Whitehorse women are behind niche, trendy shopping experiences
By Roxanne Stasysyzn, Photos Alistair Maitland
Horwood’s Mall on the corner of Main and First in downtown Whitehorse is nearly always congested with enough people to give any bushed Northerner high blood pressure. The mall itself isn’t quite a “mall” by south-of-60 standards; it’s more a tight gathering of stores whose back ends are connected by a hallway. The building has been the commercial centre of Whitehorse since the early 1900s, but recently, the stores have become trendier; newer shops have moved in and started offering city-caliber shopping experiences.
The main floor is home to a growing group of women who have staked their business claims there. Beside the toy boutique is The Collective Good, a modern general store with handmade furniture and international housewares, owned and run by husband-and-wife team Paul Gort and Jen Williams. Next to them, Lorraine and Ciara Stick’s Climate Clothing offers all-organic styles from undergarments to garnishes. Across the hall, Unity Accessories, a small boutique started by Lori Simcox and Heidi George, neighbours the new Itsy Bitsy Yarn Store, co-owned by Sophie Jessome and her partner Yann Le Roy. Across the hall from them is the brand new Front Street Clothing Company: owner Cathy Merkel just opened the doors to this posh, urban clothing boutique in November. Upstairs, office and retail spaces showcase even more women entrepreneurs, including a massage therapist, consultants and a female-run marketing firm.
Right across Main Street is the control centre of a female tycoon duo that has opened five businesses (two restaurants, one bar, a coffee shop and a clothing store) in the last four years. Around the corner are at least two more boutiques opened by women including Unity (the original clothing store, from which the accessories boutique in Horwood’s is spun from), and Bella Home Décor, opened by Sarah Krauzig right before Christmas in 2010, bringing urban vintage chic furniture to Yukon cabins near you.
“Women are still doing business just as confidently and wholeheartedly as the generations of women that came before us,” says Skoke Burns at Angellina’s. “It’s the audience that’s changed. The population and demographic has changed. There are all these young women in business who are targeting their own demographic. It’s hard to ignore.”
The trend has definitely caught the eye of the local business community.
Last year, the Whitehorse Chamber of Commerce flew up Juliette Powell to talk about how small and new businesses can use social media to their advantage. Powell is the author of 33 Million People in the Room and speaks across the country as a new media business consultant. Chamber president Rick Karp thought it might be worthwhile to host a luncheon specifically catered to women in business. He figured 20 to 25 women would attend. They ended up closing the doors at 72.
“People were saying ‘I’m not eating, but I’m not leaving’,” recalls Karp. In all, 105 businesswomen got through the doors, with many standing around the room’s edges. “We knew we tapped into something that had to be worked on and developed,” says Karp. The chamber held a number of meetings and hosted gatherings that eventually led to it tasking two local, female consultants with producing a Women in Business Planning Report and an Inventory of Resources to map out the supports for women business-owners in the city. Feedback from the reports call, namely, for more mentorship and networking opportunities. The chamber has since reached out to organizations like Yukon Women in Trades and Technology and Yukon Women in Mining to get their input on local needs. Though nothing formal has yet to be established, Karp says the chamber often hears about businesswomen getting together to support one another and network casually.
In Whitehorse, women are making their mark through the micro-business sector—businesses that have eight employees or less, says Karp. They represent a lot of what you notice while walking downtown: the stores, boutiques, restaurants.
Many of these women started their stores because they saw something missing in Whitehorse. As residents, they were tired of having to fly south to get what they wanted.
Take Climate Clothing, which offers Yukoners chic clothing made from bamboo, soy, eucalyptus, pure cotton: before it opened its doors seven years ago, you couldn’t find such products anywhere in town.
“We do have a huge earth-conscious, granola-type following up here in Yukon. We really do care about what we put on our skin and what we do with the earth,” says manager Ciara Stick.
“We tend to talk a lot about what we put into our body but we never talk about what we put on our body,” adds owner Lorraine Stick.
Both mother and daughter are born and bred Yukoners who hadn’t heard much about the organics clothing culture before Lorraine went traveling in Vietnam and came home to inspire a lot of online research for her daughter Ciara. The eco-conscious culture stuck in Lorraine’s mind. The Champagne and Aishihik First Nations member, who grew up living off the land before she was brought to residential school, saw ideologies in tune with her upbringing. This business has let her find a way to reconnect back to her roots. “I feel like I’ve gone kind of full-circle, back to being in touch with nature again,” she says.
For Betty Skoke Burns, her business started by filling a personal need too.
Angellina’s began as an online store, which Skoke Burns ran out of her home, eight years ago. The elementary school teacher had been living in the Yukon for four years and was about to have her second child. “You couldn’t buy any of the toys or tools that supported my—and many people’s—parenting or teaching philosophies in Whitehorse,” she says. “And I knew that if I didn’t do it, someone else was going to.”
Eventually Angellina’s moved into a space near the back entrance of Horwood’s. She only moved into the prime storefront that faces Main and First recently. With the move, came the space to renovate her look—which is now on par with toy stores in large metropolitan centers like Vancouver and Toronto.
“[Women] are rocking the Yukon business scene and are doing so in a more recognizable way,” says Skoke Burns. “Perhaps because they are doing it with such an increase in confidence.” To her, that confidence as a woman in business came naturally. She was raised by her grandparents who owned a community grocery store in Nova Scotia, and her mother who was a single parent and young lawyer during a time “when it would be unusual for a woman to be a successful force in the courtroom.”
Skoke Burns sees a lot of room for niche businesses to open up in Whitehorse, and an opportunity for women to take the lead in that space.“I just think right now, in Yukon, we have the perfect combination of circumstances. There is opportunity in the Yukon. My store is very unique and you will get who I am and my philosophy just by coming in my store. There was no specialty store (like it).
“It’s a climate for lots of growth, it’s a climate for the right demographic, the right population and really smart people that are willing to follow their dream without questioning too much, they just think they can do it,” says Skoke Burns. “We were all raised in a certain generation that we don’t question women in business anymore.
Baffinland looks to triple iron ore shipments from Milne Inlet
By Herb Mathisen
Iron ore mining officially got underway at Mary River this September, but the brains behind Baffinland took little time to pat themselves on the back, as they were busy plotting their next move. The company is thinking big with its next phase of development: bigger than its initial, scaled-down “early revenue phase,” but not quite as big as its final project, tundra railway and all.
The most dramatic change in its “phase two” plan, submitted to the Nunavut Planning Commission in late October, would see the company nearly triple the amount of iron ore it ships from Milne Inlet (to 12 million tonnes from its currently-approved 4.2 million tonnes per year) and extend its shipping season to 10 months of the year, instead of just during the summer. That means as many as 150 ore carrier shipments leaving Milne Inlet annually, with these vessels transferring their loads to larger ships in Eclipse Bay for the summer months and to ships in ice-free Western Greenland waters during the winter.
Baffinland was originally approved to transport 18 million tonnes per year by railway to a port at Steensby Inlet, 149 kilometres to the south. But with estimated construction costs approaching $5 billion, it held off and instead decided to go with a soft launch. This let Baffinland generate revenue for itself and local businesses, and get its product to market while working out the bugs at the operation. “But it was clear from the get-go that the Early Revenue Phase was not the project that we were really pursuing,” says Baffinland CEO Tom Paddon.
By mining and shipping out more iron ore, the new plan would help the company drive down per-tonne production costs, says Paddon, letting them compete with high-volume, low-cost producers, mainly in Brazil and Western Australia. Paddon wouldn’t say how production costs under phase two would compare with current operations, but says the company wants to be in the lowest quartile (in terms of costs per tonne) of operating iron ore mines. “At the right production rate, we can compete with anybody,” he says. “But we can’t do that at our relatively low production rate.” (Mary River’s high-grade ore does not require refining.)
Paddon wouldn’t divulge how much the new phase might cost either. But it will not be insignificant. Baffinland would build a new dock at Milne Inlet, upgrade its tote road and bridges, and purchase two ice-breaking ore carrier ships, two tug ships and increase its haul truck fleet to 75 from 22 to accommodate the added production. More production would also mean more employment.
Slumping iron ore prices (at a five-year low of US$75 per tonne in November) did not spur the phase two application, says Paddon: “Certainly, the iron ore prices don’t make it any easier to do anything, but we want to be able to compete against those who can exist within the current iron ore price regime.”
The plan will likely require an amendment to Baffinland’s project certificate. Nunavut Impact Review Board executive director Ryan Barry says the process would roll out much like the Early Revenue Phase application. (That proposal took roughly one year to review.)
NIRB will circulate the plan to communities and wildlife organizations, gauging concerns about the potential environmental impacts posed by the added shipping and increased tonnage. Baffinland would then develop an environmental impact statement to address the questions raised. “We’d use that as the basis for our public review and ask people if they support the conclusions the company has made about their environmental effects,” says Barry. This public review, including technical meetings and information sessions, would culminate with a final hearing, giving the public an opportunity to present directly to the board, which would then determine whether the amendment should be allowed to proceed and how the project certificate should be updated.
Baffinland still considers the railway and southern port the most efficient way to move the ore. “We’re still absolutely committed to getting the railway. It’s just not realistic today,” says Paddon, adding increased revenues from the proposed expansion’s added production would help pay for it. The latest projections have railway construction starting in 2021 and the first shipment from Steensby Inlet in late-2024.
If Nunavut doesn’t get an agreement in principle within a year, a federal election could derail the devolution process. Simon Awa is Nunavut’s chief negotiator. And he wants a good deal. Bad.
By Chris Windeyer, Photo by Scott Wight
The Government of Nunavut badly wants a devolution deal of its own, but progress has been slow. In 2008, the GN signed a protocol that would help guide negotiations. It appointed a negotiator, as did the federal government and Nunavut Tunngavik, who are at the table per the terms of the Nunavut Land Claims Agreement. Since then, there’s been little but radio silence from Ottawa. All that changed this fall, when Aboriginal Affairs Minister Bernard Valcourt abruptly rebooted talks, appointing a federal chief negotiator.
Nunavut’s point man is Simon Awa. If there’s an indispensable person in the Nunavut civil service, Awa is it. He’s worked as a deputy minister or ADM in most GN departments, served as president of the Baffin Regional Inuit Association, and was the executive director of the Nunavut Implementation Commission, which oversaw the creation of the Nunavut government, between 1994 and 1999.
He was born and grew up in a traditional outpost camp outside of Igloolik, leaving his family for 10 months each year to stay at a hostel in the community to attend federal day school. “That sort of put a cement to my independence and self-reliance at a very early stage of my life,” he says.
Awa views his new job as chief negotiator as a chance to cap off his career with a devolution deal that would finally allow Nunavut to take control of lands and water and directly earn royalties from resource projects.
How did you feel about becoming Nunavut’s chief negotiator?
I was very honoured. I think it was timely in a certain way, because I’m not a young man anymore. So with the experience that I have, it would be some kind of legacy, if I can call it that, that I will leave behind. And that would be awesome if I could achieve such a milestone in my life.
Do you have any idea why Ottawa felt like now was the right time to press ahead with negotiations?
I think there are several factors that could come into play that Canada finally made an ultimate decision to proceed with the negotiations. The minister of Indian and Northern Affairs had a special representative on the devolution file, however I don’t think they had a cabinet mandate to negotiate and I think that’s why this file has been very slow from 2008 until just recently.
The Government of Canada may have their own agenda, but I cannot speculate what it is. But in their words, they are hoping to reach an agreement in principle within a year.
That was my next question. They want to get to the AIP within a year. That’s quick.
That is quite quick. Having said that, the Government of Canada has already gone through two sets of devolution negotiations with Yukon and NWT. So Canada is quite optimistic to reach an agreement in principle in a year perhaps by using some of the lessons they learned from the Yukon and NWT and some of the templates that could be adopted for Nunavut.
From the GN’s perspective, what lessons can you draw from the Yukon and NWT in concluding their agreements?
I don’t have an opinion on either the Yukon or NWT deals. However, one of the complicating factors for Nunavut is it’s a huge territory and it encompasses many islands, especially in the south all the way to James Bay and Nunavik and all the islands up north that include internal waters. That will probably make things more complicated that Yukon and NWT. Right now our priority is to negotiate the devolution of land, water and resources in Nunavut. What I see down the road is that after we have reached an AIP in those areas, then the next step would be to negotiate oil and gas in offshore areas.
What things are easy to negotiate? What do the federal government and Nunavut agree on and what are the more difficult areas?
We don’t know. When the GN, Canada and NTI announced their negotiating teams on October 3, the tripartite negotiators already had a teleconference, already had a face to face meeting here in Iqaluit. Since October 3 we’ve already met twice. We are starting to map out, over the next few months, the agenda, the work plan that we’ll be negotiating. I’m aware that some [issues], I cannot say which, will be easier to reach an agreement on. Some will be a bit more difficult, for example monetary terms, human resources, infrastructure, office space and staff housing.
At the same time I can say that Nunavut is lucky in some ways because we don’t have to deal with many groups like they had to in the NWT. We have to deal with only one organization, which is NTI.
Can you give me a glimpse into what these meetings are like? How cordial are people with one another? Do things ever get heated?
The meetings were very cordial. I guess on Nunavut’s side, NTI’s side, we know the people who are at the table. We work with these people. We have some history with these people. If there are some complicating matters we will be establishing tripartite working groups to work on the issues and the details will be brought to the main table to make the final decision. So there are processes in place that if there’s a disagreement, they can be referred to a working group to sort out. So far the first meeting was very good and I was quite satisfied with the outcome.
Paul Mayer’s 2007 report, commissioned by the federal government, mentioned the GN’s issues with human resources and capacity. Are you concerned about the GN’s ability to take on new responsibilities?
I don’t have a real major concern. That’s because Canada itself has current vacancies now [in positions] that are to be devolved to the GN. They should be trying to staff them. It’s not only the GN’s responsibility to hire staff, it’s also Canada’s responsibility to ensure that they are ready to devolve staff to the GN. It’s a two-way issue for both the GN and Canada.
Do you have any guesses as to how long it will take to conclude a final agreement?
Optimistically, if we could reach an agreement in principle by 2015, next summer or fall, then I could see a couple of years to reach a final agreement in 2017.
Does that one-year goal put pressure on you?
I don’t think so. I have to give a lot of credit to work that was already done and a lot of research that was already done by this office, by the government of Canada, by NTI, since 2008. We are not starting from ground zero. A lot of work has to be put into this. What we need to do at the table is to put all that material together and come up with an AIP that is acceptable to all three parties in a short period.
How badly do you want to see this done? What will it be like when Nunavut can finally sign a final agreement on devolution?
Well personally, I want it bad [laughs]. As a chief negotiator I really want to reach an agreement in the near future. A year is a good target. I can work with that.
The timing is also very critical knowing that the federal government may call an election next fall. For me the timing is critical because what would happen if a new government—either a minority or another party, it doesn’t matter—came into power? Would that stall devolution negotiations again? That is my big concern. The momentum is there right now.
It’s not about the money in a lot of ways, it’s about local control.
I am here leading the team for the GN, not for my benefit. I can see looking years ahead that I am doing this for the benefit of my children and grandchildren. I may not see a huge benefit or impact during my lifetime.
Having said that, there will be immediate benefits out of devolution, for example, employment opportunities for Nunavummiut. But in terms of other benefits like royalties, those will not come immediately in large sums. There might be a little bit here and there, but not immediately. The real benefits are long-term.
