Canadian Mining Journal


Prospects and projects

For most companies working claims across Canada, the chances of moving from exploration into production are slim and more likely none, thanks to investors cocooning into a wait and see position.

For most companies working claims across Canada, the chances of moving from exploration into production are slim and more likely none, thanks to investors cocooning into a wait and see position.

In fact, the prospects for converting promising discoveries past the drilling and into the blasting stages are dismal right now, but like all mining stories, there are a handful of fortunate ones out there still making headlines by claiming “development status” beside their property’s name.

And, as we all know, that’s a level of achievement in itself because getting that first shovel into the ground isn’t an overnight achievement; it’s the end result of a countless number of sleepless nights of worrying about being able to move forward.

In any event, as mentioned in the headline, only a handful of companies experience the thrill of ‘getting dirty’ and here’s a look at a fortunate few who are getting one step closer to seeing their dreams come true.

Starting on Canada’s west coast, Western Correspondent David Godkin provides a look at some of the projects that are active and moving forward.

Arctos Anthracite Project

Once downward pressure on coal prices eases and global demand for coal rises, we can expect more attention to focus on the Arctos Anthracite Project in northwestern B.C.

With 125 Mt of run-of-mine coal sitting below the 4000 ha mine site, it’s one of the larger undeveloped deposits of metallurgical coal in the world and driven by a joint ownership deal between Fortune Minerals (50%) and South Korea’s POSCO (50%).

In May, the project partners announced they’d sold its interests in the Arctos coal licences to B.C. Rail, but maintain the exclusive right to repurchase the licences for a 10-year period.

With $110 million of work completed, including test mining, pilot plant processing and trial cargos, Arctos will transport processed anthracite by rail to Ridley Terminals in Prince Rupert where it will be shipped to global markets.

Remaining steps: prove to B.C. Environmental Assessment Office that mine development can be done sustainably. Next: build an additional 147km of rail line from the current terminus to the mine site, all part of an estimated $789 million, three-year capital investment. If everything falls into place by the projected start date in late 2016, the project would have an estimated mine life of twenty five years.

Avanti Kitsault Mine (AKM)

Equally important to global steel manufacture is molybdenum to produce high-value, stainless and alloy steels ultimately destined for pipelines construction, bridges, storage tanks, etc.

With federal and provincial environmental and construction approvals in the bag, Alloycorp Mining Inc. is set to begin annual production of approximately 11,600 tonnes of molybdenum in 2017 and more than 1 million ounces of silver at its Avanti Kitsault Mine (AKM) near British Columbia’s Nass Valley.

To do that, the mine plan calls for a conventional truck-and-shovel open-pit mining operation, running 365 days a year, underpinned at the outset by a one-billion-dollar investment. Most of the engineering – courtesy of engineering and procurement manager AMEC Foster Wheeler Inc. and Knight Piésold – is completed. So, too, is replacement of the Nass River Bridge and an access road to the mine site in 2014.

Run-of-mine ore from the open pit crushed and conveyed to a stockpile will feed a 14 MW SAG mill and passed to a 14 MW ball mill to liberate mineral values from the host rock. Molybdenite will then be recovered by flotation processing into a molybdenum concentrate. Process design includes a concentrator with a nominal capacity of 40,000 tpd, but over designed for a capacity of 45,000 tpd.

Dome Mountain Mine

Like Arctos Anthracite mine, the Dome Mountain Mine will depend upon access to deep water ocean ports in Prince Rupert as well as Kitimat and Stewart to get its product – gold and silver – to global markets.

Located approximately 38km due east of the Town of Smithers in northwest British Columbia, the project consists of 42 contiguous mineral claims and one mining lease over a total area of more than 11,000 hectares.

As of January 2013, 75 per cent of the underground development needed for full-scale production at Dome Mountain was completed. This included major earth works, water treatment plant, ore crushing and load-out facility, an extensive pipelines system for sediment control water recycling, installation of compressed air, water and ventilation services into the mine.

