INDUSTRY AND TRADES WINTER/SPRING 2024
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WINTER/SPRING 2024 | INDUSTRY & TRADES
FEATURES B.C. announces funding for eight manufacturing projects Two major mining prospects could put B.C. on the nickel mining map
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Workforce surpasses 550 at gold mine southwest of Prince George This aerial shot shows the site of Blackwater Gold mine, 160 km southwest of Prince George. Artemis Gold photo Ted Clarke
Construction of the Blackwater Gold mine, 160 kilometres southwest of Prince George, remains on target to begin extracting the first gold pour in the second half of this year. Artemis Gold said construction was 59 per cent complete as of Dec. 31 and the company had spent $389 million of its initial capital expenditure of $730-750 million. By the end of 2023, Artemis has entered into $615 million worth of contractual commitments.
A 640-hectare mine site has been logged and cleared. All access roads needed for the first phase of construction are now operable. Construction of the mine’s water management facilities is progressing according to plan, the company says. That includes the Davidson Creek diversion and the sediment control pond, which features a two-millimetre thick environmental control liner. Work also continued to expand the septic field and construction
of the hydro transmission line remains on schedule. Major works construction through Dec. 31 surpassed 1.1 million hours with a zero lost time injury frequency rating and an all-injuries rating of 91.86. Blackwater now has a fleet of 60- and 100-tonne rigid frame haul trucks and 150-tonne excavators. Five 240-tonne rigid frame haul trucks have also been delivered to the site and four of them are now
substantially assembled. Delivery of the remainder of the fleet to support mine operations is expected before July. Blackwater surpassed 320 employees in Q4, of which 20 per cent were female and 30 percent identified as Indigenous. Fifty per cent of the workforce is from the local region and 80 per cent are from B.C. By December, there were more than 550 workers involved the project.
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INDUSTRY & TRADES | WINTER/SPRING 2024
Features Workforce surpasses 550 at local mine
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Partnership paves the way for rare earth elements
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B.C.’s critical mineral mines potential to generate $791B
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B.C. announces funding for eight manufacturing projects
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Clean energy hydrogen project announced in PG
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Two major mining prospects could put B.C. on the map
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Indigenous leaders excited for Cedar LNG project in Kitimat
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B.C. construction industry predicted to be ‘surprisingly robust’ in 2024
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Japan gets mixed messages on B.C. forest products 12 Mining CEO seeks partner for Cariboo gold project Publisher | Curtis Armstrong Editor | Neil Godbout
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Partnership paves way for rare earth elements mine north of Prince George
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it’s significant that McLeod Lake will now be a true partner in making decisions throughout the process
McLeod Lake Indian Band chief Harley Chingee, left, signs partnership agreement with Defense Metals CEO Craig Taylor and Minister on Mines, Energy and Low Carbon Innovation Josie Osborne at the BC Natural Resources Forum at the Prince George Civic and Convention Centre.
Ted Clarke
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n equity partnership and co-design agreement between the McLeod Lake Indian Band and Defense Metals of Vancouver could create a rare earth elements mine north of Prince George.
that if they were to cut off that production or just absorb all of their production internally, we’d be left without these modern conveniences we’ve come to rely upon.”
The mine, which would extract neodymium and praseodymium, magnetic metals used in cell phones, air conditioners and maglev trains, is projected to produce 10 per cent of the global supply once it becomes fully operational.
The mine, 35 kilometres east of Bear Lake, would be the first of its kind in Canada.
It would be the first of its kind in Canada. “it’s significant that McLeod Lake will now be a true partner in making decisions throughout the process,” said Defense Metals CEO Craig Taylor. “Neodynium and praseodymium are instrumental in the manufacture of light-weight magnets that are in all of our day-to-day devices, cell phones, electric vehicles, electric seats in your car, wind turbines, military components, air conditioning, refrigeration. “Right now the industry is dominated by China. They have 80 per cent of production and there’s a real threat to the West 4
Taylor estimates the construction phase would create 400 jobs and operations would require 200 full-time employees. Depending on the permitting process, the company is hopeful construction will begin in four-six years. Construction cost is estimated at US$300 million. Taylor says the metals are close to the surface and can be easily extracted. The mine site sits along the 700 logging road and is close to hydro transmission lines, railway and highways and is only about 400 kilometres away from the port in Prince Rupert. There’s also a skilled work force to draw from in Prince George, 115 km to the south. The Wicheeda Project is generating interest in South Korea, Japan, Europe, Australia, and the United States from companies looking to fill their
processing needs. Capable of annually producing 25,000 tonnes of rare earth oxide, the product would initially be sent to China for further processing. The Wicheeda deposit is enough to supply three processing facilities. “The Chinese really latched on to it decades ago and they said rare earths are to China what oil is to Saudi Arabia, so they’ve taken that and run with it,” said Taylor. “We’re looking for help and I think the Western world has woken up to that fact and they’re starting to support projects like this.” The McLeod Lake band purchased 2.6 million common shares in Defense Metals as its commitment to the project. “It’s a true form of economic reconciliation for our people because we’re involved in the project every step of the way,” said McLeod Lake chief Harley Chingee. “We’re glad to be part of this and hopefully we can get a bigger stake as we go forward.” The project has been in the works for six years and is now in the exploratory and planning stage, which means more research, environmental assessments and social and technical evaluations will be required
to determine mine feasibility and its potential outcome. B.C. Minister of Mines, Energy and Low Carbon Innovation Joan Osborne said the project perfectly aligns with Canada’s Critical Minerals Strategy and its development will leave a low-carbon footprint will help the province achieve a sustainable net-zero emissions future. “B.C. is home to 16 of the 31 critical minerals identified in Canada’s Critical Minerals Strategy and pretty much everything you touch has a connection to this industry,” said Osborne. “More and more as we drive electric vehicles or take electric busses, as we see wind turbines, as we put solar panels on our homes, we’re part of this energy transition. “We know we’ve got the minerals here in B.C. and we’ve got a generational opportunity to seize and develop this in a way that helps protect the environment and contributes to climate action goals and does so in partnership with communities and First Nations and creates really good-paying jobs.”
