NWT mining future takes a critical turn – North of 60 Mining News

Home of Canada's first and only rare earths mine, Northwest Territories is rich in minerals critical to clean energy revolution North of 60 Mining News July 1, 2022

Rare earths from the Nechalacho Mine being delivered into the supply chain marks the opening of a new critical minerals chapter in the story of mining in Northwest Territories a saga that includes a 1930s gold rush to the territory's capital, a whole new town to support the Pine Point zinc mine, and the unlikely discovery of world-class diamond deposits in the famed Lac de Gras region.

"We have an opportunity to add to our rich and long-standing mining story," Northwest Territories Minister of Industry, Tourism and Investment Caroline Wawzonek said during the Yellowknife Geoscience Forum last November.

Building upon the economic foundation that the mining of gold, zinc, and diamonds has provided for Northwest Territories' economy for nearly a century, this North of 60 jurisdiction is now looking at a future that includes being a reliable and responsible source of the bismuth, beryllium, cobalt, copper, gallium, germanium, lithium, nickel, rare earths, tungsten, vanadium, and other metals critical to low-carbon energy, electric vehicles, and digital technologies.

"From our beginnings in base metals like zinc, lead, and gold, we progressed to becoming the birthplace of ethically sourced diamonds in the 1990s," Wawzonek said during a June 17 address at the Arctic Development Expo in Inuvik, Northwest Territories. "The breadth of our mineral potential is expanding even further, thanks to the presence of green economy metals like rare earth minerals, lithium, nickel, and cobalt needed to meet the demand of clean technologies along with many other resources recognized as critical or strategic minerals and metals."

The International Energy Agency forecasts that the annual supplies of minerals and metals being fed into the burgeoning EV and battery storage sectors will need to expand by 30 times between 2020 and 2040 to build the renewable energy infrastructure and electric vehicles necessary to achieve global climate goals.

This has industry and governments investing heavily into ensuring there are abundant, reliable, and responsibly mined supplies of the raw material needed to build the renewable energy revolution a list of critical minerals and metals that Northwest Territories could help supply.

Wawzonek told North of 60 Mining News that NWT hosts known deposits and occurrences with 23 of 31 minerals that have been deemed critical by the Canadian government, and this vast northern territory, which is roughly twice the size of Texas, remains largely underexplored.

Above and beyond being a reliable North American source of these critical minerals often imported from places like China, the Democratic Republic of Congo (DRC), and Russia, the permitting system in NWT ensures that the mined commodities produced in the territory meet high environmental, social, and governance standards.

What sets the NWT permitting system apart is indigenous involvement throughout the process, which allows NWT's First People to consider both the impacts and benefits of a proposed mining project. This process, which requires a recommendation by an indigenous review board prior to government approval, has been criticized for adding time to the permitting process.

The NWT industry minister, however, contends that having ingenious involvement built directly into the process results in consensus building with residents and a permitted mining project that has ESG at its very core.

"We are world leaders in these measures, well known for our environmental oversight, Indigenous representation in regulatory processes, and the recognition of traditional knowledge," she said. "In fact, the NWT model; the ESG-I, with its unique approach to collaborative and consensus-based legislative development, resource royalty sharing, and socio-economic and benefit agreements, is anchored by the critical leadership of NWT Indigenous Governments in resource exploration and development in Canada."

Canada's first REE mine

The newly developed Nechalacho Mine is an operating example of the advantages NWT has to offer, both in terms of rich critical minerals potential and the strength of the ESG-I model in the territory.

In addition to being the first rare earths mine in all of Canada, Nechalacho boasts environmental advantages and a relationship with local indigenous companies that bolster the ESG score of this producer of a group of elements critical to EVs, wind turbines, and a broad array of other modern industrial and consumer products.

Australia-based Vital Metals Ltd., which operates Nechalacho Mine through its Canadian subsidiary Cheetah Resources Corp., is working hard to ensure that as many benefits as possible from mining rare earths at Nechalacho are realized by NWT businesses and people.

"It takes a village to raise a child, and it takes a community to build a project. A community of indigenous and non-indigenous suppliers, employees, and not-for-profits," said Cheetah Resources Vice President of Strategy and Corporate Affairs David Connelly. "Without this community, the Nechalacho rare earth project could not exist, and the NWT would not host Canada's first rare earth mine."

Cheetah believes the money it spends with local businesses is "sticky," meaning that it leads to additional benefits in the territory. As such, the company acquires roughly 90% of its goods and services from NWT businesses, excluding machinery not made or sold locally.

