New firm with new plan buys Izok Lake
A Toronto-based firm called Kit Resources has a new plan to develop the Kitikmeot’s Izok Lake site.
IQALUIT Kit Resources Ltd. of Toronto has announced its intention to develop a zinc and copper mine at Izok Lake the same property in the west Kitikmeot that Metall Mining Corporation shelved and walked away from four years ago.
The company has signed a letter of intent to buy the Izok Lake site from the Inmet Mining Corporation for $40 million U.S.
Kit Resources, formerly known as Arauco Resources Ltd., already owns rights to several gold properties covering 138,000 acres of Inuit-owned land near George Lake south of Bathurst Inlet and the Back River.
Deep sea port at Bathurst Inlet
It’s counting on the eventual construction of a deep-sea port in Bathurst Inlet to make the Izok lake base-metals operation feasible.
“By putting Izok Lake together with George Lake, hopefully under one infrastructure, we can maybe save some money all the way around and make the thing work,” Kerry Knoll, a spokesman for Kit Resources said.
Situated 83 kilometres west of Echo bay’s Lupin gold mine, Izok Lake is thought to contain one of the richest undeveloped base metal deposits in North America. The property is known to contain deposits of zinc, copper, lead and silver.
A highly publicized proposal by Metall now called Inmet to develop the Izok Lake property fell apart four years ago. Metall eventually shelved the project, citing low world base metal prices and the high cost of financing a road to a proposed deep water port on Coronation Gulf.
But the project’s prospects look somewhat brighter now that the Canadian Hydrographic Service has completed charting Bathurst Inlet, demonstrating its potential as a site for a deep-sea port.
Sharing cost of port?
Previous studies have shown a privately funded port site near Coppermine on the Coronation Gulf would be too expensive.
“Now if that can be shared among three or four different mines, then suddenly things change,” Knoll said.
A number of mining companies in the region, along with the GNWT, helped pay for the $900,000 study in Bathurst Inlet last summer. The results were made known two weeks ago.
The move by Kit Resources to buy Izok Lake is part of the company’s regional strategy to acquire projects in the region that will complement its George Lake gold project.
The company also envisions developing a network of roads linking the proposed port with its own George Lake property and other mining projects to lower operation costs in the region.
“Ship transport is the cheapest transport in the world,” Knoll said. “So if you can supply something by ship and then only have to take it a couple of hundred kilometres, you’re going to save an enormous amount of money.”
Ties with Nunasi Corporation
Kit Resources’ chief executive officer, John Zigarlick, is well known in the Kitikmeot region as the past president of Echo Bay Mines. He is currently president of Nuna Logistics, a contracting firm specializing in mining infrastructure that’s 51 per cent owned by the Nunasi Corporation.
Under the terms of the sale, Kit Resources has paid Inmet $100,000 and will pay another $900,000 within the next 90 days. The remaining US $39 million is due on or before May 31, 1998.
“We’re now looking at financing it partly by bringing in another mining company as a partner,” Knoll said.