Nunatsiaq Online
NEWS: Nunavut February 13, 2012 - 4:03 pm

Hope Bay’s golden ring eludes Kitikmeot Inuit Association

“A big disappointment," KIA president says

JANE GEORGE
Until this past December, Newmont Mining Corp.was gearing up to launch Nunavut's second gold mine at Doris North, located in Nunavut about 90 kilometres south of Cambridge Bay. Since last July, miners had been stockpiling gold-rich ore as they drilled and blasted deeper into the earth. Newmont was expected to ship up a mill next summer, and get all its permits and agreements in place, so the mine would be ready to go in 2014. Now there’s a freeze on the project, which was put into “care and maintenance
Until this past December, Newmont Mining Corp.was gearing up to launch Nunavut's second gold mine at Doris North, located in Nunavut about 90 kilometres south of Cambridge Bay. Since last July, miners had been stockpiling gold-rich ore as they drilled and blasted deeper into the earth. Newmont was expected to ship up a mill next summer, and get all its permits and agreements in place, so the mine would be ready to go in 2014. Now there’s a freeze on the project, which was put into “care and maintenance" in a surprise Jan. 31 decision. (FILE PHOTO)

CAMBRIDGE BAY — Jan. 31 was not an easy day for Kitikmeot Inuit Association President Charlie Evalik.

That’s when Evalik received a telephone call from Jim Spenceley, president of Newmont Mining Corp.‘s Hope Bay Mining Ltd., telling him that the Hope Bay gold project would be put on “care and maintenance,” instead of steamrolling towards production.

Newmont’s plans for the future had included additions to its 340-plus workforce at Doris North, another mining camp, and increased activity, including production from open pit and underground mines, fed by gold deposits at Doris North and at least five other major deposits within the 80 kilometre-long greenstone belt.

A “phase two” Hope Bay mine proposal sent to the Nunavut Impact Review Board Dec. 8 said the company planned to start work between 2014 and 2015, with a projected mine life of 15 years.

After hearing Spenceley’s news, Evalik first thought about the loss of jobs now and in the future for Kitikmeot Inuit.

About 160 Inuit had jobs at the Hope Bay mine and that number was expected to jump to 250 in 2012.

Today Evalik calls Newmont’s decision “a big disappointment.”

However, Evalik said in a Feb. 13 interview he had known since last December that Newmont was still weighing the estimated resources of the Hope Bay greenstone belt and the cost of doing business in the North —  costs that included a Dec. 15 fire at the Doris North camp that cost the company at least $500,000.

Meanwhile, the KIA continued to negotiate a longer land-lease agreement and a traditional knowledge agreement with the Hope Bay Mining subsidiary, so the company could access KIA’s traditional knowledge database and studies.

A new Inuit impact and benefits agreement (IIBA) was also under negotiation.

And, last year, the KIA had signed a “capacity” agreement with Hope Bay Mining that allowed KIA to expand its lands, environment and resources department by two positions, and to plan for the construction of larger new building for the KIA in Cambridge Bay.

The Nunavut Resource Corp., chaired by Evalik, was also looking at investing in a string of microwave towers which would link the future Hope Bay mine — and ultimately the rest of the Kitikmeot — to the South’s fibre-optic telecommunications network.

But Newmont’s decision means some of these plans are up in the air.

However, negotiations leading to a new IIBA and land lease agreement will continue, Evalik said.

But the money attached to the signing of these deals was not behind Newmont’s decision to back away from Hope Bay, maintained Evalik.

“Money was not an issue,” he said.

There was no cash figure mentioned for the IIBA and no bluff from the KIA to extract more money, he said.

But Evalik admits he’s not expecting the mine to move ahead quickly, although he’s quick to say that Newmont’s decision is “not the end of the road.”

And down that road Evalik said he’s convinced the mine “will still be relevant” and eventually come into production.

Hope Bay was just one of several mines under development in the Kitikmeot region, he said — MMG, the Chinese-owned Minerals and Metals Group, continues to looks for more zinc around its Izok Lake property, Elgin Mining Inc. now plans to revive the Kitikmeot region’s mothballed Lupin gold mine. Shear Diamonds Ltd. wants restart at Jericho diamond mine, and Xstrata Zinc Canada and Sabina Gold and Silver Corp. are all looking at moving ahead with mines in the region within 10 years.

Sabina said Feb. 13 it’s already mobilizing camps at its Back River gold project, Nunavut — and has made its first payment of $1.4 million to the KIA, as per a deal announced last October.

Sabina and many other mining and exploration companies are expected at the Kitikmeot Trade Show, which opens Feb. 14 in Cambridge Bay.

In addition to the blow of learning Newmont won’t move ahead at Hope Bay, the KIA also has faced internal upheavals, such as a recent decision to fold the Kitikmeot Economic Development Corp. on March 31.

That’s after the KEDC, whose mandate is to assist business and training, accumulated a debt of several hundred thousand dollars. Its executive director Bobby Gunn left his position late last year.

The KEDC’s role will be taken up by the KIA, Evalik said.

 

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