Manitoba Mining is Doing Quite Nicely, Thank You

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Provinces such as Ontario and British Columbia often get the bulk of the attention when it comes to the resources sector here in Canada, but make no mistake a number of other provinces have had more than their share of success in this crucial national industry – Manitoba is a prime example.

Some of the more well-established mining communities in Manitoba include: Flin Flon, Granville Lake, Leaf Rapids, Lynn Lake, Snow Lake, Thicket Portage, Thompson and Wabowden. The most dominant types of mining are gold and copper.

Manitoba’s total production value within this industry totals about $3.2 billion annually with metallic minerals accounting for about $1.65 billion, petroleum $1.36 billion and industrial minerals $188 million. The revenue amounts to about 7 per cent of the province’s entire gross domestic product and 13 per cent of all exports. There is $1.3 billion in capital expenditures and $140 million in exploration and deposit appraisal spending with seven operating mines and five projects advancing towards new mine development. Major producers include: Vale, in nickel and copper; HudBay Minerals, in copper and zinc; San Gold Corporation, in gold; and Tantalum Mining, in cesium. Annual employment averages 5,800 workers.

With a population of just over 1.2 million, Manitoba is Canada’s fifth largest province and the eighth largest in terms of geographic territory. A key element in the progression of the mining industry in this prairie province has been support from the provincial government, which isn’t the case throughout many other jurisdictions in Canada.

Chris Beaumont-Smith works with the Manitoba provincial government in the role of Acting Manager, Minerals Policy and Business Development, Geological Survey. The Geological Survey conducts a wide range of investigations in the province’s Precambrian Shield, Western Canada Sedimentary Basin, and Hudson Bay Basin. Investigations include examination of exposed bedrock, subsurface materials, and surficial sediments including sand, gravel and organic deposits.

The Geological Survey provides data and products such as geological maps and reports, metallic and industrial mineral deposit reports and databases, mineral resource assessments, targeted geoscience research, development of exploration models, and maintenance of data inventories.

Beaumont-Smith says the Manitoban government is highly supportive of the mining industry.

“Government supports our presence at Exploration Roundup in Vancouver and here at PDAC and we have our own show in November, which has about 1,200 delegates,” he tells us. “Our approach is to provide a forum for both Manitoba-based companies and companies that are active in Manitoba to present their projects. Unlike some other jurisdictions, where our November Manitoba government show would be focused on the government surveys research, we open it up to the entire industry so we have sessions for both our industry partners and The Geological Survey.

As previously noted, much fanfare in the mining industry often centres on such established players as Ontario and British Columbia, but Manitoba has a wealth of resources of its own.

“We have two well established major miners, HudBay Minerals in Flin Flon and Vale – which used to be Inco – in Thompson,” Beaumont-Smith says. “Right now, particularly on the HudBay side of things, we are going through a significant period of expansion. They have two new mines under development right now and they’ll be going into production incrementally over the next two years.”

“On the base metals side with HudBay we’re going to see very significant increases in their production,” Beaumont-Smith reveals. “On the nickel side, with Vale (as with most producers), they’re challenged right now but they’ve been very successful in streamlining their operations and we’re very optimistic that things are going to work out quite well. We’ll likely see further expansion of their operations in the not too distant future.”

As with virtually all mining regions anywhere in the world, Beaumont-Smith confirms there have always been ebbs and flows when it comes to the level of success within the industry throughout the years. A lot depends on juniors being able to raise capital on the stock markets.

“We’re in a particularly difficult capital crisis right now,” Beaumont-Smith admits. “We have a very large pipeline of particularly gold projects that are being run by juniors that are looking for major intermediate partners and it’s been a real challenge for them to advance their projects. Luckily they’ve been able to raise the necessary capital to move forward so in that respect we’re looking at probably three more projects going to feasibility in the next year or so, particularly on the gold side. There’s potential for a four or five-fold increase in gold production over the next four or five years.”

One of the great disappointments for those involved in Manitoba mining is how much they believe it’s been underexplored. You can count Beaumont-Smith amongst those who feel that way. He says there’s a lot of potential throughout the province, but believes the northeastern section may yield the greatest rate of return, especially east of Thompson towards the Ontario border.

“It’s a continuation of the tectonic regime – or the rocks that host Ring of Fire,” Beaumont-Smith continues. “Geology doesn’t stop at the border. It’s an area where we’ve got a multimillion ounce gold deposit that’s going to feasibility. At the same time the government is starting a process of pushing all-weather roads into that region so we think the northeast part of the province could see a very significant increase in exploration in the future when the markets recover to finance it. Certainly the potential is there.”

The Manitoba Mining Industry has been acknowledged by the provincial finance minister as one of the most important revenue streams for the province. The industry has also been tabbed as one of the fastest growing sectors in terms of revenue generation for the government as well.

“It’s our second-largest primary resource sector,” Beaumont-Smith states. “It’s something like 13 per cent of exports and 7 per cent of GDP, so it is very important. The government recognizes this and is really trying to support it as best it can and alleviate some of the difficulties felt, especially by some of the smaller companies.”

As of April, 2013 there are five major near-term development projects on the docket.

The Lalor Project is a $704 million development of a 4,500 tonne-per-day underground mine and concentrator. Initial 1,500 tpd production began in mid-2012 and full production is anticipated by next year, exploring gold, copper and zinc. The base-metal resource stands at over 18 million tonnes and the gold resource more than 10 million tonnes. Exploration drilling of the deeper portions of the deposit continues from underground.

Reed Copper Project commenced trench excavation and ramp development in June of last year. The copper-zinc project is on schedule for initial production by the fourth quarter of this year. Ramp-up to full production of about 1,300 tpd is expected by the first quarter of 2014. A National Instrument 43-101-compliant resource announced Apr. 1, 2011 outlines an Indicated Resource of 2.55 million tonnes of 4.52 per cent copper. Ore from the high-grade near-surface copper deposit will be trucked to the Flin Flon concentrator.

Snow Lake Gold Mine feasibility study results indicate positive economics for reopening the Main mine and the No. 3 zone with a combined 2,000 tpd production rate. The mine is forecasted to produce 80,000 to 90,000 oz. of gold per year and operate for a minimum of six years. Measured and Indicated Resources total more than 72,000 oz. of gold. Further exploration is planned on the 88 square kilometre property.

Monument Bay Gold Project preliminary Economic Assessment Study in 2009 confirmed robust economics. Mega plans to expand and upgrade the resource with surface diamond-drilling and an ongoing old core assay program (OCAP). Mega and Red Suck Lake First Nation signed a memorandum of understanding to cover certain portions of the project that lie within the traditional lands of the First Nation.

Maverick Gold Project has Auriga Gold Corp. working towards restarting the past-producing Puffy Lake mine at their holding south of Sherridon. Conditional on securing financing, the company’s plan is to start initial open-pit mining this year, followed by underground mine de-watering and underground production. The mine is expected to produce 40,000 oz. of gold per year for up to 10 years.

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