INDUSTRY & TRADES | WINTER/SPRING 2024
B.C.’s critical mineral mines have potential to generate $791B, report says Turnagain nickel project in British Columbia. Giga Metals photo Nelson Bennett Glacier Media
If every one of the 16 critical mineral mines or mine expansions proposed for B.C. were to be built, it would generate $36 billion in initial investment, and a staggering total economic output of $791 billion over the life of the mines, according to a new economic impact study commissioned by the Mining Association of BC (MABC). That’s not including the five new gold and silver mines also proposed for B.C., which would represent an additional initial investment of $1.9 billion. There are currently 17 mines operating in B.C., the report notes -- 10 metals mines and seven steelmaking coal mines. There are also two smelters in B.C. – the Rio Tinto aluminum smelter in Kitimat and a lead and zinc smelter in Trail, B.C. The mining and smelting industry in B.C. sustains 35,000 jobs, generates more than $18 billion in economic activity and accounted for close to 30 per cent of the value of B.C. exports in 2022, according to an economic impact study by Mansfield Consulting Inc. for MABC. The federal and provincial governments officially support the development of more mines in the critical minerals space. This includes copper and nickel mines. There are 14 new mine proposals in the critical minerals WINTER/SPRING 2024 | INDUSTRY & TRADES
space in B.C., plus two proposed expansions of existing copper mines. Eight of the new mines or expansions would be copper, three coppermolybdenum and one copperzinc. One of the proposed new mines is nickel, one nickelcobalt, one niobium and one rare earths. “The 16 projects are in advanced stages of development,” the MABC says in a backgrounder to the study. “A number of these projects are in the early stages of regulatory review. Others may enter regulatory review within a few years.” Should all 16 projects get approved and built, it would represent a total investment of $36.5 billion for development and construction – which is roughly the equivalent of a single large liquefied natural gas plant and its upstream operations. (The LNG Canada project’s total capital investment has been estimated at $40 billion, which includes the upstream natural gas wells, processing, pipelines, etc.) In the near term, the 16 mines would generate an estimated $80 billion in economic output, labour income of $22 billion, total GDP of $38 billion and $11 billion in taxes. Over the life of the mines, the study estimates total longterm economic output of $793 billion, labour income of $184 billion, total GDP of $398 billion
and $155 billion in tax revenue. “According to the study, each of the 16 critical mineral mines reviewed would generate GDP of $24.8 billion during their respective life span averaging 24.1 years,” the MABC says in a backgrounder. “Broadly speaking, over 80 per cent of the economic benefits from the proposed critical mineral projects would accrue to British Columbia, with nearly 20 per cent benefiting other parts of Canada.”
The study compared the economic impacts of the new mines to other sectors, such a film and TV, forestry and residential construction. The study estimated the nearterm economic impacts of the new mines would be $31 billion, compared to the B.C. motion picture industry’s total GDP of $2.7 billion. It puts the long-term economic impacts of the new mines at $183 billion, compared to the $2.4 billion from forestry.
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B.C. announces funding for eight manufacturing projects
Brenda Bailey, Minister of Jobs, Economic Development and Innovation, speaking at the announcement in Prince George. Hanna Petersen
New funding is on the way for six wood-product manufacturers and two fabricated-metal manufacturers in B.C. The province is contributing as much as $8.6 million through the BC Manufacturing Jobs Fund (BCMJF) to fund eight new capital projects to help manufacturers grow and diversify their operations through new production lines, equipment and innovative technology, setting the stage for long-term sustainability while establishing new jobs and preserving existing positions. “Natural resources helped build this incredible province and the local economies that are the foundation of B.C.,” said Brenda Bailey, Minister of Jobs, Economic Development and Innovation. “The BC Manufacturing Jobs Fund helps B.C.’s forest-sector operators modernize and adopt the new, innovative technologies that get more jobs out of every tree harvested, while creating secure, sustainable jobs in forestry.” Funding through the fund is part of a series of programs the province has introduced to 6
support the growth of valueadded manufacturing in B.C.’s forestry sector.