For the GN, it’s being able to manage and control the land, instead of being managed by Ottawa. It’s all part of the evolution of Nunavut. The territorial government was moved from Ottawa to the Northwest Territories in 1967. In those days the MLAs were mostly appointed by Canada.
Some years later we got elected members, then Inuit and aboriginal members, and we went through the land claim settlement, creating Nunavut with its own government. The next step is management and control of resources, the land and water, for and by Nunavummiut. This is all part of the evolution of Nunavut.
Lessons in longevity from Yellowknife’s oldest business
Interview by Katie Weaver
Keeping the lights on for 78 years is an impressive feat for any business. That’s especially so when the town the business serves has only been around for 80 years. But Weaver and Devore, Yellowknife’s Old Town staple, has managed just that. More remarkable is the fact that the general store has been family-owned throughout its existence. But this just might explain its staying power.
For the uninitiated, Yellowknife’s longest-standing store was founded in 1936 by Harry Weaver and business partner Bud Devore, who first met in Peace River in the 1920s and began barging supplies up North. They landed on Yellowknife’s Back Bay during the gold rush and set up shop just a few metres away from where the store stands today.
With the same splintered counters and uneven floors but now touched with modern convenience like computers and suck-pack machines, the business had been passed down over the generations. Harry Weaver married Nell McTavish, who gave birth to five children, including Bruce Weaver, who took over the store when Harry had a stroke. Bruce would go on to marry Irma Rucka, and they had eight children, three of which (Bud, Ken and Dave) run the business today.
Katie Weaver, Harry’s great-granddaughter, sat down with her father (Bud) and two uncles (Ken and Dave) to chat about the origins of the store, how to successfully run a family business and keep customers coming back in this day and age.
On origins:
Bud: [Harry Weaver and Bud Devore] built the store [now Bullocks Bistro] and you can see where the new logs are and the old logs are. That was done in 1935, 1936. Here we are in 2014 and the same logs are still there.
Ken: What drew them was the gold rush. They parked there and they had materials to trade. They would’ve had axes and knives and probably ammunition and guns. And tobacco was a big thing back in those days. And basic things like sugar and flour. They decided to build a little trading store. Gold was first discovered in 1934 at Burwash point. By 1936 they got here and they started construction. From what I understand, the store just kind of grew but it was mainly to help them do their prospecting. They were trading, trapping and prospecting and the store was supplementing their general revenue.
On trust:
Ken: They’d send fur down to the fur auctions in Edmonton and they probably realized some money from that. And then they would go and visit all the wholesalers and they would buy supplies and order them to get shipped up to Yellowknife. Wholesalers, you know, they would get to know traders and people and they would extend credit to Weaver and Devore. So lots of times stuff would come in the spring and they wouldn’t be able to pay for it until, say, the fall and they’d pay for it as they sold it. That’s not the way things are anymore. Now they’ve got a direct link to our bank account and they take whatever they want, I think. (Laughs)
Bud: Back then, honesty was a big thing and [the wholesalers and suppliers] got to know people.
Dave: Business was different.
Ken: There was a lot more honour and trust amongst people that showed good faith, I guess.
On trusting customers:
Ken: Family Allowance Day and Old Age Pension Day was especially busy because everybody would get their checks and they’d want to shop and get supplies for their families.
Bud: We would extend credit for a lot of the old age pensioners so they could keep eating through the month. And on pay day Frank Enzo used to say “Happy days are here again,” and he used to have the biggest smile ‘cause he had some cash.
Ken: That was just part of the way that we did business.
On sticking together through adversity:
Bud: When Dad died in 1975, we had no life insurance and if the store failed, there would have been a pretty sad story about the Weavers. All the family pooled in and said that we had to make this business work. We all pitched in. There’s no fallback. The business was our life insurance. We worked to no end to make this business work. We all pulled our weight, and I think that’s a true statement. When we had to perform, we did.
On the future of the family-run business:
Ken: Honestly, the days of the old family business, the way I see it, the old general store and the family-run business, is basically going to be a thing of the past. I just see that the big chains are taking over and the big get bigger and the weak get weaker. I really don’t see a lot of promise for too many small businesses. Even to get into to, say, a convenience store, they all usually run under a label of some kind, whether it be Winks or Reddi Mart or a Mac’s.
Dave: The independents are done now.
Ken: Independents are really going to be a thing of the past. It’s more difficult for us as independents even to find suppliers. We’ll go to order a product from this warehouse and we find we’re restricted. They won’t sell to a small store cause we’re not big enough. There are restricted items.
Also the cost. Just to raise funds and capital to start a business would be ominous in today’s world. It’s not like the old days where you kinda built a log cabin and hung your shingle on the wall and said, “Hey, we’re open for business.” I think it’s more difficult.
On how to succeed in today’s corporate environment:
Dave: I’ve heard the comment that “at least you get service when you come down here” compared to [an employee saying] “It’s in aisle five,” then walk away.
Bud: And we care. If we can help you, we’ll do our best to help you. This is our living. We’re not working for wage. This is us. We’re self-employed people trying to make a living, trying to make this still work.
Ken: We have a vested interest.
Dave: That’s a better way of sayin it.
Ken: Obviously, some 16-year-old that’s working in Wal-Mart, they just fill the shelves and they don’t know much about the stock or the inventory. We have about 40 or more years of experience. (Laughs) And so we all know a little bit about every area of the store. When Bud’s not here, we try our best to fill in with what he knows.
Bud: We have a pretty good knowledge of the old way that we used to live. We sell oil heaters. That’s an old fashioned way of living. That’s what we’re used to, accustomed to. What new kid would know about oil heaters today? They don’t exist in anybody’s houses. I used to go around fixing them all the time, going from house to house. “Have Bud over and give him a few drinks and he’ll fix your oil heater.” To this day, when I advise people, I’ve had other companies call me saying “We don’t know much about this. Is Bud there?” That’s also ‘cause I’m old. And when it comes to talking about knives, holy cow, there’s not many guys with Dave’s knife knowledge. Dave knows a lot.
Ken: Yeah, “It’s sharp so don’t cut yourself.” (Laughs)
Bud: He’s joking but really, people come here to see Dave if they need a special knife. They need someone who knows a bit about it. He’ll contact [suppliers] and try to get that product you want.
Mobile entrepreneurs are feeding on Northerners’ appetites for change
By Herb Mathisen
Whenever the bus stops, Cash and Carry is open for business.
First with a trailer and now with a retrofitted bus, Mike Sharpe has been running food across the South Slave and Dehcho regions—from Fort Resolution to Fort Simpson and all communities in between—since July.
Shelves installed inside the former transit bus are stocked with flour, sugar, canned goods and other household products, purchased on the cheap during twice-monthly trips to big box retailers in Edmonton. The idea is to pass savings on to consumers in communities, where local grocer competition is nonexistent.
Sharpe and his common-law wife Joyce Paes have put their life’s savings into Cash and Carry. After the upfront purchases (bus, inventory and one-year business licences for each community) and operating costs (gas, and more gas), they can still turn a profit and provide savings for customers. “In some cases it’s four, five or six dollars on a product,” he says. “Over the span of 20 items, you’re saving $30 or $40 and that’s great.” Sharpe’s discovering what people want as he goes (“Toilet paper. I’ve learnt to never go anywhere without toilet paper”) and takes custom orders to bring shoppers items found only in the south. “Customer service is the premise of the business,” he says.
Paul Sippel, founder of Whitehorse’s Door to Door Foods, is taking that approach too. Since 2000, he’s run Sippel’s Fine Foods, a wholesaler serving grocery stores, convenience stores and restaurants. But in December, he and his wife Katherine began bringing natural food choices—sustainably-sourced seafood from Alaska, grass-fed Alberta beef—directly to Whitehorse homes.
Sippel sold off a portion of his wholesale business to concentrate on his new enterprise, but takes advantage of the warehouse’s freezer and cooler and his pre-existing shipping rates. This lets him focus on personally delivering items across the greater Whitehorse area. “I wanted to be the face of the company,” he says.
About half of Sippel’s business comes from outside Whitehorse. (With a minimum $500 purchase, he covers freight charges.) Sippel’s shipped to most Yukon communities, Atlin, BC, and even the NWT—Inuvik is a hot spot.
In October, Sippel rolled out a weekly organic dairy service in Whitehorse, including milk in old-school glass bottles, which are later returned, sterilized and reused. “It’s just getting back to our grassroots,” he says.
Sharpe and Sippel aren’t alone in shaking up the status quo. In August, a group of foodies in Iqaluit flew up gourmet items for a local market. And community gardening is undergoing a renaissance across the North, with people more willing to grow for themselves what they’d otherwise pay for at the store.
An update on the most advanced mining projects in the Northwest Territories.
By Guy Quenneville and Herb Mathisen
CONSTRUCTION STAGE:
Whoever said three’s a crowd?
Construction is underway on the NWT’s fourth diamond mine, the first since the opening of De Beers Canada’s Snap Lake diamond mine in 2008. In September, the newly empowered post-devolution GNWT approved the Type A water licence for Gahcho Kue, paving the way for De Beers and partner Mountain Province of Toronto to start construction at the mine site in earnest.
Construction actually began last December, thanks to a pioneer work permit that allowed for early site preparation. As of the end of July, 36 per cent of Gahcho Kue had been erected. According to Mountain Province president and CEO Patrick Evans, construction is scheduled to wrap at the end of 2015, with commissioning of the process plant scheduled for the first half of 2016 and initial production starting in the second half of 2016.
And if there’s any doubt that the demand for polished diamonds has bounced back from the recession—when mining operations at Snap Lake were suspended for six weeks—look no further than Mountain Province’s recent efforts to raise its share of financing for Gahcho Kue (per its revised 2009 joint-venture agreement with De Beers). Just five days after the partners received the water licence approval, Mountain Province announced it had successfully raised $100 million in financing. Oh, the wonders a permit can do.
Gahcho Kue comes on the scene amid predictions that the world’s supply of rough diamonds will begin to tighten after 2018, due to a lack of significant new diamond discoveries. (See graphic below for the role Canada, and the North, play in the worldwide supply of diamonds.) For its part, Gahcho Kue will produce about six million carats in white diamonds a year for its first four to five years, before dropping to between four million and five million for its last seven years. And that’s just the current plan: deepening the mine’s three open pits could unlock another 20 million carats and extend the mine’s life to 17 years. -GQ
FINANCING STAGE:
“We have a producing mine in Colorado.”
These aren’t the first words you’d expect to hear from the president of a company looking to open a base metals mine. But faced with tough to impenetrable capital markets, companies like Robin Goad’s Fortune Minerals are resorting to creative ways of advancing Northern mining projects like NICO.
In October, London, Ontario-based Fortune completed its 100 per cent acquisition of the Revenue silver mine in Colorado for $25 million. The mine will, once it begins production, potentially give Fortune more of something it desperately needs to start construction on the fully-permitted NICO project: money. With only $6 million in cash to its name as of August, Fortune has a long way to go to raise the $600 million needed to build NICO and to cover its reclamation deposit to the GNWT. Still, in addition to boosting Fortune’s credibility as a producer, the Colorado mine “opens us up to a broader spectrum of potential institution investors, particularly generalist U.S. funds,” says Goad. “The capital pools that will be available to us will be exponentially larger.”
Goad is also confident that Fortune will be able to secure further financing from Procon Resources, a Vancouver-based mining contractor that is majority-owned by China CAMC Engineering, a Beijing-based provider of international engineering, procurement and construction services. Procon has already invested $11.7 million in NICO. “Our Plan A financing involves a strategic partnership and project financing through Procon. But we’re also exploring other alternatives for financing,” he says. These includes off-take agreements, in which a partner puts up a portion of a mine’s cost and receives a guaranteed amount of supply from that mine.
Of the four commodities that comprise the NICO project—cobalt, gold, bismuth and copper—cobalt is the likeliest candidate for such an agreement. “Any one of these metals can be the dominant revenue contributor at any point in time,” says Goad. “Right now, cobalt is indeed the most important contribution to the project. It’s trading at $12.20 to $12.70 and we use $10.50 in our base case assumptions.” The supply of cobalt, which mainly comes from China and the republic of Congo (currently facing the Ebola crisis) is expected to plateau in 2016 or 2017—just when Goad hopes to begin commercial production at NICO.
In the meantime, there are other important matters to consider, like a 51-kilometre all-weather access road that Fortune will need to build from the mine site to just outside Whati. That road will connect to another all-weather road (“The Tlicho road”) being proposed by the GNWT and the Tlicho government, stretching down from Whati to Behchoko. (See map.) According to Goad, a project description for the Tlicho road should be filed with regulators soon, and he expects the review process for his own NICO access road to go smoothly. -GQ
Canadian Zinc has sent reputed contractor Procon Mining and Tunneling—a subsidiary of NICO investor Procon Resources—underground at its Prairie Creek project. The mission? To help Canadian Zinc optimize the mining plan for the long-in-gestation-but-now-fully-permitted base metals property.
With $15 million recently raised by Canadian Zinc, one of Procon’s tasks is to conduct a $3-million underground exploratory drill program, because while the mine currently has enough resources to support 11 years of mining, “we have an equal amount of inferred resources that, when converted into reserves...could potentially double this mine life,” says Steve Dawson, Canadian Zinc’s VP of corporate development. Meanwhile, another company, Tetra Tech, is putting out tender packages to get up-to-date capital cost estimates for all the items needed to get the mine operational.
Prairie Creek was initially developed in the early 1980s but was abandoned after silver prices collapsed, with Vancouver-based Canadian Zinc picking up the property a decade later. A slow and torturous regulatory process ensued, until, in 2013, the company obtained all the necessary permits to begin construction on new pieces of mine infrastructure (a water storage pond, a paste backfill plant) and to upgrade old ones (like a more fuel efficient power plant).
But as with many base metals projects, large-scale financing remains hard to acquire. The work of Procon, Tetra Tech and AMC Mining Consultants—which has been tapped to review the mine plan and re-examine the existing reserves and resources—is meant to feed an updated feasibility study. “We will use [that] to raise the necessary financing to put the mine into production,” says Dawson. Production is still being eyed for 2016. -GQ
PERMITTING STAGE
Toronto-based Avalon has asked that the permitting process for Nechalacho be slowed down, saying current market conditions make it impossible for Avalon to proceed with construction in early 2015, as previously hoped.
“The rare earths market, like many minerals and metals, is currently experiencing reduced demand which has depressed market prices for rare earths and suppressed investor interest in the sector,” wrote Mark Wiseman, Avalon’s vice president of sustainability, to the Mackenzie Valley Land and Water Board.“
Avalon president Don Bubar has since hinted that a lengthy regulatory process (six years to prepare, file and get approval of its environmental assessment) also accounts for Nechalacho’s woes. Putting aside that hot potato, rare earth index prices actually began falling three years ago, in the middle of 2011, according to data presented to investors in June by aspiring American rare earth miner Molycorp. As for the future, that same presentation cited data from Industrial Minerals Company of Australia and Curtin University saying that rare earth demand is expected to grow at six per cent to 10 per cent annually through 2017. For its part, Avalon is hopeful demand for rare earths will rebound next year.
The freeze on permitting gives Avalon time to figure out some back-end-of-production matters. The location of a hydrometallurgical facility, where rare earths from Nechalacho will initially be separated, has yet to be pinpointed. The process for that separation needs to undergo further testing. And studies to help to produce an updated feasibility study and to bring down the $1.6-billion capital cost—$625 million more than it cost to build Snap Lake in 2008—remain ongoing.
