Northwest Territories welcoming mineral explorers

by Ellsworth Dickson

Resource World Magazine sat down with Katrina Nokleby in Vancouver, a geological engineer and Minister of Industry, Tourism and Investment for Canada’s Northwest Territories. She later added updates regarding the COVID-19 pandemic.

RESOURCE WORLD: How has the COVID-19 pandemic affected exploration and mining in the NWT and are there any positive signs for the coming exploration season?

KATRINA NOKLEBY: There will be a lag for work in the field. Seeing things move forward as the sentiment changes, more and more people will be encouraged to explore in the Northwest Territories.

I was encouraged from what I heard at Roundup in Vancouver. There’s a lot of interest in the Northwest Territories but also frustration that I’m hearing from industry trying to navigate our systems as well as the high cost of doing business there.

RW: Yesterday I was at a breakfast presentation by a company that noted they are getting out of Burkina Faso because it’s too dangerous. Then I received a press release from Montero Mining about how the Tanzanian government expropriated their mining concessions. There’s no security of mineral tenure.

I would imagine that explorers would like the fact that the Northwest Territories has secure mineral tenure in a safe, stable political jurisdiction. Can you comment on that?

KN: When we had our diamond boom, a lot of the conversation at that time was around ethical diamonds versus some other places. Today, I think there’s a message we can also include regarding our rare earth potential and having them sourced in Canada versus China. One of the best things about the Northwest Territories is that we have a very robust regulatory system, one of the most advanced in the world.

I think there’s a want in the exploration and mining industry to leave positive legacies behind. They know they have a PR issue when I speak with them about power and energy. Some are telling us they are not attracted to the Northwest Territories because right now we can only offer diesel operated mines and that’s not fitting into the sustainability mandate that mining companies have for themselves. I think junior exploration has dropped off a bit because they would like a greener energy source available.

So, what that signals to me is that the industry recognizes that they need to do a better job of showing that they’re good corporate citizens. We look at our three diamond mines – those businesses have been great to the Northwest Territories- they’ve done things right in an environmentally sound way. They’re consulting and engaging with the local people and creating employment opportunities and training those people.

I’m seeing a shift in the mining industry from just profit. They want an ethical place to do business where they’re having meaningful impact.

RW: Does the Northwest Territories offer any incentives for explorers?

KN: We have a grassroots exploration incentive program called Support for Entrepreneurs and Economic Development (SEED). Qualified NWT prospectors can receive a maximum of $5,000 over three years to assist in purchasing tools and equipment as well as purchasing supplies and services directly related to prospecting activity.

We are also going to be looking at tax incentives. We know that the biggest complaint is the high cost of doing business in the North. As a new Minister, my Ministry is looking to see if there’s a way that we can change our fee structure that makes it more incentivized for junior explorers.

When I put my other hat on as Infrastructure Minister, if I can get some of these infrastructure projects going like roads into our mineral rich areas as well as the Taltson Hydroelectric Expansion Project we can offer a better energy source that could result in an uptick in exploration and mining.

RW: Is the Northwest Territories participating in the Invest Canada North program?

KN: Yes, we’re very excited by the announcement of the funding for the next three years at PDAC to try to attract some international investment.

The Yukon Mining Alliance and the NWT and Nunavut Chamber of Mines, in partnership with the governments of the three territories, recently announced that the Government of Canada’s Canadian Northern Economic Development Agency [CanNor] will provide $500,000 over three years to host Invest Canada North at PDAC. The initiative connected NWT explorers with potential global investors.

In addition, I think we’re going to see more partnerships between the federal government and the Northwest Territories.

RW: With the entire world on the cusp of switching to electric vehicles, does the Northwest Territories have potential to host battery mineral deposits?

KN: We do. I know we have lithium and cobalt. Maybe not so much for that use, but we also have rare earth elements as well.

There is this weird misinformation about mining that we need to move away from mining as we’re moving into a greener technology. However, we still need to have mining to make solar panels, batteries and wind turbines – even the bodies of the electric cars.