In January 2023, the Ministry of Forests introduced a new valueadded manufacturing program to establish a dedicated fibre supply for small and mediumsized manufacturers. The province said it is working with the valueadded manufacturing sector to increase the flow of fibre and find ways to expand local production of high-value wood products. The projects funded include: San Industries Ltd., a vertically integrated forestry company that produces value-added and engineered wood products, will receive as much as $2.5 million to support purchasing new equipment, optimizing its processing line and constructing a new storage facility at its Port Alberni plant. The project will enable better use of diversified fibre sources in creating valueadded products and help it enter new international markets, while creating 30 jobs. Richmond Plywood Corp. Ltd., is receiving as much as $2.3 million to purchase and install new, innovative equipment to enhance its value-added
Citizen staff photo
manufacturing processes using second-growth fibre and waste wood. The capital project will result in Richmond Plywood upskilling 24 employees to higher-paid, skilled positions and will create 14 jobs at the company. Coast Tsimshian Resources LP is a forestry company fully owned by the Lax Kw’alaams Band near Prince Rupert. It will receive as much as $970,000 for the acquisition of an industrial chipper and peripherals, which will allow increased the utilization of its fibre basket, while decreasing residual wood waste. It will ultimately create a new business stream for Lax Kw’alaams Band, while creating 108 direct and indirect jobs. Downie Timber Ltd in Revelstoke is a lumber-milling and remanufacturing wood processor. It will receive as much as $825,000 to purchase and commission a new debarker system, alongside facility upgrades that will enable the company to reduce reliance on old-growth fibre and optimize operations, while protecting 229 existing jobs within the company. Sunrise Engineering & Manufacturing Inc. in Delta is a fabrication facility that provides welding, machining and assembly services that
specialize in the manufacturing and repairing of a wide variety of pulp mill equipment. It will receive as much as $805,000 for its project to acquire new advanced manufacturing equipment including four CNC machines that will increase their capacity and competitive advantage, improve efficiency and create five skilled jobs. Access Precision Machining Ltd. In Salmon Arm is an advanced manufacturing machining and fabrication service provider that manufactures custom machined parts for various industries including oil and gas, aerospace and commercial sectors. It will receive up to $800,000 to purchase seven new machines, including six CNC machines, to help grow its market in priority sectors with international exports, increase productivity and create as many as 18 jobs; Yarrow Wood (2012) Inc. in Chiliwack is a lumber remanufacturer, providing custom square and rectangular lumber remanufacturing for forestry companies. It will receive as much as $130,000 to upgrade equipment that will support profiling lumber in-house, including its moulder, infeed/outfeed and blower system, which will allow it to process a wider variety of valueadded wood products using a broader scope of log species and creates as many as seven jobs; and C.W. Creative Woodcraft Ltd. In Cobble Hill is a cabinet and millwork manufacturer specializing in using local, second-growth fibre. It will receive as much as $286,000 in funding to support the expansion of its existing facility and the acquisition of new machinery to double its production capacity, optimize production, reduce waste and create as many as 14 jobs.
INDUSTRY & TRADES | WINTER/SPRING 2024
Clean energy hydrogen project announced in Prince George
Premier David Eby was at Chemtrade in Prince George to announce a green hydrogen energy project that will help fuel the boiler at the adjacent Canfor’s Intercon pulp mill. Ted Clarke
A collaborative project will turn clean energy hydrogen and use it to replace natural gas used by Canfor’s Intercon Pulp Mill in Prince George. Waste hydrogen produced through hydrolysis by Chemtrade as a byproduct of making sodium chlorate will be refined and compressed to provide a low-carbon fuel source that will supply up to 25 per cent of the gas needed to heat the boiler of the adjacent mill used to make pulp and paper products. The project, which also involves Fortis BC, will be funded by Chilliwack-based Teralta Hydrogen Solutions and is expected to create dozens of construction jobs and several permanent operational positions at the Chemtrade facility next to the pulp mill. It’s expected to produce an average 500,000 gigajoules of clean energy and reduce carbon emissions by 700,000 tonnes over the several-decades lifespan of the project. The electolyzers that will create the hydrogen will run using grid electricity. Premier David Eby said the burgeoning global market for hydrogen is estimated to grow to $87 billion by 2030 and $305 billion by 2050 and he said Prince George is getting in on the ground floor of that market as a potential hydrogen hub. The Teralta project is among 50 domestic and international WINTER/SPRING 2024 | INDUSTRY & TRADES
projects related to hydrogen currently under consideration by the province. “The reason for that is hydrogen is one of our best bets to decarbonize one of our hardest-todecarbonize sectors, where we’re using natural gas or fossil fuels,” said Eby. “Hydrogen enables companies in Asia potentially to decarbonize their steel-making operations, which is one of the major interests for export here in British Columbia. “Clean hydrogen opens a world of opportunities for our province that we’re not taking advantage of yet. And are right there for us. It may be the first project of its kind but it certainly won’t be the last. Eby said the province has created an office to streamline approval of clean energy and major projects office, to ensure regulatory processes and permits don’t delay projects. Teralta CEO Simon Pickup acknowledged that the province’s regulatory amendment in 2021 cleared the way for his company’s hydrogen program. “We will be able to provide clean hydrogen for Canfor to reduce their emissions, reduce operating costs and showcase a new model for making hydrogen actually viable for industrial users,” said Pickup. Josie Osborn, Minister of Energy, Mines and Low Carbon Innova-
