NWT & Nunavut Mining 2019

Tracking progress on Baffinland IBA

NWT - NUNAVUT

Latest News on Northern Exploration Projects

2019

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photo courtesy of Agnico Eagle photo courtesy of the Department of Infrastructure

Residents gather in Rankin Inlet for a donation event sponsored by Agnico Eagle in June. The mining company gave away $1 million to aid literacy and firefighting.

2 November 18, 2019

November 18, 2019 3

NWT/NUNAVUT MINING

How much more should mines give the North?

Many factors to consider when assessing whether Northern mines are truly on solid ground

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The Ekati diamond mine, 300 km northeast of Yellowknife, has been in production since 1998. Residents of the NWT are still waiting to hear whether owner Dominion Diamond Mines will proceed with the Jay project.

by Derek Neary 1RUWKHUQ 1HZV 6HUYLFHV

NWT/Nunavut

The North's mining industry has injected an enormous sum into the economies of the NWT and Nunavut.

There's no doubt about that.

Notwithstanding, one area of debate remains whether the mining companies should be doing more to aid and build the territories.

This year's edition of NWT and Nunavut Mining delves into that issue with some input from Northern politicians and industry representatives. Other leadership voices chose to remain silent on the issue.

It's a fascinating topic – one that many Northerners continue to discuss among themselves. The mining companies have benefitted large numbers of us directly, or perhaps a family member: provided jobs, sponsored a sports team or a trip, financed scholarships, donated to a community agency or local charitable cause.

The figures associated with this, and tied to Impact Benefit Agreements, are staggering: rising into the hundreds of millions over the years, or even surpassing $1 billion in the case of Ekati, the oldest of the North's operating mines.

Can we open the spigot even further?

In Nunavut, where a housing shortage has long plagued the territory, Housing Minister Patterk Netser has called upon land

claims organization Nunavut Tunngavik Inc. (NTI) to assist in housing. NTI takes in royalty payments from mining companies and has a trust fund approaching $2 billion. NTI's president declined to discuss the matter when Nunavut News broached it.

Netser has also made it clear that the mining industry must play a key role in the housing crisis, although he's stopped short of imploring mining companies to construct new homes for their Nunavummiut workforce. Yet chatter about the possibility of Agnico Eagle building houses has persisted for years in the Kivalliq.

Why not? Why shouldn't the mines assemble residences for their workers in Northern communities? In some respects, it seems completely justified to make such a demand. In other ways, one's left to wonder if the mines are well positioned to make such commitments.

Agnico Eagle, which gave $1 million to organizations in Baker Lake and another $1 million to groups in Rankin Inlet earlier this year, revealed in correspondence to Environment and Climate Change Canada in May that the company has yet to recoup its expenditures for the Meadowbank gold mine. Part of the reason for that is two writedowns equalling $1.2 billion U.S., meaning that much of the market value of the mine has been lost over the past decade.

Despite that and high operating costs in the North, Agnico Eagle still invested another $1.2 billion to develop its new Meliadine gold mine and Amaruq gold deposit. The multi-

national miner has repeatedly referred to Nunavut as a "politically attractive and stable jurisdiction with enormous geological potential" that has "the ability to generate strong gold production and cash flows over several decades."

In the Baffin region, the Qikiqtani Inuit Association (QIA) extracted greater benefits from Baffinland Iron Mines through the renegotiation of its Inuit Impact Benefit Agreement last year.

Baffinland's CEO admitted that the QIA was "rightly frustrated" with a lack of progress over the years, but he said the Mary River mine – boasting a world-class, high-grade resource – was "underwater" in its early years of operation due to depressed iron prices. Baffinland is now banking heavily on phase two of its mine plan moving ahead to bring more robust earnings.

In the Kitikmeot, TMAC Resources' Doris North mine recently reported its first quarterly profit – a modest one – after being in production for a couple years.

The NWT's diamond mines have endured languishing diamond prices for a few years. In October, Bloomberg Press reported that diamond sales for De Beers' global operations, which includes Gahcho Kue in the NWT, had tumbled 39 per cent from a year earlier. Dominion Diamond Mines still hasn't disclosed whether it will push ahead with the Jay project at Ekati, which could have implications on the extension of the mine life.

Can the North's mining industry afford to give more?

It may depend which side of the ore pit you're on.

NWT/NUNAVUT MINING 2019

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4 November 18, 2019

MINING NWT/NUNAVUT

Mining benefits to the North climb into the hundreds of millions Impact Benefit Agreements, donations and scholarships add up; legacy projects could grow

by Derek Neary 1RUWKHUQ 1HZV 6HUYLFHV

NWT/Nunavut

The North's mining giants have taken precious minerals and metals from the ground but leave an abundance of cash in return.

The question is how much is enough?

Gold miner Agnico Eagle made a splash in Rankin Inlet in June with a $1-million donation to enhance literacy and firefighting. In August, a similar event was held in Baker Lake, with another $1 million handed out for food security, firefighting and search and rescue.

The endowments marked the opening of the Meliadine gold mine and the Amaruq gold deposit.

The Meadowbank gold mine, which produced more than three-million ounces of gold between 2010 and 2019, benefitted the Kivalliq Inuit

Association through a 12 per cent net profit interest royalty for several years of the mine life. Inuit Impact Benefit Agreements for Meliadine and Amaruq will keep the streams of money flowing for governing Inuit organizations. Agnico Eagle's royalties and fees paid to the Kivalliq Inuit Association and Nunavut Tunngavik Incorporated – past and future – over 15 years will add up to $450 million, the mining company estimates.

Agnico Eagle also provides each Kivalliq hamlet with funding to support community-based initiatives, and has pots of money designated for social and recreational activities at the municipal level.

Thousands of kilometres away in the Northwest Territories, the Tlicho Government banked close to $5.5 million in 2019 from combined Impact Benefit Agreements

with the diamond mines in the barrenlands to the north.

That money will be funnelled into cultural activities, infrastructure, mine employee support programs, scholarships and summer student programming.

The Behchoko Sportsplex, a 50,000-square-foot recreation facility that opened in 2017, was built with financial assistance from Dominion Diamonds. The Tlicho Government is developing a regional infrastructure strategy that will prioritize other potential legacy projects.

"There is always room for growth. We hear about programs invested in by mining companies overseas, where they are investing in hospitals," reads a statement that the Tlicho Government sent to NWT and Nunavut Mining. "It would be wonderful to see the (mining) companies working, together with the Tlicho Gov-

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Agnico Eagle handed out $1 million during an August celebration in Baker Lake to mark the opening of the Amaruq gold deposit. From left, Richard Aksawnee representing Baker Lake's search and rescue; Dominique Girard, Agnico Eagle's vice-president Nunavut; and Baker Lake MLA Simeon Mikkungwak cheer during the presentation of a cheque for $150,000 that was designated for search and rescue. ernment and the GNWT, to construct more infrastructure in critical areas of infrastructure gaps – recognizing our needs based on our own infra-

structure needs planning."