NWT suppliers use the "sticky dollars" received from the goods and services provided at Nechalacho to pay their local employees, buy from other NWT suppliers, pay rent to local landlords, donate to community charities, and pay municipal, school, and territorial taxes and fees.

In addition to doing business with as many local businesses as possible, Cheetah has set the standard for indigenous hire more than 75% of the workers at Nechalacho in 2021 were Canada's First People.

The ability to achieve such a high First Nation hire rate has a lot to do with contracting Det'on Cho Nahanni Construction Ltd., a Northwest Territories-based First Nations company, to carry out the mining and earthworks at Nechalacho.

"The Yellowknives Dene First Nation is pleased to be the first Indigenous group in Canada to be responsible for mineral extraction on their traditional territory," said Yellowknives Dene First Nations Chief Ernest Betsina. "When indigenous people conduct the mining operations, they are better able to control the process, resulting in better safeguarding of the environment."

When it comes to safeguarding the environment, Nechalacho boasts advantages that set it apart from competitors it is near-surface, very high-grade, and needs minimal processing to produce a concentrated ore product ready to ship for processing.

The ore dug up by Det'on Cho Nahanni Construction is simply crushed and fed through an ore sorter that discards the non-mineralized rocks creating a high-grade ore without the need for water or chemicals. This sorted ore concentrate is bagged and shipped to Saskatchewan where it is processed into mixed rare earths carbonate.

Vital began feeding the first Nechalacho ore through a dense media separation plant at its new rare earth extraction facility in Saskatchewan earlier this month.

"We have been a rare earth miner for more than 12 months and now we can commence production of rare earth carbonate," said Vital Metals Managing Director Geoff Atkins. "We are excited to have reached this milestone at Saskatoon despite the challenges surrounding supply chains and logistics across the world."

Mixed rare earth carbonates produced in Saskatchewan will be shipped to separate facilities for the final separation into the individual rare earth oxides needed for EV motors, wind turbine generators, speakers, computer hard drives, medical imaging devices, and a plethora of other high-tech devices.

Putting NWT at the front end of a supply chain critical to the transition to low-carbon energy and transportation.

"It sends a signal that Canada is indeed a serious player in the international drive toward a sustainable, reliable, responsibly mined source of critical rare earth elements independent of China and also of Russia," said Wawzonek.

Bridging the gap

Like the rest of Canada's North and Alaska, NWT is a vast and remote land with limited transportation and energy infrastructure. This often makes the economics of mining even high-grade deposits, especially those that produce a concentrate that must be shipped elsewhere for processing, out of reach.

The territory, which has been working to bridge this gap between its rich mineral resources and the markets that need them, hopes the federal government's C$3.8 billion (US$3 billion) budget to support Canada's critical minerals strategy includes funds to continue this effort.

The recently completed 97-kilometer (60 miles) Tlicho Highway to the community of Whati is an example of recent efforts to extend infrastructure closer to the territory's critical mineral potential.

Funded by a partnership between the federal, territorial, and Tlicho First Nations governments, this recently completed project extends road access to within 50 kilometers (30 miles) of Fortune Minerals Ltd.'s NICO cobalt-gold-bismuth-copper project, which will need road access to deliver concentrates to market.

Located about 150 road-kilometers (95 miles) north of Hay River and the northern end of the rail system in NWT, NICO is a near-development stage project that includes an intriguing mix of critical and precious metals.

According to a 2020 plan, a mine at NICO and an associated refinery would produce an average of 1,800 metric tons of battery-grade cobalt sulfate; 1,700 metric tons of bismuth; 300 metric tons of copper; and 47,000 oz of gold annually over the first 14 years of mining.

This mix of metals in NWT makes NICO an intriguing prospect for those wanting to see more critical minerals mined and refined in North America.

According to an annual minerals report published by the U.S. Geological Survey in February, DRC accounted for roughly 69% of the cobalt mined during 2021.

"This country has a high-risk index for doing business owing to poor infrastructure, resource nationalism, a high perception of corruption, and a lack of transparency as well as wars," USGS wrote about DRC in a 2018 report on cobalt.

Russia, the world's second-largest producer, accounted for another 6%.

This creates a dilemma for companies that need cobalt for the lithium-ion batteries powering EVs and a wide range of devices that make the world greener and more convenient.