tion, said Prince George is ideally positioned geographically to attract investment in hydrogen and pioneer new technologies the world needs to build a low-carbon economy and meet climate goals. The city has been identified as the site of $3 billion megaproject to produce green hydrogen for export proposed by Australian mining giant Fortescue. Eby told the gathering at the Chemtrade announcement the head of Fortescue has already met with Mayor Simon Yu and Lheidli T’enneh chief Dolleen Logan to discuss the project, which would require one gigawatt of power to operate, equivalent to the entire power production of the Site C dam once it’s up and running. Fortescue is working with HTEC of Vancouver to develop the project and in September filed Initial Project Description with the BC
Environmental Assessment Office. The province has set up a task force to examine the potential impact of such a project on B.C.’s electrical grid. Osborne also pointed to the Tse’khene energy hub, a $7 billion project clean hydrogen export project at Kerry Lake, 90 kilometres north of Prince George, a proposed partnership between Mitsubishi and the McLeod Lake Indian Band. “Prince George is a crossroads,” said Osborne. “The location, in terms of having railways, the highways and the proximity to Prince Rupert and the port for export. The technology innovators are already here and we have the welcoming of the First Nation and the city and it’s kind of like all those pieces come together.”
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Two major mining prospects could put B.C. on the nickel mining map
B.C. has two major nickel mine prospects that are in the early development stages
Nelson Bennet
Canada is the world’s sixthlargest nickel producer, with roughly 130,000 million tonnes of nickel produced in Ontario, Quebec, Manitoba and Labrador annually. There are currently no nickel mines in B.C., but a growing demand for the metal from the electric vehicle market, and a federal strategy that promotes critical mineral selfsufficiency in Canada, could change that. There are now two very large nickel mines proposed for B.C., representing a potential investment of roughly $8 billion: The FPX Nickel Corp. Baptiste project near Fort St. James and the Giga Metals Turnagain project near Dease Lake in northwest B.C. Both projects are in early development stages, with prefeasibility studies published in recent weeks. “FPX Nickel’s Baptiste project and Giga Metals’ Turnagain project are two of the world’s top 10 nickel projects,” said Michael Goehring, president of the Mining Association of BC. “These are two exciting projects that are really what the government of Canada’s critical minerals strategy is all about. 8
“These are two projects that have received investment from significant and sophisticated global players. That’s strong validation in the strong fundamentals of both of these projects.” Mickey Fulp, geologist and publisher of the Mercenary Geologist, is less bullish about either project, due to their grades and economics, though he admits the Baptiste project is “interesting” because of its unique mineralization. “It’s an interesting project, but it’s 15 years in and they still are trying to solve a metallurgical process with a deposit that, even with their economics, looks marginal at best,” Fulp said. He’s even less impressed with the Turnagain project. “It’s very, very low grade – 0.2 per cent nickel,” Fulp said. “It’s very remote.” And yet both projects have drawn big players in the steel and automotive industries as project partners. The Turnagain deposit is owned by Hard Creek Nickel Corp., a joint venture between Giga Metals and Mitsubishi Corp., which owns 15 per cent. In May, Finland’s Outokumpu Oyj – Europe’s largest
Mangiwau/Moment/Getty Images
stainless-steel producer – took a 9.95 per cent equity stake in FPX for $16 million. The FPX project started out as First Point Minerals, founded by Canadian Mining Hall of Fame inductee Peter Bradshaw, who discovered the unique awaruite deposits in what would become the Decar Nickel district, of which Baptiste is one deposit. Bradshaw is now chair of FPX. At 60,000 tonnes of annual production, the Baptiste mine would produce about half the amount of nickel currently produced in the rest of Canada and would be one of the 10 largest nickel producers in the world, said FPX CEO Martin Turenne. The Decar nickel district features some unique mineralization: Awaruite and brucite. Whereas Turnagain is a typical nickel-sulphide deposit, the Baptise deposit is free of sulphides. The nickel is contained in awaruite – a mix of nickel and iron. And the brucite is a mineral that is particularly conducive to carbon mineralization – i.e. permanently sequestering carbon. FPX has spun out a subsidiary, CO2 Lock Corp., which is exploring
the potential for the DecarBaptiste sites to pilot brucitebased carbon sequestration. (Giga Metals is also exploring the potential for carbon sequestration in the Turnagain mine’s tailings.) Because awaruite is magnetic, magnetic separation can be used in primary processing, as opposed to the chemical metallurgical processing needed for nickel sulphides. This makes the processing simpler and cleaner. “There’s a cost advantage to that and there’s also an environmental advantage from not having these massive chemical baths that you’re having to separate one mineral from the other,” Turenne said. “That lower degree of sulphur means it’s a cleaner geology. It also means it’s a cleaner end product, and that absence of sulphur and deleterious elements in that concentrate means that we can bypass the smelting stage. “This rock is not acid generating, so there’s an advantage in terms of the chemical composition of the tailings from the rock itself, and also the fact that you’re not using that same scale INDUSTRY & TRADES | WINTER/SPRING 2024
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FPX Nickel’s Baptiste project and Giga Metals’ Turnagain project are two of the world’s top 10 nickel projects...