Dominion Diamond Mines CEO Shane Durgin noted that the diamond miner also contributed towards the Ulu

Heritage Building in Kugluktuk, another of its affected communities. More commitments are under consideration.

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NWT/NUNAVUT MINING

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"The company has also had discussions with other communities and has funded feasibility studies for potential projects," Durgin stated.

Dominion Diamond Mines spent more than $1 billion on Impact Benefits Agreements payments, donations and scholarships in the NWT and Kugluktuk between 1996-2018, according to the company. The amount allo-

cated for donations fluctuates annually with the state of the diamond market and general business considerations being among the factors, Durgin noted.

Based on almost three years of weak demand for diamonds, Tom Hoefer, executive director of the NWT and Nunavut Chamber of Mines, strikes a note of caution.

"This has to be reflected in corporate social responsibility payments and investments,"

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Residents gather in Rankin Inlet for a donation event sponsored by Agnico Eagle in June. The mining company gave away $1 million to aid literacy and firefighting.

Hoefer said. "When companies work in the ever-changing markets, they have to adjust their spending and investing continually."

Iron, produced by Baffinland, has been "all over the map" in terms of pricing over the past five years, Hoefer noted. Gold, which Agnico Eagle extracts in the Kivalliq, has enjoyed buoyant prices over the past three years.

Yet in a letter to Environment and Climate Change Canada Minister Catherine McKenna in May, Agnico

Eagle CEO Sean Boyd stated that Agnico Eagle had not yet recovered its original investment in the Meadowbank gold mine after eight years of operation due partially to writedowns – a reduction of asset value – of $1.2 billion U.S. "Our social investment for future years depends on the business and community needs, as well as on our social obligations," Agnico Eagle stated. "With the growth of our Nunavut platform, our objective more than ever is to make sure that social invest-

ment is done strategically and according to community priorities."

The Kivalliq Inuit Association declined comment for this article.

Mining companies can contribute with more than cash, Hoefer noted. He recalled Diavik volunteering its expertise to complete construction of the Shorty Brown Arena ahead of schedule and at a lower cost than the City of Yellowknife anticipated.

"I can tell you that Diavik leveraged training dollars to

help build community infrastructure. Essentially, they created real hands-on training programs on real community projects to create a win/win/ win," stated Hoefer, who used to work for Diavik. "The community got a completed building to use and for a cheaper price because training dollars subsidized the labour rate, so to speak. Students received carpentry skills, which Diavik could put to work during mine construction as trades helpers. So, you can be innovative too."

6 November 18, 2019

MINING NWT/NUNAVUT

NWT MLAs share thoughts on pros and cons of mining New assembly will be laying the groundwork for the replacement of Diavik jobs

by Derek Neary 1RUWKHUQ 1HZV 6HUYLFHV

NWT

Sixteen legislative assembly seats were filled in the Oct.1 territorial election. Three others were retained via acclamation. We contacted all the victorious candidates with questions about mining. These are the ones who responded.

1) What do you consider to be the greatest advantages and disadvantages of mining in the NWT? 2) Do you believe the mines do enough overall for the territory in terms of employment, royalties, donations and legacy projects?

3) Although closure isn't expected to occur during your term as MLA, Diavik is winding down and is scheduled to cease operations as of 2025. How would you propose to replace the approximately 1,100 jobs that will be lost?

Jackie Jacobson, Nunakput 1) Our greatest advantage is the straight-up resource potential that the NWT has. We also have an advantage in that our history is built on mining, much of our infrastructure exists today because of mining. A recent survey of NWT residents found that 85 per cent of NWT residents support responsible mining.

The disadvantages include unsettled land claims and lack of infrastructure.

2) We should be spreading the wealth around the territory.

Some regions are benefitting much more than others, such as my riding of Nunakput. We should insist that corporate headquarters stay in the NWT. 3) It will be up to the new government to do everything in its power to attract exploration dollars and build the infrastructure necessary to see some more mines open up across the territory.

We desperately need jobs, especially in the regions.

Shane Thompson, Nahendeh 1) Advantages: Benefits include socio-economic and participation/impact benefits agreements with the affected Indigenous governments. There are training and employment opportunities for NWT residents. Offshoot is the business development opportunities for Northerners, support and help with community development, investment in capital and community (social and sporting events) projects and royalty and taxes being paid to the NWT. The major drawback of mining is the damage the operations cause to the environment. It can destroy the habitats, disturb the wildlife and the chemicals used can leach into the groundwater and pollute the area. Air and noise pollution are other possible downsides. Not enough of the money stays in the

NWT and not enough jobs are given to Northerners.

2) I think more can be done. Employment numbers need to be higher. They need to develop opportunities for workers to advance in the system. There needs to be more training offered.

I believe the donations and legacy projects have been an asset to the NWT communities with mines in their regions. However, I think a bit more can be done. A lot of money is leaving the NWT. 3) This is a big challenge. I would hope another mine would open up. I know in the Nahendeh riding we are seeing one potential mine opening up, Norzinc, and this is exciting.

Then we would have to look at small-scale opportunities such as: GNWT contracts need to be awarded to Northern contractors for the economy to grow and flourish in the North. Northern contractors provide employment for Northerners and skills development. These contractors are invested not only in the local economy but in our communities as a whole, as many of the contractors are residents themselves.

We need creative ways to enhance tourism outside of the larger centres. Northerners offer a rich and diverse cultural and traditional perspective and experience, coupled with the incredible untouched landscape that few people have the pleasure of enjoying. Unfortunately, the larger centres are the only places many of our tourists visit due to the undeveloped Northern tourism industry.

I believe the utilization of green energy products would enhance the local economy. If you look at geothermal, not only does it operate the power plant but the heat can be used to heat buildings and greenhouses we build that will allow us to grow our own food. This would create more employment opportunities, careers, lower the cost of living in the community and make the community more self-sufficient.

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NWT/NUNAVUT MINING

Nunavut MLAs weigh in on Northern mining industry Politicians discuss benefits, drawbacks and whether mines should play a role in housing

by Derek Neary 1RUWKHUQ 1HZV 6HUYLFHV

Nunavut

What do Nunavut MLAs have to say about the mining industry?

We reached out to them with the following questions. Territorial politicians who saw fit to respond appear below.

1) What do you consider to be the greatest advantages and disadvantages of mining in the Nunavut?