Bubar has been an outspoken critic of the North’s regulatory system and government policy to attract investment. In an April 2014 presentation, he urged the GNWT to create a mineral advisory board, like in the Yukon, where miners can meet regularly with the industry minister. A recently released plan for unrolling the GNWT’s new mineral development strategy says the idea of an advisory board will be considered next year. -GQ
Dominion Diamond Corporation is one busy company, and if a crucial permitting process goes its way, it intends to stay that way.
In addition to mining and selling rough diamonds from the Ekati and Diavik diamond mines, the company recently upped its interest in Ekati, to 90 per cent. It also revived a briefly inactive Northern brand (see sidebar). But the Yellowknife-based company’s chief focus remains the Jay project, a plan to mine one new pit at Ekati that would extend the mine’s life by 10 years. Dominion was due to file its developer’s assessment report—which will kickstart the project’s environmental assessment—before the end of the year; a prefeasibility study was also due in the same time period. The Jay pipe lies in a separate but very close buffer zone just 25 kilometres from the current Ekati mining operation.
Dominion is under the gun to get Jay permitted in time for 2020—Ekati’s current reserves will run out that same year. The project is also a test for the GNWT: with devolution underway, territorial government ministers now share a greater responsibility for approving future mining projects like Jay in a timely manner. The pressure is already showing: updates on the Mackenzie Valley Environmental Impact Review Board’s public registry now obsessively track how much time remains on “the clock” for environmental assessments, which need to wrap up within new timelines.
Dominion recently made news for saying it wants to stop paying for the flights that currently transport southern-living Ekati workers from Edmonton to the mine site. Diavik operator Diavik Diamond Mines Inc. attempted the same plan in 2009 but pulled the plug after a year. Finding enough Northern workers to staff its underground mining operations proved too difficult, says Diavik spokesperson Doug Ashbury. Dominion may have a hard time putting its own plan in action anyhow: the Union of Northern Workers, which represents about 450 workers at Ekati, says the proposed scrapping of flights will be a big issue when collective bargaining on a new agreement begins in February. -GQ
EXPLORATION STAGE:
Seabridge Gold CEO Rudi Fronk is frank when discussing the effect the market is having on his Courageous Lake project. “At today’s gold price, the existing reserves at Courageous Lake don’t make it,” he says. Though those reserves are impressive—a 2012 pre-feasibility study revealed proven and probable reserves of 6.5 million ounces—at $1,200 per ounce, the project in its current incarnation wouldn’t work. “Our all-in costs are about $1,100 per ounce so you really don’t have enough room there at a $1,200 gold price to show any kind of reasonable return,” he says. That’s why Seabridge is looking to find new high-grade material on its property to improve the economics of the project. Fronk explains if they were able to mine high-grade material early on, it would postpone the need to build a roaster until after the project was generating revenue, which would make it easier to construct up front.
In 2013, Seabridge discovered a new deposit, Walsh Lake, which showed grades 50 per cent higher than Courageous Lake. (Earlier this year, Seabridge released an initial resource estimate on Walsh Lake, with 4.62 million tonnes grading 3.24 g/t.) “We need a few more of those,” says Fronk, adding the company has found some new targets to drill following a geophysics program this summer. But Fronk says the extent of the drilling program next year will be contingent on market conditions improving and also the company’s progress on its KSM gold-copper project in B.C. Seabridge is hoping to find someone to take a majority interest in that project and Fronk admits much of the company’s financial and human resources are tied up in that process for now. -HM
ONE TO WATCH: TerraX Minerals
Yellowknife owes its origins to the discovery of gold. Though the precious metal has fallen out of fashion recently and the city has moved on to become a diamond industry hub since the Con and Giant mines shut down, TerraX Minerals is hoping to bring some shine back to Yellowknife.
The Vancouver-based company’s Yellowknife City Gold Project has crucial ties with the past: it’s located on the Yellowknife greenstone belt, on an extension of the very same shear system as Con and Giant mines, which operated for 65 and 58 years, respectively.
TerraX’s project area has held interest since Yellowknife’s gold rush days, with some historical drillholes for the project going back as far as 1938. Since 2013, the company has been busy buying up properties in the area—Northbelt, Walsh Lake, U-Breccia—and now has claims to roughly 93.5 square kilometres. To date, it has focused most of its exploration work on its Northbelt property, just 15 kilomtres north of the city, and has been poring over historical core and assay data. This year, it drilled 12 holes (1,343 metres) and some early assay results displayed some of the high grades that Yellowknife is famous for.
As of this summer, the company had spent almost $2.7 million on exploration work related to Northbelt. That number is sure to rise: in October, the company closed a private placement for more than $2.7 million, securing funding for its winter drilling program. -HM
Making its Mark: The revival of a Northern brand
Last May, at the 2014 JCK Las Vegas jewelry show, Dominion relaunched the CanadaMark diamond hallmark program. The branding system, which marks stones mined from Ekati and Diavik as being of Canadian origin, was started by BHP Billiton in 2003 but had been in brief limbo after Dominion’s purchase of Ekati from BHP in 2013.
The rejig arrives as consumers grow more curious about where their diamonds come from. “If a company is wise, they will do everything to promote that willingness to be transparent,” says Greg Merrall, head of the jewelry program at Georgian College in Barrie, Ontario. “It’s a small market, but one that has tremendous public relations potential.”
According to Dominion, every laser inscribed CanadaMark logo diamond is responsibly mined in the NWT, is 100 percent natural and untreated, is tracked through every step—from country of origin to polished stone—and cut under strict quality standards.
Another Northern brand may be making a comeback, too: Deepak International’s plan to reopen two diamond cutting and polishing plants in Yellowknife—timeline: still uncertain—will bring with it the revival of the dormant Polar Bear diamond brand. Despite the brand’s being out of circulation for 10 years, Merrall is confident it will shine again. “They will get it back into the public recognition,” he says of Deepak. -GQ
A run-down of the most advanced mining projects in Nunavut.
By Tim Edwards, Herb Mathisen and Guy Quenneville
PRODUCTION STAGE:
Are you a glass-half-full kind of person? Or do you see it as half empty? Baffinland Iron Mines’ Mary River project offers observers of Northern mining a good test for where they fall on that spectrum.
On the bright side, September saw Baffinland—which is owned 50 per cent by ArcelorMittal and 50 per cent by Nunavut Iron Ore—announce that it had begun mining the first deposit of the potentially decades-spanning project. (It boasts nine deposits overall.) That officially makes Mary River the second producing mine in Nunavut (after Agnico Eagle’s Meadowbank mine, which began pouring gold in 2010), and the first for Nunavut’s Baffin Island region.
Ore is being trucked via a 100-kilometre tote road to Milne Inlet, where it is being stockpiled until it can be loaded onto ships during the 2015 open-water season. For the moment, it is estimated that 3.5 million tonnes of ore will be shipped out annually to the steel mills of Europe. About 55 ships, each capable of carrying between 70,000 and 90,000 tonnes, will make the trip each year. “After more than 50 years of talk about developing Mary River, Baffinland has succeeded,” said Baffinland CEO Tom Paddon, adding that mining operations will go on non-stop throughout the year.
But it is hard to forget what could have been, or rather, what is being put off until stronger metal prices provide Baffinland with the economic imperative to go bigger. By now the story is well known: in early 2013, shortly after the completion of its positive environmental impact review, Baffinland notified regulators that it would scale back its original $4-billion port-and-rail iteration of the project. The result is the current $750-million early revenue phase, which is nevertheless creating work for 605 people, approximately 200 of whom are Inuit.
When Baffinland decides to proceed with Plan A remains unclear. More than a decade of economic growth in China, which fueled a bullish market for commodities, has slowed. But iron ore producers continued to rush projects into production. The result is that iron ore has lost more than half its value since the boom days, trading at US$80 a tonne from a high of $190 in 2011.
Still, even in its slimmed-down incarnation, Mary River is providing an economic boost to Baffin Island. Though the financial terms of the region’s Qikiqtani Inuit Association impact and benefit agreement with Baffinland remain private, the QIA has announced a $18.7-million surplus for this fiscal year, thanks in no small part to early royalties from Mary River.
It remains to be seen what the QIA will do with that money, though a survey recently released by the association suggests substantial investments in education would help Nunavummiut better benefit from mining projects like Mary River. Of the 753 Inuit from Pond Inlet, Clyde River, Igloolik, Arctic Bay and Hall Beach interviewed, 42 per cent identified themselves as unemployed but available for work. Of that group, fewer than one-third said they had graduated from high school. -GQ
PERMITTING STAGE:
Meliadine received regulatory approval in October and is now waiting to be rubber-stamped by the feds before Agnico-Eagle can get its final permits to begin construction.
While going through the exploration and permitting processes for its Meliadine gold project, Agnico Eagle has been building infrastructure that is not only crucial for production but which should also make exploration itself much, much easier.
Of the $25 million budget Meliadine had for 2014, $5 million was spent on exploration and much of the rest on its underground ramp: this year, the company aims to have 1.4 kilometres of ramp developed, to a depth of 225 metres, and the eventual goal is to get down about 600 metres below surface. “Although our feasibility study is not completed, we know that the ramp development is going to take [three or four] years, so we went ahead with the ramp right away,” says Guy Gosselin, vice president of exploration for Agnico Eagle.
The long-term goal is to have the ramp in place for production; the short term goal of the ramp is to allow a tighter-spaced drilling program into the site’s Tiriganiaq and Wesmeg/Normeg zones and to convert Agnico Eagle’s numbers from a good quality inferred resource of 2.7 million ounces of gold to an evern better indicated resource.
Meliadine’s feasibility study is due out by early 2015. -TE
With over $1 billion spent on the Hope Bay site before TMAC Resources Ltd. took over last year, the new owner just needs to get its final financing in place, and then a year to get the site ready to go, before it starts pouring gold.
TMAC’s Hope Bay property is an 80-kilometre-by-20-kilometre greenstone belt, on which it’s identified the Doris North, Madrid and Boston deposits. According to TMAC CEO Catharine Farrow, the plan is to get Doris running first, then get the money in place to develop the next sites. “Start with Doris, produce gold and really it changes all stakeholders’ psychological view of the potential of the belt,” says Farrow. All Doris North needs is a mill, the related infrastructure and underground equipment, she says. After that, TMAC will look at building an 8 kilometre road to Madrid, and then a 45 kilometre road to Boston, to operate underground mines at those spots. Farrow said the new capital costs will be out in a preliminary economic assessment this coming March.
Farrow is optimistic about the financing. Since taking over in 2013, TMAC has raised “almost $130 million during very, very difficult capital markets,” she says. TMAC has spent $80 million since it’s taken over on drilling to turn inferred resources to indicated; some exploration; and perhaps a more stringent than normal environmental program—but for good reason. Except for a production lease from Nunavut Tunngavik Inc., Doris North has all the permits in place that it needs to be a producing mine. “We’d like to keep that,” says Farrow. -TE
Next year will be pivotal for Kiggavik. In October, Areva submitted its final environmental impact statement to NIRB, pushing ahead with the environmental review for its proposed Kivalliq uranium project.
The environmental assessment will include a technical review for intervenors to comment on Kiggavik’s FEIS. Final hearings will take place in Baker Lake, likely in early 2015, says Barry McCallum, Nunavut affairs manager for Areva. Decisions from NIRB and the feds could come sometime in 2015, followed by Areva’s applications for local water and land lease permits, and a nuclear licence with the Canadian Nuclear Safety Commission.
But there’s one final decision that could torpedo the project: Areva’s own determination about moving forward with Kiggavik. “At current prices, the project is not feasible,” says McCallum. Building and operating the mine is estimated at $5.5 billion, he says, adding “there are 130 million pounds of uranium. You can do some math yourself and figure out what might be a reasonable price, compared to US$30 (per pound).” (We did the math. McCallum’s right: at US$30, that’s just $3.9 billion in revenue, $1.6 billion short of Kiggavik’s life-of-mine costs.)
With a best-case regulatory scenario, plus three years of construction, production wouldn’t begin before 2020. But that’s the logic behind starting things now: the uranium price has time to improve. -HM
FEASIBILITY STAGE:
MMG is trying to figure out if its Izok Corridor project is worth the billions it will cost to build it. The base metals project is certainly ambitious: two mines (one at the Izok deposit west of Contwoyto Lake; another further north at the High Lake deposit), a mill at Izok, a concentrator at Grays Bay. Throw in a 325-kilometre road, a deep-sea port, an airport, and the list goes on. Ambitious indeed, which helps explain why MMG, after submitting a project description in 2012, has slowed things down to further scrutinize the project’s viability. Last spring, MMG told NIRB to postpone the project’s environmental review so it could work on a feasibility study and update its mine plan. MMG had planned to submit a revamped project description and a draft environmental impact statement to NIRB that December, but has since pushed that date back to late 2014.
Roughly $60 million has been spent on the Izok Corridor feasibility study over the last three years, says Sahba Safavi, MMG Canada project manager. As for its much-needed transportation network, MMG took a long, hard look at BIPAR, among other options, and decided that linking its deposits together on its own road system to the Grays Bay port was best. “Because this road would be centred on areas of rich greenstone mineralization, it would also improve opportunities for future mineral discoveries and development of new mines,” said Safavi. (MMG has claims to 5,000 square-kilometres in the area.) By the end of the year, it should be clearer whether MMG plans to make the Izok Corridor a reality. -HM
Hackett River keeps moving up the food chain. In June 2011, Sabina Gold and Silver Corp. sold the zinc-silver project to major miner Xstrata. Then last year, Xstrata was acquired by Glencore, and Hackett River was folded into the portfolio of the world’s largest mining company. All this is very good news for the project: should it prove viable, it would have no shortage of financial backing. Yet, Hackett River’s new owners are tight-lipped about the project’s future.
In a letter to NIRB last December, project manager Denis Hamel wrote Glencore was holding off on submitting its draft environmental impact statement—putting the brakes on the project’s regulatory process—since it was working on an updated pre-feasibility study. Glencore’s 2013 drilling program increased its indicated mineral resource from 20 million tonnes to 25 million tonnes.
Adding to the anticipation is Glencore’s revival of the Bathurst Inlet Port and Road (BIPAR), a proposed 217-kilometre all-season road and port project that would open access to the isolated project. A 2009 Sabina study put the combined road, port and mine construction at $1 billion, but that figure could rise as construction costs have since risen. And geotechnical drilling related to BIPAR in 2013 concluded that foundation materials at the dock site might not be adequate and that significant dredging would be required. Glencore is completing a pre-feasibility study for BIPAR right now, and told NIRB it would provide an update on both Hackett River and BIPAR late next month. -HM
This year started loud then became quiet for Advanced Explorations Inc.’s Roche Bay project. Other than the results of its July AGM, the last we’ve heard from Advanced Explorations was the establishment of its joint venture with Hong Kong’s Parkson Star Ltd. to create Savik Iron Mines Ltd., which gives Parkson the right to acquire up to 80 per cent of the new company. The stated goals of the partnership are to fast-track Roche Bay to production, with the new financial backing of Parkson, which is a private wealth fund that has “strong business relationships with Chinese banks as well as expertise in securing project financing for mining projects,” according to a press release issued by AEI. Another big aspect of the deal is that Parkson Star agreed to take on $13.3 million of AEI’s corporate debt.
When the press release announcing their alliance went out in May, the companies had yet to complete a definitive joint venture agreement, or the ancilliary agreements—the announcement was only that the companies were commencing the formation of Savik. And since that went out, the companies have been quiet. Other than one press release announcing the results of an annual general meeting in July, none have been released since the joint venture agreement. AEI’s Twitter account hasn’t been updated either, nor has its website. Phone calls and emails to the company were not returned, and AEI’s website hasn’t been updated.