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members do not support or consent to the exploratory work FPX Nickel Corp. is conducting in its territory and are opposed to any sort of mining operation on or near Tselk’un (Mount Sydney Williams),” the First Nation said in a press release. As for the Turnagain project, the mine would be located 65 kilometres east of Dease Lake. It would have an initial capital cost of $2.6 billion and sustaining capital costs over 30 years of $2.2 billion. It would require a new 78-kilometre access road and a 160-kilometre transmission line to tie into the Northwest Transmission Line. “We’re looking at average production of a little over 35,000 tonnes per year of nickel and a little over 2,000 tonnes per year of cobalt,” said Giga Metals CEO Mark Jarvis. The company says the mine would have a relatively low carbon-emissions intensity compared to other nickel mines. For one thing, it would use clean hydro power, by tying into the Northwest Transmission Line. For another, the company is exploring a tailings management approach that would accelerate a natural carbon mineralization process to permanently sequester CO2 in the form of
What’s changed, historically, is that now you’ve got this new demand source driving demand for nickel from electric vehicles and batteries in general.” Nickel prices fell in 2023, from US$14 per pound in January to below US$8 per pound in November, due in part to new supply coming out of Indonesia. But the longer-term forecast is for nickel demand and prices to increase, thanks to the demand from electric vehicles. The global demand for nickel has already grown by more than 1 million tonnes just in the last four years – from 2.4 million tonnes in 2019 to 3.6 million in 2023 – according to Statista. Rystad Energy predicts there will be a nickel shortage by 2026, and Glencore predicts global demand for nickel could grow to 9.2 million tonnes by 2050, driven largely by the EV battery market.
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of chemical bath means that there’s less deleterious elements going into the tailings.” FPX could sell its nickel to the stainless-steel industry. But the company is also exploring a hydrometallurgical refining process to produce EV batterygrade nickel sulphate – an effort backed by the federal government and Prime Planet Energy and Solutions, a joint venture between Toyota (TYO: 7203) and Panasonic (TYO: 6752). FPX has received $725,000 in funding from Natural Resources Canada to study the potential for a hydrometallurgical process to make battery-grade nickel sulphate. The company estimates the cost of such a processing plant would be $450 million. It would not be located at the mine site, Turenne said, but in a city with industrial infrastructure, such as rail and port access. The plant would employ as many as 400 people. The Baptiste project faces one potentially significant obstacle: First Nation opposition. The Tl’azt’en Nation had a memorandum of understanding with FPX but cancelled it in June and issued a statement that it would oppose the mine. “Tl’azt’en Nation and its
carbonates. “It is a significant source of low-carbon intensity nickel and cobalt in a form that is very amenable to processing to cathode material,” Jarvis said. One of the reasons Fulp is skeptical about the Turnagain project is its remoteness and its need for new roads and transmission lines, which add to the project’s capital cost. Fulp said both B.C. nickel projects have low grades, high capital costs and low internal rates of return. He said Turnagain’s internal rate of return is 11.4 per cent. “We always look at 20 per cent as being absolute minimum internal rate of return,” Fulp said. Jarvis said all major undeveloped nickel projects have the same kinds of challenges. “All of the really large nickel projects in the world are in the same category,” he said. “They have low internal rates of return at low nickel prices.