2) Do you believe the mines do enough overall for the territory in terms of employment, royalties, donations and legacy projects?

3) Should mines be involved in supplying housing in surrounding communities?

2) The Government of Nunavut looks for industry to provide benefits to Nunavummiut, such as training, employment, community wellness, transportation and infrastructure. Through Inuit Impact and Benefit Agreements, full Inuit employment is what companies work towards. To achieve this, they invest heavily in training programs to build capacity in our local workforce.

These efforts are paying off. More than 500 Nunavummiut from over half of our communities now work at the mines bringing financial security and benefits to many families.

In Nunavut, mining companies make significant donations to many local organizations, community events, sponsor activities across Nunavut and often voluntarily assist during emergencies. We encourage industry to help us build a foundation today so that we can prosper tomorrow.

3) There is a long history of mining companies supplying housing in mining towns or communities springing up near a new mine, with mixed outcomes. As the mining industry is still relatively young in Nunavut, there are a number of options beyond fly-in, fly-out accommodations. The Government of Nunavut is open to considering these and we strive to ensure all stakeholders work together to find the most effective solutions to these important issues.

Tony Akoak, Gjoa Haven

Patterk Netser, Aivilik MLA 1) As the MLA for the Aivilik constituency, I think increased mining near Coral Harbour and Naujaat is a very positive story. It will end our reliance on social assistance. We'll see our constituents buy new ATVs and snowmobiles, support their families better and have a more positive outlook on life instead of waiting for a monthly social assistance payment. People complain that mines bring alcohol and drugs into communities, but alcohol and drugs were around before the mines came.

We can't blame the mines for everything.

2) The mines are on Inuit-owned lands so government doesn't receive royalty payments. If more people in Coral Harbour and Naujaat are employed at mines, they'll pay income tax, which generates income for government. I hope to see more donations and legacy projects come to Coral Harbour and Naujaat.

1) The advantage for mining in Nunavut is that people are employed and are able to bring back income for themselves or the communities. The disadvantage is that sometimes income they earn can be used irresponsibly, like for substance abuse.

2) It's just too bad that mines only bring employment to select communities. Not all of Nunavutmiut take advantage or are given a chance to work in the mines.

The mines seem to select communities close to where they are mining. As for donations, not all Nunavut communities are given that chance to receive. Same goes for legacy projects.

3) I really like the idea of giving housing to surrounding communities but only surrounding communities will benefit – this should include the smaller and forgotten communities.

3) I believe mines should play a role in providing housing for their employees. It would help alleviate overcrowding.

When an employee finishes their shift rotation, they want to come home to their own home and be able to relax, free of overcrowded situations.

David Akeeagok, Minister Responsible for Mines and Quttiktuq MLA 1) Our greatest disadvantage is that Nunavut has a limited amount of infrastructure and companies find it difficult to start up. The infrastructure deficit significantly increases operating and capital costs required to mine in Nunavut.

A moderate amount of southern-connected infrastructure would go a long way to lowering costs when establishing a business in our geographically remote region. This is especially true for the mining sector.

Jeannie Ehaloak, Cambridge Bay 1) The greatest advantages are the jobs, steady reliable employment, training and hiring a diverse culture and people. There are some disadvantages: we need to ensure responsible development, and try to diminish any negative environmental impacts. I would like to see mines invest in research as it provides solutions to challenges and it exposes bright, ambitious personnel to meaningful work.

2) The mining companies do very well for employment in communities. I would like to see the mining companies sponsor more training within communities, at the high school level, to encourage and challenge students to stay in school.

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Diversify to avoid 'boom-and-bust' Continued IURP SUHYLRXV SDJH

Rylund Johnson, Yellowknife North 1) There's no denying mining has contributed a lot of economic activity to our territory. It's worth over 20 per cent of our GDP, and its spinoffs are felt through almost every other sector. The downside is that without diversification, resource-based economies are prone to the same boomand-bust cycles as the resource industry. Planning ahead for these situations will be part of the job of this assembly.

2) The mines do bring big benefits here, but we still have too much of our workforce being sourced from out-of-territory. That's not all the fault of the mines either — the territorial government has a big role to play in making sure we have a trained local workforce to fill jobs. We haven't yet delivered on that. Education is going to be a big focus in my coming term.

As far as royalties, I think we should actually be talking about revenues.

As a government, we need to take leadership and do a full fiscal review on

all the taxes, fees, and royalties we levy on mining companies to find the best way to get a first-rate deal for residents, while remaining competitive in the global economy.

3) We have a budding rare earths industry, a big mine ready to open up at Pine Point and an advanced gold project in Yellowknife, among a number of other prospects. I believe those will be important in offsetting some of the losses. One of the biggest things we need to do as a government is to settle land claims. It's one of the most powerful things we could do for reconciliation and to bring the certainty our natural resource industry and our economy are starving for. It doesn't all need to come from mining.

We need to invest in developing a more modern, clean and diversified economy by: -Supporting the knowledge economy and creation of a university in Yellowknife -Capitalizing on bringing new money to the local economies of the territory supported by attracting remote workers with smart incentives -Investing in high-potential industries like tourism and manufacturing.

8 November 18, 2019

MINING NWT/NUNAVUT

Increased Inuit employment a plus John Main, Arviat North-Whale Cove

Continued IURP SDJH

3) I think it would be beneficial for the mines to assist and support their employees in becoming homeowners.

Joelie Kaernerk, Amittuq 1) I would say the advantage is employment as I have seen the increase in Inuit employment with Baffinland.

But I believe they need to do more in training Inuit to become supervisors/managers rather than labourers.

The disadvantage is mining companies aren't doing their part when it comes to community development/ local economy. I think this answers your next question in terms of royalties, employment and donations.

3) I strongly believe if mining companies start this (housing) supply it benefits both the community and the mining company – a win/win situation. I mean, in Nunavut we have a shortage of housing and if they start with the affected community that would cut down on the waiting list from the local housing association.

Also the Qikiqtani Inuit Association and Baffinland need to work together on all issues under the IIBA (Inuit Impact Benefit Agreement) agreement to ensure all aspects of the affected communities are met with their requests.

Adam Arreak Lightstone, Iqaluit-Manirajak 1) When an economy is too dependent on any one sector it creates risk. Each new mine in Nunavut adds jobs as well as secondary economic activity, which offsets the dominant position the public sector holds in Nunavut's economy. However, with the increase in jobs and money in our communities it may also contribute to an increase in social problems; without proper financial planning comes the risk of irresponsible spending 2) I believe that the Inuit Impact Benefit Agreements play an integral role in determining how committed a mining company will be in terms of Inuit employment, royalties and donations. However, it is my understanding that some companies tend to have a stronger commitment to corporate social responsibility than others.

