Looking back at 2014
Commodity prices mostly fell in 2014. Copper down from $3.35 /lb to $2.83/lb. Gold down marginally from $1,220/oz. to $1,194/oz. Silver down from $20/oz to $16. Zinc rose from $0.88/lb to $0.98. Lead fell from $0.92/lb. to $0.84/lb. Exploration expenditures were down in all jurisdictions.
In August the main tailings pond at the Polley mine in BC failed, flushing 24 million cubic metres of water and tailings downstream. This disastrous event was shocking to the public and to the mining industry, particularly since the tailing dam had received full regulatory approvals. The Polley mine disaster did not occur in the north yet it has made the public more skeptical of the environmental safeguards that need be in place at major mining projects.
On the regulatory front the federal government moved to streamline its environmental review processes in NWT, combining three oversight boards into one. In Yukon, it proposed to amend the regulatory assessment body. Both moves have been met with litigation. Meanwhile, the Yukon Supreme Court decided against the Yukon Government in a decision about the Peel Watershed planning report. The Yukon Government is deciding whether to appeal the ruling. On the whole there has been increased litigation and reduced certainty for mining investors in Yukon and NWT.
2014 saw mining commence at the Mary River iron ore deposit on Baffin Island, a deposit so rich that the ore will be shipped direct to the smelter in Europe. Agnico-Eagle’s Meadowbank gold mine has remained in full production in Nunavut and has turned out to be a great producer for the company. NWT’s three diamond mines are in production with a 4th mine about to be built.
In Yukon two mines remain in production, while in Alaska 6 mines operate.
Construction of the Red Chris mine is expected to continue into late 2014. There are approximately 400 contract jobs during the construction period and once the mine is in operation, the company expects to employ 300 permanent full time employees.
Nine years after construction began, Cameco’s Cigar Lake mine began production on March 13, 2014. Cigar Lake is the world’s second largest high-grade uranium deposit, with grades that are 100 times the world average. Cigar Lake is considered one of the world’s most technically challenging uranium deposits to mine.
Looking forward at 2015
Hopes for a significant recovery rest with China, the consumer of about ½ the world’s metals. Yet China has slowed, probably dropping below 7% growth for the first time in a decade. Most likely commodity prices will remain depressed from their 2011 peaks.
In Alaska the Donlin gold project advances, but is a few years from construction. Yukon has two small scale gold projects, Victoria’s Dublin Gulch and Kaminak’s Coffee Creek, that show promise. Victoria needs financing and its project may move forward in 2015-16. The hot spot in the north is Nunavut with its Mary River mine shipping ore for the first time in 2015.
Uncertainty about regulatory matters, land use planning and aboriginal issues will hamper investors in Yukon and NWT. Litigation is highly beneficial to the lawyers involved. In Alaska the federal EPA has taken a stance against the Pebble gold project even in advance of the proponents filing a proposal.
BC’s Red Chris mine will start production in 2015, shipping ore through the port of Stewart. NWT’s Gahcho Kué project is the largest new diamond mine under development globally, and has the potential to become one of Canada’s major high-grade and long-lived diamond mines. The mine will be under construction in 2015.
Generally, exploration will be subdued compared to a few short years ago. One new mine will start and another one is under construction. Tough times persist.