November 16, 2001
One of Nunavut's only working mines, the Nanisivik zinc on Baffin Island.
(PHOTO COURTESY OF BREAKWATER RESOURCES)

Mining in Nunavut: lots of sizzle, no steak

Although mineral exploration continues in Nunavut, the prospects of Nunavut getting a job-creating, money-making, mineral-producing mine seems as far away as ever.

JANE GEORGE

IQALUIT – If you have money to invest, then mining companies doing exploration in Nunavut will be most happy to help you park your money.

But if you’re expecting to get a job at a new mine, don’t hold your breath: it will be a few years before there are any openings.

Unpredictable gold prices and a weak market for investment have slowed the commercial development of Nunavut’s most promising mineral properties to a snail’s pace.

Hope Bay still hopeless

Two years ago, the promoters of the Hope Bay gold deposit south of Cambridge Bay called this find the "best underdeveloped gold project in North America."

But Hope Bay is still just that, and won’t be deliver any of its promised 300 jobs any time soon.

Exploration at Hope Bay has turned up a long, 85 kilometre gold-rich belt, and investors have sunk millions into its development – some $20 million last year alone.

But so far the Hope Bay project has gobbled money instead of producing money.

The Hope Bay Gold Corporation’s stock prices have also fallen this year, from a high of 52 cents a share to a measly 15 cents.

Other major Nunavut gold projects are also at a virtual standstill.

The promising Meliadine West project near Rankin Inlet has hit a wall because its majority shareholder, WMC International Ltd. of Australia, wants to get out of the gold mining business and sell its majority share in the venture.

This year WMC and its partners spent only a few hundred thousand dollars on aerial surveys of the property.

"It continues to be a world-class gold exploration project," reads a recent press release, but its future as an operating gold mine seems elusive.

Cumberland Resources also owns 22 per cent of Meliadine West.

Cumberland is also a 100 per cent owner of Meadowbank, a promising gold stake near Baker Lake. The company says it’s well-financed, but reported little progress this year.

Diamond properties are doing better. The Tahera Corporation is planning an "aggressive exploration program" in 2002 for the area around its Jericho mine in south-western Nunavut.

Approximately 3 million carats are believed to lie somewhere underneath its 800,000 acres.

Tahera has entered into a joint-venture with Kennecot, a subsidiary company of the giant Rio Tinto mining company, which also owns the nearby Diavik diamond mine. There’s even a preliminary environmental impact statement in the works for the mine.

Then, there’s the Jackson Inlet diamond project, 120 kilometres west of Nanisivik, on Baffin Island’s Brodeur Peninsula.

Twin Mining cites new signs of more kimberlite fields on their property, which are believed to be full of kimberlite pipes, the formations that often contain diamonds.

"Results like these at Jackson Inlet enhance the potential for Twin Mining to achieve its objective to become a diamond producer by 2005," the company says.

"It’s still realistic," said Hermann Derbuch, the president of Twin Mining — even though the global economy is falling into a recession.

Twin Mining’s stock has fallen from a high this year of 66 cents a share to 37 cents.

But, Derbuch, diamonds can still make money.

He’s convinced the range of large and small diamonds his company has found in north Baffin can weather a recession, because the wealthy people who buy them will still have money.

Derbuch wants to carry out more exploration, drilling and sampling in 2002, and a feasibility study the following year.

But even if Twin Mining decides to turn its camp into a permanent mine, Derbuch isn’t planning on taking over the Nanisivik mine site.

Some of the Nanisivik’s equipment might be worth picking up, he said, but the mine is too far away from Jackson Inlet.