Two more important requirements were announced in February 2014: equipment and infrastructure for on-site milling (e.g., a mill to produce up to 250 tonnes per day); and capital financing from private and institutional source pending permit application approval. Share purchase shareholders’ agreements with Dome Mountain Resources of Canada Inc. in January 2015 will see Metal Mountain Resources Inc. continue as the mine operator.

Tulsequah Chief Project

Legal troubles at the Tulsequah Chief  Project on the Tulsequah River in northwestern B.C. go back nearly two decades, including a trip in 2004 to the Supreme Court of Canada that ruled the owner, the B.C. government, had not consulted sufficiently with local First Nations over the zinc, copper and gold mine’s development. Despite continued legal and regulatory delays, Chieftain Metals won another argument in early 2015 when B.C.’s environment Ministry concluded enough work had taken place to warrant the project’s continued development.

Seated atop the Taku River watershed at the B.C./Alaskan border, underground mining and the construction of on-site processing facilities and infrastructure underpin an affirmative feasibility report at the Tulsequah Chief property. With permits for a 2500 t/d operation also under its belt, the company has spent $50 million in purchase costs and absorbed pre-production capital costs of approximately $450 million.

Because the mine is so remote, mining personnel from Whitehorse and more distant centres will be flown in or traversed up the Tulsequah River by barge. Grid electric power is unavailable and water only available from adjacent streams. Despite the challenges, Chieftain Metals considers the Tulsequah Chief mine “One of world’s lowest production cost metal projects.”

New Prosperity Project

Everything looked good in early 2014 when B.C.’s Minister of Energy and Mines Bill Bennett voiced support once again for developing the $1.5-billion gold and copper mine located 125km southwest of Williams Lake. With milling operations and facilities in place and designs in hand for an electricity transmission line, rail load-out facility and road access to the proposed open-pit operation, continued mine development seemed like a sure bet.

Then, for a second time in 10 years, the axe fell once again wielded by the feds. Citing the potential loss to local First Nations of Little Fish Lake to a 12-square-kilometre, 115-metre-high tailings pond and possible contamination of other nearby water bodies, Ottawa rejected the mine proposal on environmental grounds. Gone, Taseko said: were 550 direct jobs and $340 million in annual gross domestic product.

Better news came June 26, 2014. That’s when the Supreme Court of Canada effectively ruled aboriginal rights and title, a complicating factor in Taseko’s application, did not exist in the area of the New Prosperity Mine. This has meant Taseko can re-enter talks with six Tsilhqot’in bands for development of the mine – considered the tenth-largest undeveloped gold-copper deposit in the world. All of this received more support in January of this year when the B.C. government granted a five-year extension to the Environmental Assessment Certificate for development of the mine.

Kemess Underground Development

Assuming you need them, make sure you pack your air sickness bags if you plan to travel to this mine. The Kemess Mine is located in North Central B.C., a site that features a 5000-foot airstrip and all weather gravel road.

So why the continued interest for a mine closed in 2011? The biggest reason is an indicated resource estimate of more than 136 Mt containing 2.6 million ounces of gold and 860.6 million pounds of copper.

In 2011, Northgate Minerals Corporation was also taken over by AuRico Gold, followed quickly by AuRico’s reclamation program to appease environmental interest. Its project proposal: to build an underground mine six kilometres north of Kemess South to produce 105,000 ounces of gold and 44 million pounds of copper annually over 12 years. Existing Infrastructure valued at more than $750 million including full grid power and mill means continued open pit operations (block caving) at the mine site.

Earlier this year AuRico Gold Inc.’s attention turned to Kemess East, where an indicated resource of 2.1 million gold equivalent ounces and an inferred resource of 3.4 million gold equivalent ounces were announced. The equivalent grade is 10 per cent higher than the nearby Kemess underground deposit. Even better, eastern deposit bellies up to existing infrastructure that boasts a 50,000 tonnes/day mill facility, permitted tailings storage and complete access to grid power.


A high-grade copper-zinc development project north of Smithers, B.C., in the Liard mining district, Kutcho had already changed hands several times before Capstone acquired it from Western Keltic in May 2008, and assessed development options there.