We need to start working harder to dispel the fear of mining and show that mining companies are often on the forefront of innovation such as electric powered mines being cheaper to run than burning diesel. That is the way of the future; however, we’re still going to be mining.

RW: The Northwest Territories is vast with not a lot of infrastructure. Is your government planning any kind of infrastructure that would help explorers?

KN: Yes, we’ve specifically named three major infrastructure projects and two of those are corridors. There is the McKenzie Valley Highway, which is about connecting communities and then we have the all-weather 413-kilometre Slave Geologic Province Corridor Road that would be an important transportation, hydro and communications corridor while connecting the region and its vast mineral wealth to points south and eventually to a deepwater port on the Arctic Ocean in Nunavut. The road that we want to build would come up through that area and then hopefully connect to the Kitikmeot Road out of Nunavut.

Our next mines that we’re seeing coming down the path are not diamond mines, whose diamonds can be flown out. These are mines that have a concentrate that needs to be shipped to markets in Asia. Currently, any shipping of concentrate is through either of the two coasts, but we’re much closer to the Arctic Ocean than we are to the Pacific. If we can connect our territory to Nunavut ports on the Arctic Ocean that’s going to significantly cut down that transport time and make us more attractive as a supplier to Asian markets.

The third infrastructure project is the Taltson Hydroelectric Dam Expansion which would then be hopefully giving us the opportunity to offer greener energy to the diamond and other mines.

Taltson was a hydroelectric dam built on the southeast shore of Great Slave Lake in support of the closed Pine Point Mine. The dam currently powers a few of our communities: Hay River, Fort Smith and Fort Resolution. We would like to expand the capacity of the hydroelectric capacity and then lay submarine cables across the lake to Yellowknife, take the transmission lines up to the mineral-rich Slave Geologic Corridor and then eventually connect it to the southern grid for redundancy as well as the ability to pay back power. These are obviously very long term projects.

We have received some funding from CanNor for prefeasibility studies, environmental assessments and to basically bring us to a point where we would be construction ready. At that point, we would make a case to the federal government for a larger investment for construction of those projects. Right now, we are advancing pieces of them at a time.

I also envision these three infrastructure projects as a way to keep our Indigenous business, our Indigenous development corporations and our communities employed as we start to see the sun setting on the diamond mines in the next decade.

Below are profiles of companies active in the Northwest Territories.

Avalon Advanced Materials Inc. [AVL-TSX; AVLNF-OTCQB] has been advancing the 100%-owned Nechalacho rare earth elements property, located at Thor Lake, 100km southeast of Yellowknife, Northwest Territories. Based on a positive 2013 feasibility study, the project has potential for economic recov ery of rare earth elements (REE), lithium, zirconium, beryllium, niobium and tantalum. Avalon initially focused its work on the heavy REE-rich Basal Zone deposit (2008-2013).

Under a co-ownership agreement, Cheetah Resources Pty Ltd. acquired ownership of the near-surface resources on the property (Upper Zone) for $5 million while Avalon retained 100% ownership of the heavy rare earth-rich Basal Zone that was the subject of the 2013 Feasibility Study. Cheetah will assume management of its planned work program to develop the T-Zone resource in 2020, where it intends to utilize sensor-based ore-sorting technology to produce a rare earth mineral concentrate.

The company recently reported that the agreement by Canada and the United States, announced December 19, 2019, to co-operate on critical minerals supply chain development (and rare earths in particular), has resulted in new government initiatives in both countries to support the creation of these supply chains. Avalon has been involved in these discussions.

Due to the COVID-19 pandemic, staff continue to work from home on a reduced work schedule in anticipation of resuming project field work when it is safe to do so.

In the meantime, project planning and permitting work continues. Dominion Diamond Corp. (private), affiliated with The Washington Companies, has ownership interests in two producing diamond mines located about 300km northeast of Yellowknife – Ekati and Diavik. As Canada’s largest independent diamond producer, the company supplies rough diamonds to the global market through its sorting and selling operations in Canada, Belgium and India.