I only hope, going forward, that social responsibility will be an integral aspect of any company that chooses to invest in Nunavut.

3) I absolutely believe that the mining industry should play a role in addressing our housing shortage in Nunavut. I believe that the best employees are long-term employees, and if a company is loyal to its employees, the employees will in turn be committed and loyal to the company.

There are many Nunavummiut who are capable of becoming homeowners, they just need some incentive to do so. If mines were to assist employees in becoming homeowners it would likely increase their employee retention. I know there are many barriers to homeownership in Nunavut, one of which is the stock, but economics has proven that as the demand increases, the supply is soon to follow.

If we are to reverse the trend of becoming dependent on subsidized housing, we need to encourage more homeownership. This cannot be done alone by the Government of Nunavut and will require assistance from the private sector.

Simeon Mikkungwak, Baker Lake 1) The greatest advantages would be employment and training opportunities for beneficiaries and also business opportunities for the private sector nearest to the operating mine.

Disadvantages would be for individuals that were dismissed from employment as some aren't given a second chance for rehire. Also, if roads constructed on migratory routes for wildlife can change route. As for those in affected communities who aren't employed or private sector not engaged, they need input as to how they can benefit also.

2) Employment opportunities are constantly advocated for, although management and senior management need to focus on the impacted beneficiaries of nearest community. Donations, I believe, are prorated and have benefitted organizations that are established. Royalties are yet to be known for the most impacted community and as for legacy projects, those are still yet to be known.

3) Housing is in major shortage overall in Nunavut and should be further looked into for private homeownership programs and investments to the nearest impacted community considering forced growth.

1) The greatest advantages are the careers, the business opportunities and the tax revenues. The careers are desperately needed, with chronic high unemployment in many communities, (mining careers) present huge potential for the next generation of Nunavummiut. The business opportunities help to develop our private sector and drive wealth generation. Tax revenues help the government stay afloat and fund our services.

The disadvantages are environmental effects, related social issues and the boom/bust nature of resource development. Environmental effects on land, water and animals are a big issue for Nunavummiut. I believe that we should be international leaders in how to mine in the Arctic while mitigating and managing negative effects. Social issues include housing pressures, crime trends and lack of childcare – these are already issues on their own but can be exacerbated by mining development. The boom/bust nature of mining is well-known and requires us to heavily invest in skill development and diversification of our local economies.

Firstly, for employment, in my opinion there will never be enough done – never enough schooling and investment until we have mines operated by 100 per cent Nunavummiut. That should be our goal. To realize that, we need all partners working together for labour force development.

The Mine Training Society approach makes most sense – one for the whole territory would be best. Just look at the NWT and the successes they have had there with the NWT Mine Training Society.

For royalties in Nunavut, it's all about the Inuit organizations, because the vast majority of royalties flow to them. As a Nunavut MLA, I guess my opinion is royalties are great, wish we had some coming to our bank accounts at the GN. There is the potential for Inuit organizations to use those royalties to help with housing issues and other key challenges, but that hasn't happened yet. Royalties need to be handled carefully in general – if you hike them too high, you will chase away investment. Another cautionary issue with royalties – I believe if you start paying out lump sums to individuals, you can end up taking away incentives for people to get educated and employed.

2) As for donations and legacy projects, they are greatly appreciated. However, we shouldn't have to see mining companies investing in childcare or in emergency services, for example. These are core government responsibilities. Unfortunately, with so many outstanding and unmet needs in our communities, the contributions from mining interests can seem like a drop in the bucket. The past 20 years have shown our territorial government is highly focused on investing in the three regional centres, so mining industry contributions to Nunavut's 22 other communities are refreshing and much needed.

3) In terms of public housing, or general housing stock, no. That is a core government responsibility. As for housing miners, now that is an interesting idea. There could be an opportunity to combine different problems – high turnover among mine employees, the lack of private homes being built and pressures on the public housing stock – into a program or project to help Nunavummiut mine employees become homeowners. Again, similar to the education and training piece, I believe it would take multiple partners pitching in together to make something like this happen. It can't be the mining industry alone.

Another option for housing would be to support the development of communities adjacent or in close proximity to mine sites. Where the projected mine life sits in the decades, such as is the case with Baffinland's Mary River Mine, we should examine the potential benefits and drawbacks to allowing these new communities to develop. It would be very complicated, but at the same time, so is flying workers two weeks in, two weeks out for years at a time with a family at home. From what I understand, that time away from family is a big part why we don't have more Nunavummiut working in mining. On principle, which living arrangement makes more sense: in a mining town, or working fly-in, fly out? I believe the miners themselves and their families could help decide. Again, this would only make sense with a long-lived mine like Mary River.

Joe Savikataaq, Premier and Arviat South MLA 1) I think the cost of doing business is often a barrier to mining in the territory. And given our commitment to responsible development, the process and timeline for approval requires a great commitment to doing business in Nunavut. However, I think Nunavut offers incredible potential for resource development and exploration. We are closer than ever to being in control of our own land and resources, and we know how valuable our untapped minerals are. The future is very bright for mining here in Nunavut.

2) I believe that mines have a responsibility to the land and communities from which they benefit. For me, this means that they need to invest in infrastructure to advance our communities in the long-term, and create jobs and skills development for Nunavummiut. I see this done in partnership with communities and developed with their vision and needs in mind.

3) Housing in Nunavut is often an effective way to retain employees and remove potential barriers to employment. I think housing should be a negotiating point between Nunavut Inuit and industry, as they decide what they want most as part of a mine's investment in their communities.

November 18, 2019 9

NWT/NUNAVUT MINING

Rare earths project open to Indigenous partners Vital Metals completes $5M purchase of Nechalacho deposit portion; will consider sharing ownership

by Derek Neary 1RUWKHUQ 1HZV 6HUYLFHV

NWT

The door is open to Indigenous groups to become part-owners of the Nechalacho rare earths deposit.

That's the word from Geoff Atkins, managing director of Australian-based Vital Metals, which made its final payment in October to complete a $5-million purchase of the upper portion of the Nechalacho rare earths deposit, 100 km southeast of Yellowknife.

"We're certainly open to those conversations and that's something that we have discussed," Atkins said of a potential partnership.

Paul Gruner, president and CEO of Det'on Cho Corporation, the economic development arm of the Yellowknives Dene, said his organization is contemplating a stake in Nechalacho, but coming up with the capital for equity would be a hurdle to clear.

"It's great to have the opportunity but we've got to

be able to pay for it and for some of this stuff we've got to look at pretty quick payback periods," said Gruner, who added that the smaller scale of the operation would make it a good entry-point for an ownership position.

