Dec '10/Jan '11

Newfoundland and Labrador

Expansion and exploration seed mining landscape

Hauling ore at Duck Pond | Photo courtesy of Teck Resources Limited

The mining industry in Newfoundland and Labrador has enjoyed strong growth in 2010, with major capital investments in new and expanding projects, and exploration successes in both emerging and former producing projects. Grassroots and advanced exploration are targeting a broad range of commodities, reflecting the wide geological diversity and strong mineral potential of Newfoundland and Labrador.

Principal among ongoing capital construction projects are Vale’s nickel metallurgical processing plant, at a total expenditure of US$2.82 billion, and Rio Tinto’s $435 million expansion of the Iron Ore Company of Canada’s operations in western Labrador. These two mega-projects alone will help ensure the health and long-term growth of the sector.

There’s gold in them hills!

All-time high gold prices, driven by continuing global uncertainty and volatility in currency markets, have had a positive impact on advanced gold exploration projects throughout the island of Newfoundland. Examples include Marathon PGM and Mountain Lake Resources’ Valentine Lake project, where drilling of a substantial bulk tonnage gold-bearing vein system has returned very promising results.

Elsewhere on the island, Northern Abitibi Mining continues to encounter high-grade vein and lower grade bulk tonnage mineralization at its Viking project. Crosshair Exploration and Paragon Minerals plan to extract a bulk sample of the high-grade Jaclyn vein at the Golden Promise

project. Castillian Resources is reevaluating unmined extensions near the former Hope Brook Mine, as well as other mineralization that was uneconomic at 1980s gold prices. Early-stage exploration targeting a variety of gold deposit types throughout Newfoundland is being conducted by several other companies, including Mountain Lake, Metals Creek, Silver Spruce, Cornerstone and Manson Creek. One of the principal developments in the gold mining sector for 2010 was Anaconda Mining’s commissioning of a redeveloped mill at the Pine Cove Gold Mine.

Asian appetite for base and ferrous metals grows

Economic and population growth in India and China continue to strengthen demand for Newfoundland and Labrador’s historically significant base and ferrous metals, as well as for new commodities such as antimony, uranium and rare earth metals. Examples in central Newfoundland, such as Teck Resources’ Duck Pond operation and Rambler Metals and Mining’s Ming Mine development, are benefiting from strong prices and increasing demand. Paragon continues to intersect high-grade base metals at its Lemarchant project near the Duck Pond copper-zinc mine, and Thundermin and Cornerstone have increased the drill-indicated resource at the Little Deer copper project. Other projects with recently reported resource estimates include those targeting zinc-lead (Messina, Mountain Lake, Buchans Minerals and Prominex).

Likewise, Labrador Iron Mines and New Millennium Capital Corporation are well-poised to avail of high iron demand as they move towards production at separate direct-shipping iron ore (DSO) projects in western Labrador. Alderon is also advancing its Kamistiatusset project, located in the heart of this world-class iron ore district.

China Minmetals has reached full production at its Beaver Brook antimony operations in central Newfoundland at a time when antimony prices are rising dramatically. Aurora Energy has received a positive preliminary economic assessment for the proposed Michelin uranium project in central Labrador. Canada Fluorspar plans to reactivate existing underground fluorspar mines at St. Lawrence and has been released from environmental assessment and is completing final design work. The company hopes to be in production in 2012.

Quest for rare earth and minerals

Exploration for rare earths/rare metals is primarily in Labrador where properties have been acquired by Quest, Rare Earth Metals, Midland and Search. On the island part of the province, exploration is being carried out by JNR, Altius, Kirrin Resources and RockBridge Resources.

Buchans Minerals and Benton Resources have discovered magmatic nickel-copper-sulphide zones on their Long Range property, and Vale is exploring for sediment-hosted copper on the Bonavista Peninsula. Four Corners is evaluating a newly discovered vanadium occurrence in western Newfoundland, while Crosshair is resampling drill core to increase the vanadium resource at its Central Mineral Belt project in Labrador.

Supporting sustainability and exploration

The provincial government continued its mine-site remediation program in 2010. Work on the historic Rambler and Baie Verte mine sites has been largely completed and a new project undertaken to address environmental and safety issues associated with the former Buchans Mine. The government also continues to enforce the proper planning for closure and rehabilitation of current mines, including the provision of adequate financial assurance.

In addition to delivering ongoing programs in the areas of geoscience, online geo-data delivery, promotion and industry assistance, the government launched several new initiatives in 2010. These include a resource evaluation of the Julienne Lake iron deposit in western Labrador, the development of an online exploration approval system and initiation of the province’s first-ever minerals strategy. This strategy will focus on expanding exploration and production activity and creating additional employment opportunities, while also ensuring environmental protection and the sustainable development of mineral resources.

By the staff of the Mines Branch, Department of Natural Resources, Government of Newfoundland and Labrador

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