CANADIAN PERSPECTIVE: Money rolling in for Canadian coal, precious and base metals projects

In the last week or so money is being thrown at Canadian mining projects left, right and centre — FNX Mi...

In the last week or so money is being thrown at Canadian mining projects left, right and centre — FNX Mining C$125 million, International Wayside US$14 million, Kirkland Lake Gold C$30 million, North American Palladium US$50 million, Western Canadian Coal $60 million.


That's the best news the mining industry can hear these days. After so many months of gloomy economic news following the worldwide financial meltdown last fall, news of investor confidence in Canadian mining is especially welcome.


Let's look at where the money is likely to be spent.


FNX operates three nickel-PGE mines in the Sudbury Basin of Ontario. The company's 2009 plans include spending $10.2 million for exploration and $54.2 million for capital expenses. The bulk of the budget ($38.9 million) will be put toward development of the Levack footwall deposit via the 2650 level access ramp and reconditioning of the Levack No.2 shaft to the 3600 level. Plans also call for an additional 2,500 metres of access development and a 45,000-tonne bulk sampling program. The remainder of the budget will be spent to complete development of the Podolsky mine and extend the main access ramp in the McCreedy West mine.


Wayside recently acquired the QR gold mine near Quesnel, BC. The loan it acquired is intended to both reopen the QR gold mine and complete development of the company's Bonanza Ledge project. Bonanza Ledge ore could be custom milled at the QR plant 110 km away. Wayside is also proposing a new open pit at the Cariboo gold quartz mine.


Kirkland Lake Gold's exceedingly rich South mine complex in northern Ontario reached commercial production April 2009. With proven and probable reserve grades near 25 g/t Au, the deep reaches of the South mine are worth exploiting. A boost in working capital will be most welcome.


North American Palladium is hoping to restart production at its Lac des Iles mine north of Thunder Bay, ON. The mine was placed on care-and-maintenance last fall due to dropping metal prices. But the metal is still in the ground, 3.7 million oz of palladium in measured and indicated resources. Now with the palladium price on the rise, North American is eager to explore and reopen the mine.


Western Canadian Coal is, as the name suggests, mining coal in northeast British Columbia. The company current mines the Brule and Wolverine deposits that together produced 3 million tonnes of coal in 2008. Western Canadian has plans to boost production to 7 million tonnes by 2012.


I believe we can reasonably say that mining investment is again picking up. The metals and minerals have always been in the ground. Now, it is only a matter of economics to mine and sell them at the appropriate moment.


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