The construction of a new raw ore storage bin at PotashCorp’s Cory operations
Saskatchewan’s economic momentum is led by the exploration and development of its abundant natural resources. Non-renewable resources accounted for 14.9 per cent of the provincial GDP in 2007.
Saskatchewan is Canada’s second largest oil producer and third largest gas and coal producer. Combined oil and gas sales exceeded $9.7 billion in fiscal year 2007-08, with industrial and metallic mineral sales accounting for about $4.5 billion.
Saskatchewan is also Canada’s third largest mineral producer and the largest uranium and potash producer in the world. Metallic mineral production in 2007 included uranium and gold, while industrial mineral production included potash, aggregate, silica sand, salt and sodium sulphate, and minor bentonite and structural clay. Mineral exploration spending in 2008 is estimated to be a record $360 million, which will be spent on over 250 projects distributed throughout the province (see map).
In 2007, uranium was produced from the McArthur River, Eagle Point and McClean Lake mines. Total production was 24.6 million pounds U3O8. In the Athabasca Basin, the world’s premier high-grade uranium exploration district, it is estimated that about $195.4 million will be spent on exploration in 2008, down slightly from 2007. Major programs include those of producers Cameco Corporation and AREVA Resources Canada Inc., and mid-sized junior companies UEX Corporation and Denison Mines Corp. The most significant discovery was that of the Roughrider zone at Hathor Exploration Ltd.’s Midwest Northeast project.
Gold exploration spending is expected to reach almost $17 million in 2008. Exploration has focused almost exclusively on the Seabee mine area of the Glennie Domain, the La Ronge Domain, and the Goldfields area near Uranium City, all on the Precambrian Shield. GLR Resources have continued working towards production at the Box and Athona deposits in the Goldfields, with further drilling and reserve/resource estimation in the past year. Golden Band Resources, on track for production by late 2009 at several of its La Ronge Domain properties, has undertaken underground exploration of the Bingo deposit. Claude Resources’ Seabee mining operation is Saskatchewan’s only gold producer, with 44,322 ounces produced in 2007 and 19,953 ounces in the first half of 2008. Claude continues exploring the Seabee area, including underground exploration at Seabee and surface drilling and resource definition at the satellite Santoy 8/8E deposit.
Despite weakening base metal prices during 2008, mineral exploration expenditures are expected to approach last year’s level of around $10 million. Most of the associated exploration targets volcanogenic massive sulphide deposits in the Flin Flon Domain, sediment-hosted sulphide occurrences in the Wollaston and Kisseynew domains, and intrusion-hosted nickel-copper-platinum group element occurrences near the historic Rottenstone mine. West of Flin Flon, Exploration Syndicate Inc. made a significant copper-zinc discovery, the Zang Zone, on its McKenzie Lake project in the Suggi Lake area. Mantis Mineral Corp. has entered an agreement with Uravan Minerals Inc. to acquire the right to obtain up to 60 per cent interest in eight Rottenstone Domain dispositions.
Saskatchewan boasts the world’s largest kimberlite field in the Fort à la Corne area, with several kimberlites exceeding 200 hectares in surface area. Diamond exploration expenditures are forecast to exceed $95 million in 2008, up from $76.6 million last year. The bulk of the 2008 expenditures will be at Shore Gold Inc.’s Star diamond project and the Fort à la Corne Joint Venture’s Orion Cluster project, both in the Fort à la Corne area. Shore’s Star Kimberlite project has NI 43-101-compliant indicated resources of 122.7 million tonnes at 13.5 cpht and inferred resources of 30.3 million tonnes at 13.1 cpht. The Fort à la Corne joint venture is a 60:40 partnership between Kensington Resources Ltd., a wholly owned subsidiary of Shore, and Newmont Mining Corporation of Canada Ltd., respectively. It has budgeted $86.8 million for accelerated exploration and evaluation of the Orion kimberlite cluster.
It is estimated that over $40 million will be spent on exploring for industrial minerals in 2008. Although much of this will be potash-focused, there will also be some exploration for kaolin and rare earth elements. The estimated expenditures do not include substantial coal exploration, which began after April 2008, when the Ministry of Energy and Resources completed its annual survey of exploration expenditures.
In 2007, Saskatchewan’s potash industry broke all production and sales records. The $3.06 billion in potash sales accounted for about 67 per cent of Saskatchewan’s mineral sales and one-third of global production. It is estimated that over $40 million will be spent on potash exploration in 2008. Saskatchewan’s potash producers will also invest $8.5 billion between 2005 and 2020 to increase production capacities by 87 per cent. For the full story, see inset story.
Great Western Minerals Group Ltd. continued evaluating and developing its Hoidas Lake rare earth element deposit, 60 kilometres northeast of Uranium City. Their 2008 winter drilling program totalled 6,836 metres in 32 holes. Great Western also recently acquired Less Common Metals Ltd., a leading rare earth–based alloys manufacturer and supplier. One of Less Common’s key clients produces permanent magnet motors used in Toyota’s hybrid vehicles. About 20 kilograms of rare earth oxide ore will be required for each hybrid car, and Toyota forecasts producing 100 per cent hybrid vehicles by 2020.
In August 2008, Whitemud Resources Inc. opened its newly constructed meta-kaolin (a new-generation cement substitute) plant and quarry at the Gollier Creek deposit near Wood Mountain. The company now has proven reserves of 52.9 million tonnes of ore and measured and indicated resources of 131.1 and 28.2 million tonnes, respectively.
In April 2008, Goldsource Mines Inc. reported discovering coal while drilling for kimberlite on its Border property claim block in east central Saskatchewan. A 22-metre intersection of Cretaceous sub-bituminous grade coal touched off a staking rush in the Hudson Bay area, that quickly extended westward across the province. Since the initial discovery, the Ministry of Energy and Resources has received over 7,000 coal permit applications covering approximately 5.4 million hectares.