Worldwide commodity markets are volatile and a lack of investment in projects makes these challenging times for the mining industry. Canada’s North is not immune to this reality. Still, a number of projects in the Nunavut territory continue to persevere, despite the many and obvious obstacles – weather, darkness, remoteness, and a lack of infrastructure chiefly among them.
Optimism is high for mining growth in Nunavut. Nunavut (“our land”) is full of resource opportunity with a rich and diverse geology. At least four projects are currently advancing closer to becoming mines in Nunavut, representing a variety of products from gold to silver to copper and zinc, and diamonds.
Over the last 80 years, Nunavut has produced billions in a variety of minerals. Significant contributions have come from Nunavut’s past-producing mines that include the Lupin gold mine, the Polaris and Nanisivik zinc-lead mines, the Rankin Nickel mine, and the Jericho diamond mine.
In terms of numbers from now until 2030, Nunavut’s potential mines could contribute over $36 billion to Nunavut’s Gross Domestic Product (GDP); taxes and royalties of over $10 billion and; nearly 100,000 years of person employment with an overall income of $9 billion. Not only will governments and Nunavut residents benefit, but through the Nunavut Land Claim Agreement, the Inuit land claims organization Nunavut Tunngavik Inc. would also reap a considerable portion for its Inuit beneficiaries.
Nunavut’s Land Claim Agreement is one of the most comprehensive claims in the country. It shares resource management between Inuit land claimants and government. It also requires major projects to sign Inuit Impact Benefit Agreements. In selecting lands, the Inuit leaders recognized that their future also relies on non-renewable resources. As a result, they built an attractive portfolio by strategically selecting subsurface lands for their potential mineral wealth. Royalty benefits from some of these lands have now begun to flow.
Mining holds great promise to help pave the way to Nunavut’s economic self-reliance. Nunavut has two operating mines. Agnico Eagle Mines Ltd. (AEM) opened Meadowbank Gold Mine in early 2010 as Nunavut’s first new gold mine development since the creation of the Territory in 1999. Production from Meadowbank accounts for roughly 18 per cent of the GDP, reflecting the importance of mining to the territorial economy. The company recently announced it is proceeding with a pit expansion at Meadowbank, extending its operating life to 2018.
Mary River, Nunavut’s newest mine, mined its first iron ore in September 2014. Due to the mine’s remote location, ore was stockpiled until the ice-free shipping season opened, and the first ore was shipped to customers in summer of 2015. The project, owned by Baffinland Iron Mines Corp., is located on northern Baffin Island. Due to the quality of the ore, no processing is required before shipping it to market, reducing overall impact to the environment and keeping production costs low. Baffinland has adopted a phased development strategy for this resource which is critical to prudent, reduced-risk development. The company employs just over 600 people between the port at Milne Inlet and the mine site itself.
Revised federal government projections for 2015 mineral exploration and deposit appraisal spending are “up” in Nunavut. Natural Resources Canada’s latest semi-annual report Exploration and Deposit Appraisal Expenditures, by Province and Territory (September, 2015) shows 2015 spending intentions of $202.5 million in Nunavut, an increase of $44.5 million (28 per cent) from $158 million in 2014. The majority of that spending will be on precious metals. Senior companies in Nunavut are expected to spend the majority at 60 per cent of the total exploration, while 39 per cent of the spending is projected to be on grassroots exploration, with the majority on deposit appraisal. As a share of projected Canadian investment, Nunavut remains in fifth place.
Mining projects developing in Nunavut include the Doris deposit at Hope Bay where the TMAC Resources team is pushing for gold production by late 2016. AEM recently increased its capital budget to keep its Meliadine gold project on track for a potential late 2019 startup. Sabina Gold & Silver produced a positive Feasibility Study on its Back River project. MMG is working on infrastructure to support development of its Izok Corridor project. Public hearings on AREVA’s Kiggavik uranium mining project were completed although a final decision has not yet been rendered by the federal minister.
There are some great exploration projects in Nunavut. AEM continues to advance the Amaruq gold deposit near its Meadowbank mine. Peregrine Diamonds completed a bulk sample on its promising CH-7 kimberlite near Iqaluit, and Kaizen Discovery is using “new eyes” to revisit copper properties previously explored by others. North Arrow Minerals completed a bulk sample on its Q1-4 kimberlite and Kivalliq Energy continued to advance its Angilak uranium property.
Nunavut offers an attractive and certain regulatory environment. There are number of regulatory improvement initiatives underway in the North. Launched in 2009, the Government of Canada’s Northern Regulatory Improvement Initiative is helping to complete land claim obligations and create timely, consistent and certain processes. Increasing participation in the industry by Aboriginal governments and businesses is a positive sign for the future. Federal Bill C-47, the “Northern Jobs and Growth Act” created Nunavut’s first ever dedicated environmental legislation, the “Nunavut Planning and Project Assessment Act”. The Act, which became law on July 9, 2015 (Nunavut Day), establishes a proven, highly-efficient “single-entry” system which promotes the concept of a “one-project – one-assessment” approach to resource development projects and land use planning approval. Legislated timelines in the act promise process efficiency.
Nunavut’s policy makers are taking an equally pragmatic view of the future. The Inuit have produced a progressive Mining Policy which helps reinforce investment certainty. In 2007, the Government of Nunavut released a positive Mineral Exploration & Mining Strategy. Then, in 2012, through public consultation, the government was able to reinforce a supportive Nunavut Uranium Policy. Also underway, the Nunavut Planning Commission is working towards establishing a final Nunavut Land Use Plan.
All of these developments send the signal that mining is welcome in Nunavut. However, a lack of infrastructure plagues the territory and is a major cause of high production and exploration costs. With government-sponsored transportation networks such as roads, port facilities, and airstrips, Nunavut would be in a position to provide easier and cheaper access to not only support expanding exploration programmes and new mining development, but also lower the cost of living for communities.
The Chamber of Mines continues to advocate and educate on behalf of the Northern minerals industry. We remain confident that by working together, we can help our industry rebound and recover. For more information on the mining and exploration industry in Nunavut, contact Elizabeth Kingston at: firstname.lastname@example.org, or visit www.miningnorth.com. You can follow us on Twitter @MiningNorth.
By Elizabeth (Liz) Kingston, general manager – Nunavut, NWT & Nunavut Chamber of Mines