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Indigenous leaders excited for Cedar LNG project in Kitimat Panelists for the BC Natural Resources Forum Indigenous Leadership in B.C’s LNG Industry panel discussion gather for a photo on the stage at the Prince George Civic and Conference Centre. From left are Crystal Smith, chief councillor, Haisla Nation; Karen Ogen, CEO of First Nations LNG Alliance; Eva Clayton, president of Nisga’a Nation; and Shannon Joseph, chair of Energy for a Secure Future. Citizen staff photo
Ted Clarke
The need for more facilities to export liquid natural gas from Canada to Asian markets was never more apparent to Karen Ogen than when she went on a tour of China and saw cities shrouded in a permanent haze from coal smoke. That served as a reminder to Ogen, CEO of the First Nations LNG Alliance, why the world needs the Cedar LNG project, a $3.2 billion electrified floating facility proposed for Haisla Nation land along the Douglas Channel near Kitimat. “They burn a lot of coal in China and we need to get them off of coal to a cleaner energy, which is LNG,” said Ogen. “B.C. and Canada have an opportunity. We have natural resources that the rest of the world wants and needs and we have the solution, so B.C. needs to get on board. Right now LNG is being shipped to the States and they are turning around and selling it and no economic benefits are coming back to B.C. or Canada, and we need to change that. “It makes perfect sense for LNG to be shipped to Asia from Haisla and the B.C. coast, it’s a shortcut. Instead, they’re going through 10
the Gulf Coast and the Panama Canal. We’ve got an opportunity here and we’ve got to take it.” Last March, Cedar became the first Indigenous majority-owned facility to receive environmental approval. With all the permits now in place the project is awaiting a final investment decision sometime in the next 2 1/2 months and the anticipation is building for Crystal Smith, chief counsellor of the Haisla First Nation. “It’s definitely a different kind of excitement, for sure,” said Smith, who shared the Prince George Civic and Conference Centre forum stage with Ogen as part of an LNG panel. “It’s a lot of responsibility and we are looking forward to making the decision and I am literally praying every night that it’s a positive one. “It’s trailblazing. We are setting a path of how economic projects such as Cedar can be accomplished, proving to the world that Indigenous communities want to be a part of the solution. We want to be a part of what’s happening globally while maintaining our values and our cultural beliefs through making decisions that we have and being part of that solution.”
Cedar and its partner Pembina Pipeline Corporation plan to build one of the lowest greenhouse-gas emitting LNG facilities in the world. Powered by renewable electricity from BC Hydro, Cedar will tap into the Coastal GasLink pipeline through an 8.5 kilometre pipeline now approved by the BC Energy Regulator. Longterm agreements are in place to use existing roads and other infrastructure already bordering on the deep-water port where that ship will be anchored in the channel, directly across from the Kitimaat Village. “With choosing a floating facility, in the next 25 or 30 years when the project potentially may be done or may be extended, the ship simply detaches and can be refurbished and sent to a different location if required,” said Smith. “We don’t have to build any extensive infrastructure. The ships will pull up right next to the Cedar facility, so that is a definite plus.” The floating plant will be capable of handling three million tonnes per year of liquid natural gas which will be pumped into carriers that will reach the Pacific through the Hecate Strait.
The project will create about 100 permanent jobs and will need about 500 workers during the construction phase. Ogen says Cedar is an example of a major development that will create jobs and economic wealth to benefit people, the province and the country, and it will show the world it can be done without poisoning the air with greenhouse gas emissions. She says Canada’s cold winters demonstrate why clean-burning natural gas is still a needed commodity and people should not be reluctant to use it. “People think the sky is falling,” said Ogen. “We need to be able to look at things in a meaningful way that’s a responsible common-sense approach on how we will continue with LNG and not just go to something else we can’t afford or is not feasible for northern climates. “We need to get our B.C. economy going, because right now I see gas prices have gone up, food prices have gone up, rent and mortgages have gone up and the poor people are getting poorer. Our Indigenous people live in poverty and that’s who it’s going to hit the hardest.”
INDUSTRY & TRADES | WINTER/SPRING 2024
B.C. construction industry predicted to be ‘surprisingly robust’ in 2024 Claire Wilson Glacier Media
Attitudes about the year ahead for B.C.’s construction industry are looking rosier than expected. Despite economic uncertainties, 87 per cent of B.C. contractors expect 2024 to be as busy – or even busier – compared with last year, according to an annual survey from the Independent Contractors and Businesses Association (ICBA). “This seems counterintuitive given that we have rolled from one crisis to another in recent years – from the COVID-19 pandemic, to supply chain disruptions, to inflation and then historic increases in interest rates,” said ICBA president Chris Gardner. While forward-looking attitudes for construction are positive, two-thirds of B.C. contractors cite the shortage of people as the biggest challenge in 2024. When survey respondents were asked if there are enough qualified workers in the trades they require, 79 per cent said no. “Four in five contractors still can’t find enough of the people they need. This dynamic has not changed for years given Canada’s dismal record of identifying the skills gaps in our economy and attracting the new immigrants we need to fill them,” said Gardner. “Last year, only two per cent WINTER/SPRING 2024 | INDUSTRY & TRADES
of the approximately 460,000 new permanent immigrants to Canada ended up pursuing a career in the construction trades. We must do better.” The industry dealt with headwinds such as inflation and higher interest rates in 2023, complicating the financial feasibility and delivery of projects. Survey respondents indicate that labour shortages, supply chain issues and government red tape will be among the biggest challenges they face in the year ahead.
of those surveyed saying that they are experiencing delays. This is in addition to challenges with government red tape, with 60 per cent saying that the government is on the wrong track, up from 55 per cent last year. “We have not moved the needle on housing supply for the past 50 years – we are building fewer homes today than we did in 1972. Reams of new regulations and convoluted
approval processes have choked the supply we need to keep home prices affordable for firsttime homebuyers and young families,” said Gardner. “All three levels of government need to stop the finger-pointing and working at cross-purposes, and collaborate meaningfully to fast track housing, cut red tape, and put in place practical policies that will make a real difference for home buyers.”