The Ekati Mine recovered 5.2 million carats from 2.9 million tonnes processed in fiscal 2017. Processing volumes were 23% lower as compared to fiscal 2016 due to the extended shutdown following the process plant fire in June 2016. The Diavik Mine (Dominion 40%/Rio Tinto 60%), on a 100% basis, recovered 6.7 million carats from 2.2 million tonnes processed in calendar 2016. Carats recovered were 4% lower than the revised calendar 2016 plan of 6.9 million carats, due to lower recovered grade as a result of higher levels of underground dilution encountered in the A-418 and A-154 South kimberlite pipes.

A program to develop the Jay diamond pipe at Ekati will extend the mine life Equity Metals Corp. [EQTY-TSXV;NNADF-OTC], formerly New Nadina Explorations, has a JV interest in the Monument Diamond Project located on the south shore of Lac De Gras. Diamond-bearing kimberlites of the Monument property form part of the Lac de Gras clusters and occur within 40km of both the Ekati and Diavik Diamond Mines. The project owners are Equity Metals (57.49%); Chris and Jeanne Jennings (22.11%); and Archon Minerals Ltd. [ACS-TSXV; AHNMF-OTC] (20.4%). Equity Metals is the operator.

Evrim Resources Corp. [EVM-TSXV] and Newmont Mining Corp. [NGT-TSX; NEM-NYSE] have been exploring the Astro Project, a new gold discovery within a 10-km long structural corridor along the Yukon-NWT border. The partners have completed a mag/VTEM survey, detailed geologic mapping, chip-channel and talus fine sampling and an 11-hole reverse-circulation reconnaissance drilling program.

Vertical chip-channel sampling at the Radio prospect returned 3.3 g/t gold over 26 metres (including 12.5 g/t gold over 6 metres) across magnetite-pyrite skarn and overlying siltstone. Drill hole RAD19-01 intersected 1.36 g/t gold over 10.7 metres, including 3.13 g/t gold over 3.05 metres.

Additional chip-channel sampling at the Microwave prospect returned 3.6 g/t gold over 18 metres (including 7.2 g/t gold over 6 metres) and 3.1 g/t gold over 8 metres from trenches oriented normal to northwest-striking fractures.

Ultraviolet is a new discovery 1km southeast of the Radio prospect and hosted within a similar stratigraphic horizon.

Rock chip channels perpendicular to bed ding returned 6.1 g/t gold over 4.0 metres.

Far Resources Ltd. [FAT-CSE] has a 100% interest in the road-accessible Hidden Lake lithium project located about 45 km east-northeast of Yellowknife.

Hidden Lake hosts lithium-bearing pegmatite dykes that are part of the larger Yellowknife Pegmatite District which have been described as the largest lithium resource in Canada with a minimum of 55,000,000 US tons at 1.41% L2O primarily as spodumene.

Future exploration will focus on drilling the high-grade dykes beneath the initial holes to determine the shape of the dykes and to provide estimates of grade and tonnage.

Fortune Minerals Ltd. [FT-TSX; FTMDF-OTCQB] has engaged several consultants to advance its 100%-owned NICO cobalt-gold-bismuth-copper project 160km northwest of Yellowknife. An updated Feasibility Study assessed an expanded mill throughput rate of 6,000 tpd and a number of process improvements for the vertically integrated development reflecting the demands for greater cobalt product output from potential strategic partners.

It also assessed lower capital cost options of producing gold and metal concentrates at the mine site for sale to third-party processors that would eliminate or defer the need to construct a vertically integrated refinery. The base case for both studies contemplated a mine and concentrator in NWT and a related refinery in southern Canada producing cobalt sulphate used in lithiumion rechargeable batteries, gold doré, bismuth ingot, and copper cement.

Fortune recently signed an Access Agreement that detailed the conditions under which the company can build and operate the 51-km NICO Project access road on Tlicho-owned lands between the community of Whati and the mineral project.

