Mining Explorers 2009: Look up north to the NWT; diversity in abundance

Robert R. “Bob” McLeod

Special to Mining Explorers 2009

The Northwest Territories has a rich and diverse commodity base. There is significant interest in the development of strategic metals, base metals and precious metals. In 2008, exploration projects were active in all these areas. Of particular note are the Gahcho Kué Diamond Project, the Prairie Creek lead-zinc project, the Thor Lake rare-earth elements project, the Yellowknife Gold Project and the NICO gold-bismuth project.

Mining in Canada’s Northwest Territories continues to diversify even in the face of global uncertainty. The northern characteristics of resilience and innovation continue to define an industry that has produced some truly incredible results in this territory over the last ten years.

Located about 100 kilometres southeast of Yellowknife, Avalon Ventures’ Thor Lake site is home to one of the most significant rare earth deposits in Canada. Avalon is currently conducting definition drilling on its Thor Lake project and horizontal limits of the mineralization have been defined. Results from the 2008 drilling are some of the best results to date in terms of grade and thickness.

With the opening of the Northwest Territories’ third producing diamond mine in 2008 it has become, by value, the world’s third largest producer of rough diamonds. The total value of metal and diamond shipments from the Northwest Territories in 2008 was $2.74 billion, accounting for 98 percent of the total value of metal and nonmetal production in the territories that year. The staple of the northern mining sector, diamond mining and related activities account for the highest per capita GDP in Canada; 30 percent higher than that of the next-closest province.

Diamond production comes from the Northwest Territories’ three diamond mines – Ekati, Diavik and Snap Lake. Diamonds are a luxury good and the demand for diamonds decreased significantly in 2008 as a result of the global economic downturn. In response, each diamond mine announced cost-cutting measures designed to address and weather the current global situation. These necessary measures will help maintain the flourishing industry that is present in the Northwest Territories. They are already bearing fruit, with the recent announcement that Diavik is now able to forego its planned 6-week shutdown this winter.

On a different front, this year North American Tungsten’s CanTung Mine saw a 22 percent increase over the first quarter of 2008 in tungsten concentrate produced. In Q1 2009, North American Tungsten had net earnings of $4.92 million and sales revenues of $17.6 million. On August 18, 2009, North American Tungsten announced an updated reserve estimate that prolongs the mine life another 2.5 years – to fourth quarter 2011.

Mining in the Northwest Territories industry has been defined by steadiness, even in difficult times. The Northwest Territories has many of the resources that the world will be looking for to drive economic growth when the current economic turmoil passes.

With its partners, the Government of the Northwest Territories has constructed a strong, sustainable mining industry, one which will assist in the creation and maintenance of a diverse, independent North.

Robert R. “Bob” McLeod is minister of Industry, Tourism and Investment for the Government of Northwest Territories.