The proposed Sisson tungsten and molybdenum mine near Stanley, New Brunswick has cleared another regulatory hurdle.
On Friday (June 23), the Canadian Environmental Assessment Agency announced the environmental assessment of the project had been completed.
The proponent, Vancouver-based Northcliff Resources Ltd., has been trying to move the project along for quite some time.
The New Brunswick government is also been keen to see the mine open as it would employ 300 people – hopefully for a long time as the estimated mine life would be 27 years.
In a press release issued on the day of the federal government announcement, Northcliff president and CEO Chris Zahovskis said “our focus now will be on securing offtake and financing to advance the project.”
In short, what Zahovskis is saying is the company now has to find customers for the metals it hopes to mine from Sisson, and a way to pay for the project’s estimated $579 million capital cost.
It’s worth noting the project, located 100 kilometres northwest of Fredericton, got CEAA’s approval even though the Agency determined the mine is likely to cause significant adverse and cumulative environmental effects on the current use of lands and resources for traditional purposes by Maliseet First Nations.
If the company does start construction, will that admission by the Agency come back to bite Northcliff in the form of protests and roadblocks from some members of the Maliseet?
There are also market conditions to consider.
China is the largest producer and consumer of tungsten. As goes the Chinese economy goes , so goes the global tungsten market.
That market hasn’t been doing so well since 2012. In Northcliff’s most recent management discussion and analysis filing, it says prices for tungsten and molybdenum have been depressed for the past five years, although prices for both have improved modestly in recent months.
The analysis does provide some optimism that tungsten prices, at least, will increase in the short-term, saying “some market forecasters” think the market should fall into a supply deficit in 2017, drawing down stockpiles and increasing prices.
But will the price increases – assuming they occur – be enough to convince investors to provide the kind of financing required to get the mine built?
Northcliff does have a significant minority partner in the Sisson project in New Zealand-based Todd Group, which should give it more time to find that financing.
However, even after receiving the regulatory blessing of CEAA, the fact is the Sisson mine is still just a concept.