 The eventual objective: to re-scope and redesign a project focused on a smaller, less capital-intensive, high-grade open pit and/or underground projects that could be developed faster than that previously planned.

Soon after, Capstone completed a positive preliminary economic assessment and outlined several opportunities for future enhancements. Even before the recommendations of the assessment were received, Capstone started revamping mineral resource estimates at the Esso and Sumac deposits, followed by a successful 10,000-metre diamond drill program. The program was so successful (81 new diamond drill holes and a much higher grade than all earlier models) that the company announced a more robust NI 43-101 compliant mineral resource for the Main deposit in February 2009.

While Capstone is still evaluating its options for the Kutcho project, the proposed mining method includes an underground operation with a 12-year mine life for the property. The mine plan calls for an operating throughput of 2500 t/d, and an average annual production rate of 35 million pounds of copper and 55 million pounds of zinc.

Leaving Canada’s west coast and moving next door to Alberta where most of the news in recent months has been on the oil sands, and the challenges companies working there are having, there’s also a better-news story coming from Coalspur Mines Ltd involving its flagship coal project in Alberta.

Vista Coal Project

Coalspur’s main Vista Coal Project, which covers approximately 10,000 hectares and provides a large-scale, surface-mineable, thermal coal development , is located adjacent to CN Rail’s main line and connects directly to B.C.’s Ridley Terminals to provide Coalspur with an essential chain for exporting its coal to Asian Pacific markets.

To meet the growing demand from these Asian markets, Coalspur is now preparing to develop the Vista project with first coal anticipated at the end of 2016 at an initial production rate of up to 6.5 mpta (Phase 1) and an eventual run-rate of 12 mpta (Phase 2) over a 30-year mine life.

To help ensure a reliable source of coal for years to come, the company also has its Vista South Coal Project, located approximately 6 kilometres southwest of the main Vista Coal Project, covering about 23,000 hectares.

Coalspur says that future drilling on Vista South will provide additional data to define the coal mineralization in the region.

Moving now from Alberta and up north of the 60th Parallel into Yukon where mining activity has run the gamut in recent years, two projects: Victoria Gold’s Dublin Gulch Property and North American Tungsten’s Mactung Deposit, are worthy of note.

Dublin Gulch and Eagle Gold

To start with, the Dublin Gulch property is located approximately 85km by road north northeast of the Village of Mayo in central Yukon and about 500km north of Whitehorse.

The property hosts Victoria Gold’s flagship Eagle Gold deposit and multiple other targets at various stages of development. The site hosts the 6.3-million ounce (indicated and inferred) gold deposit. It’s shovel-ready and is the most advanced project in the region, and is on track to be the largest gold mine in the territory.

The proposed Eagle gold mine has year-round road access, with a commercial grid power approximately 45 kilometres away. Landing facilities for commercial air transport are located 80 kilometres to the south.

Mactung Project

Located near the border of Yukon and Northwest Territories in the Selwyn Mountain Range is North America Tungsten’s Mactung Deposit with an Indicated Resource estimate of 33 Mt of tungsten.

The project is forecast to run at 2,000 tpd from an underground operation using conventional long-hole plus cut-and-fill mining methods. The ore will be processed into both premium gravity concentrate and a flotation concentrate.

The company says the mine life is 11.2 years for the underground mine with the potential to expand by 17 years with an open pit, exploiting near-surface, lower-grade indicated and inferred mineral resources.

One step farther east in the Northwest Territories where the potential for exploration and development is unequalled in many other parts of Canada, the following four companies and the projects they’re working on come to the front.

Nechalacho Project

Avalon Rare Metals’ Nechalacho Rare Earth Elements Project, located at Thor Lake in the Mackenzie Mining District, approximately 100km southeast of Yellowknife, is a property comprised of five contiguous mining leases totalling 4,249 hectares and three mineral claims totalling 1,860 hectares.

It’s Avalon’s flagship rare metal project, and since acquiring the property in 2005, the company has invested almost C$100 million in developing the property, including more than 120,000 m of diamond drilling in 559 holes, resulting in large deposits enriched in heavy rare earths.

