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Vol. 17, No. 46 Week of November 11, 2012
Providing coverage of Alaska and Northwest Canada's mineral industry

Mining Explorers 2012: Mining remains key to NWT’s future

Industry dates back to 1890s gold claim; diverse minerals brightens outlook

Min. David Ramsay

Special to Mining News

The Northwest Territories has been closely linked with the mining industry ever since B.A. Blakeney, a prospector on his way to the Klondike, staked the first gold mining claim here in 1898. And although the focus has shifted from gold to diamonds, the industry remains at the forefront of any discussion regarding the NWT’s economic well-being: the territory produced over C$2 billion in total mineral shipments in 2011, a staggering total for a jurisdiction which has a population that barely exceeds 40,000 residents.

Although diamonds remain the backbone of the NWT’s economy, the life of the territory’s three producing mines – like any non-renewable resource – is finite. However, both government and industry have been proactive on this front, with numerous projects in various stages of exploration and permitting, and the Government of the Northwest Territories developing a Mineral Development Strategy designed to ensure the NWT’s mining future remains as bright as the diamonds it has become so famous for producing.

There is no shortage of mining activity in the NWT and the array of projects on the horizon promises a future as vast and diverse as the northern wilderness. From a return to the territory’s golden roots to operations as groundbreaking as Blakeney’s first discovery over a century ago, there is reason to be excited in the NWT – both with the present, and for the future.

Today: A diamond-driven economy

Over the past decade, the NWT’s mining industry has come to be defined by diamonds. With three currently operating mines – BHP Billiton’s EKATI Mine, Rio Tinto’s/Harry Winston’s Diavik Mine, and De Beers Canada’s Snap Lake Mine – the NWT is the third-largest producer of rough diamonds by value in the world, with over 10 million carats produced by the three mines combined in 2011.

And while these three currently operating mines continue to drive the NWT’s economy – employing thousands of residents, spending billions in local goods and services, and contributing nearly one third of the territory’s total GDP – new diamond projects continue to rise to the fore. A fourth mine, De Beers Canada and Mountain Province Diamonds’ Gahcho Kue Project, is currently undergoing environmental impact review and could provide as many as 49 million carats in diamonds over its lifetime.

Diamonds, though, are not the only products currently being mined in the NWT. The resilient CanTung Mine, operated by North American Tungsten Corporation (NAT), may have been in production since 1962 – longer than the NWT’s three diamond mines combined – but its best days are certainly not in the rearview mirror. After a short shutdown in 2009/2010 due to the global economic recession, NAT announced record net income for its first quarter of 2011, and is continuing exploration activity in order to extend the mine’s life.

Tomorrow: A wealth of resources

Although today’s NWT mining sector is diamond focused, many potential mines – containing many different potential mineral reserves – lie on the horizon. Chief among these is a potential resurgence of the gold mining industry that first established the NWT as a land filled with mining potential. Two different gold mining projects – Tyhee Development Corporation’s Yellowknife Gold Project and Fortune Minerals’ Nico Project, which also contains proven cobalt and bismuth reserves – are currently undergoing environmental assessment, and a third, Seabridge Gold Corp.’s Courageous Lake Project, is in the advanced exploration stage. These three projects represent an exciting link to the NWT’s colorful past, filling a hole in the NWT’s mining economy that had been opened since the closure of Giant Mine in 2004.

A link to the future, though, resides southwest of Yellowknife, at Avalon Rare Metals’ proposed Nechalacho Project. Nechalacho is a source of rare earth elements – minerals such as scandium, yttrium, and europium which are vital to the production of “green technologies” such as rechargeable batteries, fuel efficient cars, and wind turbines. Nechalacho is currently undergoing environmental assessment and has both NWT residents and green technicians worldwide excited at the prospect of a world-class deposit of what will prove to be a vital resource in years to come.

And though rare earth elements do serve to diversify the NWT’s mineral reserves beyond the anchors of diamonds and gold, they are not the only promising mineral project on the horizon. Located 90 kilometers (56 miles) north of Nahanni Butte - within the Nahanni National Park Reserve - Canadian Zinc Corporation’s Prairie Creek Mine is the host to nearly 6 million metric tons of measured and indicated minerals resources, including zinc, lead, copper, and silver. Prairie Creek has undergone environmental assessment and is currently in the regulatory stages, and, once completed, will serve to bring much needed economic activity to the Dehcho Region of the NWT.

Looking ahead: Mineral Development Strategy

But while the mining industry has been the driving force behind the NWT’s economy, including nation-leading gross domestic product figures, employment, procurement and value-added industries such as manufacturing, mineral exploration has, of late, been decreasing in the NWT. The global recession was part of it, but industry representatives also cite a complex regulatory system, unresolved land claims and the lack of infrastructure as hindrances to investment.

Led by a renewed political focus, (the NWT’s 17th Legislative Assembly took office in October, 2011), the Government of the Northwest Territories has responded by partnering with the mining industry and other key stakeholders to advance and develop a Mineral Development Strategy for the future. A necessary and key step, it is felt, in increasing expenditures in the mineral exploration and deposit appraisals with a view to positively impacting the quality of life for NWT residents, government revenues, business retention and expansion and the productive use of resources.

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