Atkins said Avalon's efforts to build a strong relationship with Indigenous groups was part of the appeal of the project.

"That's something that Don Bubar (president and CEO of Avalon) and his team really need to be congratulated on," he said. "Our intent is we hope to be able to continue those relationships and build on them," he said.

There are still many details for Vital Metals to hammer out, much of which will be contained in the finalized mine plan.

"We need to complete a bit more test work first. Once we have that test work completed we'll be able to finalize our timelines of when we'll be able to commence oper-

ations," said Atkins.

Cheetah Resources, which was recently taken over by Vital Metals, had initiated negotiations and a purchase agreement with Avalon Advanced Materials, the longtime project owner that still retains rights to the remaining Nechalacho resource.

Vital Metals owns the high-grade rare earths to a depth of approximately 100 metres below the surface.

The historical resource at the site – measuring 160 million tonnes of ore with a rare earths grade of close to 1.5 per cent – is "certainly enough for us to define our project," said Atkins.

The company's test work and engineering studies will also determine the tonnage rate, the design of the processing plant, the number of jobs and the life of the mining project.

Vital Metals is still lining up customers to buy the rare earths, which could be used in products such as comput-

ers, cellphones, televisions, rechargeable batteries and magnets found in wind turbines and hybrid cars.

"We have commenced discussions with potential customers but we have not signed any agreements," Atkins said on Oct. 17.

One part of the research that Vital Metals is carrying out is to ensure a sorting method that requires no chemicals or re-agents, and water use would be limited to dust control, according to Atkins. It would eliminate the need for tailings dam.

"We believe the best way to get into production as quickly as possible is by simplifying an operation," said Atkins.

The rare earths concentrate could be flown out but Atkins sounded keen on the possibility of using a barge to ship it to Yellowknife or Hay River.

"Because the site of the project is very close to (Great Slave Lake), it provides that

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A barge is loaded for Cheetah Resources, since taken over by Vital Metals, at the Government Dock in Yellowknife. The company has made its final payment for a portion of the Nechalacho rare earths deposit, 100 km southeast of Yellowknife. option and the scale would work a lot better from our perspective," he said. "Once again, that's obviously a discussion we need to have with the regulators to ensure that any risks are mitigated and we have the appropriate man-

agement plans in place to be able to do that."

Avalon had already acquired regulatory permits for Nechalacho, but Vital Metals will need to amend the permits in accordance with the scope of its project.

10 November 18, 2019

MINING NWT/NUNAVUT

By the numbers Mining companies produce reams of data

by Derek Neary 1RUWKHUQ 1HZV 6HUYLFHV

NWT/Nunavut

Mining companies dig up massive volumes of metals and minerals. They also produce reams of data annually.

The following is a collection of facts and figures from the mining industry in the Northwest Territories and Nunavut.

NWT NWT diamond mines have collectively spent close to $14.5 billion with Northern businesses since 1996, which represents nearly 70 per cent of their total procurement, according to the 2018 GNWT socio-economic report. Close to $6.5 billion has been spent with Northern Indigenous businesses since 1996.

-Mining accounted for nearly $1.8 billion of the NWT's $4.95 billion gross domestic product in 2018, or approximately 36 per cent.

-The GNWT has collected an average of nearly $100 million in yearly revenue – primarily taxes and royalties – from diamond mines over the past decade, the 2018 GNWT socio-economic report states.

-GNWT resource revenue sharing in 2017-18: Inuvialuit Regional Corporation: $2.2 million Sahtu Secretariat Inc.: $1.6 million Tlicho Government: $1.4 million Gwich'in Tribal Council: $1.4 million Northwest Territory Métis Nation: $737,041 Deninu K'ue First Nation: $278,452

Acho Dene Koe First Nation: $199,695 Salt River First Nation: $283,297 Katl'odeeche First Nation: $190,696 -Ekati, Diavik, Snap Lake and Gahcho Kue provided a combined 56,642 person years of employment from 19962017. Northerners – Indigenous and non-Indigenous – represented 49 per cent of that labour, according to the GNWT. -Ekati's $302 million allocated to Northern businesses accounted for 57.6 per cent of its overall $524 million in spending in 2018. Half of the Northern spend, or $151 million, went to Indigenous enterprises.

-Freight, cargo and mail transport were Ekati's largest expenses at $79.9 million in 2018. Earth-moving equipment came next at $59 million.

That was followed by mine drilling and blasting services at $46.5 million, personal and domestic services as $15.6 million and vehicle repair and maintenance at $12.4 million.

-Of Ekati's 1,625 employees in 2018, 715 (44 per cent) were Northerners, and 408 (25 per cent) were Northern Indigenous. Among the latter workforce, two people were listed as managers, one as a professional, 97 as skilled employees, 199 as semi-skilled and 110 as entry-level. Women occupied 226 positions, or 14 per cent of the total workforce.

-There were 51 people in the Ekati apprenticeship program in 2018, including contractors.

-Diavik spent $329 million with Northern businesses in 2018, which was 75 per cent of its overall annual spending.

Northern Indigenous businesses procured $158.4 million.

-Of Diavik's 2018 operations workforce, 560 Northerners (51 per cent) were among the 1,113 employees.

Northern Indigenous workers – 219 of them – accounted for 20 per cent of the workforce.

-Diavik fresh water use in 2018: 677.4 million litres.

-Gahcho Kue spent $208 million with NWT-based business in 2018, including more than $51 million with Indigenous ventures. Total expenditures in 2018 amounted to $290 million.

-NWT residents made up 265 of Gahcho Kue's full-time equivalent (FTE) employees in 2018, representing half of the 527 FTE jobs. NWT Indigenous employees numbered 135, or 26 per cent – two of those jobs were categorized as management, 17 as skilled labour, 75 as semi-skilled and 41 as unskilled. Women filled 100 FTE jobs.

-Gahcho Kue imported 52.1 million litres of fuel in 2018.

Nunavut -Mining represented $680.7 million of Nunavut's $2.96 billion gross domestic product in 2018 – approximately 23 per cent.

-In 2018, Agnico Eagle had nearly 400 Inuit employees working at its Nunavut operations. Local hires were 38 per cent of the workforce at Meadowbank and 14 per

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Total spending at Dominion Diamond Mines' Ekati site added up to $524 million in 2018. Northern businesses captured $302 million of that spending while $151 million went to Indigenous ventures. cent of the employees at Meliadine. Thirty-three per cent of the company's Inuit workforce was female in 2018. Agnico Eagle is projecting that it will expand to 2,000 workers in the territory in the coming years and it's expecting 700 of those employees to be Inuit.

