Canada’s True North Gems gets mining licence from Greenland
Vancouver firm ready to start producing rubies and sapphires
Greenland has issued a 30-year mining licence to a Vancouver firm for the commercial extraction of rubies and pink sapphires from a deposit located about 120 kilometres south of Nuuk.
True North Gems, which has explored the site since 2004, said March 3 the licence will allow them to transform themselves from an exploration firm into a producer of valuable gem stones for a global market.
“It will enable us to showcase and deliver a new supply of rubies and pink sapphires to the worldwide gemstone industry,” Nicholas Houghton, the president and chief executive officer of True North Gems, said in a news release.
Rubies and sapphires are crystallized forms of a mineral called corundum: aluminum oxide.
When trace elements like chromium produce a deep red colour, the gems are called rubies. When crystallized corundum stones occur in other colours — blue, yellow or pink — they’re called sapphires.
True North Gems believes its Aappaluttoq site, located near the village of Qeqetarsuatsiaq in southern Greenland, contains an indicated resource equal to about 59 million grams, or 296 million carats of rubies and sapphires.
An additional inferred resource is estimate at 21 million grams, or 109 million carats.
The company said that, as of March 10, they will be legally authorized to start a small open pit mine near Aappaluttoq.
The company’s estimated capital expenditure for the first two years is about $33.5 million, with operating expenses of about $6.3 million a year.
The mine’s initial life span is estimated at nine years and is expected to create up to 80 new jobs in Greenland, at the Aappaluttoq site and at a processing facility in Nuuk.
Under the licence, Truth North Gems will pay 5.5 per cent “gross royalty” on the mine’s gross revenues, in any calendar year when the total paid by the company in corporate taxes, withholding taxes and another type of royalty called “surplus royalty” add up to less than what the gross royalty would be.
The surplus royalty would be calculated from the company’s before tax earnings on any annual profit that exceeds a profit margin of 40 per cent.
The company has also started talks on an impact-benefit agreement with the local municipality, the Greenland government, local workers associations and employers associations.
True North Gems was once active in south Baffin, where they explored a rare blue sapphire deposit discovered by two Inuit prospectors from Kimmirut, Seemeega Aqpik and Nowdlak Aqpik.