Dec '10/Jan '11


New mine a milestone for young territory

Bulk sampling of Beluga 3 kimberlite using an RC drill at Amaruk property | Photo courtesy of Diamonds North

The forecast for 2011 is one of continued interest and activity by the mining and exploration industry in Nunavut. According to NRCan’s expenditure surveys, industry has invested an estimated $2.13 billion (actual dollars) in Nunavut since 1999. With the advancement of several projects through the regulatory process and new discoveries, the territory is gearing up for a period of increased growth and development.

The rise in commodity prices and stability in financial markets sparked a significant resurgence in exploration activity across the territory over 2009 levels. Exploration and deposit appraisal expenditures of $280.6 million are anticipated for 2010 (based on NRCan industry surveys), an increase of 49 per cent from 2009.

Nunavut’s mineral potential is diverse, as reflected by the variety of commodities being sought and the distribution of projects across the territory’s three regions: Kitikmeot, Kivalliq and Qikiqtaaluk. More than 23 million hectares of mineral tenure on Crown land is being explored for precious metals, diamonds, uranium, base metals, iron, REE and Ni-Cu-PGM. Approximately 5.4 million hectares of mineral tenure has been acquired in the past 18 months.

Gold exploration dominates landscape

Exploration for precious metals, most significantly gold, represents more than 50 per cent of 2010 expenditures. Agnico-Eagle Mines Ltd. (AEM) leads in this area. The company began commercial production in March at the Meadowbank gold mine, located north of Baker Lake (Kivalliq), and increased its Nunavut presence later in the year with its acquisition of Comaplex Minerals Corporation in July 2010. This has given the company 100 per cent control of the Meliadine property, northwest of Rankin Inlet (Kivalliq), which hosts six known deposits that boast Measured and Indicated resources of 3.3 million ounces of gold, with an additional 1.7 million ounces Inferred. AEM has announced a two-and-a-half-year program to improve the resource estimate and refine the existing mine plan through a 200,000-metre drill program and underground exploration to commence in 2011.

Hope Bay Mining Ltd. (a subsidiary of Newmont Mining Corporation) has continued work in the 80-kilometre length of the Hope Bay greenstone belt in the Kitikmeot region. Newmont is proposing phased development of the known gold deposits that could lead to more than 10 years of gold production from the Hope Bay belt. To date, exploration efforts have identified four gold deposits with overall potential for more than nine million ounces of gold within the greenstone belt. Underground development began in late 2010.

Sabina Gold & Silver Corporation continued work on its Hackett River project (silver-rich base metal) and Back River project (gold) in the western Kitikmeot region. The 2010 program at Hackett discovered high-value mineralization proximal to the East Cleaver and Main deposits, and extended the Boot deposit.

Within the Back River property, Sabina focused on the Goose Lake claim block. Two new gold discoveries were made within five kilometres of the Goose Lake deposit. An updated resource figure is being prepared for this deposit incorporating new drill results; pending results of the resource calculation, a scoping study is planned to commence early in 2011.

Other advancing gold exploration projects include North Country Gold Corp.’s Committee Bay project, Diamonds North Resources Inc. (Amaruk Gold, Halkett Inlet) and Commander Resources’ Baffin Island gold project.

MMG Resources Inc. (MMG) will conduct a prefeasibility study on the deposit at Izok Lake (Kitikmeot). MMG also signed a letter of intent with Diamonds North Resources Inc. (Diamonds North) to conduct exploration on the Amaruk nickel project.

The most advanced uranium exploration project, AREVA Resources Canada Limited’s Kiggavik project, is undergoing an environmental assessment as part of the regulatory process to bring the project into production. Other active uranium exploration projects include Cameco Corporation’s Thelon Basin claims, Kivalliq Energy Corporation’s Lac Cinquante project and Forum Uranium Corporation’s North Thelon project.

New kimberlite discoveries

Peregrine Diamonds Ltd. discovered 36 new kimberlites on the Hall Peninsula (southern Baffin Island, Qikiqtaaluk region): 34 on the Chidliak property and two on its adjacent Qilaq property, bringing the total known kimberlites in the region to 52.

Other diamond exploration programs continued in the Kivalliq and Kitikmeot regions. Peregrine and Indicator Minerals Inc. completed sampling and drilling programs on the Nanuq and Nanuq North properties, respectively. Shear Minerals Ltd. purchased the Jericho diamond mine and other related assets of Tahera Diamond Corp. and Benachee Resources Inc. Shear plans to increase the historical resource base and complete a new economic assessment of Jericho in late 2011. In addition, Shear and partner Rio Tinto discovered a new kimberlite on the Chesterfield property. Diamonds North is awaiting results from the processing of a 25-tonne bulk sample of the Beluga-3 kimberlite located on the company’s 100 per cent-owned Amaruk property.

Exploration continued at Baffinland Iron Mines Corporation’s Mary River iron ore project on northern Baffin Island. Four more deposits were discovered in 2010, bringing the property total to nine. In September 2010, the company received an unsolicited takeover bid from Nunavut Iron Ore Acquisitions Ltd. In November, a support agreement was formed with ArcelorMittal S.A. to submit a solicited takeover bid for the company, which has the unanimous support of the Baffinland board of directors. Advanced Explorations Inc. is also exploring for iron on its Roche Bay and Tuktu properties, located on the Melville Peninsula.

By Karen D. Costello and Matt Senkow, Indian and Northern Affairs Canada, Iqaluit, Nunavut

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