Newfoundland and Labrador mining enters a rich vein of exploration and development
On the south side of Millertown, the pavement disappears and Beothuk Street transforms into a gravel road. Leaving this quiet, central Newfoundland community behind, the road stretches out into the distance, through the bush, past forests and bogs, rolling hills and small lakes, and over bridges before finally reaching Valentine Lake. It’s here, approximately 80 km south of town, that Marathon Gold is working on a mining exploration and development project that warms the heart of Millertown Mayor Fiona Humber.
“It’s great news,” she says. “People are just waiting for another mine to open.”
ASSAYING THE PROSPECTS
Throughout Newfoundland and Labrador, the mining sector is buzzing with the promise of projects like Marathon Gold’s Valentine Lake site, Delrey Metals’ Four Corners property in southwestern Newfoundland and the expansion of Vale’s Voisey’s Bay mine.
“The level of activity has picked up over the last three years in terms of mines opening up, exploration and development,” says Ed Moriarity, executive director of Mining Industry NL. “It’s due to a combination of the markets and the commodities we have in the ground.”
In northwestern Newfoundland, Anaconda Mining is still working its Pine Cove site in the Baie Verte area after finding more ore near the surface at the south end of that mine. But the company is also spreading out with exploration at its nearby properties. “We continue to explore there and at Stog’er Tight and Argyle as well,” says CEO Kevin Bullock.
Anaconda’s total exploration and development budget for this year was $7.5 million, including $1.5- million for exploration of its Tilt Cove property to find new drilling targets, sample soils, conduct two surveys and re-log 13 historic drill holes.
In September, Anaconda was planning to drill 4,000 meters in the final quarter of this year. The company was then only slightly more than halfway through its exploration and drilling program for the year and was still planning to sink another $2.6 million into its Goldboro property in Nova Scotia.
Anaconda’s initial plan for Goldboro was to transport all its concentrate to Newfoundland for processing at its facility in Point Rousse. But further exploration revealed more than enough ore for Goldboro to warrant its own processing plant. “We no longer plan to barge material to Pointe Rousse in the future. The only barging we will carry out is to ship the 10,000-tonne bulk sample to Pointe Rousse. This is planned to be fully shipped and processed in [the fourth quarter of this year],” says Bullock.
Also on the Baie Verte Peninsula, Rambler Metals & Mining Plc. is ramping up production at its Ming Mine. “We have demonstrated over the first half of the year that our operations are capable of reaching and exceeding our own throughput expectations,” says Rambler Metals president and CEO Andre Booyzen. “The remainder of 2019 will be an exciting time for us with plans in place to upgrade our lower grade ore and further improve mill feed rates. This will start us on our longer-term journey towards expanding to 2,000 ore tonnes milled per day at much higher grades.”
Early in September, Rambler Metals announced it had secured $2.5 million (USD) in financing through the issuance of unsecured convertible loan notes.
Elsewhere in the province, Tata Steel Minerals Canada Ltd. (which operates a high-grade iron ore mine in Labrador as a joint venture with Ressources Québec, the Government of Quebec and junior mining company New Millennium Iron Corp.) is expected to move ahead with plans for a $700-million wet processing plant.
According to the provincial government report Mining in Newfoundland and Labrador, “The wet plant will allow (Tata Steel) to take advantage of current market premiums for high grade, high-quality concentrate. (Tata Steel) will produce both concentrate and (direct shipping ore) once the plant is fully operational.”
That plant got a boost earlier this year with a $6.8-million shot in the arm from Ottawa to fund a 27-km transmission line from Nalcor Energy’s Menihek hydroelectric generating station. That one initiative alone is expected to cut the operation’s consumption of diesel by 40 per cent.
Nearby, mining giant Iron Ore Company of Canada (IOC) is a year into its Moss Pit. The project is helping to ramp up the company’s annual production and is expected to extend the life of its operations in Labrador City. “It will play an important role in …increasing our competitiveness in the global market at a time when our product is in high demand and securing significant premiums,” said Iron Ore of Canada president and CEO Clayton Walker in a statement published September 2018.
A relative newcomer to the province’s mining sector is Vancouver-based Delrey Metals Corp. The company raised $1.5 million in financing in mid-July through a private placement and is drilling at its Four Corners project east of Stephenville. That drilling program, announced in June, was to include up to 5,000 metres of drilling spread over 20 targets and 1,600 metres of trenches during this exploration season.
Although the company was initially primarily interested in vanadium (a malleable and corrosion-resistant metal used in cars, pipelines, jet engines and batteries), the recent surge in iron ore prices has shifted its focus to include more planning and strategy around iron and titanium to better maximize the value of all three metals found on the project.
“We are delighted with the recent movement of iron prices to more than $1,000 (USD) per tonne, making new five-year highs,” said president and CEO Morgan Good in a June 5, 2019 press release. “Other companies such as Champion Iron Ltd. and ML Gold Corp. with their iron assets in eastern Canada have both seen a dramatic appreciation to their share prices and valuations of late, which simply cannot be ignored as the iron sector continues heating up.”
In non-metallic mining, Atlantic Minerals Ltd. is expanding its existing quarry at White Hills near Stephenville in a move expected to extend its calcium and dolomite limestone operations there for another 25 years.