-Agnico Eagle's total payments to Nunavut governments in 2018 amounted to $55.2 million. Payroll taxes paid by employees formed

the bulk of that at $38.6 million. Payroll taxes coming from the company added up to $6.8 million. Government royalties and mining taxes rang in at $2.5 million while municipal taxes cost $1.7 million.

-Close to 80 companies registered with Nunavut Tunngavik Inc. (NTI) provided goods and services to Agnico Eagle's Nunavut projects in 2018. The miner spent $408 million with Inuit firms in 2018.

-Baffinland awarded 18 contracts valued at close to $141 million to Inuit-owned businesses and joint ventures in 2018. Since the development of Mary River, Inuitowned businesses and joint ventures have earned $960 million worth of contracts.

-In 2018, the amount of work done at Mary River was equivalent to approximately

1,529 full-time equivalent jobs. Out of that, Inuit filled the equivalent of 216 of those positions. Inuit employees collected $12 million in payroll in 2018 and Baffinland has paid out $45.2 million in pay to Inuit workers since 2014.

-Baffinland paid approximately $5.1 million in employee payroll tax and $5.9 million in fuel tax to the territory government in 2018.

-The $19-million Qikiqtani Skills and Training for Employment Partnership (Q STEP) is made possible by $9.4 million of in-kind support by Baffinland, $7.9 million from the Government of Canada and $1.6 million of in-kind support from the Kakivak Association.

-Since 2014, Baffinland has provided $170,000 to 34 students through the company's scholarship program.

November 18, 2019 11

NWT/NUNAVUT MINING

Nunavut looks to mines for housing help Cabinet minister says industry must be partners in addressing crisis

by Derek Neary 1RUWKHUQ 1HZV 6HUYLFHV

Nunavut

Should mining companies be constructing residences for their employees living in the North?

Nunavut's housing minister is turning to industry for assistance.

"We have no choice but to work in partnership with industry to resolve our housing challenges," Patterk Netser said in the legislative assembly in February after Rankin Inlet North-Chesterfield Inlet MLA Cathy Towtongie pointed out that the Government of Nunavut's 2017 memorandum of understanding with Agnico Eagle makes reference to housing as one of 10 priority areas for collaboration.

Netser told NWT and Nunavut Mining that a team from the Nunavut Housing Corporation met with representatives from Agnico Eagle

and Baffinland Iron Mines to discuss Nunavut's housing crisis earlier this year.

"Some points of discussion included how existing income earners at mines can be assisted to develop their personal financial management to save toward purchasing a home, as well as seeking ways to increase affordable housing in communities of points of hire," Netser stated. "Those discussions are ongoing."

It's estimated that Nunavut, where overcrowding is commonplace, needs close to 3,500 additional homes to meet existing demand.

NWT and Nunavut Mining asked detailed questions of Agnico Eagle about the company's plans, if any, to begin building homes in Nunavut. This was the response from a spokesperson with the multi-national miner: "Agnico Eagle has a good relationship and works in collaboration with the Nunavut

Housing Corporation via our memorandum of understanding. We are sharing information and are involved in order to document the situation and to help find possible creative solutions to provide housing," the statement reads.

Tom Hoefer, executive director of the NWT and Nunavut Chamber of Mines, suggested that territorial governments should devote revenue derived from mines directly to housing. He said mines currently pay "whopping" property taxes each year that are essentially "windfall taxes" because the mines receive nothing in return for the payments.

"Often people in communities are so used to government paying for everything that they might not realize that all the taxes that mining companies and their workers and businesses pay to government is actually benefiting them and their commun-

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Could mining company Agnico Eagle build homes for its employees in Rankin Inlet or Baker Lake someday? The Government of Nunavut is leaning on mining companies to facilitate housing ownership. ity," Hoefer stated. "So they might naively say, who cares about mining because everyone knows the government pays for everything. So one idea to create the appropriate linkage would be to create a

new housing fund, and have the GN or GNWT put all the property taxes they receive into it, and then use that fund to build new housing in the communities. The more new mines that are built, the more

new houses are constructed."

This structure would allow mines to continue to concentrate on mining while the government oversees the building of homes, Hoefer added.

12 November 18, 2019

MINING NWT/NUNAVUT

OPERATING MINES

Operating mines: diamonds, gold and iron Nunavut now has four producing sites; NWT diamonds under price pressure

by Derek Neary 1RUWKHUQ 1HZV 6HUYLFHV

Nunavut/NWT

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November 18, 2019 13

OPERATING MINES Continued IURP SUHYLRXV SDJH

NWT/NUNAVUT MINING

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14 November 18, 2019

November 18, 2019 15

16 November 18, 2019

MINING NWT/NUNAVUT

EXPLORATION

Quest for mineral riches Staking, surveying, sampling and drilling part of the North's magnetism

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Auryn Resources' Committee Bay property spans an enormous 773,000 hectares southwest of Kugaaruk. The company planned to test up to four targets with up to 3,000 metres of drilling this past summer.

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A colourless 0.85-millimetre diamond recovered from the ML8 kimberlite at North Arrow Minerals' Mel property, 140 km south of Hall Beach.

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The grassroots prospecting camp at Silver Range Resources' Sparta property, 84 km northeast of Yellowknife.

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Blue Star Gold conducted drilling at its Hood River site, approximately 125 km west of Bathurst Inlet, in September.

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A channel sampling program at Nighthawk Gold's Andy Lake, 20 km south of the company's flagship Colomac Gold Project.

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Sabina Gold and Silver's marine laydown area camp, located on southern Bathurst Inlet in the Kitikmeot region of Nunavut.

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22 November 18, 2019

MINING NWT/NUNAVUT

EXPLORATION

SKRWR FRXUWHV\ RI 6DELQD *ROG DQG 6LOYHU

The exploration team for Sabina Gold and Silver examines a rocky outcrop in a newly dug trench at the Goose Property in Nuanvut's Kitikmeot region.

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TerraX Minerals, Acasta Heliflight, the NWT Mine Training Society, the Yellowknife Ski Club, the GNWT and other organizations have combined efforts to upgrade prospector Winslow Ranney's 1930s trail. It is now known as the Ranney Hill Geological Interpretive Trail on the Yellowknife City Gold Project, a 15 km drive from city hall. While still an active exploration route, its also serves as a recreation, tourism and education trail. Shown here is one of more than 20 classes from North Slave school boards that have used the trail as an outdoor classroom during the annual Mining Matters program for those in grades 4-7.

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November 18, 2019 23

EXPLORATION

NWT/NUNAVUT MINING

Fortune's road still has twists and turns

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Once the Tlicho all-season road is completed, Fortune Minerals will be in position to build a 50-km tote road to the mine site, located north of Whati.