The company says that mine and processing facilities have been designed to significantly minimize impacts on water, land and air and reduce the project’s carbon footprint. A 10-year binding toll-refining and strategic partnership agreement has been signed with Solvay, a global leader in rare-earth refining, to reduce any perceived risks associated with heavy rare-earth elements.

NICO Project

Fortune Minerals Limited is developing its NICO property, a gold-cobalt-bismuth-copper project that will include mining and concentrating ores in the Northwest Territories with further processing at a proposed Saskatchewan Metals Processing Plant.

Through this project, NICO is now positioned to stand out as a North American asset dedicated to the process for manufacturing rechargeable batteries used in electric vehicles, and stationary power storage applications such as smart phones, tablets and laptops.

The NICO deposit contains open-pit and underground Proven and Probable Mineral Reserves containing 1.1 million ounces of gold, 82 million pounds of cobalt and 102 million pounds of bismuth, at a planned mill throughput of 4,650 tpd.

More than $110 million of work has already been conducted at the NICO project.

Prairie Creek Mine

Canadian Zinc’s Prairie Creek Mine is located in the Mackenzie Mountains and is a silver and base metals property already in the advanced stages of development, with substantial resources of high-grade silver, zinc, and lead.

Exposures of mineralization vein structures, which overlie thicker stratabound mineralization, both of which are included in the present resource, are known to occur over a distance of 16 km through the property.

Gahcho Kue Project

The last but possibly the most exciting project to come out of the Northwest Territories in quite some time is Mountain Province Diamonds/De Beers’ Gahcho Kue Project, the largest new diamond mine under development in Canada, if not globally.

With the potential to become one of the country’s major high-grade and long-lived diamond properties, the mine is located on a 10,353-acre site located at Kennady Lake, approximately 300km northeast of Yellowknife and 90km from De Beer’s ‘Snap Lake’ diamond mine.

The proposed project is expected to mine 3 million tonnes (3 million long tons and 3.3 million short tons) of kimberlite, and to produce 4.5 million carats (900kg) per year over an 11-year mine life.

The project consists of a cluster of four diamondiferous kimberlites, three of which have a portable mineral reserve of 35.4 million tonnes grading 1.57 carats per tonne for a total of 55.5 million carats.

The final stop on the “North of 60” tour of Canada is Nunavut, where Baffinland Iron Mines’ Mary River Project remains the key mining project in the territory. Here’s a brief look at what’s happening at the mine.

Mary River Project

The Mary River Project is on northern Baffin Island, an isolated location where working conditions range from -30 C in the winter and 24-hour darkness from November to January, to 24-hour daylight from May to August, but in continued cool to cold conditions.

Aside from the harsh conditions, it’s also home to Baffinland Iron Mines’ property where the company has the potential to mine 3.5 million tonnes per year of iron ore

The project has a 21-year mine life.

Much farther south in Ontario, where the working conditions are less environmentally challenging, the four following projects are worthy of note.

Clavos Project

The Clavos gold project is a joint venture involving Sage Gold, St. Andrews Goldfields and Abbey Gold. It’s located about 45km northeast of Timmins and 10km by haul road, and consists of 50 contiguous leased and /or patented claims

More than 513 surface drill holes totalling 113,434 metres have been punched into the property.

Exploration of the property dates back to 1939, with the initial discovery in 1946. The project straddles the contact between the Porcupine Group sedimentary rocks to the south and older ultramafic volcanic rocks to the north.

Cochenour Project

Farther west in the province in the Red Lake Mining District is where Goldcorp Inc has been working on its Cochenour Project, located just five kilometres west of its flagship operations, Red Lake Gold Mines, and approximately 230km northwest of Dryden.

The site is accessible by Highway 105, which heads north from the Trans-Canada Highway and by daily commercial air services that connect the local communities to both Thunder Bay and Winnipeg.

The project is located in the core of the Canadian Shield and the company has been working on numerous studies, including geotechnical assessments, infrastructure rationalization and placement, and backfill and material handling; plus intensive exploration this year to upgrade the inferred resources.

