promising, Johnstone said the new territory musn’t look to diamonds alone to grow the mining sector.
“The potential is great, but you don’t want to be entirely reliant on diamonds,” Johnstone said.
Investment in base metals development is hampered by the lack of infrastructure, since these mines that can’t be located too far inland away from a port, Johnstone said.
“For the long term there’s definitely going to be a mining industry in Nunavut, but it’s going to be a challenge to attract that investment to find out enough about the geology to look for a variey of different minerals, so that when one commodity drops its price, another is sustained.”