Engineering & Mining Journal

APR 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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76 E&MJ • APRIL 2018 MINING IN SASKATCHEWAN & MANITOBA clear. "Vale and Hudbay were established decades ago, and then there was a huge gap in investment, so we are looking at setting up a regime that will make up for that gap and allow investment to come," commented Blaine Pedersen, Minister of Growth, Enter- prise and Trade. Demonstrating its commitment to fa- cilitating a favorable operating environment, Manitoba's government is developing a Min- eral Development Protocol and reducing red tape where possible. Government support and maintaining an open dialogue with in- dustry will be key in furthering the sector. "Manitoba has huge potential," emphasized Ashley Kirwan, vice president and senior ge- ologist at Orix Geoscience, a consulting firm specializing in geoscience services for explo- ration companies. "It is a vast province and only a fraction of the land has been explored in depth… This is the best time to branch out into Manitoba as there are undoubtedly deposits still to be found. In addition to nick- el, copper, zinc and gold exploration, com- modities like lithium and cobalt are going to gain a lot of traction." Deserving Attention Indeed, Manitoba's potential for resources associated with clean energy makes it attrac- tive for new exploration ventures. Toronto-based Far Resources is following this route at its Zoro project, located near Snow Lake. The company's project not only has seven dykes, but is in a pegmatite field. The 2018 drill program will follow up on these other dykes that may be covered, and Far Resources has increased its land pack- age from 500 hectares to 2,200 hectares in anticipation. Mustang Minerals is hoping to access this corner of the market with its combined op- eration from two open pits, Mayville (copper- nickel) and Makwa (nickel-copper). Its last major study was a preliminary economic as- sessment but, due to the cycle, the company has been underfunded for the past couple of years. However, Robin Dunbar, Mustang Minerals' president, maintains a positive outlook going forward. "Most people have a forecast for the price of nickel of US$7 to US$7.50/lb which, coupled with the current strong US dollar, puts us at the level of our existing PEA," commented Dunbar. While base metals have put Manitoba on the map, precious metals have been rela- tively underexplored but offer many potential opportunities for investors. "It is because the original discoveries, such as the Flin Flon de- posit, were base metals and they were very large," remarked Gorden Glenn, chairman, president and CEO, Minnova Corp. A feasibility study has just been complet- ed on Minnova's PL gold deposit in central Manitoba, a re-start from a past producing mine in the 1980s. The project should pro- duce 50,000 oz/y and up to 70,000 oz/y with the expansion potential. "It is very comprehensive technical study and is NI43- 101 compliant. The project is very robust with a high IRR of over 50% and relatively low capex of approximately C$35 million. This contributes to a very short payback of approximately 1.5 years. The capex is low because we have a 1,000 mt mill that is in very good condition considering it has not been used for 30 years," continued Glenn. Another project with significant potential is Altius' Lynx diamond project. In partner- ship with a group of prospectors and geolo- gists, the Manitoba Geological Survey found diamonds in the outcrop. "It is an enigmatic system, in part because it is probably the oldest diamond occurrence in the world (2.7 billion years old)," explained Lawrence Win- ter, VP exploration at Altius Minerals. "It is not a kimberlite per se, so it is not like most diamond deposits at all. It is such a volumi- nous sequence where the potential for a bulk tonnage deposit is significant. A comparable situation in the copper business would be a porphyry deposit." Altius, established 20 years ago, is a prospect generator that generally seeks to le- verage projects by bringing in partners, never taking a project to the development stage on its own. While Altius is widely recognized as a royalty company, its Lynx diamond project in Manitoba is one of more than 30 projects in its exploration business unit. With a clear message from the govern- ment and proven resource potential, attract- ing investment and driving exploration, in- cluding by ensuring clarity for investors, are the next steps for the province in fostering a strong mining sector. "We are coming out of nearly two decades of NDP government, and the new conservative government is focused on promoting business," highlighted Norman Snyder, managing partner at Taylor McCaf- frey LLP. "If the carbon tax is an issue here, it is because we are dealing with it now; at least we will have some certainty about the taxation framework that other provinces do not have. We expect to see more support for businesses, but it is a big task." As things stand, Manitoba lacks ad- vanced exploration projects, meaning a lag in traction and new mine development in the foreseeable future. Nevertheless, with continued focus from the government and an uptick in mining investment imminent, the province has all the makings for success in the longer-term.

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