Kearney Mine

Ontario Graphite’s Kearney Mine, located just off Highway 11 about 20km north of Huntsville near the Town of Kearney, is the site of one the world’s better resources of natural flake graphite, and because of the mine’s proximity to one of the province’s better transportation routes, its location also helps make the mine one of the more accessible projects in Ontario.

It’s estimated the Kearney Mine has the potential to process approximately one million tonnes of ore per year while producing about 20,000 tonnes of natural, large flake, high-carbon graphite concentrate.

Leaving Ontario and moving east brings us to a host of other projects that are in varying stages of exploration and development, and few projects have received more national coverage than Quebec’s “first diamond mine,” otherwise known as The Renard Diamond Project.

Eastern Correspondent D’Arcy Jenish starts with a look at the Renard Diamond Project, but doesn’t stop there, as he moves east with a more in-depth look at activities on Canada’s east coast.

Renard Diamond Project

Stornoway Diamond Corp’s Renard Project is an advanced project and, according to the company, is set to become Quebec’s first diamond mine.

Stornoway began construction of a combined open-pit and underground operation after arranging a $946-million financing in July 2014. The first ore is expected at the plant by late 2016, and full production is slated for mid-2017. Diamond-bearing kimberlite pipes were first discovered in 2001 and Stornoway, of Longueuil, Que., acquired a 50 per cent interest in 2006. The company acquired the balance from a Quebec crown corporation five years later. The deposit is remotely located, some 800km northeast of Montreal and 243km from the town of Chibougamou, but the project fits nicely with the provincial government’s Plan Nord, an ambitious scheme to develop Quebec’s north.

In fact, the province and the company combined to build a road from Chibougamou to the mine site, and Stornoway has reached an accord with the James Bay Cree that will ensure their participation.

Renard is expected to produce for 11 years, although the company anticipates additional discoveries will extend the life of the mine. It will initially yield 1.6 million carats per year, representing approximately two per cent of global rough diamond supply by value.

Caribou Mine and Mill

Vancouver-based Trevali Mining Corp., a zinc-focused base-metal producer, acquired this fully developed polymetallic project in New Brunswick from a previous operator, who had invested approximately $100 million between 2006 and 2008 to overhaul and modernize the mine infrastructure and processing plant.

Trevali Mining launched production and commissioned the 3000-tonne-per-day mill in May this year.

Located 50km west of Bathurst, the Caribou Mine is a high-grade massive sulphite deposit containing zinc, copper, lead, silver and gold.

The company expects to produce 93 million pounds of zinc annually, along with 32.5 million pounds of lead, 3.1 million pounds of copper, 730,000 of gold and 1,500 ounces of gold.

Trevali Mining invested $36.3 million in pre-production capital expenditures and has fully refurbished a little more than half of the 13.3 kilometres of underground workings on 10 of 16 levels.

Also, the company built a 75,000-tonne stockpile of ore before commissioning the mill and an additional 28,000 tonnes has been drilled and made ready for blasting.

The project is staffed with 200 employees, contractors and consultants, and the company expects to employ 300 people full-time once mine and mill are operating at capacity.

The mine life is projected at 6.3 years.

Dumont Project

Royal Nickel Corporation of Toronto contends that its Dumont resource is big enough to become the fifth-largest nickel sulphide operation in the world. To make that happen, however, the company is working to acquire all its permits and arrange financing before construction of a mine can commence.

The deposit was discovered in 1956 and the potential for large-scale mineralization was confirmed in 1970, but it has since lay mostly dormant.

 Previous owners explored intermittently between 1982 and 1992, but lost interest. Royal Nickel acquired the property in 2006, and over the next three years, conducted 90,000 metres of exploratory drilling.

The company estimates that Dumont holds 6.9 billion pounds of nickel in proven and probable reserves and another 1.3 billion pounds inferred–enough to support a mining operation for 30 years.

Royal Nickel completed a feasibility study in 2013, which calls for construction of a mill to process ore into a high-grade nickel concentrate that will be shipped elsewhere for processing.

