72 Report on Mineral Activities in Québec - 2014 CHAPTER 5 Deposit appraisal and mine development Martin Bernatchez, Katrie Bergeron, Denis Blackburn, Dominic Fragasso, Denys Laplante, Jacinthe Paquet, and Denis Raymond In 2014, 27 mining projects were in the deposit appraisal phase (Figure 5.1 and Table 5.1) and five projects were in the mine development phase (Figure 5.2 and Table 5.2). 5.1 Deposit appraisal Alumina Orbite Aluminae (Orbite) owns two processing plants on its industrial site in Cap-Chat, Gaspésie. In the first plant, argillite (~20% Al 2 O 3 ) or any other alumina-rich substance is processed into smelter-grade alumina (~99% Al 2 O 3 ), whereas in the second plant, smelter-grade alumina is upgraded to produce high-purity alumina (≥ 99.99% Al 2 O 3 ). The two plants require additional investments to become operational. In 2014, Orbite opted to invest in its high-purity alumina plant to make it operational for the spring of 2015. The company also stated that no investments were planned for the smelter-grade alumina plant until the high-purity alumina plant had reached full capacity. Consequently, Orbite will not mine its argillite deposit in the short or medium term to supply its smelter-grade alumina plant. Thus, in 2014, the mining project based in Grande-Vallée (argillite mine) was removed from the list of projects in the deposit appraisal phase. Iron Champion Iron (Champion) announced in December 2014 it is making progress on its feasibility study for the Fire Lake North project, stating that “delivery of the full feasibility study remains a primary focus for Champion.” The results of this study are expected before the end of 2015. Lac Otelnuk Mining (Lac Otelnuk) is a joint venture between Adriana Resources and WISCO International Resources Development & Investment, a Chinese steelmaker. In October 2013, the joint venture commissioned engineering firm SNC-Lavalin to conduct a feasibility study on the Lac Otelnuk project located 150 km north of Schefferville. The study, initially scheduled for release at the end of 2014, is now expected in 2015. Following a call for interest in July 2014, the Québec government joined forces with Champion (south of Fermont) and Lac Otelnuk (north of Schefferville) to create, on October 16, 2014, the Société ferroviaire du Nord québécois (SFNQ). The latter will be responsible for the preparation of a study aiming to define the optimal railway option to improve access to the Labrador Trough. The study is expected to be released by the end of 2015. The Québec government’s contribution has been set by decree to a maximum amount of $20 million and will be drawn from the Fonds du Plan Nord. Private partners Champion and Lac Otelnuk will contribute technical data, studies and related services. In the fall of 2014, Oceanic Iron Ore Corporation announced that additional work on the feasibility study and the environmental impact assessment study on the Hopes Advance project would take place pending the arrival of a major partner on the project. At the end of 2014, the company has not yet succeeded in finding such a partner. Photo: MERN
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72Report on Mineral Activities in Québec - 2014
CHAPTER 5
Deposit appraisal and mine developmentMartin Bernatchez, Katrie Bergeron, Denis Blackburn, Dominic Fragasso, Denys Laplante, Jacinthe Paquet, and Denis Raymond
In 2014, 27 mining projects were in the deposit appraisal phase (Figure 5.1 and Table 5.1) and five projects were in the mine development phase (Figure 5.2 and Table 5.2).
5.1 Deposit appraisalAlumina
Orbite Aluminae (Orbite) owns two processing plants on its industrial site in Cap-Chat, Gaspésie. In the first plant, argillite (~20% Al2O3) or any other alumina-rich substance is processed into smelter-grade alumina (~99% Al2O3), whereas in the second plant, smelter-grade alumina is upgraded to produce high-purity alumina (≥ 99.99% Al2O3).
The two plants require additional investments to become operational. In 2014, Orbite opted to invest in its high-purity alumina plant to make it operational for the spring of 2015. The company also stated that no investments were planned for the smelter-grade alumina plant until the high-purity alumina plant had reached full capacity.
Consequently, Orbite will not mine its argillite deposit in the short or medium term to supply its smelter-grade alumina plant. Thus, in 2014, the mining project based in Grande-Vallée (argillite mine) was removed from the list of projects in the deposit appraisal phase.