Electricians currently have the largest shortage of positions, with carpenters in second and plumbers in third. Carpentry ranks first when it comes to the largest shortages coming from future retirements. However, labour shortages can also result in increased career opportunities for those looking to get into the construction industry, said Gardner. “Construction trades are in intense demand, and the earnings potential remains strong – meaning that real incomes are growing at a faster pace than in other sectors,” he said. Survey respondents predict that the average construction hourly wage will increase by five per cent this year, with an additional six per cent increase in 2025. Other challenges identified by survey respondents are supply chain issues, with 62 per cent
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Japan gets mixed messages on B.C. forest products typically fetches $149 per cubic metre. “It would be uneconomical to divert quality sawlogs into wood pellets,” the ministry said in an email to BIV News. Connolly said she got no firm commitments from Japanese companies or officials that they would stop buying B.C. wood products but said “we put it on their radar.”
Conservation North photo Ben Parfitt, right, and Michelle Connolly, seated, meet with a member of Japan’s House of Representatives. Nelson Bennett
B.C. Forests Minister Bruce Ralston recently returned from a trade mission to Japan, where he and B.C. forestry companies were promoting B.C. wood products, but environmentalists from B.C. had already beaten them there to do the opposite. Pre-emptively, Conservation North director Michelle Connolly and Ben Parfitt, a policy analyst for Canadian Centre for Policy Alternatives, had already travelled to Japan the week prior to Ralston’s trip, at the invitation of Japanese environmental groups, where they urged companies and policymakers to stop buying wood pellets and lumber from B.C. because the province still allows the logging of primary forests.
“This would be a devastating blow to the forest industry in British Columbia and lead to a huge job loss,” he told BIV News. Ralston said B.C. exported $1.45 billion worth of forest products to Japan last year, about $741 million of which would be softwood lumber. Japan is also a major buyer of B.C. wood pellets, which are made mostly from wood waste. Japan uses wood pellets as an alternative to thermal coal for power generation. Although burning wood pellets produces CO2, it is considered to be carbon neutral, since regrowing trees eventually take up the CO2 produced in combustion, whereas coal is nonrenewable.
“Forestry interests promote the idea that B.C. forests are managed sustainably, when they are not,” Connolly said in a press release. “We were invited to Japan to tell the public and key decision-makers about what’s happening to at-risk forests and species in this province.”
The wood pellet industry in B.C. uses sawmill and harvest waste – waste that is otherwise burned anyway in slash piles. But Connolly and Parfitt say wood pellet producers in B.C. also harvest live trees from primary forests for the express purpose of feeding wood pellet plants.
Japan is B.C.’s second most valuable export market for forestry products, Ralston said, so any boycott of B.C. forestry products in Japan would be “devastating.”
While in Japan, Connolly and Parfitt met with “pellet financiers,” elected officials and media. They also met with the Sumitomo Corporation, which owns the Pacific Bioenergy plant
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in Prince George. The plant was permanently shut down in February 2023. “B.C. is a high-risk place from which to source pellets,” Parfitt reportedly told investors and bioindustry officials in Japan, according to a news release. “Logging companies have cut down too much forest too quickly. Sawmills, pulp mills and even some pellet mills have closed because too little primary forest is left.” While some trees from logging operations do end up being used to make wood pellets, they are generally of no value to sawmills or pulp mills. These trees are either below pulp log quality or “bush grind” which would otherwise end up burned in slash piles. In 2022, the Wood Pellet Association of Canada issued a report that found that 85 per cent of the inputs of wood pellets in B.C. is waste from sawmills. About 11 per cent comes from low-quality logs that neither sawmills nor pulp mills want, and four per cent from “bush grind” (also known as hog fuel). The B.C. Ministry of Forests says pellet mills pay about $35 per cubic metre for logs, whereas a sawlog used to make lumber
“They were all pretty incredulous about what’s happening in B.C., based on what we were telling them, and they committed to looking into it,” she told BIV News. “They just finished building a whole new pellet plant in Sendai, so I think this is something they think they’ve committed to for the long-term, and our purpose was to tell them that pellets coming from B.C. are fundamentally unsustainable because we still log primary forests in B.C. and it’s just a highrisk environment from which to source them because sawmills are closing down,” she said. Connolly said it’s not just wood pellets, but any wood product from B.C. that comes from primary forest, that she wants to see countries like Japan to stop buying. But it does not appear Japan plans to stop buying B.C. wood products. Ralston said there is a shift going on in Japan, however. With its aging population, Japan is building fewer homes with lumber. “The opportunity for future growth in wood structures is in the institutional sector,” Ralston said. “They view wood, rightly, as a low-carbon product, embodying carbon and all those good environmental attributes, so they’re anxious to build with wood.” INDUSTRY & TRADES | WINTER/SPRING 2024
Mining CEO seeks partner for Cariboo gold project
Osisko Development photo
Osisko Development is using several innovative technologies at Cariboo including Sandvik Roadheaders for underground tunnelling. Colin McClelland, The Northern Miner