The site’s FAQ stated the company was aiming to be finished the regulatory process by late this year, but NIRB executive director Ryan Barry says that, since the project’s screening in 2008, the only thing that’s come through NIRB have been land use permit renewals and extensions (the last one being in May of this year, expiring May 2015).
The proposed mine would be an open pit near a natural deep water harbour that would require no dredging. A 2013 presentation stated the company was looking at shifting to liquid natural gas from diesel (which is becoming vogue for many Northern mines).
Perhaps the company is staying mum until all the details of the formation of Savik have been hammered out, or maybe it’s waiting for iron demand to come around until it makes a decision on where to go next. The outlook for the commodity does not look good. A report released by Moody’s Investors Service on October 17 stated iron ore prices could go down further, as global supply increases and steel demand slows. Moody’s, a credit rating service, stated it may reduce the ratings it gives to iron producers, as it reassesses its data. BHP Billiton chief marketing officer Mike Henry, whose company is one of the world’s top-three iron producers, told Australian media that iron ore prices being below US$100 a tonne, might be “the new normal.”-TE
Though gold prices have wakened, Sabina Gold and Silver Corp.’s Back River project is sitting pretty with cash in hand enough to finish its feasibility study and get through the permitting process.
An October 7 press release stated the feasibility study should be wrapped up next year, derisking the project ahead of a funding drive to finance construction and start-up. Sabina vice-president of communications Nicole Hoeller says the mining plan, with four open pits and one underground component, should be through the permitting process by sometime in 2016. Not deducting costs for a 2015 drilling program, Sabina estimates it will have $23 million left over by the end of next year, plus a feasibility study and its regulatory process (at least mostly) complete.
At the beginning of this year, Sabina submitted its draft environmental impact study, which NIRB then stated conformed to its environmental assessment guidelines. The next step, a technical review, is slated to begin later this month in Cambridge Bay. Then, Sabina will have to wait until it’s done its feasibility study so the company can complete its final environmental impact statement.
The next step is to get financing to cover capital costs, and the markets will of course play a role in whether the mine would go forward—with gold trading around $1,200 an ounce and Sabina’s cost to produce each ounce at close to $1,000 an ounce, the margins are pretty slim. But, optimistically, according to Hoeller, shovels would hit the dirt in 2016 and the mine would be producing by 2018 at the earliest. -TE
EXPLORATION STAGE:
Nunavut’s premier diamond play has officially moved from the early to advanced stage of exploration, with a preliminary economic assessment—the first major step in any project’s economic evaluation—being readied for completion in the first half of 2016. “In the last six months or so, we’ve really gone over the hump and stepped firmly into the resource development phase,” says Tom Peregoodoff, executive vice-president of business development for Toronto-based Peregrine Diamonds, which owns the Chidliak project.
Peregrine is now fully in control of the project after two different partners bowed out in recent years. First there was BHP Billiton, which completely exited the diamond business, and then there was De Beers, whose parent company, Anglo American, is tightening its mining assets worldwide and has already set aside significant construction money for the Gahcho Kue project in the NWT.
Peregrine is focusing on Chidliak’s three most promising kimberlites, based on previous drilling: CH6, CH7 and CH44. A mini-bulk sample pulled from CH6 in 2013 recovered stones of one carat and above, with the largest stones being more than two carats. The company will pull bulk samples from all three kimberlites next year; a rig capable of drilling 26-inch-diameter hole down to 300 metres was destined for delivery to Iqaluit via sealift as of October. Peregrine is seeking to move its kimberlite resources into the “inferred” category—one step removed from final “indicated” resource category. To help with funding all this work, Peregrine raised $15 million through a rights offering in October.
With a PEA slated for 2016, the next question is when the company hopes to file a project description with the Nunavut Impact Review Board. It’s too soon to tell, says Peregoodoff, but he adds the company would like to do so as early as possible, given the lengthy review process any big project must go through: an NIRB process chart posted on Agnico Eagle’s website shows that the process from submitting a project description to receiving a Type A water licence can take three to four years. One thing Chidliak has going for it: its targets are not underwater, “so we wouldn’t have to build dykes or drain lakes—quite a bit different than what you see in the NWT,” says Peregoodoff.
Peregrine may not even have to build an all-weather access road from Iqaluit (where sealift materials are unloaded) to the mine site. Encouraged by its successful movement last year of mini-bulk sample materials via snowmobile on the snow trail between Iqaluit and Pangnirtung, the company has contracted EBA Engineering Consultants to look into the feasibility of supplying Chidliak via a much simpler, and less costly, winter road. “If the seasonal road is possible, then that really helps bring down your capital cost,” says Peregoodoff. -GQ
AMARUQ: THE WOLF OF THE KIVALLIQ
A promising gold site emerges near the Meadowbank mine
Reserved in its glee, Agnico Eagle Mines Ltd. has been slowly dropping hints at the value of a project 50 kilometres from its Meadowbank gold mine, which it’s named Amaruq—Inuktitut for wolf. “We need a lot more drilling but so far with the results we’re getting, it looks double the grade of Meadowbank,” says Guy Gosselin, the company’s vice president of exploration. That’s six to eight grams of gold per tonne at Amaruq compared to three to four grams per tonne at Meadowbank.
When Agnico Eagle was starting on Meadowbank, there were a few areas nearby that its geologists suspected might harbour lucrative gold stores. After signing a mineral exploration agreement with land claim beneficiary organization Nunavut Tunngavik Inc. in 2013, exploration started right away: a humble four-hole, 1,000 metre drilling program yielded promising results. Nine more holes followed later that year. By the time we spoke to Gosselin in early October, the company had drilled 150 holes, although he says only half of those hit what is potentially their big deposit.
The Amaruq narrative currently has two main thrusts. First, give the investors what they want to know, with a resource estimate. Gosselin says the exploration team knew before they lowered the first drill that the deposit would have to have at least one million ounces of gold at a grade of at least 4.5 grams per tonne for it to be a feasible satellite deposit for Meadowbank. With early results suggesting much higher grades, investors are waiting to hear how close the estimated resource is to the one-million-ounce goal, and Gosselin says we should expect a resource estimate by December.
The second plotline is the construction of a road from Meadowbank to the Amaruq exploration camp. A team has been looking at possible routes and has it narrowed down to a few choices. Once that’s in place, exploration will be easier and cheaper (goods and workers are currently flown in via helicopter).
So, where does Amaruq fit into Agnico Eagle’s trinity of Kivalliq gold projects? Its grade is higher than the other two sites; it’s close enough to the existing Meadowbank mine that they could truck ore from the open pit (assuming the deposit allows an open pit) to be processed 50 kilometres away at the mine; and its proximity to that existing infrastructure could help usher it through the environmental assessment process much quicker than Meliadine. But nothing’s for sure. Amaruq’s been under the microscope for two years—compared to Meliadine’s 20—and the gold markets are time and time again proving their unpredictability.-TE
Opening a mine in the North is a slow, often torturous game. So who's winning?
By Herb Mathisen, Tim Edwards and Guy Quenneville
The past two years haven’t been kind to project developers.
But that’s the mining game: one day, investors can’t throw their money at you fast enough, the next you’re just trying to keep the lights on. In the last two years, commodity prices have fallen in step with investor confidence in the industry. Equity markets have dried up and everyone is feeling the pinch.
To survive these times, companies are getting creative. Fortune Minerals and Seabridge Gold have turned their attention to near-term southern projects that might provide a cash boost for their NWT projects. Yukon’s Victoria Gold is hunkering down with a few years’ worth of cash and waiting for the right deal to come along. And MMG and Glencore, both looking to develop major bulk metals operations in Nunavut, have gone back to the drawing board to make the projects more cost-effective and, ultimately, to make them make economic sense.
The news is not all bad. Iron ore mining has officially begun on Baffin Island, with Baffinland stockpiling ore for shipment next summer. And De Beers and Mountain Province Diamonds have started construction of their Gahcho Kue mine in the NWT.
The ‘Next 23’ feature provides a comprehensive look at the challenges facing Northern miners. Here's what's happening in the Yukon:
FINANCING STAGE:
Victoria Gold can afford to be patient right now. As it seeks out financial backing to build its $400-million Eagle gold project, the company has more than $20 million in cash, which CEO John McConnell reckons can comfortably cover planned exploration expenses and other costs until the end of 2017.
The company is open to all financing options—an acquisition by a major, a joint venture, or potentially building and operating the mine on its own—so long as it provides value to shareholders, says McConnell. Streaming deals, where a miner promises a portion of their end-product in exchange for money upfront, is a popular financing method with precious metals developers these days and McConnell doesn’t rule out that possibility either. (He’s in active negotiations with Franco-Nevada and Sandstorm, among others, he says.) But even though the project is shovel-ready and waiting only for a cash infusion, he’s not going to rush and take the first offer that comes up. “With our treasury, we don’t have to do anything silly,” he says. “We’ve seen lots of companies blow themselves up because they’ve signed silly debt deals or silly stream deals.”
The proposed open pit/heap leach operation has plenty of selling features: it’s fully permitted for construction with its Quartz Mining License (equivalent to a land use permit), and recently applied for a water license, which is only required to begin operations. The Eagle project has year-round road access and Victoria Gold is finalizing a deal with the Yukon government to build a 26-kilometre spur line from an existing transmission line that would power the project. And it has signed an impact and benefits agreement with the Na-cho Nyak Dun First Nation in 2011. Going against it, though, is the gold price, hovering just above US$1,200 per ounce in October. McConnell says though Eagle’s 2012 feasibility study used US$1,325/oz. as a baseline gold price, the project still makes financial sense. “But I think the market sentiment at US$1,200/oz. is that no project should go forward, so it makes it difficult,” he says. “The group of banks we’re working with are almost bending over backwards to give us money. The problem is they’ll give you 60 per cent of what’s required and, traditionally, the other 40 per cent would come from the equity markets. Right now, the equity markets are essentially shut down.”
But Victoria Gold isn’t sitting idle while it looks for capital: it’s drilling to build up resources at its Olive deposit, just two kilometres from Eagle’s proposed mill, to improve the overall economics of the project. The company budgeted roughly $5 million towards exploration this year and McConnell says the latest results show Olive has double Eagle’s grades. “It’s very tempting to sit on our hands and save our money, but we don’t think that’s why shareholders gave it to us, so we’re going to try and do things that are accretive to Eagle.” McConnell is optimistic the company will have financing in place in the next six months to start the 18-month construction process in April 2015, targeting full production for 2017. -HM
PERMITTING STAGE:
The Yukon’s biggest resource development project is so close to production, yet seems so far away. The environmental review for Western Copper and Gold’s Casino project was stalled so that the company could further consult the Little Salmon/Carmacks First Nation. And though the company has about $20 million earmarked for the permitting and engineering process, it has none of the nearly $2.5 billion required to make the project a reality. But you won’t see any sweat on president Paul West-Sells’ brow.
“It obviously sounds like a lot of money, because it is,” says West-Sells. But the figure’s in line with other large-scale copper-gold projects. The Casino project has an estimated 20-year mine life, and possibly another 25 years beyond that. So when you look at the commodities—“at the bottom of the market” right now, he says—you have to take the long view. “Even at today’s commodity prices (around US$1,200 per ounce for gold and US$6,600 per tonne for copper), this project is very, very economically attractive. Even if you were to take 10 per cent off the commodity prices, it’s still really economically attractive,” says West-Sells. “If the project looks good now, it should look good in the future.”
Western Copper will be looking to bring in partners to finance the majority of construction costs, and then look to debt and equity markets to cover the rest. All this is moot until the company rejoins the YESAB process. Earlier this year, Little Salmon/Carmacks First Nation sued the regulatory board on the grounds it has the right to more consultation before Casino enters the assessment process. Since then, Casino has agreed to a consultation work plan with the First Nation and West-Sells says he expects some more agreements to be announced in the coming months. -TE
Mactung got a boost in September when it was granted environmental approval by the Yukon Environmental and Socio-Economic Assessment Board. The company is now focusing its efforts on refining the project design, hoping to make the project cheaper to build and more efficient once it’s up and running. North American already owns and operates the Cantung mine, 160 kilometres south of Mactung on the NWT side of the Yukon border, and has recently invested in mill improvements there to increase throughput and metallurgical recoveries. These improvements, says director Allan Krasnick, will be incorporated into the Mactung design.
At the same time, North American will look at different ways to power the proposed 2,000-tonne-per-day underground project, as the current plan would see it run on diesel. The mine will also need to upgrade a portion of the old Canol Road to make it accessible for fuel and haul trucks.
Once the updated plan is completed, the company will apply for its water and quartz mining licenses. Construction is anticipated to take roughly two years and Krasnick estimates the project could begin production in as soon as four years from now.
This gives the company ample time to develop a local workforce at Mactung. Again, the company hopes to draw on its experiences at Cantung. The hope is that both Mactung and Cantung will one day operate simultaneously: thanks to continued exploration work, Cantung’s mine life has been extended beyond the end of 2017. Ideally, employees trained at Cantung would later transition to Mactung. “We have this advantage in having an existing mine,” says Krasnick. “We’d be able to offer people a career with our company, which would be great.”
The company will have to find a way to pay off the $357 million needed to build Mactung, as it doesn’t look like it will come from Cantung profits. “That would have been wonderful, but I don’t think it will be sufficient,” says Krasnick. As of July, the company held only $190,000 in cash and had spent $1.3 million the previous quarter on financing and loan interest. -HM
Gone are the heady days earlier this decade when gold bounced around between $1,600 and $1,800 per ounce. Yet with it sitting around $1,200 an ounce in early October, Janet Lee-Sheriff, brand new CEO of Golden Predator, owner of the Brewery Creek project, still thinks money can be made mining the precious metal. “It’s interesting. The other day we were talking about when we went to the Yukon [in 2009], gold was $800 an ounce and everybody was profitable and gung-ho. Now gold is $1,200 and everybody is terrified,” she says.
When gold hit such lofty heights, miners pushed to produce more and more ounces, driving up costs and cutting into profits. This, says Lee-Sheriff, has given the industry some credibility issues. “Gold companies did it to themselves in creating some uncertainty about their business model,” she says. “It has to be about profit and not ounces.”
Golden Predator took over Brewery Creek in 2012 and got to work increasing mineral resources on the brownfield property. (It was closed in late 2001 by Viceroy Resource Corp. when gold was $275 an ounce) With a road into the site, a camp and maintenance buildings, and seven heap leach cells, the company won’t have to start from scratch. It estimates initial construction costs of roughly $100 million and Lee-Sheriff says the company is seeking a joint venture partner “with deeper pockets than we have” to move the project along. But it won’t be as easy as hooking up the power—which the project plan currently lacks—and hauling out ore. Though Golden Predator was able to increase the Brewery Creek mineral resource, many of the deposits fall outside the originally permitted areas. Since this means the project will have to go through a complete environmental assessment, Golden Predator is completing a rejigged mine plan that includes all its deposits. A preliminary economic assessment is due out this month. -HM
FEASIBILITY STAGE:
For Copper North Mining’s Carmacks project, this year has been one of deconstructing and rebuilding—really, reimagining—every component of the mining plan.
Harlan Meade took over as CEO and president in March. “When I looked at the project, there were really three things that I didn’t like about it,” says Meade. The first was it cost too much to produce the cathode copper, which was the sole product of Carmacks at the time. There is gold and silver in the ore, so Copper North added a gold and silver leach circuit. The byproduct credits from that brought the cost to produce down from US$1.57 per pound to about $1.07 per pound. “That was the first step—get the cash costs down to a level where you can get people to give you money, even in these ugly markets.”
