August 22, 2003

An economic crossroads

What will happen to Lupin's infrastructure?

JIM BELL

If Kinross Mining Corp. pulls the plug on its aging Lupin Mine, Nunavut would lose more than a few dozen jobs and some service contracts.

Nunavut might also lose a key transportation hub that could play a role in unlocking the Kitikmeot region's enormous mining potential - opening new mines that could replace, and one day surpass, the jobs and business opportunities lost in Lupin's demise.

The Lupin site, which boasts a runway capable of handling Boeing 737 jets, lies at the end of a vital winter ice-road that starts at Yellowknife and runs past the Diavik and Ekati diamond mines on its way into the Kitikmeot region.

"It would be a shame to lose all that really good infrastructure. It is an invaluable piece of property," said Charlie Lyall, president of the Kitikmeot Corporation.

The Kitikmeot Corporation, along with other regional organizations and a group of mining companies, are the proponents behind the Bathurst port and road project - a plan that would build a road connecting the Kitikmeot's interior with a deep-sea port on Bathurst Inlet.

Lyall sees the Lupin site as one day being an integral part of a new Kitikmeot transportation system.

"It would be an ideal jump-off point once the road and port goes in for all the different mine sites. You could transport people there with jets and then disperse them to the different mine sites, and the port." Lyall said.

Lyall also said the Lupin site is a useful reference point for pilots flying in the area.

"It's the only place between Yellowknife and Kugluktuk and Cambridge Bay and Resolute, so it is a good navigation aid."

Right now, the Bathurst project is mired in red tape. Robert Nault, the minister of the Department of Indian Affairs and Northern Development, wants the proponents to submit a new project description. That's because the Inmet Mining Corp. has withdrawn plans to develop the lucrative Izok Lake zinc property, forcing proponents to change the scope of their project.

But Lupin's possible demise might affect other mining projects that are still very much alive, such as the Tahera Corp.'s Jericho diamond mine project, which lies only 25 km from Lupin.

Alex Buchan, the municipality of Kugluktuk's economic development officer, says he's worried about how the Lupin shutdown could affect Tahera's plans. Tahera was counting on the Lupin winter road to haul mine construction supplies to its site.

"I guess some of the worries that we would have are how the closing of the Lupin mine affects the economics of Tahera, because most of the supplies and everything goes up the winter road and everything terminates at Lupin, and whether the subsequent reduction in winter road traffic is going to somehow affect the Jericho economics," Buchan said.

Officially, though, the Lupin Mine is not yet closed for good. Its owner, the Kinross Gold Corp. of Toronto, has placed it on "care and maintenance," and the company won't make a final decision until after it conducts a review, a process that could take some months.

In that review, Kinross will study the feasibility of extracting about 110 ounces of gold it believes lie in rock pillars that are still standing inside the mine. That would likely be the company's final act before closing the mine for good.

Lupin's previous owner, Echo Bay Mines Ltd., pioneered the use of a winter ice-roads in 1982, when it began production at Lupin. The model has since been used at new diamond mines in the Northwest Territories.

Echo Bay's former CEO, John Zigarlick, now runs the Inuit-owned Nuna Logistics, a well-known company that specializes in ice-road transportation and other mining-related services.