Iron
Champion Iron (Champion) announced in December 2014 it is making progress on its feasibility study for the Fire Lake North project, stating that “delivery of the full feasibility study remains a primary focus for Champion.” The results of this study are expected before the end of 2015.
Lac Otelnuk Mining (Lac Otelnuk) is a joint venture between Adriana Resources and WISCO International Resources Development & Investment, a Chinese steelmaker. In October 2013, the joint venture commissioned engineering firm SNC-Lavalin to conduct a feasibility study on the Lac Otelnuk project located 150 km north of Schefferville. The study, initially scheduled for release at the end of 2014, is now expected in 2015.
Following a call for interest in July 2014, the Québec government joined forces with Champion (south of Fermont) and Lac Otelnuk (north of Schefferville) to create, on October 16, 2014, the Société ferroviaire du Nord québécois (SFNQ). The latter will be responsible for the preparation of a study aiming to define the optimal railway option to improve access to the Labrador Trough. The study is expected to be released by the end of 2015.
The Québec government’s contribution has been set by decree to a maximum amount of $20 million and will be drawn from the Fonds du Plan Nord. Private partners Champion and Lac Otelnuk will contribute technical data, studies and related services.
In the fall of 2014, Oceanic Iron Ore Corporation announced that additional work on the feasibility study and the environmental impact assessment study on the Hopes Advance project would take place pending the arrival of a major partner on the project. At the end of 2014, the company has not yet succeeded in finding such a partner.
Photo: MERN
73 Report on Mineral Activities in Québec - 2014
In the spring of 2014, New Millennium Iron Corporation and Tata Steel Minerals Canada published a feasibility study for the Taconite-KéMag project located north of Schefferville. The initial investment is now estimated at $8.2 billion for a project to produce 22 Mt per year of concentrate, of which 16 Mt per year will be processed into pellets. At the end of 2014, the two mine developers had not yet secured the financing required to commence construction on the mine site.
The Duncan Lake project is held by Century Iron Mines Corporation (65%) and Augyva Mining Resources (35%). Since the spring of 2013, no significant work has been carried out on the project, and the majority partner, Century Iron Mines, is focusing its efforts on another mining project (Joyce Lake in Labrador). Consequently, the Duncan Lake mining project was removed from the list of projects in the deposit appraisal phase in 2014.
In January 2012, Barlow Mine, a privately funded company, released a NI 43-101-compliant technical report on the Montgolfier Iron Hills iron ore project located about 14 km south of the former Selbaie mine (east of Matagami). The company is seeking financing to continue its work and studies on the project, and to complete a prefeasibility study in 2016. It also intends to prepare a feasibility study by 2019. Main operational issues include the transportation of iron ore concentrate and the mine site’s power supply. Barlow Mine is considering the possibility of joining forces with a strategic partner on this project. The Iron Hills mining project was removed from the list of projects in the deposit appraisal phase at the end of 2014.
Iron-titanium-vanadium
In recent years, BlackRock Metals and Prosperity Minerals Holding have been working on a project to mine a magnetite, ilmenite, and vanadium deposit located east of Chibougamau. The mining project would involve two open pits and would produce a (vanadium-bearing) magnetite concentrate and an ilmenite concentrate. In the fall of 2014, the company announced its intention to add a metallurgical component to the BlackRock project but did not produce a technical or economic study. Overall, the mining project will enable the company to produce pig iron, titanium slag, and vanadium (or ferrovanadium). In 2015, efforts will focus on securing the financing required for the entire project (mining and metallurgical components), at an estimated cost of more than $1 billion.
Graphite
In 2013, Mason Graphite and POCML 1 released the results of a preliminary economic assessment for the Lac Guéret project, located 260 km north of Baie-Comeau, on the west shore of Réservoir Manicouagan. For an initial investment estimated at $130 million, annual production will be on the order of 176,000 tonnes of ore grading 27.4% graphitic carbon (Cg) over a mine life of 22 years. Primary processing is expected to take place at a plant in Baie-Comeau, to produce 50,000 tonnes of concentrate grading 93.7% Cg. The company is planning to publish a feasibility study by the summer of 2015.