The next step was to bring down capital costs. Among other opportunities for cost reduction, the team found Chinese suppliers that could provide major infrastructure like the solvent extraction and electrowinning and acid plants for half the cost. The equipment is in use and has proved to be of excellent quality at mines overseas, says Meade. These changes have taken the capital cost from $225 million to an estimated $150 million.
Finally, Copper North changed its processing method: rather than heap leach the copper, they’d use vat leaching, which is more efficient and more environmentally sound. “Think of them as a series of swimming pools all linked together. And the beauty of that is that the copper leaches very fast, and we can also neutralize the materials after we finished leaching ,which would make them much more agreeable for the gold-silver circuit.”
This will all find its way into Copper North’s new feasibility study, kicked off in October. The study is being conducted by B.C.-based engineering firm JDS Energy and Mining Inc., and China’s Beijing General Research Institute of Mining and Metallurgy. The company hopes to have it completed by the summer of 2015.
At that point, they’re left with a cheap, efficient plan, which will be taken—as soon as everything is firmed up—right to the affected First Nations, then to YESAB, and should enter the financing stage right when Meade expects global copper supply to take some hits. “When we’re out there project financing in the second half of next year, the outlook for copper should be pretty good. Don’t ask me what gold and silver’s gonna do because it’s anybody’s game.” If Carmacks goes into production, Copper North plans to plug into the Yukon Energy power grid, just nine kilometres away. “I don’t think project financing is going to be a big hurdle for us. What becomes our biggest challenge? A skilled labour force,” says Meade. But since the project requires just 150 workers, Meade isn’t too worried about his company being able to get what it needs while maximizing Northern employment. -TE
FEASIBILITY/EXPLORATION STAGE:
Selwyn-Chihong’s bankroll must be the envy of all its Northern peers.
After taking a 50-per-cent stake in the project in 2010, China’s Yunnan Chihong Zinc and Germanium Co. acquired Selwyn Resources outright in 2013 and formed Selwyn Chihong Mining Ltd. (SCML), which has aggressively pushed the zinc project ahead with money most juniors in this tight times would kill for.
By December, says Maurice Albert, vice president of external affairs, SCML will have spent around $65 million just this year on exploration drilling, project engineering and its recently completed preliminary economic assessment. The worked included upgrades to the project’s access road, which required replacing eight bridges. “That road is now operational and we’re currently using it to bring up fuel to site and resupplying our camp, which up to now has been entirely dependent on air service,” he says.
Albert is quick to add that the Selwyn project is a priority for Yunnan Chihong Zinc; the company plans to spend another $58 million on it next year. “The funding makes a world of difference,” says Albert. “Even for a public company dependent on its ability to raise capital on the market to finance its exploration activity, there’s no way that the project could be developed at the speed at which we’re doing it right now.”
The project being considered is a 35,000-tonne-per-day operation mining eight open pits. “We want to bring the mine into production,” says Albert. After the initial $2 billion in capital costs are paid back, the company would likely look to expand the project to eight other identified deposits, even if that means SCML will have to go through the Yukon’s regulatory process all over again.
SCML is happy with the results from its preliminary economic assessment and is now whole hog into its pre-feasibility study, which it hopes to complete by late June. In 2012, the company filed a mineral resource of 185.6 million tonnes indicated, with an estimated zinc resource of 21.26 billion pounds, and 237.9 million tonnes inferred, with an estimated 23.44 billion pounds of zinc. Those numbers have since improved, says Albert, but he declined to make them public. SCML is looking to enter the environmental assessment process in October 2015, and complete its feasibility study in early 2016. Though it’s still very early, the company anticipates the environmental assessment will take about two years and permitting another year, meaning construction could start in 2018 and pre-production in 2020. “We’re looking at open pit, so there’s going to be a need for stripping before we can get to the resources,” says Albert, adding the first ore shipment would be tentatively in Q2 2021.-HM
EXPLORATION STAGE:
While it’s working on finishing its feasibility study for Coffee and entering the Yukon environmental assessment process, Kaminak Gold Corp. is confident its project will be attractive to fund, no matter the desolate market conditions. “Our all-in sustaining costs are actually under $700 an ounce right now,” says president and CEO Eira Thomas, adding it was probably the most surprising thing to come out of this year’s preliminary economic assessment. “I think many people just assumed because we’re a Northern project that our costs are going to be high. The reality is that Coffee is a project that, because of the grade and because of the very strong metallurgical attributes, is delivering low all-in sustaining costs. That gives us a lot of confidence that this is the right kind of project to be advancing in this market.”
Coffee’s other biggest news item of the year happened this fall, with the discovery of gold at another zone, which Kaminak has named Kona North. “We’re hopeful, based on the first holes into it, that we’re on to an exciting new opportunity in the Coffee Gold District,” says Thomas. They’re hoping, as well, that what they’re finding at Kona will qualify for inclusion in the resource estimate of the currently-underway feasibility study.
The feasibility study’s expected to cost $30 million and be wrapped up by the end of next year. In addition to updating the resource estimate, an exciting feature of the study is an updated power plan: whereas the PEA looked at running the mine on diesel, the company is now investigating a hybrid method in which liquid natural gas will be the main power source, with diesel as a backup. Otherwise, Thomas says Kaminak wants to keep the project as conventional as possible—an open pit mining, heap leach operation funded by debt and equity, though she notes the tough markets have made it necessary for operations to look to other funding sources, like streaming models.
It’s also been proactive in negotiating with affected First Nations, “from Day 1,” says Thomas. A communication and cooperation agreement is in place with the Tr’ondek Hwech’in, on whose land the main deposit sits, and a communication agreement is in place with the White River First Nation. Ultimately, there will also be consultations with the Little Salmon/Carmacks and Selkirk First Nations, as roads to the site will have to cut through their lands.
After its feasibility study and consultations are complete, Kaminak will submit its environmental impact statement and hopes to make it through the YESAB process in about two years, so it can be shovel ready by end of 2017 or early 2018. Then it will look to maximize local employment (the mine will created 126 jobs) through training initiatives and by consulting local First Nations. -TE
Preliminary really being the key word, this fall saw the release of ATAC Resources’ preliminary economic assessment for the Tiger Deposit. The Rackla gold project is a 1,700-square-kilometre property made up of two trends. The company’s main focus has been on exploring the Tiger Deposit, in the Rau Trend, but it has also been finding Carlin-type gold (wherein sediment holds microscopic, or “invisible,” gold) in its Nadaleen Trend. It’s the first deposit of the Carlin type found in Canada, the company boasts.
The Tiger Gold Project would be an open pit mine using a conventional truck-and-excavator fleet to mine two million tonnes of mineralized material over its five-year lifespan. Transportation to the producing mine, according to the preliminary economic assessment, would be via helicopter or plane in the summer (there’s an airstrip eight kilometres from the site) and by ice road in winter.
The project plan has two diesel generators powering the site. The assessment found conventional milling wouldn’t be worth the cost, due to the small size of the resource. It looked at a hybrid of a small carbon-in-leach circuit for fine material and then a heap leach for coarse material; with this method, the cost to produce the gold would be $626 per ounce. Due to the weather and isolation, processing of ore would be seasonal, operating for only 158 days of the year (while mining happens year-round).
In October, ATAC stated it was well-financed, with $20 million in its treasury. Requests for an interview went unanswered. -TE
YUKON'S OPERATING MINES:
When Alexco Resources Corporation suspended operations at its Bellekeno silver mine in September 2013, the plan was to reopen it the following spring. More than a year later, the Yukon mine remains closed. Citing high operating costs and the depressed silver market as factors behind the shutdown, Alexco is currently looking to further explore and develop its Flame & Moth deposit, which saddles its current milling infrastructure, as a way to increase throughput and lower costs through economies of scale. The company will require additional capital to develop the underground mine, but if all goes well, a company spokesperson says it could start back up by late 2015.
Meanwhile Capstone Mining went through with two rounds of layoffs at its Minto copper mine this year. In January, 44 contract employees were laid off when the company slowed down mining from its lone open pit in advance of the expected permitting schedules for its planned Minto North expansion. Then in September, Capstone received its Quartz Mining License for the expansion, but not its water license, which it required to begin pre-stripping work for its new open pit. As a result, 50 more employees were laid off. Capstone plans to process stockpiled ore and continue underground mining until Minto North is fully permitted.
Things are still proceeding cautiously at the privately-owned Yukon Zinc Corporation’s Wolverine mine, after it laid off roughly 100 employees, decreased production by 40 per cent from its designed capacity of 1,700 tonnes per day, and reduced operations to one shift a day back in June 2013 due to falling commodity prices. In September 2013, the company began hiring staff back at its silver-zinc mine as the average production increased to 1,200 tonnes per day. By September 2014, production was up to 75 per cent capacity, or 1,350 tonnes per day, according to a company spokesperson, with 293 employees, including contractors. -HM
How to argue that mineral development is a renewable resource
by Tim Edwards
You might have learned in school that mineral exploration is a non-renewable resource—unlike forests that replenish or fish that breed, once you take the diamonds out of a kimberlite pipe, that’s no longer a diamond-bearing property. Hoefer thinks there’s an argument to be made that mining actually can be considered renewable, so long as commodity markets fluctuate and technology continues to improve.
There are two aspects to this assertion: One, that restaking already-explored properties with new technology can lead to new discoveries, all the while providing inflow into the economy from the same property over a long period of time; two, that prospectors can stake and explore claims, sell those claims, and then the mercurial commodity markets might place those claims right back on their laps if their new owner dumps them.
A good case study would be TerraX Minerals’ gold properties 15 kilometres north of Yellowknife. Since the late 1930s, what’s now TerraX’s Northbelt property has been almost continuously staked and restaked, with at least 463 holes drilled on the property over the years. When TerraX took over Northbelt in 2013, it had the technology to take the historical data and map it out into 3D models and continue the exploration work. But gold’s not so hot right now, and many junior exploration companies are having a tough time finding financing for gold projects. “They start exploring the gold property and they end up finding a copper-zinc showing [in 2013 and 2014],” says Hoefer. When gold markets were feverish, base metals weren’t, so a geologist might have found some copper and not have bothered even writing it down. Now, with gold down, lots of juniors are derisking their projects by working base metals—like copper and zinc, which are often found with gold—into their resource estimates and production plans.
Right next to the Northbelt is TerraX’s Walsh Lake property, which the company bought from Yellowknife prospector Walt Humphries in October 2013. Humphries had sold the property before, to Kelmet Resources, which eventually went under. The claim reverted and, after close to 25 years, Humphries had it back—and then sold it again, getting $90,000 (over four years), 260,000 shares in TerraX, and $400,000 in exploration funding out of the deal.
It’s not a rare occurrence, either. Lane Dewar was once part of a team that sold the same platinum-paladium-gold-uranium property in the Sahtu four times. The site kept reverting to public title, and Dewar and his partner kept going back in. They staked it for the last time three years ago. (They found out last year that it was stuck in the middle of land that had been set aside for conservation last year by the Sahtu Land Corporation. Dewar says the claim probably would have been grandfathered in, but without the ability to expand and with the host of issues that come with being surrounded by a conservation area, they’re letting it lapse. “That’s it, it’ll probably never be staked again,” says Dewar.) Dewar says these occasionally-lapsing, resalable claims can be godsends for those trying to make a living in the business.
Admittedly, justifying mineral exploration as a renewable industry sounds a little forced. But these instances serve to show that the same property can bear fruit many times for everyone involved, and sometimes a downturn in the market can be a blessing for the prospector—provided it picks back up again.
As China and India devour the world’s dwindling supply of gems, a new cluster of diamond exploration is hitting the NWT. It’s being led by a gallery of familiar figures who helped launch the territory’s diamond mining industry 20 years ago. Who among them will find Diamond Mine No. 5?
By Guy Quenneville, Illustration by Diego Patiño
Our characters’ story starts in a tent, just off the melting surface of Lac de Gras, in 1994.
In November 1991, Chuck Fipke’s company, Dia Met Minerals, made the first discovery of commercially viable diamonds in the NWT, at Point Lake. Fipke’s find—which was eventually transformed into the Ekati diamond mine—touched off the largest staking rush in the history of Canadian mining. From 1991 to 1993, hundreds of interests big and small staked more than 30 million acres in the Barren Lands of the NWT and what is now western Nunavut.
Among those snapping up land close to Ekati was a Welsh coal-miner-turned-engineer named Grenville “Gren” Thomas. Thomas had arrived in Canada in 1964, settling in Yellowknife to work underground at Giant Mine. But what he really wanted was to explore the North as a geologist, so he formed a company, Aber Resources. Thomas built up a track record: he discovered the Thor Lake rare earths deposit, currently under development by Avalon Rare Metals, and he helped explore the High Lake base metals deposit, now owned by MMG Minerals.
Less than a week after Fipke sent out his November 1991 Point Lake press release, via fax, Thomas and an associate named Chris Jennings made some phone calls. They sent a crew of men immediately south of Fipke’s land to stake some 700,000 acres.
Three years of exploration and a dizzying amount of joint ventures later—including one with Robert Gannicott, the current president of Dominion Diamond Corporation—Aber
finally made the discovery it was hoping for.
It was spring. The ice on Lac de Gras, hundreds of kilometres northeast of Yellowknife, was quickly melting, and Aber’s drilling window for the season was all but closed. The Aber team was huddled inside a core shack tent, pouring over the last of the program’s core samples. Eira Thomas, a recent University of Toronto geology grad and the daughter and protégé of Gren Thomas, led the team. It turned out to be quite the first gig. Aber crew member Robin Hopkins was holding a slab of kimberlite when it snapped in half, laying bare a 1.8 carat diamond. With that accident, the company discovered the A154S kimberlite pipe, which would prove to be one the richest diamond pipes in the world and lead to the opening of the Diavik diamond mine in 2003.
THE GANG’S ALL BACK
More than 80 million Diavik carats later, Gren Thomas is on the hunt for a new source of NWT gems. And he’s got backup.
Thomas, 73, is the chairman of North Arrow Minerals, a Vancouver-based exploration company with several holdings in the Slave Geological Province—the vast area that eventually went on to produce the Snap Lake mine, too. North Arrow is in the early stages of exploring two parcels of land southwest of the Diavik mine site. It spent $1.7 million on drilling this year, and plans to spend at least another $3.3 million before July 2017.
North Arrow’s strategy—focusing on land that is near or directly beside the NWT’s existing diamond mines—is similar to that of a growing group of companies that includes Canterra Minerals, Arctic Star Exploration, Margaret Lake Diamonds, Prima Diamond Corp., Kennady Diamonds and Mountain Province Diamonds. They’re all hoping to prove out a simple, recently popularized geologic term known as “closeology”, which states that the best place to go looking for diamonds (or any other other sought-after mineral) is close to where they’ve already been found.
“Look no further than Diavik as an example of it working well,” says Ken Armstrong, North Arrow’s president and CEO. “Aber staked their claims to tie onto Ekati after the Point Lake announcement, and they ended up staking ground that had the Diavik kimberlites on it. That was pure and simple closeology.”
