How do the territories mine openings compare with closures for 2019 and 2020?

by Greg Klein

See part 2 of this series, covering the western provinces.

One indication of the state of mining involves the vital statistics of births and deathsthe new mines that arrived and the old mines that left. To that end we survey each Canadian region for some of the major gains and losses that occurred over the past year or are expected for the next. The first of this multi-part series looks at the countrys three northern territories, with each distinct jurisdiction contributing to a study in contrasts.

Yukon

Yukon without mining? That might surprise people better acquainted with the territorys past than its present. But such was the case for nearly a year, following the suspension of Minto, Yukons sole remaining hardrock mine up to 2018. Nevertheless operations returned to this fabled mining region in September as Victoria Gold TSXV:VITcelebrated Eagles debut. By late November the company reported 10,400 ounces of gold and 1,600 ounces of silver from the heap leach operation.

Victoria Gold finished construction a month early on Yukons largest-ever gold mine. (Photo: Victoria Gold)

Less than two weeks later the company unveiled an updated feasibility study raising the annual production target for the territorys largest-ever gold mine from 200,000 to 220,000 gold ounces, based on a 20% increase in proven and probable reserves for the Eagle and Olive deposits. Victoria expects to reach commercial production in Q2 2020.

By mid-October Minto came back to life under LSE-listed Pembridge Resources. Capstone Mining TSX:CShad placed the underground mine on care and maintenance in 2018, after about 11 years of continuous operation, as acquisition negotiations with Pembridge stalled. But the companies sealed the deal last June. Within weeks of restart Pembridge reported 1,734 dry metric tonnes of copper-gold-silver concentrate. Proven and probable reserves totalling 40,000 tonnes copper, 420,000 ounces silver and 45,000 ounces gold give Minto an estimated four more years of production.

Among the most advanced Yukon projects is BMC Minerals Kudz Ze Kayah, a zinc deposit with copper, lead, gold and silver. The privately owned UK-based company reached feasibility in June and hopes to begin at least nine years of mining in 2021.

Environmental/socio-economic reviews continue into Newmont Goldcorps (TSX:NGT)Coffee gold project and Western Copper and Golds (TSX:WRN)Casino polymetallic project. Should Casino make it into operation, the copper-gold-silver-molybdenum operation would be by far the territorys largest mine.

Read more about Yukon mining.

Northwest Territories

Confidence in the territorial economy fell last October when Moodys downgraded a $550-million bond issued by Dominion Diamond.Theres no plan in place to extend the mine life at a time when the debt is coming closer and closer to coming due, the credit ratings agencys Jamie Koutsoukis told CBC. We continue to see a contraction in the time they have to develop this mine plan.

Part of the Washington Group, Dominion holds a majority stake in Ekati and 40% of Diavik, where Rio Tinto NYSE:RIO holds the remaining 60%. Along with De Beers/Mountain Province Diamonds (TSX:MPVD)Gahcho Ku, the three diamond operations comprise the territorys largest private sector employer.

Agnico Eagle once again laid claim to Arctic riches with the Amaruq satellite deposit, over 300 kilometres west of Hudson Bay. (Photo: Agnico Eagle)

In an October presentation before the territorys newly elected legislative assembly, the NWT and Nunavut Chamber of Mines urged the government to safeguard the economy by improving investor confidence in the mining industry.

An election year in the NWT and Canada-wide, 2019 brought optimistic talk and initial funding for the NWTs Slave Geological Province Corridor and Nunavuts Grays Bay Road and Port, two transportation proposals that would offer enormous potential for mineral-rich regions in both territories.

Nunavut

Whispers could be heard throughout the room as intervenors turned to their colleagues. Members of the audience turned their heads, looking for Baffinlands reaction to what was unfolding. Baffinland officials sat stone-faced, sometimes crossing their arms and looking down at the table as [Nunavut Tunngavik Inc. president Aluki] Kotierk spelled out the motion.

That was the scene described by the Nunatsiaq News as the Nunavut Impact Review Board abruptly suspended hearings into Baffinland Iron Mines $900-million Phase II expansion plans for Mary River. The proposals, already accepted by Ottawa, include building a railway to replace a 100-kilometre road north to the companys Milne Inlet port and doubling annual production to 12 million tonnes iron ore. The new railway proposal comes in addition to a previously approved but un-built 150-kilometre southern rail link to a harbour that had been planned for Steensby Inlet.

The company maintains that expanded production and a northern rail line will be crucial to the existing operations viability. Responses at public hearings ranged from support to skepticism and outright opposition. Within weeks of the hearings suspension and a month ahead of a scheduled layoff, Baffinland let go 586 contractors who had been working on expansion preparations.

About 290 kilometres southeast of Meadowbank, Agnico Eagle celebrated Meliadines first gold pour in February.(Photo: Agnico Eagle)

Despite all that, operations continue at Mary River and Nunavut remains a bright spot in Canadian mining.

Thats largely due to Agnico Eagle TSX:AEM, which brought two new operations to the territory. Meliadine began commercial production months ahead of schedule in mid-May, followed by Amaruq in late September.

As a satellite deposit, Amaruq brings new life to the Meadowbank mine and mill complex 50 kilometres southeast. With the latter mine wrapping up its ninth and last year of operation, Amaruqs open pit offers an estimated 2.5 million ounces up to 2025. Should hoped-for permitting come through in late 2020, a Phase II expansion could broaden the lifespan. Meanwhile drilling seeks to upgrade the projects underground resource.

Meliadine began with underground production but has an open pit scheduled to come online by 2023. Combined open pit and underground reserves of 3.75 million gold ounces give the operation a 14-year life.

TMAC Resources (TSX:TMR) expansion plans moved forward in October as construction began on an underground portal to Madrid North, a fully permitted deposit that could enter production by late 2020. The new operations probable reserves of 2.17 million gold ounces far overshadow the companys other three Hope Bay deposits, which total 3.59 million ounces proven and probable.

By comparison, the current Doris operation hosts 479,000 ounces proven and probable. Hope Bay has updated resource/reserve and prefeas studies scheduled for Q1 2020.

See part 2 of this series, covering the western provinces.

This article was posted by Greg Klein - Resource Clips on Wednesday, December 18th, 2019 at 1:12 pm.

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