GoldMining Inc. [GOLD-TSX; GLDLF-OTCQX] has been working on its 100%-owned, 12,120-hectare, Yellowknife Gold Project located 50 to 90 km north of Yellowknife. Measured and Indicated Resources stand at 14,108,000 tonnes averaging 2.33 g/t gold, for 1,059,000 oz gold. Inferred Resources are 9,302,000 tonnes averaging 2.47 g/t gold, for 739,000 oz gold.

Permits have been received to enable the company to complete advanced exploration work including diamond drilling, underground development and operation of the existing camp, airstrip and winter road.

Gold Terra Resource Corp. [YGT-TSXV], formerly TerraX Minerals Ltd., has drilled 9,715 metres at the Sam Otto Zone at the Yellowknife City gold project. Drilling is being done in an effort to expand the NI 43-101 Inferred Mineral Resource estimate at the Sam Otto Zone. Three holes (53, 54 and 58) intersected visible gold in quartz veins similar to the discovery hole TSO18-35.

Highlights include 1.06 g/t gold over 12.9 metres and 1.63 g/t gold over 7.25 metres in hole TSO20-063, and 0.45 g/t gold over 41.96 metres, including 1.68 g/t gold over 5 metres in hole TSO20-062. To date Gold Terra has released eight holes out of 34 holes drilled this winter with assays still pending. Gold Terra owns a 100% interest in the Yellowknife City Gold project, encompassing 790 km2 of contiguous land within 12 km of Yellowknife.

The company recently acquired two large claims, Aurora 1 and 2, accessible by paved road from Yellowknife. The Aurora claims tie up ground containing strike extensions of the Ptarmigan and Tom mines (collectively 120,000 oz gold averaging 10 g/t gold, which were acquired by Gold Terra in 2018.

Mountain Province Diamonds Inc. [MPVD-TSX; MPVDF-OTCQX] has a 49% interest (De Beers 51% and operator) in the Gaucho Kué diamond mine 280 km northeast of Yellowknife. During fiscal year 2019, 3,284,520 carats were sold at an average value of $84 per carat (US $63 per carat) for total proceeds of $276.3-million (US $208.2-million).

Nighthawk Gold Corp. [NHK-TSXV] has released drill results on the remaining nine holes (2,800 metres) from its Treasure Island gold project, located 11 km north of the company’s flagship Colomac gold project 220 km north of Yellowknife, within the north-central portion of its 100%-owned Indin Lake gold property. Highlights included hole T19-11, which recorded 12.70 metres of 8.51 g/t gold, including 7.30 metres of 14.06 g/t gold, and including 2.85 metres of 33.67 g/t gold. Hole T19-10B intersected 7.00 metres of 6.35 g/t gold, including 2.00 metres of 21.02 g/t gold.

At Colomac, highlights included hole C19-40 that intersected 85.50 metres (40.00-metre true width) of 1.86 g/t gold, including 9.25 metres of 2.85 g/t gold, 22.75 metres of 2.57 g/t gold, and including 13.05 metres of 3.10 g/t gold; with a deeper intersect of 24.25 metres (12.00-metre true width) of 2.04 g/t gold, including 9.00 metres of 3.57 g/t gold and including 6.00 metres of 4.13 g/t gold.

North Arrow Minerals Inc. [NAR-TSXV; NHAWF-OTC], ~21%, has recovered 232 microdiamonds from the Anchor kimberlite at the LDG Joint Venture Diamond Project, a prospective 147,200-hectare joint venture property located just south of the Diavik Diamond Mine. Dominion Diamond is the operator with a ~79% interest. A $3.5 million exploration budget has been approved.