But North Arrow’s strategy extends beyond holding prime real estate. It’s also cultivating a team with some serious expertise in finding a future diamond mine, which in turn is attracting investors—no easy feat these days. Hence the presence of Thomas, who is joined again by his daughter Eira, dubbed the Queen of Diamonds. While sitting on the Aber board (which she left in 2006), Eira co-founded her own company, Stornoway Diamond Corporation. Stornoway developed the Renard diamond mine in Northern Quebec, which is currently under construction and hurtling toward production in 2017. Eira is now putting her skills to use as an advisor to North Arrow’s management team, one of several senior positions she holds with resource companies. Another of those companies is Lucara Diamond, which is backed by billionaire mining tycoon Lukas Lundin. He’s acquired a 20-per-cent stake in North Arrow.
Though not a brand name himself, North Arrow president Armstrong has strong ties to the early diamond days. Like Eira, geologist Armstrong was hired straight out of school to work on the Diavik project. Armstrong generated some of the initial resource models that ultimately persuaded Aber and partner Rio Tinto to proceed with the mine’s construction. “I was right in the heart of the excitement,” recalls Armstrong. “Ekati was just getting ready to start production, and everyone knew Diavik wasn’t too far behind. After the Point Lake news release, the people who moved fastest were the ones who were familiar with how to get things done, and Gren was at the top of that list.” Armstrong has worked with the Thomases ever since.
And at a time when raising money for grassroots exploration remains next to impossible for most companies, Armstrong says having people like Gren and Eira in his inner circle is crucial. “There are so many junior exploration companies. One of the ways companies can differentiate themselves is the management involved. Do they have a track record of success?’”
SHINE ON YOU CRAZY DIAMONDS
Companies like North Arrow are taking a second look at Arctic diamonds because demand for luxury gems is rising but the supply of rough diamonds is poised to fall short by 2018. The last major diamond discovery occurred in Zimbabwe in 1997, with worldwide rough diamond production peaking at 175 million carats eight years later. Major mines in Africa are starting to thin out, while Northern mines like Ekati and Diavik are past their primes: Ekati’s current reserves will run out in 2020, Diavik’s in 2023 (leaving aside still-to-be-permitted expansion plans). Russia, where the Alrosa mines alone produce 27 per cent of the world’s diamonds, may well invite increased economic sanctions, further restricting supply.
Meanwhile, a rising middle class in China and India—whose populations total 2.6 billion—is increasingly emulating the West in its veneration of diamond engagement rings. Both countries have seen their domestic diamond jewelry markets balloon by an annual growth rate of 12 per cent between 2008 and 2013, according to De Beers’ first ever “Diamond Insight Report,” released in September.
Now, with the economy of diamonds’ chief buyer, the U.S., slowly recovering, North American diamond projects are attracting significant investment again. In July, Eira Thomas’ former company, Stornoway, raised a whopping $947 million to put the Renard diamond mine in production; it was the world’s largest-ever financing package for a publicly listed diamond company. Not long after, Mountain Province Diamonds—De Beers Canada’s partner in building the NWT’s upcoming fourth diamond mine, Gahcho Kue—raised $45.5 million in a private placement. (Another two deals totaling $100 million followed last month.) Factor in promising results from another diamond project south of Gahcho Kue, held by Kennady Diamonds, and it’s no surprise that companies like North Arrow are sniffing around the Slave Geological Province again. The GNWT’s Industry, Tourism and Investment minister, David Ramsay, even has a nickname for the potential string of new diamond developments that could join Gahcho Kue: “the Ring of Ice.”
“It’s nice to see a concentrated effort by juniors coming in to try to find the next round,” says Barrett Elliott, a diamond geologist with the Northwest Territories Geoscience Office. “It’s certainly an upswing compared to the last few years.” Mineral exploration spending on NWT diamond projects totaled $57.9 million in 2013, up 45 per cent from the previous year, and considerably higher than the investment seen by any other commodity type, according to statistics from Natural Resources Canada.
OPEN SEASON
Another important factor has helped spur the new era of diamond exploration: freshly available land. “Some positions have opened up that weren’t necessarily open for staking in the 1990s when people blanketed [the place],” says Randy Turner, the 65-year-old president and CEO of Vancouver’s Canterra Minerals. “By 1993, the entire NWT was staked.”
Canterra is a spin-off of Winspear Diamonds, which might ring a bell. Taken over by Turner as a shell company just eight months before Chuck Fipke’s Point Lake discovery, Winspear eventually went on to discover the Snap Lake diamond deposit. Though it sold its one-third stake in Snap Lake to De Beers in 2000 (making more than $300 million off the sale), the company still held on to land close to Snap Lake, namely, the King property, which sits just north of De Beers’ mine (see map). As a result of its extensive work in 1990s and early 2000s, the company has a large database of Slave Geologic till samples covering two million acres, and it’s been reviewing that trove for the last 15 years, until, as Turner tells it, “we sat down and made a corporate decision a year ago to go back in and explore.”
Among the properties Canterra has recently acquired is Marlin, located to the west of Kennady Diamond’s Kennady North project and northwest of Gahcho Kue. Turner picked it up because of its location, obviously, but also because another junior explorer, Margaret Lake Diamonds—whose own Margaret Lake property runs adjacent to Marlin—had been flying airborne gravity surveys over the land anyway. Indeed, improvements on early-90s technology also account for the return of companies like Canterra. “Geophysics is much more advanced than it was 20 years ago,” says Turner. “Airborne gravity was really in an infant stage. Mountain Province and Kennady have used that, which is one of the reasons Margaret Lake is using that as a tool at Marlin and our property.”
Turner has definitely assembled himself a dream team of former Northern diamond pioneers, with ties to both Ekati and Snap Lake. Besides Turner, Canterra’s board of directors includes James Eccott, the man appointed as Dia Met Minerals’ president and CEO following Chuck Fipke’s Ekati discovery, plus James Excell, who as president of BHP Billiton Diamonds shepherded Ekati through its $700-million construction process. Yet another director, John McDonald, served as Turner’s vice-president of exploration when Snap Lake was discovered.
Turner agrees with North Arrow’s Armstrong that working in the Northern diamond industry requires a tremendous amount of patience (“Fifteen years is about the average right now” for bringing a diamond property into production, he says), and a very particular set of skills. “People who have had discoveries will be the ones that will be able to finance and advance properties up here,” he says. Canterra’s star power seems to already be paying off: British Columbia billionaire Jimmy Pattison has taken a 19 per cent stake in Canterra. “[We] bring credibility,” says Turner. “These people look at this and say, ‘These guys did it once before. Maybe they’ll do it again.’”
BUDDY CAN YOU SPARE A PASSING REFERENCE?
There is another, far less heralded figure from Northern diamonds’ early days. Buddy Doyle—one of the busiest operators in the Slave Geological Province today, the ‘Where’s Waldo?’ of the diamond exploration uptick (see chart on page 24 )—was there in the tent too when the Diavik discovery was made.
Doyle stands out in many ways. Among his cohorts, the intrepid Australian-born geologist is the only one who can claim to have hung upside down from a crashed helicopter while exploring for gold in Papua New Guinea. He’s noticeably younger than the likes of Gren Thomas and Randy Turner, his wispy black bangs obscuring his face in photos. He’s been photographed at least once licking drill core samples at one of his exploration sites—and clearly loving it. Perhaps these quirks are Doyle’s way of getting noticed after years of playing second fiddle to the likes of Gren Thomas and Robert Gannicott, who, as the big-name wheeler-dealers of Aber Resources, dominate so much of the narrative of the Diavik discovery.
Doyle was the money man during the Diavik find. Or rather, he represented the money men. Doyle was in the Diavik discovery tent working as the North America exploration manager for Kennecott Canada Exploration. Kennecott was the subsidiary of Rio Tinto, which was funding Aber’s exploration work at the time—a key detail, and one explaining why Rio Tinto retains a 60-per-cent interest in Diavik to this day. “Buddy was really the guy in charge because they were the guys with the money,” Robert Gannicott said in an interview last year.
Doyle remembers standing beside geophysicist Robin Hopkins when the diamond drill core broke in half, having the rock handed to him, being asked “What is this?” and, after a beat, responding, “Effing unbelievable!” But no matter: after Doyle and Eira Thomas sat down for a joint three-hour interview with the author of the 2001 book “Barren Lands: An Epic Search for Diamonds in the North American Arctic,” Doyle didn’t even get a single mention in the book.
It’s tempting to see Doyle’s involvement with various projects in the Slave Geological Province today as his bid for fame. But he remains modest about it all. If, as vice-president of exploration for Arctic Star Exploration, he named a property he’s combing west of the Diavik mine with partner North Arrow Minerals as “the Redemption project,” it’s because he wanted to reward the patience of his investors, not because he’s nursing sore wounds, he says. “People want to make it out like it was one person,” Doyle says of Diavik. “It’s really one person as a team. Gren and Eira are still very good friends of mine. We were all in the tent together when that diamond was found. Eira worked hard, I worked hard. It was a team effort.”
No, Doyle’s M.O. can ultimately be boiled down to the theory of closeology—looking where the good stuff has already been found. Besides his involvement with Arctic Star (and Amarillo Gold, and Western Potash, and a company that manufactures drone technology), Doyle is the head of exploration for Margaret Lake Diamonds, which, in addition to partnering with Canterra on the Marlin property, spent $1 million this year on its titular Margaret Lake property, north of neighbour Gahcho Kue.
“Kimberlites always occur in families,” says Doyle, who was awarded the Hugo Dummett award for excellence in diamond exploration in 2007. “On average, when you find one, you find 30. That’s why they’re a great area of play.”
But times have changed since the early 1990s, he adds. In the era after Bre-X, companies like Arctic Star face vigorous scrutiny from increasingly demanding investors. “Once upon a time you just had to hit a kimberlite and the stock would skyrocket. Now you have to produce a bulk sample or something. It’s a much more ‘show-me’ market. But that’s good. I like it when people know what they’re doing when they invest money.”
Echoes Armstrong, “You almost need to come to the table with a portion or a good portion of your funding already in place, and if that’s there, you can fill in the remaining part.”
PRIMA DIRECTIVE
There are some outliers working in the Slave Geological Province, too, companies with little to no connection to the discovery of the Big Three. Take Prima Diamond.
“We’re definitely a newcomer,” says Robert Bick, president and CEO of Prima, also based in Vancouver. “Back in May, we looked at what was happening in the NWT and we were very fortunate in being offered a property.” Originally brought to Bick’s attention by an Edmonton associate , Godspeed Lake lies 40 kilometres south of Gahcho Kue. A second property sold to Prima shortly thereafter, Munn Lake, located southeast of Diavik, also holds promise, says Bick. Munn Lake saw more than $5 million in exploration work between 1996 and 2007 by SouthernEra Resources, when the programs were run by current Mountain Province and Kennady Diamonds head Patrick Evans. “Munn Lake is totally irresistible because there’s a diamondiferous kimberlite on it, a diamondiferous boulder field, and there are four additional kimberlite targets that have already been identified,” says Bick.
Prima can’t count any rock stars from the early 1990s among its management team. The closest thing it has is Dr. Roger Morton, professor emeritus in geology from the University of Alberta. (He taught Randy Turner of Winspear and Canterra back in the 1970s.) But what Prima lacks in proven NWT talent it makes up for in highly prospective land. Claims in the NWT revert back to the Crown if no work has been done on them after a certain period. That’s what happened to Godspeed before Prima picked it up, which means it’s gone largely unexplored, says Bick. As for Munn Lake: “[I was] talking to some of the old timers who have been in the business. They were a little surprised that we were able to grab it because everybody had intended to stake it.” Both Canterra and Margaret Lake Diamonds have asked Prima if they could buy Munn Lake; Bick has refused, though he says he might be open to a partnership down the line. “It’s clear that it’s a very hot property,” says Bick, “which is why we staked it in the first place. We were just at the right place at the right time.”
Early numbers point to another slow year in Northern exploration
By Guy Quenneville
It’s not a complete picture, but what we have so far is not promising.
Early (conservative) estimates from the Yukon Government’s department of energy, mines and resources peg the value of mineral exploration work in the Yukon this year at $75 million, with another $50 million in development spending. Both figures are heavily skewed, however, by the tens of millions being plunked down by one particularly well-endowed company: Selwyn-Chihong Mining Ltd., a state-owned Chinese outfit.
The Yukon government is the only territorial government that currently keeps its own statistics on activity, though the GNWT, now that devolution has occurred, may begin soon. The GNWT and the Government of Nunavut rely on Natural Resources Canada, which issues early estimates at the start of each year and revises them right around now—though not in time for this issue. NRCan predicted combined territorial spending of $335.7 million this year, down 25 per cent from 2013.
“It’s certainly a lot quieter than it has been in previous years, a lot less going on, both regionally and nationally,” says Martin Knutson, president of Matrix Aviation Solutions, which services exploration companies from Yellowknife. (NRCan predicted national exploring spending of $2.1 billion in 2014, down from $2.3 billion).
Another way to gauge the health of the exploration market is to look at the TSX Venture Exchange, which junior exploration companies with early stage projects tend to use. Though the year isn’t over yet, miners have raised $190.7 million through 21 offerings on the exchange—up from $96.7 million through 15 deals during all of 2013.
That might sound promising, but it may be too early to connect the dots between a boost in financing and an increase in exploration spending, given that many commodity prices were still doing poorly this fall. “Some companies might prefer holding onto their cash until conditions improve,” says Drew Hasselbach, who writes about mining for the National Post. “Also, this data only tells us whether Canadian companies have been able to raise funds. It doesn’t tell us where in the world they might spend it. That money could be going to Latin America or Africa, and not the North.”
It got the feds to open money up to Inuit associations. But what does the Nunavut Resources Corporation want the money for?
By Herb Mathisen
It was a can’t-miss plan hatched during can’t-miss times. When Newmont bought Miramar’s Hope Bay gold project for $1.5 billion in 2008, the Kitikmeot Inuit Association didn’t see a penny, even though it signed agreements and granted rights that had helped move the project forward. Charlie Evalik, KIA president, didn’t want to see his organization lose out again: in 2010, he created the Nunavut Resources Corporation, a KIA subsidiary.
The idea was to promote and provide access to prospective Inuit-owned land to project developers in exchange for an ownership stake, to finance the project until interest was piqued and then sell it—either outright or retaining a small share. “It’s really just an opportunity for Inuit to try to take advantage of wealth creation prior to a mine going into production,” says Scott Northey, NRC’s operations director.
The plan may have worked during those free-spending days, but the mining industry is characterized by its cyclical boom-or-bust nature and the junior mining finance market has slowed to a standstill. “It’s absolutely dead,” says Northey.
Earlier this year, NRC created its own exploration company, West Kitikmeot Gold Corporation, and in 2012 signed a strategic alliance with HTX Minerals—now Transition Metals, after a 2013 acquisition—tasking NRC with being the money-finder. NRC has met on Howe Street, Bay Street and Wall Street, but hasn’t yet had any luck. “We had some traction in New York, but for us to do anything, we were going to get measly amounts of money and give up 30 per cent of the company,” says Northey. “If people were talking $5 million or $10 million for 30 per cent, we might have said that makes sense. But $500,000 to $1 million for 30 per cent, that didn’t make any sense, so we didn’t go down that road.”
With the mining sector languishing and payoffs frustratingly far away, NRC is turning its attention to Northern infrastructure projects. And after successfully lobbying the feds to let Inuit organizations apply for the multi-billion-dollar Building Canada and PPP Canada funds (see sidebar), it hopes it’s found a new lease on life.
