Firms put pedal to the metal on Melville Peninsula iron projects in Nunavut
Advanced Explorations teams up with Chinese pipe producer on Tuktu 2, Roche Bay deposits
Advanced Explorations Inc. is forging ahead with plans to develop iron mines on Nunavut’s Melville Peninsula, southwest of Hall Beach.
Together, the company’s Tuktu 2 and Roche Bay deposits could contain more than one billion tonnes of iron of up to 68.9 per cent iron “ideally suited for all end users of iron products.”
The company announced this week that it has entered into an agreement with XinXing Ductile Iron Pipes Co. Ltd. for the exploration and development of the Tuktu 2 project.
In 2010, the Chinese company, one of the world’s largest producers of cast iron pipe, announced it would spend as much as $1 billion to fast-track Advanced Exploration’s Roche Bay iron mine project into production.
Under the recent Tuktu 2 agreement, XinXing will have the right to earn 50 per cent of Advanced Exploration’s interest in the project by providing $20 million in three stages, with an initial $5 million payment.
This will go towards a drill program on Tuktu 2 to investigate its “direct-ship ore potential” of the deposit, that is, whether the iron on the property is of such high grade that it can be taken out of the earth and shipped to market without further processing.
Should the results of the drilling program look promising, the Chinese company has agreed to make future installments of $5 million and $10 million toward the Tuktu 2 project.
“The Tuktu 2 agreement provides the opportunity to fast track exploration and rapidly assess the project’s economic potential and if warranted, move quickly towards a development scenario that could then be aligned with the development of the Roche Bay iron project south of Tuktu,” said Advanced Explorations’ president and chief executive officer, John Gingerich, in a recent company news release.
“This agreement provides an important step to an integrated vision. We are very pleased that our partner shares our vision of a broader regional development scenario.”
The Roche Bay project contains more than 500 million tonnes of high-grade iron ore over 140 kilometres, 60 km southwest of Hall Beach and close to the coast at Roche Bay.
Earlier this month, Advanced Explorations Inc. announced “a positive outcome” of a feasibility study conducted on the part of its iron-rich Roche Bay project.
The feasibility study points to a 15-year mine lifespan for a project that wouldn’t need a lot of infrastructure, since the main ore body is only six kilometres from a natural, deep water harbour. This means the mine development would need no railway, extended power lines, or slurry pipelines and there would be “no dependency on third parties to provide these services.”
The proposed mine plan would include a mine, iron ore storage, tailings ponds, roads, airport and a port.
To power its projects, Advanced Explorations has been working new energy sources. These could supply power, cut operating costs at the future mine and allow for more mining to take place on the site.
The location of the projects, coupled with access to a deep water port, provides opportunities that could lead to a regionally based, alternative energy program, the company said earlier this year.