And in southern Newfoundland, Canada Fluorspar (NL) Inc. underwent a public consultation process last spring for its proposed shipping terminal to the west of its mine in St. Lawrence. “[It’s] intriguing to us because it brings in the possibility of being able to sell aggregates in addition to our fluorspar,” Canada Fluorspar president and CEO Bill Dobbs told a TV news crew. According to Dobbs, a terminal in that location would extend the fluorspar operations by another decade above its already-expected eight-year lifespan.
“When you put an aggregate by-product in the mix, we see an increase in jobs of at least 10 per cent and probably higher,” he said.
Horticultural and environmental peat moss products producer Hi-Point Industries (1991) Ltd., which has harvesting operations in Bishop’s Falls and Corner Brook, got a financial shot in the arm earlier this year with $570,000 in loans from the province. That money is to boost the company’s efficiency and its exports.
In gypsum operations in the province, Galen Gypsum Mines Ltd. is still extracting the soft mineral from its Coal Brook deposit on St. George’s Bay on a seasonal basis.
Also in St. George’s Bay, Red Moon Resources is planning to ramp up its own production of gypsum to 250,000 tonnes per year over the remainder of this year and into 2020 after starting production in August 2018.
On the other side of the province in Conception Bay South, Trinity Resources Ltd. is busy with its pyrophyllite mine and milling operation, selling waste rock as aggregate.
Add all that growth together and it’s obvious that the mining sector is one of the bright spots for the Newfoundland and Labrador economy.
“On the mining side, the future of metal mining in [Newfoundland and Labrador] is brighter with the Voisey’s Bay underground expansion under way,” noted the Conference Board of Canada in last summer’s Provincial Outlook Executive Summary. “The $1.7-billion (USD) project will extend operations at the current site, reach the operational stage sometime in 2021 and produce at peak capacity between 2025 and 2033.”
Vale reported earlier this year it had already pumped about
$67 million (USD) into that project by the end of its second quarter this year alone, bringing its total investment to about $290 million (USD).
“We are on track to produce first ore from Reid Brook in 2021 and, beginning in 2020, we will gradually transition from open pit to underground mining,” says Joao Zanon, project director for the Voisey’s Bay mine expansion project.
“Underground mining operations will extend the life of our Voisey’s Bay operations until at least 2034,” he says. “At peak production, the underground mines will produce about 40,000 tonnes of nickel-in-concentrate per year, which we will ship to Vale’s Long Harbour facility to be processed into finished nickel.”
The Conference Board’s forecast for this year states that the economic boost from mining and other sectors will fuel job growth in Newfoundland and Labrador with a net gain of 2,160 jobs in 2019 after years of weak to mild growth.
Although mining is an activity usually out of sight for most Canadians living in big cities, it is a major contributor to Canada’s economic well-being.
Pierre Gratton, president and CEO of the Mining Association of Canada, says the industry contributed $97 billion, or five per cent, to the country’s GDP in 2017 and is responsible for 634,000 direct and indirect jobs across the country.
MILLERTOWN LOVES VALENTINE
Marathon Gold Corp.’s preliminary economic assessment has already shown there are 2.7 million measured and indicated ounces of gold at its Valentine Lake project, enough to keep a mine going for 12 years while producing 225,000 ounces of gold a year.
That would mean roughly 400 new jobs, 200 miners and administrative staffers working two shifts, says Marathon Gold president and CEO Matt Manson.
So, even though there’s still roughly two years of work to be done before the Toronto-based junior miner can get a working mine up at Valentine Lake, including the environmental assessment process, Mayor Humber is optimistic.
“We’re all pretty confident it’s going ahead. It’s so promising,” she says. “It’s clean and they can extract the gold from the rock with minimal damage… They don’t have to use as many chemicals and so it’s easier on the environment.”
In early September, the markets too were bullish on Marathon Gold when the company announced it was able to raise more than $20 million in a private placement with a syndicate of underwriters led by Canaccord Genuity Corp. and Sprott Capital Partners.
The deal, which still had to get regulatory approval at the time of the writing of this article, offered up units with common share warrants which allow buyers to pick up Marathon Gold stock at a pre-set price within two years and flow-through shares. These allow buyers to write off from their income taxes a portion of the mining company’s expenses for its Valentine Lake project. The offering also included Marathon Gold common shares bundled into units with common share warrants.
An option in that deal, exercised by early October, raised another roughly $5 million for Marathon Gold and brought the total amount of new capital to just over $25 million. Roughly $10 million of that is to be spent on further exploration of the Valentine Lake project.
Mining activities at Valentine Lake are well underway: there’s already a camp there with enough room for 50 workers, offices, a cafeteria and a core shack in several vinyl-clad, prefabricated buildings. An electrical transmission line is nearby. That road access and handy electrical power are big assets for Marathon Gold.
“Infrastructure is really important. You can have a mine you can drive to and work off the grid and not have to bring in diesel generators,” says Manson. “These are very, very important not only because they lower operating costs but also to lower the risk.”
In Millertown, the prospect of not only jobs but also more customers for local businesses is buoying spirits.
According to Mayor Humber, the local Osmond’s Saw Mill is already getting more work making ore boxes for Marathon Gold and the C&S Variety store is seeing more people buy gas and groceries.
“It’s bringing a lot of people into the town,” she says. “We have an inn and cottages. So, if Marathon Gold has investors and experts come in, they’ll stay and eat there.
“It’s what we’ve been hoping for.” •