Potential partnerships with mine project developers MMG, Sabina and TMAC (Hope Bay’s newest owner) on transportation and telecommunications projects have been discussed, says Northey. But he’s most excited about getting involved with Arctic Fibre’s ambitious $850-million fibre optic link between Tokyo and London. “I would hate to be on the sidelines if it does go forward,” says Northey. NRC wants to raise $30 million for the installation of undersea cable boxes during the first phase of the two-phase project, to eventually provide 98 per cent of Nunavummiut with broadband access. (Without those boxes, phase one would connect to just seven Nunavut communities.) Other Inuit organizations along the line could also apply to the feds for funds, reasons Northey, to help build and profit from the project.
The fibre optic link, Northey believes, should fall under Building Canada’s $4-billion fund allocated to projects that have a “national significance” for the country. “I can’t think of anything that would satisfy the national interest component better than that project,” he says. But broadband is not currently an eligible asset class under that fund. “So we have some more lobbying to do.”
Cape Dorset's finally getting an arts centre to match the caliber of its artists
By Ashleigh Gaul
For more than 50 years, Cape Dorset printmakers, painters and carvers have been more or less defining Inuit art—and they’ve been doing it from a printmaking shop that many say should be condemned. “Artists are used to working in difficult conditions,” says Alain Fournier, partner at Montreal architecture firm FGMDA, “but [the Cape Dorset] conditions are unhealthy. People should not be working there.”
That’s why Fournier is helping develop Cape Dorset’s new Kenojuak Cultural Centre—an art studio that will finally match the quality of the art it produces.
“Living creation” is the concept behind the proposed centre, says Fournier —“which means, specifically, while art is going on in the print shop, it will be accessible to locals and tourists.” The centre will triple-function as a collection of art studios, a community hub and a visitors centre for tourists. The idea is open-concept studios separated by glass partitions, plenty of natural Northern light, a viewing gallery with permanent and temporary exhibits, a sales centre, and—for the community—a cultural area and access to the hamlet’s digitized archives. The mission of the place, Fournier says, will be both “cultural and artistic.”
The dream of replacing Cape Dorset’s dilapidated Kinngait Studio isn’t new. For 40 years, artists and community leaders have kicked around plans for an upgraded arts centre. But according to Fournier, the projects were “fairly expensive and overly elaborate” and collapsed under their own weight. As far back as the ’80s, a new arts centre was priced out at $30 million. Unsurprisingly, it went nowhere.
Today’s Kenojuak Cultural Centre project, slated to open in April 2016, is more feasible—$8 to $9 million. Better yet, says Jimmy Manning, president of the Inuit Art Foundation and former manager of Cape Dorset’s print shop, the new plan is being driven by the priorities of the artists. He says younger artists, in particular, “are focusing on much larger-scale pieces, on paper. The smallness, tightness of the [old] studios was not working out. This new place will have all the space they need.”
As for the older generation, adds Fournier, “some of the artists have been around for almost 50 years. They’ve been very patient. And, as we’re nearing the construction phase [with funding from Nunavut Tunngavik, CIBC, TD Canada Trust and private donors], people are starting to believe in it more and more. It’s not a joke, it’s a real project. It’s not just a toothache that keeps coming back.”
Naseem Bashir, the president and CEO of Williams Engineering Canada, looks back on 25 years of Northern business
By Guy Quenneville
Bashir, 52, is president and CEO of Williams Engineering. The company was founded by Allen Williams in Edmonton in the late 1970s and recently celebrated 25 years of doing business in Yellowknife and the greater North. Its major achievements include the engineering work for Nunavut’s legislative assembly and the firm’s specialization in Northern fuel storage tanks capable of withstanding extreme Arctic temperatures.
Bashir has steered the company through its rockiest times. Within six months, starting in late 2007, founder Allen and his son and heir apparent, Reagan, died in two separate plane crashes (the latter while piloting the company’s Piper Malibu plane). Bashir, by then the largest of the company’s minor shareholders, wasted no time taking the reins of the company. But he did so just in time for another crash, the Great Recession, when spending on mining projects slowed to a crawl. “It was a hairy time,” says Bashir, a 2011 finalist for Ernst & Young’s Entrepreneur of the Year award.
But the company has more than survived, thanks to its growing expertise in mining and community infrastructure, and its steady presence in the North. Bashir spoke last month to Up Here Business about the war-torn country he almost started his career in, what the company is working on today, and the ongoing challenge he says is “disastrous” for the growth of his business.
How did you end up in the North?
I started as a summer engineering student at the Edmonton office. But I only finished off half a term there because I got interested in a girl and ended up marrying her. My wife’s a nurse, and in our last year of school we talked about what we would do after university. I really wanted to work in the oil and gas business and wanted to be an expat right out of school, if I could. So I said, “Let’s go to the Middle East.” That was the plan. We looked around and said, “You know what? Saudi Arabia is a little too conservative. Other places are a little too risky. How about Kuwait?” Then Iraq invaded. So I didn’t want to go to the Middle East anywhere.
Williams, where I’d worked for the summer, said, “Why don’t you go to Yellowknife?’” I had no idea where it was. So they showed me on a map.
Williams didn’t establish its branch in Yellowknife until 1989. You arrived here two years later. What were those early years like?
When I first got here we were in the soup on a project that was basically a small tank farm at Snare Lake. We had got this contract from the GNWT’s Petroleum Products Division, which at the time was doing all the fuel storage facilities in the North. They were trying to get people to move north and build a capacity of engineering firms in the NWT so that they didn’t have to keep sending things south. They wanted people here who understood the Arctic, its conditions, and so they gave us a shot on this project.
We weren’t doing a very good job, from our perspective. I showed up and—not that I’m Superman; but I’m bull-stubborn and practical and adopt a brute-force approach—I just worked it to death until I gave them enough satisfaction that we could do more than this project. Meanwhile we were getting a little bit bigger and little bit better at what it is we were doing. I think that was the beginning of doing larger civil projects: fuel storage facilities, primarily.
We started one project at a time. It takes a long time to make a name for yourself. I remember walking around town and going to see new clients and they’d say, “Well, after you’ve been here for a couple years, we’ll give you some work.”
Eventually you were tapped to head the firm’s third office, in Calgary. But what Northern project helped make the company’s name?
There were actually two. When Nunavut was created in 1999, we were retained to do the engineering for the new legislative assembly. It was like, “Holy cow. The building of a new government.” And while that one was going on, we were hired to do our first set of buildings at the Ekati mine. I spent almost the next 10 years working on projects for Ekati out of Calgary. To me it was the beginning of a career in heavy mining engineering and things that really got me excited.
The mining industry is really small. Somebody at the Raglan mine in Quebec said, “We need a power engineer that can help us.” So I ended up doing work there for Xstrata. Then I ended up doing studies for Areva Resources for their uranium project in Baker Lake, Kiggavik.
At your recent 25th anniversary celebration in Yellowknife, you talked about what you see as a negative regulatory environment up here. Does that cut in to your mining business?
It’s disastrous for growth. A BHP-like company that wants to extract resources, or an oil and gas company like Conoco, if they do not see this environment as being attractive to them, they have many other choices and they will go there. And they have the horsepower to do that. When the resource companies don’t come in, whatever money the people in that community cannot make anymore, they’re not going to go [spend it at] Shoppers Drug Mart. So then Shoppers Drug Mart is not going to build or expand. The Northwest Territories is primarily a resource economy, which is the primary feeder for all kinds of things to occur.
Instability just creates this sense of “We can’t afford to have people anymore so we have to let them go.” Stability is the most important thing for busineses. They need to know that they can trust what’s coming into the windshield next week. And if the stability is not there, if the regulatory regime is not there to build a steady flow of business, we can’t build a business this size here and be here for another 25 years.
Does the process of devolution in the NWT give you some hope, then?
I think there was lot of duplication in services between what the GNWT was doing and what the feds were doing. If you have to ask your mom every time you want to go out, it’s hard to have any fun. You’re shackled. So the hope is it will create a more efficient government that can approve projects faster and keep an eye on the capacity of the economy to do that. Or it can do things at a reasonable pace.
How did the company bounce back from the deaths of Allen and his son Reagan?
How? Maybe brute force and ignorance. Reagan’s plane crashed on a Thursday. By the weekend, I was appointed president. Somebody had to be in control. It was literally just a few months before the beginning of the Great Recession. In fact, the Great Recession was already beginning. We had all these things happening at the same time: we were in negotiations to acquire the business from the family, I was moving my family from Calgary to Edmonton, trying to sell a house, trying to build a house, and we had a company where we didn’t know if we were going to be here or not. And then we get whacked with this huge recession.
How did you get through that?
One of the important things about our business is that when you have a bunch of backlog, you can keep on working as long as those contracts are good. Really, 2008 and 2009 were some of our better, if not the best, years we had, because of work we had left over from the recession. We didn’t have to start pulling back until 2010.
What is the company working on today?
We’re doing some remediation work at Con Mine. We’re working in Tulita on a new community complex for the band there. We’re also finishing up the design of the new medical centre in Hay River.
Speaking of Yellowknife remediation projects, what kind of opportunity does the Giant Mine remediation project present you?
We did the first phase of air quality monitoring last year. I think we hired five people for that, so that we had 29 people in the office last summer. All other projects that were put out for RFPs were put on hold until the federal government signed off on the remediation plan. Now that they’ve signed off, we expect some of the RFPs might need to be redone, because the scope has changed. We’ll start to see some of those come out in the near future.
As Iqaluit undergoes an exciting new wave of economic activity, we talk to one of the city’s pioneering realtors about flipping houses in the Nunavut capital (and beyond)
By Herb Mathisen, Photo by Scott Wight
Until this year, John Matthews was Nunavut’s only licensed realtor. But he knew competition was coming. “It was only a matter of time,” he says.
Twenty-six years, to be precise. Matthews arrived North in the early 1970s, taking teaching jobs across the pre-Nunavut North before landing in Iqaluit in 1988 with a management studies teacher position at Arctic College. Taking to heart the adage “those who can, do; those who can’t, teach,” he went into business with a teaching colleague and his colleague’s wife, a former realtor. Although a poorly thought-out chip truck venture failed, the company kept on with its real estate business. When his partners left town, Matthews bought them out, renaming the business Atiilu Real Estate (atiilu meaning “more” in Inuktitut. As in, more care, more planning, more vigilence, in response to the chip truck disappointment).
Business started out slow, but Atiilu now sells residential buildings and manages office, commercial and retail properties across the territory, out of Iqaluit. Matthews—a former Iqaluit mayor—has sold homes in Igloolik, Arviat, Clyde River and Pond Inlet, and says the housing markets in less bustling communities differ immensely with those in Nunavut’s regional centres. And while it’s still a seller’s market in Iqaluit, he thinks upcoming developments could swing the balance towards buyers.
UHB: You started your professional life as an educator. How did you get into real estate?
JM: I was involved in management studies and I felt that if I was teaching management studies, I should be running a business. I looked around for something that I thought would work and where there was potential, and that was real estate property management.
UHB: How has the market evolved since 1988?
JM: There have been very, very significant changes. In the beginning, we were managing some properties but there were very, very few house sales. And then when houses were selling, the threshold, I think, was around $200,000. People just couldn’t think of paying more than $200,000 for a house. That’s gone up steadily: $250,000, $300,000, $350,000. We’re at the point now where we’re challenging $700,000 for houses.
It’s a sellers market in Iqaluit because there are no lots available. There won’t be any lots for the next couple of years. Then those will be phased in. So that will relieve some of the upward pressure on the price of houses now. People are willing to pay if they want to get a house, because supply is very limited.
UHB: How many houses are sold in Iqaluit each year?
JM: The residential sales in 2012 were 63 and 60 in 2011. They were probably higher in 2013. The first couple of years, there may have been one or two. It’s gone up in leaps and bounds.
UHB: How do Nunavummiut sell their homes? Word of mouth? Bulletin boards? Or guys like you?
JM: Everything. Some people will sell on their own, some people come to me, and there are a couple of other companies that have just opened in the last year or so. There is a PropertyGuys.com franchise and there is a company that just recently opened, Iglu Realty.
UHB: What are some of the biggest issues facing potential homeowners outside of Iqaluit?
JM: The demand in most of the communities, except for possibly Baker Lake or Rankin Inlet and one or two others, is very, very low. There is a very limited homeownership market. If someone has bought a house, say, in a community like Igloolik, it’s not easy to sell.
Will land-hungry Yellowknifers go wild for a new wilderness subdivision?
By Aaron Spitzer
When Monte Kehler puts down his tools and gazes out across his new backyard, he likes what he sees. “It’s rocky, the lake is beautiful, there’s lots of nice trees, there’s beavers, fish—it’s the wilderness. You’re five minutes from downtown but it feels like you’re camping.”
Kehler and his young family are building a home in Yellowknife’s first, but possibly not last, “waterside residential” subdivision. Two years ago, when the city opened up these 30 huge lots near the shore of bucolic Grace Lake, it was an experiment in acreage-style development: a neighbourhood of pine-shrouded, wave-washed properties offering homeowners a bit of frontier elbow room.
Kehler, living in Iqaluit at the time, bought a parcel sight-unseen. Having spent part of his childhood lakeside in B.C., he was keen on the cottage-country lifestyle—“canoeing and row-boating and fishing, and a lot of wilderness for our kids to play in.”
He wasn’t alone. Faster than you can say “land rush,” the Grace Lake lots were snapped up. So now, city officials are contemplating an even bigger subdivision on the south side of the lake—85 properties, some as big as 3,600 square metres, likely priced between $100,000 and $200,000.
And based on the buzz the plan is getting, it appears plenty of Yellowknifers are eager for their own little piece of paradise.
It’s been a long wait. For a small town in a big hinterland, the NWT’s capital is perversely urban—a tight squeeze of skyscrapers, condos, trailers and mansions, mostly packed haunch-by-paunch, far from woods and waters. Niven Lake Subdivision, the city’s most extensive residential project of recent decades, was derided by some as a “blast and build”—the natural landscape razed, the parcels as tiny as one-tenth of an acre, the houses practically touching.
Adrian Bell lives in Niven—“and I love it.” But the Yellowknife city councillor and local realtor admits that “we’re jammed in. That works for some people. But others don’t want to look out their window while they’re doing dishes and stare at someone else doing dishes.” Bell says Grace Lake could give home-seekers a new option: “It was clear we didn’t have many lots of this size. There were folks who wanted them.”
Indeed there were. For years, claustrophobic Yellowknifers have cast their eyes enviously toward their neighboring capital, Whitehorse. There, says Yukon Real Estate Association president Val Smith, as many as one-quarter of homeowners live on country-residential properties—out-of-town lots with “a couple acres, access to recreation and wilderness, room to have a couple of puppy dogs and a pony maybe.” She says wilderness living is what Yukoners demand. “It’s the last frontier. If you’re in the North, it’s an expectation.”
Smith shares that expectation. She was raised 20 minutes outside of Whitehorse on the road to Takhini Hotsprings, where parcels covered at least 15 acres and bears and wolves were backyard visitors. For a few years she tried living downtown, but gave up. “I wasn’t comfortable looking at buildings, more buildings and people walking by. Now when I sit on my deck, I hear birds. I see trees and mountains.”
Of course, Smith admits, there’s an ugly side to beautiful living. Whitehorse spills across more than 400 square kilometres of mountains, rivers and forests—a footprint larger than that of at least a dozen sovereign nations. Residents of far-flung neighbourhoods like Marsh Lake or Mendenhall might have a two-hour daily commute—which, some Yukon environmentalists argue, is good for neither nature nor the soul. Lately they’ve been pressing Whitehorse planners to make the city cleaner, greener and
way more dense.