Developers of burgeoning NICO mine endure cobalt slump, search for financing

by Derek Neary 1RUWKHUQ 1HZV 6HUYLFHV

Tlicho

On a journey to targetted production by 2022 or 2023, Fortune Minerals has a major item being scratched from its checklist: a road to Whati.

Construction on the route branching off from Highway 3 began in September. The $411.8-million 97-km gravel road – spearheaded by the

GNWT with a federal funding contribution and the Tlicho Government taking a 20 per cent equity stake as part of the P3 deal – is projected to open to the public during the first half of 2022.

It will allow Fortune Minerals to build a 50-km tote road to its NICO cobalt-goldbismuth-copper mine, north of Whati.

"The mine would not be

economic without a road," Fortune Minerals' president and CEO Robin Goad said of the vital infrastructure.

But Fortune's checklist is still fairly lengthy. Near the top of that list for more than a year has been finding a financing partner to help make the $800-million mine a reality. Times have been tough recently in the cobalt industry with prices bottoming out

near $12 per pound due to a period of oversupply, Goad said. That situation has been improving with a rebound to $18 per pound recently.

NICO contains an estimated 82 million pounds of cobalt. With the element being a key component in the manufacturing of electric batteries for vehicles, Goad expressed confidence that demand for cobalt will

remain strong long-term. He cited some analysts' forecasts for $30 per pound in a few years due to a predicted deficit. Goad said Fortune would be "happy" with prices in the $25 to $30 range.

In the meantime, the company has been exploring strategic partnerships for its gold reserves – more than one million proven and probable ounces of the precious metal.

Fortune also went through a recent exercise where its executive examined the possibility of increasing the daily output of ore to 6,000 tonnes instead of its original plan of 4,650 tonnes. That plan has been rejected.

"The cashflow is insufficient to pay off the increase in the capital," Goad said of the prospect of raising tonnage.

If and when it reaches production, NICO will offer 150 jobs in the NWT and the mine life is projected at 17 years, although there's a possibility to extend it to 25 years depending on economics, said Goad.

There will be another 85 jobs based at a refinery but it won't be located in the NWT. Shipping the needed volumes of lime to the NWT would be costly, Goad said. Another advantage to establishing the plant in the south is the ability to process materials for other parties, something that wouldn't happen on site at NICO, Goad noted.

Fortune is still negotiating

a place to put its hydrometallurgical plant with three potential hosts in Saskatchewan. Hopes were dashed for an agreement with Corman Park, outside of Saskatoon, Sask., in March when a zoning change scuttled the deal.

The company also has a couple of "very large and strong" geophysical anomalies to probe – defined with assistance from the Geological Survey of Canada. One of those anomalies underlies the NICO deposit while the other is 1.5 km to the east. Drilling could occur next year, said Goad.

Relations with Indigenous groups in the NWT are "very good," he added.

"We're hoping to complete an access agreement very shortly and discussions are continuing on an IBA (impact benefit agreement)," Fortune's president and CEO said.

Construction on the Whati all-season road is expected to be ongoing throughout the year but may be on reduced operations during portions of the winter and during spring thaw, according to Greg Hanna, communications officer with the Department of Infrastructure.

As of early October, 96 workers were engaged on the road-building project, 32 of whom were Northerners and/ or Indigenous. The workforce will continue to grow and recruitment efforts will be ongoing, Hanna stated.

24 November 18, 2019

November 18, 2019 25

NWT/NUNAVUT MINING

Tracking progress on a new deal Revisiting Baffinland and the QIA's amended Inuit Impact Benefit Agreement a year later

by Derek Neary 1RUWKHUQ 1HZV 6HUYLFHV

Iqaluit

October 3 marked one year since the Qikiqtani Inuit Association (QIA) and Baffinland Iron Mines renegotiated their Inuit Impact Benefit Agreement.

The new deal is intended to bring greater advantages to the regional Inuit association and its membership.

The QIA recently provided an update on the terms outlined in the updated IIBA. A project manager is being hired to oversee a feasibility study for a regional training centre to be based in Pond Inlet. Baffinland and the federal government have pledged funding toward the facility.

In the coming months, QIA plans to hold consultations on the types of training that will be hosted at the site and the location of the centre in the community.

Pond Inlet will also be the first community to take possession of a marine research ship that Baffinland has already purchased. Arctic Bay, Clyde River, Iglulik and Hall Beach will benefit from research vessels in future years.

For 2019, the Mittimatalik Hunters and Trappers Organization, which submitted an accepted proposal, is absorbing the $200,000 available annually through the Wildlife Monitoring Program.

However, the $400,000 designated yearly to pay for harvesters' fuel usage in Pond Inlet hasn't yet been distributed as Baffinland is still deciding upon a method to do that. The QIA has made suggestions.

An expanded Inuit training budget â&#x20AC;&#x201C; now standing at $2.25 million per year â&#x20AC;&#x201C; means that there is more in the coffers for the Qikiqtani Skills and Training for Employment Partnership (Q-STEP). The program has introduced hundreds of Inuit to the mining industry, heavy-equipment operations, apprenticeships and provided academic upgrading since 2017.

There are constantly new intakes into Q-STEP, according to the QIA. During early October, Simonie Alainga was one of five Inuit beneficiaries to fly into Mary River to experience life at the mine site for a week. He spent time with maintenance department staff, who worked on small vehicles

SKRWR FRXUWHV\ RI 6LPRQLH $ODLQJD

Iqaluit's Simonie Alainga stands in front of one of the giant haul trucks at Baffinland's Mary River mine, where he underwent a week of orientation through the Q-STEP program in early October. "I wanted to try something new and different," he said. like pickup trucks and loaders, also known as skid steers.

Then Alainga was assigned to the crews handling the massive haul trucks and was invited to climb up to sit inside.

"I was very excited. It really blew my mind when

I saw the 793 (haul truck) for the first time," he said of the 5.5-metre high behemoth that can carry close to 250 tons and has more than 2,400 horsepower. "You could see everything (from the driver's seat), except for what's in front

of you, basically."

Alainga, 23, never finished high school. When he saw a poster promoting Q-STEP and the possibility of employment, he chose to apply.

"Once I saw that I wanted to jump on it as soon as I

could ... they were telling me that they're going to help me upgrade my education and that was one of my biggest points of going into this program," he said. "I want to try and start my career with QIA and Baffinland."

26 November 18, 2019

MINING NWT/NUNAVUT

How to save a life Mine Rescue Competition helps prepare emergency personnel for real-life crises

by Derek Neary 1RUWKHUQ 1HZV 6HUYLFHV

NWT/Nunavut

The annual Mine Rescue Competition puts emergency skills on display, and Richard Church knows first-hand how that readiness can translate into saving a life.

