Turning rocks into dollars

As government bureaucrats, along with the NWT and Nunavut Chamber of Mines, conduct “Nunavut Mining Week” activities this week to promote the benefits of mining to Nunavut residents, the industry is now ready to build a new generation of Nunavut mines.

One of the smaller projects, the Tahera Diamond Corp.’s Jericho Mine in the Kitikmeot is already up and running.

And over the next five to 10 years, base metal, iron, and gold projects in all three Nunavut regions promise to deliver many hundreds of millions in new investment, along with hundreds of jobs and scores of business opportunities for those who are ready.

There are now so many mineral exploration projects in Nunavut that it’s impossible to list them all – but here’s a look at four of the most promising ones.

Wolfden Resources Inc.

After scooping up the huge, but long-dormant Izok Lake lead-zinc deposit and the infrastructure at the former Lupin gold mine in the Kitikmeot region earlier this year, Wolfden Resources Inc. of Thunder Bay, Ont. is now on the verge of developing a lucrative network of base metal mines west of Bathurst Inlet in the Kitikmeot region, connected by road to a dock on Coronation Gulf.

Wolfden’s plans, unveiled earlier this month, will see the company move rapidly towards development of the Izok Lake property – which will require an investment of $536.6 million.

In the early 1990s, development of an open-pit mine at Izok Lake was thought to be a sure thing. But low zinc prices forced the property’s owner, Metall Mining Corp., to mothball the project.

Metall then sold the property to Inmet Mining Corp., which did little to move the project forward until late last year, when Inmet worked out a $49.7 million deal to sell Izok to Wolfden.

At the same time, Wolfden acquired a majority interest in the Hood and Gondor base metal properties, adding them to their High Lake copper-zinc-gold-silver project in the same region.

After aquiring the remaining infrastructure of the old Lupin gold mine, about 80 kilometres east of Izok Lake, from Lupin’s former owner, the Kinross Mining Corp., Wolfden is now ready to move Izok Lake towards development.

The company says they can use the existing mill at Lupin to process ore from Izok Lake and possibly other sites that would be developed in the future.

“The Lupin infrastructure represents a major reduction in capital versus building a new mill and tailings complex at Izok, and also streamlines the permitting requirements for development,” Wolfden said in an update issued Sept. 6.

Wolfden says they will produce a full feasibility study on Izok by the middle of next year, and are already talking to bankers about getting financing to pay for the project.

They estimate that Izok Lake contains 14.4 million tonnes of ore containing copper, zinc, lead and silver. They believe most of that can be mined using a a low-cost open-pit method, but in the future they say they’ll study a smaller area called “Inukshuk” that could be mined using underground methods.

They plan to ship ore to markets via a road to Coronation Gulf that would connect Izok and Lupin with the Gondor, Hood, Ulu and High Lake projects.

The company also plans to move the High Lake copper-zinc project into full production soon, and is preparing an environmental impact statement for a mine at High Lake and a docking facility at Coronation Gulf.

It’s not yet clear how Wolfden’s port-road project will affect the highly-publicized Bathurst Inlet Road-Port project to the south-east of its properties.

Baffinland Iron Mines Corp.

If it goes ahead, Baffinland’s $1.5 billion extraction plans for Mary River’s rich iron ore deposits will likely become the biggest private-sector project ever seen in the eastern Arctic.

These plans, which have taken shape rapidly since Gordon McCreary, a former executive with Kinross Mining, acquired Baffinland in 2004 with other shareholders, involve a vast open pit operation connected by a short railway to a seaport at Milne Inlet, where huge ocean-going ships would transport ore to markets in either Europe or the United States.

McCreary, who was in Iqaluit last week to give a presentation on the project, says the mine would have a lifespan of at least 34 years. The ore body, which has not been completely explored yet, is proven to contain at least 337 million tonnes of iron ore, with an estimated market value of $6.26 billion.

However, two of the five iron ore deposits at Mary River have not been completely explored, and the company believes there may much more iron there waiting to be found.

The ore body is so rich – with an iron content ranging from 65.9 per cent to 68.7 per cent – that an on-site mill is not required to prepare the ore before it’s shipped to market. The company believes most of it can be shipped in “lump” form: crushed into small pieces and then loaded onto an ore-carrying vessel with little processing.

The company has started talks with the Qikqtani Inuit Association on an Inuit impact and benefits agreement.

Over the next year or two, the company will continue exploring, seek investors and potential buyers for iron ore, and look at delivering a bulk ore sample to market by 2008.

Though its exploration program is at an advanced state, Baffinland is still a long way off from filing an environmental impact statement, and is not yet in a position to apply for the necessary permits and licences required for an actual mine.

Cumberland Resources Ltd.

After winning the approval of the Nunavut Impact Review Board this past August, Cumberland’s proposed Meadowbank gold mine near Baker Lake is now waiting to get a green light from Jim Prentice, the federal minister of Indian and northern affairs.

If Prentice says yes to Meadowbank, Cumberland’s remaining bureacratic hurdles, such as the acquisition of a water licence, should occur quickly, making it possible for the company to prepare for construction next year and begin operating three open pits by 2008 or 2009.

Cumberland says that during its eight-year life cycle, the Meadowbank mine will add $1.4 billion to Nunavut’s gross domestic product and employ about 350 people, half of whom could be Inuit.

Miramar Mining Corp.

After getting Prentice’s approval, Miramar is now close to being able to build its small Doris North gold mine east of Bathurst Inlet.

The Doris North mine, with a life-span of only two years, is the only the first step in Miramar’s Hope Bay project, which would see the extraction more than five million ounces of gold.

Miramar recently signed an Inuit impact and benefits agreement with the Kitikmeot Inuit Association.