Dec '07/Jan '08

Newfoundland and Labrador

East coast mining steps up

Mineral development continues in Newfoundland and Labrador

Information sourced from the Department of Mines and Energy, Natural Resources, of the Government of Newfoundland and Labrador

The mining industry in Newfoundland and Labrador produces more than a dozen mineral commodities ranging from aggregates used in road construction to iron used in structural steel, limestone used in agriculture, nickel used to produce stainless steel, granite used in counter tops, and copper wire for use in electrical generation and distribution.

Since 2004 there has been an increase of about 490 per cent in the value of the province’s mineral shipments with the 2007 forecast at approximately $3.97 billion, up from $673 million in 2004. This increase is due to opening of the Voisey’s Bay and Duck Pond mines and a broad based increase in prices and local production of copper, zinc, nickel and iron ore over this time period.

Direct employment in the Newfoundland and Labrador mining industry is projected to be 3,795 person years in 2007, an increase of 115 over the 2006 level. The level of exploration investment in the province has increased dramatically as well. In 2006, about $101 million was spent in the province on mineral exploration and deposit appraisal; this total was expected to increase to $160 million in 2007.

Mining and development

Anaconda Mining Inc. (previously named Anaconda Gold) is developing the Pine Cove Gold deposit outside Baie Verte. During 2005, in an effort to reduce the capital cost, Anaconda redesigned its mine plan from a 1,000 tonne per day operation to a 350 to 500 tonne per day operation. This reduction in mill throughput would also extend the mine life from 6 to 15 years. The Pine Cove gold deposit hosts probable reserves of 2,332,676 tonnes grading 2.76 grams per tonne of gold for 207,000 ounces of gold. Inferred resources total 66,700 tonnes grading 2.43 grams per tonne of gold for 5,200 ounces of gold. Groundbreaking at the site took place early in July, with plans for a fourth quarter start to mining operations at the site.

In 2006, Atlantic Barite Limited reactivated the Buchans barite plant, which operated in the 1980s to produce barite from the tailings of the former base metal mine. The plant has the capacity to produce approximately 15,000 to 20,000 tonnes of barite per year, with an expected mine life of up to 20 years. Located at Lower Cove on the Port au Port Peninsula, Atlantic Minerals Limited operates limestone and dolomite quarries, a modern two million tonnes per year processing plant and deepwater ship loading facilities. Total shipments of limestone and dolomite from Lower Cove are forecast to increase from about 1.6 million tonnes in 2006 to 1.8 million tonnes in 2007.

The Duck Pond mine is located approximately 30 kilometres south of the former Buchans mine in central Newfoundland. The deposit has proven reserves of 4.1 million tonnes at an average grade of 3.3% copper, 5.7% zinc, 59 grams per tonne silver and 0.9 grams per tonne of gold. Production started in January 2007. The mine is expected to produce approximately 41 million pounds of copper, 76 million pounds of zinc, 574,000 ounces of silver and 5,000 ounces of gold annually over the eight-year mine life. Annual employment at the mine is anticipated to average 192 people.

Located near Glenwood, the Beaver Brook antimony mine was opened by Roycefield Resources Ltd. in 1997. The mine operated for several months before increased low-cost production from China caused a significant drop in the price of antimony, forcing Roycefield to close the mine in early 1998. Antimony prices have recovered substantially and the current owner, Beaver Brook Antimony Mines Inc., plans to reopen the mine later in 2007. Dewatering of the underground workings was completed in August, and underground site rehabilitation is ongoing.

Continental Stone Limited (CSL) intends to establish a granite quarry north of Belloram on the province’s south coast. The project has successfully completed a provincial environmental assessment and is currently undergoing a federal environmental review.

Crew Gold Canada Ltd. acquired the Nugget Pond processing facility on the Baie Verte Peninsula from New Island Resources in October 2006. The company saw this as a long-term solution to processing ore from their Nalunaq Gold Mine in south-western Greenland, which it operates through its subsidiary company, Nalunaq Gold Mines. Ore shipments began in February, and in April the company re-commissioned the Nugget Pond mill and poured the first gold bar from Nalunaq ore. Shipments are arriving through a temporary port facility at Goodyear’s Cove until a site for a permanent facility is chosen.

The Hutton Beaches are located in an uninhabited area about 360 kilometres north of Nain. Freeport Resources Inc.’s Hutton Beaches project consists of several high-grade heavy mineral sand beaches, composed largely of garnet. Freeport has assembled a technical team to assist with marketing, product development, pilot plant design, transportation and site logistics as well as environmental and site monitoring. Efforts by the technical team will form the foundation of a full scale feasibility study on the project.

