Nunavut Resources Corp. hits wall in money-raising campaign: Evalik
Tight global finances, P3 problems make for a “very challenging year"
(updated, Oct. 6, 9:00 a.m.)
The Kitikmeot Inuit Association’s president, Charlie Evalik, was blunt when he spoke Oct. 2 to delgates at the association’s annual general meeting in Cambridge Bay.
The Inuit-owned Nunavut Resources Corp., set up in 2010 to invest in gas, oil or mineral projects and bring them into production, has had a “very challenging year” in its quest to meet its exploration and infrustructure development goals, he said.
“In both cases there have been a number of exciting accomplishments, but these have been accompanied by crushing disappointments,” Evalik said.
Last March, the NRC entered into an alliance with HTX minerals, with the aim of leveraging $18 million from the public and private sectors for five year’s worth of operations and exploration.
“However, the signing of the agreement occurred at a time when the financial market normally available and interest in investing in grass roots exploration has been effectively closed,” Evalik told the KIA delegates.
Over the past seven months, the NRC and HTX tried to find “less traditional sources of funding,”
“But while there has been some interest within Canada, the UK and the US, we have so far been unsuccessful in finding any third party support,” Evalik said.
On Sept. 27, the HTX and the NRC said the KIA would invest $1 million in the partnership.
By next spring, the NRC plans to “refine its pitch to seek new investors to be fully funded for the next five years.”
An April announcement by Nunavut MP Leona Aglukkaq said the NRC would receive $3 million in federal money to boost its investment fund and secure other more money.
NRC also signed letters of intent, which had promises of money attached, with SNC Lavalin, Sabina Gold and Silver Corp., “but has so far been unsuccessful in deploying the $3 [million]” raised.
While there are no public details about the deal with the engineering firm SNC Lavalin, Sabina said it would give the NRC up to $2 million as “seed funding” to develop a work plan for joint infrastructure projects in the Kitikmeot.
But the biggest disappointment was to come.
Earlier this year, the NRC made a public-private-partnership application to P3 Canada for $75 million.
Evalik did not say what project that was for, but it could have been for 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, which Evalik mentioned in 2011.
That application had numerous letters of support attached.
Right now, P3 projects are seen as partnerships between private and public governments to pay for large scale projects such as the Iqaluit International Airport renovations and new terminal, which recently received $77.3 million from the P3 program.
Evalik told the KIA delegates that First Nations reserves are able to submit applications, so the KIA, which manages hundreds of thousands of square kilometres of lands and organizes many social programs, and submitted the application with the NRC as a partner, should qualify as a quasi-governmental group.
Evalik said the prospects for the NRC’s application looked good, but then the unnamed Government of Nunavut official, who had backed the NRC application “was let go.”
P3 Canada asked for confirmation that the GN still supported the application.
In early August, the NRC received a letter from the GN that supported the NRC application, but rejected “the notion that the KIA was some form of regional government.”
That meant the NRC’s P3 application didn’t qualify for consideration.
At the same time, “one of the mining companies (which Evalik did not want to name) that provided a letter of support visited P3 Canada and explained in no uncertain terms that they would never support the business model as presented by NRC.”
The NRC now expects to receive an official refusal from P3 Canada on its application, Evalik said.
NRC plans to spend the next year to challenge the eligibility criteria for P3 Canada so that these allow the regional Inuit associations like the KIA to qualify.
And it plans to find a “suitable mining partner” for a new application next June, he said.
On Oct. 3 Nunavut Premier Eva Aariak attended the KIA meeting.
Aariak acknowledged the huge infrastructure deficit of Nunavut, and praised the KIA’s efforts to overcome that, saying she was “proud” of the region.
As for access to the P3 Canada program, Aariak said she would get more information on the program.