That’s the same beef some Yellowknifers have with the Grace Lake scheme. Yellowknife has long prided itself on being compact and walkable; in 2010, Moneysense magazine crowned it Canada’s most pedestrian-friendly city. So it’s no surprise that at a June open-house held to gather feedback on the Grace Lake expansion, municipal officials were accused of betraying their own “Smart Growth Plan,” which emphasizes wilderness preservation, carbon reduction and urban infilling. One displeased resident said, “I don’t understand why you plan to destroy Grace Lake.” Declared another: “This is sprawl!”
Of course, Yellowknifers don’t crowd together just to be eco-friendly. They haven’t had much choice. The city is hemmed in—by mines, by territory claimed by the Yellowknives Dene, and especially by the rock-ribbed Canadian shield, which makes construction in the NWT nearly as pricey as building on the moon.
This has led not just to urban “densification,” but also to pioneer ingenuity. Since the old days, locals triumphed over the daunting Precambrian bedrock by simply doing without buried infrastructure. In the city’s Old Town, water still arrives by truck and sewage departs the same way. And, antiquated as it may seem, that’s the plan for Grace Lake. Forget underground pipes: Residents will pay for their own trucked services, cutting the cost of developing the subdivision in half.
Bell, for one, cheers that approach. “It’s the reality of challenging environments: People are not willing to pay 50 per cent more to have [utilities] in the ground.” He also pooh-poohs the notion that Grace Lake isn’t “smart growth”; after all, the neighbourhood will be just four kilometres from downtown. “People have to understand what sprawl really is,” he says.
Monte Kehler sees both sides. While he builds his new home at Grace Lake, he and his family are living in another house just a few minutes’ walk from the city centre. “There are tradeoffs,” he admits. “But I expect I’ll be biking into town quite a bit, and I’d like there to be a trail that connects to downtown. And it’s not like it’s even a 20-minute commute.”
And the longer Kehler spends out at his new property—surrounded by black spruce and pink outcrops, and by the gleaming lake with its beavers and muskrats and grebes—he falls even more in love with the place. “I feel like each week I’m out there,” he says, “I get a year of my life back.”
Four years ago, the NWT’s caribou-hunting outfitters took a fatal hit. Their business was banned. Fortunes were lost. Lives were ruined. Did it have to happen?
By Darren Campbell
At 66 years young, Gary Jaeb is looking for a new line of work when most people his age are enjoying retirement. Jaeb doesn’t want to be in this position, but since January 1, 2010, the longtime Yellowknife resident has been a businessman without a business. That’s the date that the Northwest Territories government banned sport-hunting of the Bathurst caribou herd.
That day was a dark one for Jaeb. Since 1983 he had been taking hunters out to the barren grounds north of Yellowknife so they could bag Bathurst caribou. At its peak from 1996 to 2005, Jaeb’s outfitting business, True North Safaris Ltd., averaged 150 hunters per year and employed three full-time staff and over 30 seasonal workers. Hunters would pay Jaeb roughly US$7,000 for the privilege of hunting a trophy bull. That’s all gone now.
When I talked to Jaeb in August, he and his wife Bertha were looking for an apartment to live in. The commercial property in Yellowknife’s Kam Lake neighbourhood they had been living in was sold in October 2013. Under the terms of the sale the Jaebs were allowed to live in it for a year, but had to move out by this October. The couple were in poor financial shape and Jaeb’s skills as a caribou outfitter are not in high demand in the NWT. “I’m virtually unemployed and the lodges aren’t operating,” Jaeb says. “I’ve got to try to figure out a way to make a living. It’s tough.”
Tough is an apt word to describe the situation barren ground caribou outfitters have faced since the NWT government brought down the hammer in 2010. The hunting ban eliminated their industry and put them and their employees out of work. It left their camps empty, and for the most part, unattended and neglected. And it was done without providing any compensation for their loss. It’s left outfitters bitter and prompted them to take legal action. Six outfitters are pursuing a lawsuit against the NWT government, seeking compensation for what they say was an expropriation of their businesses. “It was our life’s work and we were good for the territories. They screwed us,” Jaeb says.
“EVERYTHING IS BIGGER in the Northwest Territories,” says one of the landing pages on the Spectacular Northwest Territories website—the organization charged with marketing the tourism industry in the territory. That line used to apply to the Bathurst caribou. The herd was abundant—in 1996 the NWT government said the Bathurst herd numbered 350,000—and hunters loved to stalk them on the NWT’s vast (and largely unpopulated) tundra north of Yellowknife known as the barren grounds. But a decade later the NWT government started releasing troubling numbers about the herd. In 2006, the department of Environment and Natural Resources pegged the Bathurst herd’s numbers at 128,000, a decline of 63 per cent .
In 2009, after additional caribou surveys had been conducted, more bad news arrived. The herd’s population was now a mere 32,000—due, ENR said, to a variety of factors: aboriginal harvests above the alloted amount; a past tendency to hunt pregnant cows; climate change; the encroachment of nearby mines; increased predation. To make matters worse, ENR was reporting that the number of caribou in other NWT herds, the Bluenose East, the Beverly and the Ahiak, were also dwindling. Fearing the NWT was on the brink of an ecological catastrophe akin to the collapse of the Atlantic codfish, ENR Minister Michael Miltenberger banned hunting of Bathurst caribou, suspeding all tags.
It has always been the contention of the six outfitting companies involved in the lawsuit (the plaintiffs include Jaeb’s True North Safaris plus Bathurst Inlet Developments, J Group, Arctic Safaris, Caribou Pass Outfitters Ltd. and Qaivvik Ltd.) that the hunting ban was unnecessary and based on junk science. The outfitters say Dr. John Kelsall with the Canadian Wildlife Service established in 1968 that there were four major herds of barrenground caribou: the Bluenose, the Bathurst, the Beverly and the Qaminurjuaq herds. But in the mid-1990s, the outfitters say NWT government caribou biologist Anne Gunn split the Bathurst herd into the Bathurst and Ahiak herds. Then, the claimants go on to say, another caribou biologist, John Nagy, split the Bluenose into the Cape Bathurst, Bluenose East and Bluenose West herds, and in 2006 the government split the Cape Bathurst herd into the Cape Bathurst and Tuktoyaktuk Peninsula herds.
In essence, the outfitters say the crash in caribou numbers is a result of the NWT government creating eight barrenground caribou herds when there used to be four and then comparing old herd definitions and population numbers with new ones.
“This is not a caribou problem, it’s a government problem,” says John Andre, a Montana-based outfitter who along with his wife, Anita Andre, owned and operated Qaivvik Ltd and Caribou Pass Outfitters Ltd. “They’re telling people there’s a huge scarcity, which there isn’t. There’s nothing wrong with the caribou. There never has been.”
Throughout, the outfitters have branded Miltenberger an anti-hunting boogeyman. But Miltenberger says his only agenda is ensuring the caribou are around for generations to come. “We operate under the precautionary principle. The only information we have tells us things are happening that are putting the herds in jeopardy and the numbers are down,” he says. “I’m not prepared to roll the dice and say, ‘Let’s keep hunting’ and hope it’s all good. Anecdotal information raised by other folks suggesting there are actually hundreds of thousands of animals out there that nobody knows about—I have never seen evidence of that. I’m confident the information we have is the best, most current that we can base our decisions on.”
ALL THIS TALK about faulty science, caribou surveys and dividing herds can get complicated. No matter how you cut it, though, the outfitters were stripped of their tags and left to deal with the consequences—with little help from the territorial government.
One of the things the GNWT did do once the caribou hunts were gone was create a program to help the outfitters diversify the products they offer—the Tourism Product Diversification and Marketing Program. As the name suggests, the program was meant to help all types of tourism businesses increase the number of offerings they provided. Applicants could apply for up to $25,000 in funding to develop a business plan to enhance existing tourism products or develop new ones. They could also apply for up to $10,000 to market their business. The biggest pot of cash the program provided was up to $250,000 to actually develop new tourism products.
While tourism operators could have applied for assistance in developing different hunting opportunities, the program appeared to be aimed at getting applicants to try their hand at eco-tourism—getting people to pay to watch wildlife rather than hunt it down. In fact, one of the objectives of the Tourism Product Diversification and Marketing Program as stated on the department of Industry, Tourism and Investment (ITI)’s website is to “capture a greater share of the non-consumptive tourism outdoor adventure market.”
However, encouraging experienced caribou outfitters to turn eco-tourist seemed like a bad fit from the beginning. “To think eco-tourism can fill these voids—our camps were built for caribou hunting,” says Boyd Warner, owner of Bathurst Inlet Developments. “You’re never going to attract people at the same dollar value. People are not going to pay $6,000 to $7,000 to watch the caribou.”
Still, Warner has been more fortunate than some of his fellow NWT-based barrenground caribou outfitters. His outfitting business, which goes by the name of Adventure Northwest, also offers wolf, grizzly bear, muskox and moose hunting packages. And Warner is still offering barrenground caribou hunts, in Nunavut. Much to Miltenberger’s annoyance, Nunavut has not banned hunting of the Bathurst caribou. As a result, Warner is still taking 40 hunters to hunt caribou in Nunavut each year, although it’s a far cry from the volume he had before the 2010 ban. “I had five full-time employees and an office in Yellowknife and we were taking 100 to 150 hunters annually into three or four different camps,” Warner says. “I’m only taking 40 hunters a year now at $6,000 to $7,000 per hunter. That’s a significant change in cash flow.”
Andre, who turns 65 in November, has also weathered the loss of his caribou hunting business in the NWT better than others. Armed with a business-administration degree, he and his wife have run Shoshone Wilderness Adventures, a Montana-based hunting and fishing adventure-consulting business, since 1987. After ENR shut down the commercial caribou hunt, he closed the business he had operated since 1999 and turned over his camps, which used to host 220 hunters annually, to mother nature. “The camps are just sitting there, rotting,” Andre says.
“I haven’t seen them in four years.”
Not only have these outfitters lost big bucks due to the hunting ban, the NWT tourism industry has felt the loss as well. While hunters make up a very small fraction of the tourists who visit the territory every year, they tend to be prodigious spenders on and off the tundra. According to ITI’s statistics, during the 2001-2002 tourism season, 1,400 hunters visited the NWT and spent a whopping $18.9 million, an average of $13,500 per hunter. By contrast, outdoor adventurers—the kind of tourist typically associated with eco-tourism ventures—numbered 1,552 in 2001-2002 but only spent $5.1 million in the territory, or an average of $3,286 per visitor.
The 2001-2002 period represents something of a high-water mark for the NWT’s commercial hunting sector. The number of hunters visiting the NWT has decreased steadily since 2007, when tags started to be taken away from the caribou outfitters. In 2012-2013, hunters spent only $5.8 million in the territory. “It’s left a big gap,” admits ITI Minister Dave Ramsay, when asked how the demise of the caribou outfitting sector has impacted his territory’s tourism industry. “NWT tourism really misses it.”
Of course, what is taken away can always be given back. If the government ever determined the Bathurst caribou herd had recovered and was again large enough to allow commercial hunting, Ramsay thinks there would be a great demand from hunters to bag caribou in the territory. But with no such hunts being offered since 2009, the NWT has lost market share to rival jurisdictions like Alaska and Nunavut. Gary Jaeb adds that the NWT also has a credibility problem in the big-game hunting community because the hunt was shut down without much warning. (In the statement of claim they filed with the Supreme Court of the Northwest Territories back in 2011, the outfitters say that a letter from ENR dated January 2009 was mailed out, saying tags would remain at current levels in 2010. But ENR had already, beginning in 2006, been reducing the number of tags given to individual outfitters from a peak of 180 to 132 (2006), then to 83 (2007) and then to 75 (2008). All tags were finally taken away by ENR on Jan. 1, 2010.) Hunters, says Jaeb, might be wary of booking future caribou hunts in the NWT, fearing a ban could happen again.
Marketing the NWT as a caribou-hunting destination and rebuilding client bases takes time and effort. Jaeb says that at his age, even if commercial hunting was allowed again, he has no interest in starting over.
Not that it appears the GNWT is planning on doing that. In mid-August, Miltenberger had more bad news. The latest information coming out of his department showed the Bathurst and Bluenose East herds remain in decline. The latter group, whose members stretch from Colville Lake to the Beaufort Sea, saw its numbers shrink to 68,000 last year from over 100,000 in 2010. “We are very concerned,” Miltenberger says. “Will outfitters be back in the hunting business with the Bathurst herd any time soon? In the NWT, the answer is ‘no.’”
“WE’RE NEVER GOING TO HUNT AGAIN.”
That’s Barry Taylor’s response when he’s asked about the likelihood that his Yellowknife-based caribou hunting operation, Arctic Safaris, will ever be back in business. Before the hunt was cancelled, he was one of the smaller barrenground caribou outfitters, guiding about 75 hunters per year. But he still employed up to six guides during the one-month hunting season, and he says he employed between 12 and 14 people at his camp.
Taylor is 66. He’s been dealt some severe personal and financial blows since his business went bust. He’s been unsuccessful in
selling his deserted caribou camp on Lake Providence, approximately 300 kilometres north of Yellowknife. It’s a “$700,000 liability,” he says. He sits on a couple of territorial wildlife-management boards but otherwise hasn’t been able to find work, which has drained the money he saved over the years. His wife succumbed to cancer last year, and Taylor wonders if the stress the couple was under as his business collapsed may have contributed to her passing. He’s been impressed with the resolve of his fellow plaintiffs, considering what they have been through. “I’m amazed over the last five years there hasn’t been a suicide,” Taylor says.
For these outfitters, the lawsuit is viewed as their best chance to get back some of what they’ve lost. In the statement of claim, they argue that after being “induced” by the defendants—in this case the territorial government and Miltenberger, ENR’s minister—to invest and continue to develop their outfitting businesses in the years leading up to the 2010 shutdown, their property was expropriated and their businesses extinguished by a government with no statutory authority or factual basis to do so.
For their troubles, the plaintiffs, according to the statement of claim, are seeking “general damages from the Defendant for all their capital expenditures made based on the Defendant assurances as well as damages for loss of profit and future profits and loss of goodwill, estimated to be in the tens of millions of dollars.”
Considering the outfitters filed the lawsuit over three years ago, they haven’t made much progress. But the plaintiffs say they would like to settle matters out of court if they can, and come up with a solution that would be a win-win. “We don’t need to argue if they did the right thing or not. Let’s get a judicial review, sit down and settle this thing,” Jaeb says. “But we don’t know if [the government] is going to go there.”
With this touchy matter still before the courts, Miltenberger wouldn’t say much about the outfitters’ legal action and if a settlement is likely. “We’re working through this process and working with the outfitters,” he says. “All options by all parties are being considered at this point. I’ll leave it at that.”
Taylor says he has a proposed a simple solution to the NWT government. “If they buy my camp at some sort of acceptable price, they can get rid of me.” That seems unlikely, however. The NWT does not have the financial resources of an Alberta or an Ontario, and the government isn’t keen to hand over several million dollars to a handful of outfitters. Besides, as Miltenberger has pointed out in the past, his government didn’t ban the commercial caribou hunt to ruin an industry, it did it because it believes the survival of the caribou is at stake.
Given the positions of both sides on this issue, the smart money says the NWT government will try to wait out the outfitters, knowing they have limited financial resources to carry on a long legal battle, and hope to reach a settlement more to the government’s liking. But if that is the government’s plan, John Andre warns they may be disappointed. “We’re going to try to move this forward as quickly as possible. This is not going away. We’re going to continue to fight.”