Sean Roosen, part of the team that discovered and developed the Canadian Malartic gold mine, which vies to be Canada’s largest by production, is looking for a corporate partner to help fund his latest project, Cariboo in British Columbia. The concept might follow how Gold Fields (NYSE: GFI; JSE: GFI) invested for half of Windfall in Quebec this year with Osisko Mining, a company with heritage similar to the Roosen-led Osisko Development. Australian and South American miners who want a foothold in Canada might lead the candidates for partner, Roosen said. The CEO says he’s already been discussing options with potential parties for more than six months in a tough funding market despite the price of gold hitting all-time highs this week. The partner would help raise the
forecast $588 million to build the underground Cariboo mine 700 km north of Vancouver. Osisko is targeting an operating permit by mid-next year followed by less than two years of construction. The project is part of the company’s longerterm plan to develop the legacy of brownfield sites around Cariboo. “By getting this beachhead in there, the power and the mill, this becomes a central processing facility for many more mines to be developed in the open,” Roosen said. “We like to find these big systems, bring new science, bring capital intensity.” Cariboo is expected to produce about 1.9 million oz. gold over a dozen-year mine life. It has an after-tax net present value of $502 million at a 5% discount rate and a 21% internal rate of return at a US$1,700 per oz. gold price, according to a feasibility study released cont. on pg 14
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early this year. B.C. granted environmental approval in October. The larger area features two parallel prospective trends totalling 83 km. Osisko Gold Royalties – another of the post-Malartic companies – acquired Cariboo from Barkerville Gold Mines in 2019 then spun it out to Osisko Development when it was created in 2021. The royalty company still holds about 40% of Osisko Development and a 5% net smelter return on Cariboo if the mine is built on the site dating from the 1850s.
incompetence and just lack of execution,” Roosen said. “Back in the day, expert dollars were hard and they were bootstrapping these projects. We’ve seen this a lot of places where we go in and then we have to scrap the data set and drill from scratch to meet modern standards.”
Roosen wasn’t satisfied with the project early on. Osisko Gold Royalties bought 19.9% of Barkerville in 2015 and within two years worked with Barkerville to slash its more than 4-million-oz. resource estimate to less than 100,000 ounces. Then they began drilling 750,000 metres which now shows 5.3 million oz. gold total across all categories.
The feasibility study disappointed some analysts. Cariboo would have to raise $300 million before it could start the mine’s second development stage because it wouldn’t generate enough income, industry blogger Mark Turner wrote on his IKN site. The project has a later proposed start-up date and lower grades than anticipated, BMO Capital Markets mining analyst Jackie Przybylowski said early this
“It falls somewhere between
Cariboo has probable reserves of 16.7 million tonnes grading 3.8 grams for 2 million oz. gold. It has 1.6 million measured and indicated oz. and 1.7 inferred oz., the study shows.
INDUSTRY & TRADES | WINTER/SPRING 2024
year. Stage one would have an average grade of 4.4 grams gold per tonne; stage two estimates 3.7 grams, according to the feasibility study. The funding choice, whether a partner and combinations of equity and debt, will depend on the market and potential dilution for shareholders, the CEO said. On the one hand, the price of gold soared to a record intraday high of US$2,100 per oz. on Dec. 3 and Canada remains a top-tier jurisdiction. Geopolitics stymies Russia and China, and resource nationalism is limiting the appeal of countries such as Mexico, Panama and others in Latin America. On the other hand, funding remains tough when large institutions and funds follow new environmental, social and governance rules limiting mining investments, and high inflation squeezes exploration companies. “People aren’t translating the fact that decarbonization is a mining-intensive activity, so that disconnect is surprising to me,” Roosen said. “We’ve seen a hyper increase in input costs, and in Canada we’re starting to see the drastic effects of the carbon credits, especially on the exploration side when fuels and aviation are required for remote sites. We’re in the land of unintended consequences.” Osisko wants to go almost all electric at Cariboo after securing 40 megawatts from B.C. Hydro at 6-7¢ per kilowatt hour, he said. It plans to use an autonomous tunnelling
machine, not often used in mining, to take advantage of soft sandstone host rock and reduce the use of explosives. Cariboo plans to use X-Ray fluorescence and optical sorting to cut half the ore it mines from being processed to reduce energy costs, tailings and surface water impacted by tailings, Roosen said. The mill would process 4,900 tonnes of ore a day, just under a limit requiring federal review, for 220,000 oz. gold per year. The company has already spent $235 million on project infrastructure including the start of a ramp to access the orebody that runs about 350 metres down from surface and may go 1.5 km deep. Osisko also aims to revitalize the central B.C. historical mining area around Cariboo with plans for waterparks, outdoor art, sports fields and $20 million already spent on remediating old tailings ponds with the government. The company funds a local theatre troupe and it’s bringing triple-phase electricity to the town of Wells that will help industry and ski hills. In partnership with First Nations, it’s sponsoring a roe release facility to increase the salmon population, and a caribou calving ground to help expand herds. “The Osisko motto is we leave everything better than we find it, not as good as, but better than,” Roosen said. “We’re creating infrastructure that everybody’s going to use.”
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