While working for Baffinland Iron Mines several years ago, one of Church's co-workers suffered a heart attack at the remote Nunavut mine site.

At 2:30 a.m., Church and four others immediately began several gruelling hours of chest compressions and artificial ventilation.

"We lost him and brought him back and continued working on him until 10 o'clock in the morning when we were able to get him medevaced off

site," Church recalled. "It was a long go, but we weren't really willing to give up on him."

His co-worker survived.

Church has since moved on to De Beers' Gahcho Kue diamond mine where he's emergency response co-ordinator and captain of the company's mine rescue team. Under his leadership, along with that of fellow trainer Jon Gale, De Beers captured the overall surface trophy at the 2019 Mine Rescue Competition in Yellowknife. It's a distinction they've claimed for three consecutive years. Not only that, the Gahcho Kue squad travelled to Fernie, B.C. in September and came away with the overall surface trophy at the National Western Region Mine Rescue competition,

which pitted them against the top teams from Western Canada and the northwestern United States.

The NWT Mine Rescue Competition, which was launched in 1957, sees a total of six teams face off in surface or underground events like rope rescues and rappelling, firefighting, searching in smoky conditions, first aid, testing equipment, running an obstacle course and written exams.

"By the time they're done all seven events, they're pretty wiped out," Church said of the competitors.

Gahcho Kue chose its eight-member Mine Rescue Competition crew â&#x20AC;&#x201C; six starters and two alternates â&#x20AC;&#x201C; from among the 55-person emer-

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Dan Beaulieu competes for Team Gahcho Kue at the 2019 Mine Rescue Competition in Yellowknife. Gahcho Kue once again triumphed as best in the overall surface division. gency response team. Tryouts begin each January when training sessions consume a full week. Then, as the competition draws closer and the team is pared down, training ramps up to two weeks

and finally three weeks in the month leading up to the early June competition.

"They're 12-hour days.

It's long," Church said of the training sessions.

Over at the rival Diavik

diamond mine, David Alexander and fellow emergency response team (ERT) adviser Richard Kretzschmar share the duties of overseeing the 70 ERT staff and prepping the mine rescue team. They strive to retain some experienced team members but also encourage newcomers.

"It is a great opportunity for new members to get some intensive training that helps advance their ERT knowledge and experience, training that would otherwise take years to accumulate through regular training," said Alexander, who, like Kretzschmar, has been involved in mine rescue for more than 30 years.

Trainees must commit to 12-hour days and are also expected to do extra reading, studying and practising.

Although Diavik earned the best overall underground trophy in Yellowknife this year and last year, winning at the Mine Rescue Competition isn't the only objective, according to Alexander.

"It gives us the opportunity to meet and collaborate with other teams, and it is a good indicator of how well our training program is working at our site," he explained, adding that Diavik has a mutual aid agreement with other mines in the territories.

"In the event of a large or prolonged event or crisis at one site, they can call on other mines to come and assist. The mines get together annually and complete a mutual aid exercise at one of the mine sites so that we can train together ... it is amazing how well (the mine staff) all work together."

Church can attest to the strong bonds among ERT personnel. He has trained more than 300 people over the past two decades. He said he remains in contact with them.

"It truly is a big family," Church said. "The funny thing about working these jobs is it's 14 days in, 14 out, you become family just with your co-workers alone. But when you become (an emergency) response member, you bleed and cry and sweat with these guys."

November 18, 2019 27

NWT/NUNAVUT MINING

De Beers investigates carbon storage Technique tested at Gahcho Kue diamond mine to inject carbon dioxide into processed rock

by Derek Neary 1RUWKHUQ 1HZV 6HUYLFHV

NWT

The energy-intensive process of mining expends large volumes of carbon dioxide, and De Beers is seeking a way to put that carbon into processed rock, or tailings, rather than the atmosphere.

"Think of it like a fine sand.

The minerals in that find sand react with the carbon dioxide to form carbonate minerals, so they turn the carbon into a solid form," explained lead researcher Greg Dipple, a professor in the Department of Earth, Ocean and Atmospheric Sciences at the University of British Columbia. "The carbon dioxide is going from a gas to a solid mineral and that's where the real stability and safety of it comes from."

The process has been demonstrated in a laboratory under controlled conditions in as little as two to three days, although it can take up to almost a year.

The crucial factors are time and cost, said Dipple.

"You can't afford to have five million tonnes of tailings reacting for 300 days," he said.

There's a high degree of variability within a deposit as to how quickly, or slowly, the geochemical reaction occurs and the real test is to replicate it successfully on the scale of a mining operation, he acknowledged.

Initial results have shown promise. Dipple and his team travelled to the Gahcho Kue mine, 280 km northeast of Yellowknife, this past summer and carried out an experiment approximately 100 times the size of what was performed in the lab. It was done in a basin within metres of the ground's surface.

"We learned a lot. We're still in the process of collecting all the data and we have to go through reporting with De Beers as well, but we're very happy with the way things went this summer" the professor said, adding that they're aspiring to

return to the mine again next year to expand upon their trial by another factor of 100.

"Within a couple of years we'll have clear indications of what kind of approaches will be economically feasible."

Natural Resources Canada has contributed a $675,000 grant towards the research through it's Clean Growth Program.

"The research offers great opportunity as the carbon storage capabilities of kimberlite processed while mining is such that only 10 per cent of the rock's storage potential would need to be harnessed to capture the carbon dioxide emissions of a whole mine," De Beers stated in a news release.

De Beers, which provided no further comment on the project when approached by NWT and Nunavut Mining, is also conducting similar research at its mining interests in Botswana.

The experiment comes as carbon taxes have taken effect in Canada and are

116/ ILOH SKRWR

If research proves viability, carbon emissions at De Beers' Gahcho Kue diamond mine could be stored in tailings to make the mine carbon neutral. scheduled to rise incrementally each year through 2022.

Agnico Eagle estimates that carbon taxes in Canada will cost the company $48 million over the next 14 years.

Tom Hoefer, executive director of the NWT and Nunavut Chamber of Mines, is

keeping an eye on how the carbon storage experiment unfolds.

"I think we're all hopeful but we'll have to wait for the results of the research," Hoefer stated.

Canada emits close to 700 million tonnes of carbon

each year. Nunavut produced 0.6 million tonnes of carbon in 2017 while the NWT was responsible for 1.3 million tonnes â&#x20AC;&#x201C; the diamonds accounted for approximately 33 per cent of that, according to Environment and Climate Change Canada.

28 November 18, 2019