As well, the property has easy access to roads, railways and low-cost power. The company currently expects permitting and financing will be in place by year-end, in which case it would be in a position to commission mine and mill by 2017.

Granada Gold

Location, location, location is a familiar mantra in the real estate business and this project by Gold Bullion Development Corp. of Rouyn-Noranda is certainly in the right location – the heart of the Cadillac trend, where some 50 million ounces of gold have been produced over the past century.

Gold was discovered on what became Granada in 1920. The property was staked in 1922 and production from a small mine began in 1930. Fire destroyed the surface infrastructure five years later and the property was neglected until the late 1980s, when new owners undertook exploration.

The last gold was extracted in 2000, and Gold Bullion acquired the property in 2006.

The company launched its exploration program three years later and in 2012, it  estimated that the property contained 7.8 million tonnes of measured ore at a grade of 2.14 grams per tonne, which would yield 536,000 ounces of gold.

In addition, drilling revealed another 5.3 million tonnes indicated at a grade of 2.32 grams per tonne, or 398,000 ounces.

Gold Bullion completed a pre-feasibility study in June, 2014 and the following month entered a production agreement with Iamgold Corp. that would allow the company to ship its ore 40 kilometres to Iamgold’s Westwood mill for processing during the first three years of open-pit mining.

Elder-Tagami Mine

Abcourt Mines of Rouyn-Noranda owns three former producing mines and has begun rehabilitating and extracting gold from the Elder-Tagami Mine, but requires a financing package to put it fully into operation.

This property is located 10 kilometres northwest of Rouyn-Noranda, and consists of 34 contiguous claims and concessions totalling 876 hectares. The surface infrastructure includes offices, service buildings, hoist rooms and a shaft building.

Two shafts and several drifts on 16 levels are serviced to a depth of 794 metres.

Previous owners operated the mine from 1985 to 1989, and closed it due to falling gold prices. Abcourt conducted several surface-drilling programs between 1995 and 2012, then retained independent consultants to conduct a preliminary economic assessment. It indicated that mining operations could yield cash flow of $138 million over 10.4 years.

The company hasn’t obtained financing to put the mine into full production, but in April 2013 began rehabilitating old drifts and extracting ore, which has yield 12,400 ounces of gold.

Recently, Abcourt signed a letter of intent with Richmont Mines for custom milling of 10,000 to 25,000 tonnes of ore per month between July and December 2015. 

Abcourt-Barvue Project

The Abcourt-Barvue silver-zinc project by Abcourt Mines in Val d’Or, is the second of the company’s three former producers.

It’s located 54km north of Val d’Or, Que.

Zinc was discovered on the property in 1950, and a previous owner operated an open-pit mine from 1952 to 1957.

For five years, beginning in 1985, Abcourt undertook development work at the site and extracted 632,319 tonnes of ore from an underground mine that yielded 131 grams of silver per tonne and 5.14 per cent by weight of zinc.

A decade later, the company showed renewed interest and conducted an intensive drilling program between 2002 and 2007, and completed a number of technical and environmental studies.

Abcourt also did a feasibility study. The measured and indicated resource now stands at 8.1 million tonnes, which would produce an average 55.45 grams per tonne of silver and 3.1 per cent by weight of zinc.

The company has developed alternative scenarios for putting the mine into production at projected costs ranging from $46 to $70 million. Open-pit mining would account for 85 per cent of production, which would be at least partly processed on-site in a mill with a capacity of 1,800 tonnes per day.

But before the project advances, Abcourt must arrange financing, and hopes to clear that hurdle in 2015. 

From what you’ve just read, it’s clear to see that Canada is living up to its reputation as being one of the more active and promising locations in the world for both new and existing mines and despite these troublesome times where investment is at a premium, it’s encouraging to see that exploration but moreover, development, is still happening from coast-to-coast.  

Print this page

Related Posts

1 Comment » for Prospects and projects
  1. Jeroy Peterson says:

    What about the elkreek mine of niocorp?

Have your say:

Your email address will not be published. Required fields are marked *