Galen Gypsum started mining its Coal Brook gypsum deposit in the St. George’s Bay area in 1999.Galen has shut down its mining operation as a result of Lafarge’s decision on July 10,2007,to close the Corner Brook plant.The future of the Coal Brook mine will depend on Galen’s ability to develop export markets for its gypsum and whether or not a new owner can be found for the wallboard plant at Corner Brook.

Hi-Point Industries (1991) Ltd. is a peat moss processing company and is the original producer of the oil absorbent “Oclansorb.”The company has developed its Island Pond peat bog near the Gander Bay highway for the production of horticultural peat.

Hurley Slate Works Company Incorporated ships roofing slate to international markets and flagstone to local markets. The company’s slate quarry is located at Nut Cove in Smith Sound, Trinity Bay.

The Iron Ore Company of Canada (IOC) commenced producing iron ore from its Carol Lake (Labrador West) project in 1962. Annual mine production at the open pit operation is in the 35 to 38 million tonne range at an average grade of approximately 40% total iron. Annual production capacity is 17 million tonnes of concentrate of which approximately 13 million tonnes are pelletized. IOC’s shipment forecast for 2007 was revised down from 17.6 million tonnes to 13.8 million tonnes; this reflects the impact of the strike at the minesite which lasted approximately two months. A $60 million capital expenditure was approved to expand production capacity, increasing concentrate production capacity to 18.4 million tonnes by mid-2008, and a feasibility study will assess further expansion to 21 million tonnes annual capacity. IOC also mines its own dolomite for making fluxed pellets in Labrador West; 2007 shipments are forecasted to be 146,000 tonnes. The company plans to commence mining the Plateau dolomite quarry, estimated to produce 200,000 tonnes per year over the 20 year mine life, in late 2007 or early 2008.

TUC, a subsidiary of the Labrador Inuit Development Corporation, has been quarrying anorthosite (Labradorite) at Ten Mile Bay near Nain since 1992. Production for 2007 is anticipated to total about 1,000 cubic metres, an increase of 80 per cent from the 2006 level.

Newfoundland Pyrophyllite operates the pyrophyllite mine in Manuels, Conception Bay as a subsidiary company of Trinity Resources and Energy Ltd. With known reserves, the processing facility at Manuels can dry grind and air classify various grades of pyrophyllite powder which is used as industrial filler in paints and ceramics.

Peat Resources Limited holds exploration licenses on over 130,000 hectares of peat lands in several areas of Newfoundland. Initial resource evaluation of peat lands in the Stephenville–St. George’s area has defined over 40 million cubic metres of fuel-grade peat. Field work is ongoing on other high-priority peat lands in central Newfoundland. Peat Resources is building a small-scale production facility in Stephenville. When fully operational in early 2008, the facility will produce peat fuel pellets for combustion trials in power generation and industrial applications in both Ontario and Newfoundland and Labrador.

Shabogamo Mining and Exploration Limited started mining its Roy’s Knob silica deposit near Labrador City in October 1999. Shipments in 2007 are forecasted to be 63,000 tonnes.

In 2005, Central Holdings Inc. purchased several mining leases formerly held by International Granite. The leases overlay black gabbro deposits in the Mount Peyton area of central Newfoundland. The purchase included a stone-processing plant located at Jumpers Brook, near Bishop’s Falls. The operating company, Terra Nova Granite Inc., currently supplies its plant with stone from inventory. Terra Nova Granite is focusing on the production of monuments, countertops and architectural landscaping products for domestic markets.

Voisey’s Bay Nickel Company Ltd. began mining the Ovoid nickel, copper and cobalt deposit during September 2005 and continues to do so today.VBNC has committed to constructing a commercial nickel processing plant at Long Harbour. The first option is a hydromet plant, however, if this does not prove technically or economically feasible, a matte plant will be constructed. The plant will have a capacity to produce 50,000 tonnes of finished nickel annually as well as associated copper and cobalt products. VBNC is currently working on the feasibility study for the plant and is expected to release the Environmental Impact Statement soon. The company has stated that its goal is to make a decision and inform government by June 2008. Construction of the plant will occur between 2009 to 2011.

Wabush Mines commenced mining iron ore from the Scully Mine in Labrador in 1965 and currently operates a mine and concentrating plant at Wabush and a pellet plant and shipping facilities in Point Noire, Quebec. In 2007,Wabush Mines is forecasting shipments of approximately five million tonnes of product and will employ a workforce at the Scully Mine of 537 people.

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