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COVID: Mining and exploration down but not out

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Strong gold prices are helping bolster much of the reduced exploration in NWT and Nunavut. © TMAC

Will need help to emerge stronger 

COVID‐19 continues to create the most significant health and economic disruptions in recent Canadian history. However, several encouraging statements by the federal government resonate as we wrestle with the pandemic. We are all in this together and it is important that Canada emerge stronger than it was pre‐COVID. 

The last statement really resonates with the Chamber of Mines: that the NWT and Nunavut emerge stronger than pre‐COVID. 

The northern minerals industry has not been immune to COVID. Travel was virtually shut down as borders were closed; mine workforces shrank as workers from vulnerable communities were ordered to stay home; and in one case a mine was forced into creditor protection due to the pandemic’s effects. 

Despite the pandemic’s impacts on business, northern mines have risen to the challenge. They began with applying stringent social distancing measures and sending workers from small vulnerable communities home, with pay. Longer work rotations were put in place for the remaining workers along with private, cross‐country charter flights to bring them to and from their homes safely. For added protection, several mines installed testing labs. In taking these strong steps to keep operating, northern mines have not only continued to maintain their significant contributions to northern economies, but, most importantly, they have kept workers and communities safe. 

This has not come without a price, though. Perhaps the highest cost has been the shut down of the NWT’s Ekati mine as diamond markets and sales virtually shut down. The two remaining diamond mines continue to suffer from depressed prices and reduced sales. Thankfully, Nunavut’s gold and iron mines have been blessed with stronger commodity prices, helping offset pandemic‐related higher costs and reduced production. 

Sustaining the significant benefits that mining provides rests with continued and healthy exploration investment. Without it, new deposits will not be discovered to eventually replace those being mined today. Employment, business, and tax benefits will dry up. 

Unfortunately, northern exploration has suffered significantly from COVID. Planned programs ground to a halt as travel and markets were disrupted. And while Canada provided financial relief to many businesses, the government’s flagship emergency wage subsidy program was not available to the small pre‐ revenue exploration companies that bring investment to the North. Some explorers have chosen to invest in projects in other jurisdictions where exploration costs are also much lower. 

NWT & Nunavut Chamber of Mines President Ken Armstrong says the North’s minerals industry wants to emerge from the pandemic in a stronger position but that will take a combined effort by industry and governments. © Chamber of Mines

The Chamber of Mines has worked diligently and collaboratively with federal and territorial governments to seek relief. We have been encouraged that some efforts are now assisting the struggling industry over the COVID hump. The Northwest Territories government has distributed $1 million through its mineral incentive program. In Nunavut, the federal government announced mineral tenure relief by extending the time limits on mineral lease payments. 

However, getting exploration to emerge stronger than pre‐COVID is still not assured. 

It is important to know that there is a ‘double whammy’ working against northern exploration. While COVID has made exploration efforts challenging in 2020 — and not possible in some cases — the pandemic came at a time when northern mineral exploration investment was already struggling. In February, the federal government released pre‐pandemic data confirming continuation of a multi‐year decline in exploration funding in both territories. 

The Chamber of Mines is in discussions with all levels of government on strategic actions that can help the industry emerge stronger. 

Reducing unnecessary regulatory hurdles will certainly help. Creating a special ‘North of 60’ mineral exploration tax credit would help level the playing field in attracting investment from southern Canada. Advancing the promised national strategy for strategic and battery metals will open additional new exploration and mining possibilities. And getting government support for specific projects to help with such things as their costly infrastructure (something government did 50 years ago), could make a world of difference. 

Despite all the challenges, several companies have been able to mount exploration programs in 2020, helped in no small part by a rising gold price. 

While we cannot count on or control fortuitous market prices, we can roll up our sleeves and take positive actions to strengthen the minerals industry and the northern economy. As our prime minister has stated, COVID provides Canada the opportunity to emerge stronger. It is up to all of us to make this happen, and I am proud to say the Chamber of Mines is seizing that challenge. 

Exploration – at work in 2020 in Nunavut and the NWT 

Here is a list of current exploration activities across the two territories. 

Nunavut 

· Blue Star Gold is conducting a 7,000‐metre drill program at Hood River and Ulu properties. 

· Despite cancelling this year’s program, North Arrow Minerals and EHR Resources have financing for the Q1‐4 diamond deposit bulk sampling (planned for summer 2021) at the Naujaat diamond project. 

· Sabina Gold & Silver has reported its first results from high‐grade drilling of Umwelt Underground at its Back River gold property. The Back River Goose project is fully permitted for construction and operations. 

· Western Atlas Resources completed its 13‐ hole initial drill program at its Meadowbank gold project. 

· Solstice Gold has received government approval to conduct an exploration program on its KGP gold project near the Meliadine gold mine. 

NWT 

· Fortune Minerals has started a geophysical program at its NICO gold‐bismuth‐cobalt‐ copper property. 

· Gold Terra Resources has begun a 10,000‐ metre drill program at its Yellowknife city gold project. 

· Nighthawk Gold Corp’s 2020 exploration program is underway with three drills and an expected 25,000 metres of drilling at Colomac and at the Leta Arm and Treasure Island gold projects. 

· Osisko Metals Incorporated has restarted drilling at Pine Point. At the site, the camp has been reopened for permitting and environmental initiatives and for drilling on priority targets. 

· Rover Metals has begun an 1100‐metre diamond drilling program on its gold project close to Behchoko, north of Yellowknife.