October 20, 2014
Quebec’s three most important minerals (iron ore, nickel,gold) have been hard hit by declining prices. One would expect the mining industry in the province to be depressed and in a severe slump. Yet, the opposite is true.
There are plenty of grounds for pessimism. Since April of this year the price of nickel has dropped 26%. Gold is off by 20%. Iron ore prices have plummeted by 40% since the start of the year. Iron-ore producer Cliffs Natural Resources has written down $6B in investment, largely in Quebec. Cliffs expanded into Canada when it bought Consolidated Thompson Iron Mines Ltd. in 2011 for $4.3 billion.
The optimistic news:
- The new Liberal government of Quebec has announced “Plan Nord +” which will commit $5B in funds to develop non-renewable energy north of the 49th parallel. The regions First Nations are strongly supporting the new plan.
- The provincial government has announced revival of a rail study to extend service into iron ore site further north in the Labrador Trough. This is great news for several advanced exploration projects in the trough.
- The Quebec government has announced it will invest $2M in the Arianne phosphate project, located 650 km NE of Montreal. If all goes as planned, construction could begin in 2015 of a $1.2B mine.
- The junior mining sector has been energized with several project showing great promise. Eastmain Resources for example has an advanced gold project located in the vicinity of Goldcorp’s Éléonore mine.
- Following a four year development period the initial dore bar was poured on October 1, 2014 at Goldcorp’s new Éléonore mine in northern Quebecv. The mine contains an estimated 70 ounces of gold to be recovered from the gravity circuit. Commissioning of the remainder of the plant is underway and the mine remains on track for declaration of commercial production in the first quarter of 2015. Production for 2014 is expected to be between 40,000 and 60,000 ounces of gold. Capital costs remain unchanged at between $1.8 and $1.9 billion.
- Stornaway Diamonds has raised $1B to build Quebec’s first diamond mine, set to begin production in 2017. The current project development schedule (revised in April 2014 for a 12 month delay from the January 28, 2013 Optimization Study) assumes first road access to the project site by the fourth quarter of 2013. Construction began on the project in July 2014 and is expected to continue into the third quarter of 2016. Plant commissioning is scheduled to begin in the second half of 2016 with commercial production achieved in the second quarter of calendar 2017.
There is plenty of positive news coming from Quebec, as exploration and production activities have increased.
- b)Quebec-special section in the Northern Miner, 6-12-Oct-2014.