NorZinc Ltd. [NZC-TSX; NORZF-OTCQB] is developing its key project, the 100%-owned high-grade zinc-lead-silver Prairie Creek Mine, located 200 km west of Fort Simpson. The company is considering a revised mine development plan that may include:

• A more robust 2021 phase 1 construction plan and schedule than was possible with the previous schedule;

• Further optimization of the mining design and potential throughput opportunities;

• Financing the development with a silver stream, project financing and working with government agencies for financial or other support in light of the economic benefit created by the Prairie Creek mine development;

• Building on the relationships with local communities in a number of areas to benefit both the local communities and the project;

• Advancement, revision or renewal of cer-tain operating permits to assist 2020 and 2021 activities.

Osisko Metals Inc. [OM-TSXV] announced a Mineral Resource Estimate Update (MRE) last November for its 100% owned Pine Point Project, located near Hay River. The Pine Point MRE now totals 52.4 Mt grading 4.64% zinc and 1.83% lead (6.47% Zinc Equivalent ) containing approximately 5.3 billion pounds of zinc and 2.1 billion pounds of lead insitu.

An updated MRE is planned to accompany an upcoming Preliminary Economic Assessment in Q2 2020 with the aim of continuing to increase the mineral resource base.

Seabridge Gold Inc. [SEA-TSX; SA-NYSE] has a 100% interest in the advanced Courageous Lake gold project 240 km northeast of Yellowknife. A Prefeasibility Study completed in July, 2012 estimated Proven and Probable Reserves of 6.5 million oz gold, an average annual production of 385,000 oz at an average cost of $780/oz and a mine life of 15 years.

The 2019 to 2020 Pine Point winter exploration campaign has concluded due to spring breakup and compliance with guidelines of the Public Health Agency of Canada. The exploration camp has been placed on care and maintenance following travel restrictions and will remain so for the foreseeable future.

Silver Range Resources Ltd. [SNG-TSXV; SLRRF-OTC] has five gold projects in the Yellowknife region, all with high-grade gold showings. They include Itchen, Sparta and Hare. Cabin Lake and Uptown Gold are optioned to Rover Metals Corp. [ROVR.H-TSXV; ROVMF-OTCQB].

Sixty North Gold Mining Ltd. [SXTY-CSE] has received initial trench results from its fall trenching program on the Mon gold property, 40 km north of Yellowknife. The company discovered six volcanogenic massive sulphide (VMS) targets in 2018 by followup prospecting of biogeochemical anomalies. An airborne geophysical survey in 2019 confirmed conductive and magnetic anomalies identifying potential VMS targets, some coincident with the sampled zones. Trench assays included 203 g/t silver over 0.45 metres, 82 g/t silver over 0.95 metres and 99 g/t silver over 0.40 metres.

SSR Mining Inc. [SSRM-TSX, NASDAQ] holds the Sunrise Lake VMS prospect 130 km northeast of Yellowknife which hosts silver-gold and base metal mineralization outlined by 21,774 metres of surface diamond drilling. The project is currently on care and maintenance.

Strongbow Exploration Inc. [SBW-TSXV; SBWFF-OTC] has a 4% net smelter returns royalty on the Mactung tungsten project 790 km west northwest of Yellowknife. Strongbow has a 1% NSR on the Cantung tungsten project, also in the NWT. The Mactung and Cantung projects are currently owned the Government of the NWT the Federal Government of Canada, respectively. The governments are currently seeking investors to acquire and advance the projects.

Historic Probable Mineral Reserves at Cantung were reported as 1,818,000 tons grading 0.81% WO3. The historic Probable Reserves were calculated using a 0.5% WO3 cut-off grade, and a minimum mining width of 15 feet.

Olivut Resources Ltd. [OLV-TSXV; OLVRF-OTC] has a 100% interest in the flagship HOAM Project in the Interior Plains region of the NWT near Fort Simpson. Olivut has made 29 kimberlite discoveries to date and has additional numerous targets defined for drilling. The region has diamond indicator minerals and microdiamonds.

The company has also been exploring the Seahorse diamond project, 50%-optioned from Talmora Diamond Inc. [TAI-CSE] which is exploring the Horton River diamond project 120 km south of Paulatuk.