Full steam ahead for new mining projects

Liezel Hill

February 10,2010

After the deep freeze of 2008 and early 2009, new mine and project activity in Canada is heating up again.

Like their peers around the world, Canadian miners and developers responded to the financial crisis and low metals prices by closing mines, curtailing production, delaying projects and deferring exploration.

Going into 2010, however, the industry is buzzing with activity once again. In the west, Terrane Metals, in which senior miner Goldcorp holds a large stake, has announced it plans to start building its Mount Milligan copper/gold mine this year, while Taseko Mines hopes to start construction in 2010 on its Prosperity project, also in British Columbia.

A third project, Copper Mountain Mining's copper/gold operation, in British Columbia, is already under development, and will start up next year, ramping up to around 100-million pounds a year of copper.

There have also been positive sounds coming from Vancouver-based NovaGold Resources that things are starting to move more quickly on the giant Galore Creek copper/gold project, which it owns with Teck Resources.

Teck and NovaGold started building the Galore Creek project in 2007, but surprised the market in November that year by announcing that construction would be stopped because of surging capital costs.

NovaGold has indicated that a new mine plan is expected in the first quarter of this year, and says it and Teck are considering a more "aggressive" approach.

Meanwhile, in the historical gold districts of Ontario and Quebec, new mines are starting construction and production at such a rate that companies are finding themselves competing for skilled workers.

Osisko Mining, which plans to build Canada's largest openpit gold mine, started construction on its Malartic project, in Quebec, in August last year, and is targeting first production in 2011.

Another big new gold mine, Detour Gold's Detour Lake project, in north-eastern Ontario, with its giant 8,8-million-ounce gold reserve base, will likely follow with commissioning towards the end of 2012.

Larger rival Goldcorp is also looking at a major expansion at its Red Lake camp, in Ontario, and announced in January it would sink a new shaft to extend the life of the Hoyle Pond gold mine at Porcupine, in Timmins, Ontario.

Back in Quebec, in 2009, Agnico-Eagle Mines started up its second new mine in the province in as many years, when it commissioned the new Lapa operation. The company opened its Goldex mine, also in Quebec's Abitibi region, in 2008, and is currently flying workers out of the province to staff its Meadowbank project, in the Nunavut Territory, which will start up this year.

Toronto-based Iamgold has also said it plans to start production at its new Westwood mine, in Quebec, early in 2013.

Officials from several companies with projects or operations in Quebec and Ontario have confirmed that the increased levels of activity in the region are creating greater competition for skilled labour.

"There really are some major developments going on [in Ontario and Quebec]," GFMS World Gold MD Paul Burton said in a recent presentation in Toronto.

"I think that in the next couple of years we are going to see quite a jump in Canadian gold production."

Canada fell out of the top-four list of gold producers in 2008, and currently sits at around eighth place, according to GFMS figures.

Widespread Recovery

Of course, the increased activity levels are not limited to gold- and copper-miners.

Chromite discoveries in Ontario's Ring of Fire region last year drew the attention of US coal and iron-ore-miner Cliffs Natural Resources, which eventually beat Canada's Noront Resources in a battle for junior Freewest Resources Canada.

Cliffs has said it plans to start producing ferrochrome from the Ontario deposits by 2015.

The world's biggest mining group, BHP Billiton, announced in January it has approved spending of $240-million on a potash project, in Saskatchewan, while diamond producer De Beers Canada has indicated it will ramp up to full production at its curtailed Snap Lake mine, in the Northwest Territories, by the end of 2012, and plans to add 175 jobs by the end of this year.

A feasibility study is also due by midyear on a Northwest Territories development pro-ject that De Beers co-owns with Mountain Province Diamonds.

In 2008, the mining industry contributed C$40-billion to Canada's gross domestic product, while paying about C$11,5-billion in taxes to federal, provincial and territorial coffers, according to data from the Mining Association of Canada.

The sector employed 351 000 workers involved in mineral extraction, smelting, fabrication and manufacturing, and created business opportunities for an estimated 3140 suppliers.