The bismuth also found in abundance at NICO is an increasingly important ingredient as a substitute for lead in non-toxic alloys for water pipes and in semiconductors for solar power and potentially green hydrogen production.

Read more about research into bismuth's use in hydrogen production at Solar fuel made from artificial leaves in the June 15, 2022 edition of Metal Tech News.

Bismuth, however, is one of the rarest elements in Earth's crust and is seldom found in economically recoverable concentrations.

In fact, it is estimated that NICO accounts for 12% of the world's bismuth reserves deposits where it has been shown economic feasibility for recovering the metal.

When you throw in the copper and gold, NICO offers a mix of metals increasingly critical to an electric-centric world and a monetary metal traditionally seen as a safe-haven asset in times of financial or political uncertainty.

NICO, however, requires a road to deliver concentrates to Fortune's planned refinery in Alberta and onward to the renewable energy and other supply chains that need the metals to be produced.

Fortune plans to construct an industrial access road that will link the mine to the new Tlicho Highway, which will enable metal concentrates to be trucked to a railhead south of Great Slave Lake for delivery to the planned Alberta refinery.

NWT hopes that Ottawa will support further infrastructure development to critical minerals enriched areas of the territory.

"To transition into the next chapter of our storied mining history with our rich critical mineral potential, we need strong partners at the federal level and continue to make the case for significant infrastructure investment. By doing this, we will be able to capitalize on our true economic potential," said Northwest Territories Premier Caroline Cochrane.

The C$3.8 billion (US$3 billion) federal budget to support the development of critical minerals across Canada includes C$1.5 billion (US$1.2 billion) specifically designated for infrastructure investments to unlock new mineral projects in critical regions.

Fireweed Metals

One of the most exciting new developments on the NWT critical minerals front was the territorial government's decision to sell the Mactung tungsten project to Fireweed Zinc Ltd. for C$15 million (US$11.8 million).

Stradling the NWT-Yukon border, Mactung hosts 33 million metric tons of indicated resource averaging 0.88% tungsten trioxide, making it one of the largest known undeveloped, high-grade tungsten-skarn deposits in the world.

Despite Mactung's world-class size and grade, along with being advanced well into permitting, the former owner of the project, North American Tungsten, fell into financial difficulties and filed for creditor protection before it could develop the mine that would have produced roughly 6,450 metric tons of tungsten per year

NWT government acquired Mactung in 2015 and obtained a Class 4 Mining Land Use Approval for the tungsten mine project in 2020.

In June, Fireweed agreed to buy this advanced tungsten exploration project that borders the northeast side of its Macmillan Pass zinc-lead-silver property from the territorial government.

"We now have not only one of the largest undeveloped zinc resources in the world at our Macmillan Pass Project, but also one of the world's largest and highest-grade undeveloped tungsten projects at the advanced stage Mactung Project," said Fireweed CEO Brandon Macdonald.

Fireweed's agreement to buy Mactung comes only a month after it staked Gayna River, another NWT project enriched with critical minerals.

Lying roughly 180 kilometers north of Mactung, Gayna River is a highly prospective zinc-gallium-germanium-lead-silver project that was discovered in the 1970s and is the target of more than 28,000 meters of drilling completed by Rio Tinto.

To reflect the new critical mineral diversity offered by Mactung and Gayna River, the company has changed its name to Fireweed Metals Corp.

"Our projects host major deposits of zinc and tungsten, each with unique supply dynamics and compelling demand growth," said Fireweed Metals CEO Macdonald. "With both zinc and tungsten being designated as critical minerals by Canada, the US, and the EU, Fireweed is positioned to be a significant critical minerals player on the world stage and to help enable the transition to a sustainable low-carbon economy."

Government of Northwest Territories

For the territorial government, the deal with Fireweed represents another page in the next chapter of NWT's mining story a chapter where the northern Canada territory is a reliable and responsible supplier of the critical minerals required to build a technologically driven future powered by low-carbon energy.

"The NWT is a vibrant jurisdiction with opportunities in abundance. We are looking for new partnerships across a variety of ventures and areas of development," said Wawzonek. "We continue to build on our best practices and our strengths, and we are looking to welcome like-minded investors and partners. We are ready to raise our bar once again and are likely one of the best positioned jurisdictions to do that at this moment in time."

Over his more than 14 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

Email: [emailprotected] Phone: (907) 726-1095https://www.linkedin.com/in/shane-lasley-ab073b12/

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NWT mining future takes a critical turn - North of 60 Mining News