Resource World Magazine

MINI NG Mining in Canada's North Canada's North is set to become a mining powerhouse within the next decade, according to a recent report by the Conference Board of Canada. Nevertheless, challenges such as lack of infrastructure and misperceptions by domestic and foreign investors may keep companies in this area from reaching their true potential. Released in January, the Conference Board's report, entitled The Future of Mining in Canada's North, outlined positive growth in this sector within the next decade. According to the document, "the mining sector in Canada's North is forecast to almost double its output and employment by the end of the decade – staggering growth compared to the Canadian economy as a whole." The report also forecasted that overall northern metal and non-metal mineral output will grow by 91% by 2020 from 2011. The annual gross domestic product of northern mining is also expected to expand to $8.5 billion by 2020, up from $4.4 billion in 2004. It's not that easy, however, the resource potential is there, but the challenges are great and not the least of which is an image issue, says Anja Jeffrey, Director of the Conference Board of Canada's Centre for the North. "I honestly believe, speaking to different jurisdictions, that there is a perception issue here, explains Jeffrey. "There is still the perception that doing business in the in the north is difficult because of regulatory hurdles. You can't just solve these problems with one stroke and, for some reason places like the Northwest Territories (NWT) have, unjustifiably, a reputation that it's difficult to do business there." However, it's apparent that NWT challenges can be overcome as the territory is home to two world-class diamond mines 34 www.resourceworld.com by Daina Lawrence Rendering of the proposed NICO pit, mill and camp site in the Northwest Territories, Canada. Photo courtesy Fortune Minerals Ltd. – Ekati and Diavik. The Centre for the North's, authors also outlined infrastructure, skilled labour access and government red tape as some of the challenges companies with projects in the territories will face. "Infrastructure is definitely the biggest hurdle," says Jeffrey, not to mention the cold, unforgiving climate, lack of year-round roads and high costs of fly-in/fly-out projects. There are also plenty of advantages, and if companies set up shop in the north they can take advantage of abundant resources and not have to move too far to tap another project after their current mine life is depleted – like Agnico-Eagle Mines Ltd.'s [AEM-TSX; NYSE] Meliadine gold project in Nunavut, explains Jeffrey. "In Nunavut, Agnico-Eagle has the Meadowbank gold mine that will be depleted by 2017," she says. "Now what is it that makes it profitable for Agnico-Eagle to continue its operations? They can move south of Rankin Inlet and bring their equipment, people and expertise." Agnico-Eagle's open-pit, Meadowbank Mine, is its largest gold producer, with 2.2 million ounces of proven and probable resources (24.5 mil- lion tonnes at 2.8 g/t). Fortune Minerals Ltd. [FT-TSX] is also not shying away from the northern challenge. Its NICO gold-cobaltbismuth-copper project, 160 km north of Yellowknife, NWT, has so much mineral potential that the company is willing to take on any current and future challenges, explains president and CEO, Robin Goad. In fact, this type of project is what his company was built on. "We originally were incorporated and went public with a northern focus," says Goad. "Our projects were historically focused on the Northwest Territories." The weather is also not as bad as people may think; the project is located well within the tree line and the weather is comparable to the northern areas of Ontario or Manitoba. The open-pit and underground NICO project has proven and probable reserves totaling 33 million tonnes containing 1.1 million ounces of gold, 82 million pounds of cobalt and 27 million pounds of copper. The project also contains 102 million pounds or 15% of the world's supply of bismuth – an unusual mineral used as a APRIL 2013

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