Drilling at the Ring of Fire in Northern Ontario | Photo courtesy of KWG Resources
The exploration and mining industries continue to flourish in Ontario at all stages, from prospecting through to mine expansion, thanks to higher gold
prices, new discoveries in the Ring of Fire area and Ontario’s rich geological potential. The province is well above historical levels of active claim
units, and the Thunder Bay mining division leads Ontario. Over 300 companies are actively exploring more than 600 properties across the province. Most of
the base metal mines are back to full production and most of the gold mines are expanding operations.
Ontario has 27 metal mines, all located in northern Ontario. These include 12 gold mines, 14 base metal mines, one platinum group metals mine as well as a
world-class diamond mine located in Ontario’s Far North. There are 11 major industrial operations, six of which are located in southern Ontario.
The total value of mineral production in Ontario in 2009 decreased to $6.3 billion from $9.6 billion in 2008. This decrease is attributable in part to
reduced base metal production and lower base metal prices. The value of gold production increased in 2009, due to higher production and higher prices. The
value of non-metallic minerals declined from $2.6 to $2.5 billion in 2009, because of limited demand from the construction industry.
Employment in mining and exploration in Ontario fell in 2009 but is now bouncing back as most gold mines are expanding and other metal mines have resumed
production. The outlook for 2011 is more positive as the economy recovers and demand continues to grow. However, labour shortages may become a problem with
the improved outlook in mining and exploration.
Active claim units in Ontario for 2009 are approximately 340,000, well above historical levels. Numerous mineral discoveries of chromite, base metals and
other minerals in the Ring of Fire area led to Ontario’s largest claim-staking rush ever.
Revised exploration spending estimates show that Ontario should reach a new record level of $825 million in 2010. This is a sharp recovery from 2009 when
exploration dipped to $536 million after reaching $799 million in 2008. Junior companies are responsible for about half of the exploration work, declining
from 66 per cent in 2009.
Gold remains the primary focus of exploration in the province because of Ontario’s rich history of gold mining, buoyant gold prices and the stream of new
discoveries. Exploration spending on precious metals climbed from $389 million to $620 million in 2010, while spending on base metals only increased from
$80 million to $115 million.
The most exciting exploration play in Ontario is the Ring of Fire, where the initial exploration for diamonds in 2002 led to numerous discoveries,
including base metals and chromite. Cliffs Natural Resources is the key player in the area after acquiring Freewest Resources and Spider Resources this
year to control much of the chromite resource. The acquisition now assures control of the primary deposit, Black Thor, which has an estimated chromite
resource of 74 million tonnes using 40% Cr2O3. Other key players include Noront Resources, KWG Resources and Probe Mines. Mine logistics are being
examined, including engineering services for the construction of a rail line to the Ring of Fire area. The total size of the base metal deposit was
estimated earlier this year at 11.2 million tonnes grading 2% nickel and 1% copper (Measured, Indicated and Inferred) and new drilling continues to expand
Advanced exploration projects
Gold is the key driver behind advanced exploration projects across Northern Ontario, from Red Lake to Kirkland Lake. In the west, Rubicon Minerals’ Phoenix
gold project is progressing rapidly as the company continues extensive underground development work, such as excavating a drift to establish drill stations
for underground delineation work. Near Kirkland Lake, Northgate Minerals has begun construction on its main process building at the Young-Davidson gold
mine project after receiving acceptance of their closure plan. The mine is expected to produce about 180,000 ounces annually for 15 years when it goes into
production in 2012.
Other advanced gold projects that are expanding reserves and moving into mine potential include Rainy River’s Rainy River gold project in the Kenora
district, Detour Gold’s Detour Lake project north of Timmins, Claude Resources’ Madsen gold project in the Red Lake area, PC Gold’s Pickle Crow gold
project in the Uchi Gold Belt 400 kilometres north of Thunder Bay and Kodiak Exploration’s Hercules gold project in the Beardmore-Geraldton area.
Existing gold mines continue with ambitious expansion plans to increase production by developing new deposits. At the Red Lake gold mine, Goldcorp hopes to
increase production significantly as new ore bodies such as the Bruce Channel Discovery are developed and brought into production. Production could reach
one million ounces of gold over the next few years. At the Musselwhite gold mine, Goldcorp has identified the PQ Deeps and the Lynx gold zones, which will
help them sustain gold production. Lake Shore Gold is putting their Timmins gold project into production this year, which will be processed at the
refurbished Bell Creek mill where the company also intends to process ore from production from their other properties in the area.
Xstrata Nickel opened the Nickel Rim South Mine in early 2010. This $1 billion project is expected to produce 18,000 tonnes of nickel from annual
production of 1.25 million tonnes of ore. Xstrata has also reopened the Fraser Mine in the Sudbury area. Vale has resumed production at its five Sudbury
area mines after a lengthy labour dispute. Vale is still conducting extensive exploration in the Sudbury area and construction work is underway on the
Totten Mine project. Xstrata Copper closed their Kidd Creek metallurgical plant in Timmins earlier this year but will continue to operate the mine. Outside
of Thunder Bay, North American Palladium has resumed production at its Lac des Iles PGM mine and began producing from the Offset Zone at the Lac des Iles
palladium mine. This production should more than double their output by 2014. This is one of only two palladium mines in the world and Canada’s only
primary platinum group metals producer.
The modernization of Ontario’s Mining Act includes a graduated regulatory approach for exploration, Aboriginal consultation throughout the mining sequence,
reducing the impact of mineral exploration on the environment, introducing map staking and modernizing the way companies stake and explore their claims,
including consultation with private land owners and Aboriginal communities. These initiatives will help Aboriginal communities realize their economic and
social aspirations and provide industry with certainty of rules and clarity and timeliness of process that industry needs to make investment decisions. The
bill has received Royal Assent and regulations are being developed.
The Ontario Geological Survey branch of the Ministry of Northern Development, Mines and Forestry provides extensive information on Ontario’s geology and
its world-class mineral resources. Geological data is available at GeologyOntario, a comprehensive website that provides electronic access to geoscientific
data, including maps, publications and assessment reports.
By Brock Greenwell, Ontario Ministry of Northern Development, Mines and Forestry