On August 8, 2014, Focus Graphite published a feasibility study for the Lac Knife project located 35 km south of Fermont. According to the study, an initial investment of $165 million will result in the annual production of 300,000 tonnes of ore grading 15.1% graphitic carbon (Cg) over an estimated mine life of 25 years. According to the company, mining operations may begin in 2017 and will create up to 80 jobs. Primary processing will take place on site, to produce 44,300 tonnes per year of concentrate grading 97.8% Cg. The company is considering the possibility of producing high-purity processed natural graphite destined for the battery market.
Lithium
In the Abitibi region, Glen Eagle Resources continued its work on the Authier project, where it is planning an open pit mine and the production of 103 kt per year of spodumene concentrate grading 6.0% Li2O. The company is planning to conduct metallurgical tests to confirm its process flowsheet and to determine if it is feasible to produce lithium metal from the spodumene concentrate.
Nemaska Lithium is working on the development of the Whabouchi project, located about 30 km east of the Nemaska Cree community (Baie-James) and about 280 km north of Chibougamau. The company released a feasibility study in July 2014. The projected open pit mine and concentrator with an annual capacity of 213 kt of spodumene concentrate will supply a processing plant located in Valleyfield near Montréal. The plant will produce 28,000 tonnes of lithium hydroxide and 3,250 tonnes of lithium carbonate annually. The entire project requires investments on the order of $500 million and will create 225 jobs on the mine site and 70 jobs at the processing plant. Nemaska Lithium continues to work on the permitting process required for the construction of the mine and concentrator. In November 2014, the company also signed a benefits and impacts agreement relating to development and mining operations on the Whabouchi project with the Grand Council of the Crees, the Cree Nation government, and the Cree Nation of Nemaska.
74Report on Mineral Activities in Québec - 2014
Lithium and tantalum
Critical Elements Corporation (CEC), on the Rose tantalum-lithium project, plans to mine lithium and tantalum ore in an open pit and concentrate it on site, 30 km north of the Nemaska Cree community. The company is also conside-ring the possibility of building a lithium carbonate production plant on the mine site, and producing both tantalum and mica concentrate. According to the preliminary economic assessment released in December 2011, the project calls for investments on the order of $270 million. In 2014, CEC continued metallurgical tests and other studies in preparation for a feasibility study. Samples of lithium and mica concentrate were shipped to potential end-users for validation.
Nickel, copper, cobalt, and platinum group elements (PGE)
In 2014, Royal Nickel Corporation (RNC) completed all the work required to obtain its environmental certificate of authorization for the Dumont Nickel project. At the end of 2014, RNC had not yet obtained the government decree to go ahead with the project.
Niobium and tantalum
Development of the Crevier niobium-tantalum project held by Crevier Minerals, a subsidiary of MDN, showed little progress in 2014. The project located northwest of Girardville in the Lac-Saint-Jean region has now been moved to the list of deposits with a tonnage estimate.
Gold
Agnico Eagle Mines acquired the Akasaba West project in January 2014. On October 21, 2014, the company sub-mitted a project notice to the Canadian Environmental Assessment Agency (CEAA). The CEAA made a call for public comments before making a decision on whether the project should undergo a federal environmental assessment. The MDDELCC also received the project notice and issued a directive on November 11, 2014. The gold and copper open pit mine will have an estimated mine life of four years at an average mining rate of 4,000 tonnes of ore per day, to be treated at the Goldex mill (~30 km). Ore will be shipped either on the existing road network (Chemin du Lac-Sabou-rin and Route 117) or via a new hauling road from Akasaba West to the Manitou site then on existing roadways. This mining project will extend the life of the processing plant on the Goldex mine site, and the resulting tailings, like those of the Goldex mine, will also contribute to the restoration of the historic tailings pond at the Manitou site (listed in the MERN’s inventory of environmental liabilities). Agnico Eagle Mines held meetings with the local community and elected officials.
The Croinor Gold project held by Monarques Gold Corporation is located 50 km east of Val-d’Or. In October 2014, an updated prefeasibility study was published. The project involves underground mining operations over a period of five years at a daily production rate of 475 to 675 tonnes. Ore will be custom-milled by one of the mills in the region. Investments required for construction are estimated at $27.34 million. Monarques Gold Corporation is planning to test a new mining method using equipment developed by Minrail based in Val-d’Or, designed for shallow-angle mining operations.
In April 2014, Clifton Star Resources published the results of a prefeasibility study on the Duparquet project lo-cated near the town of Duparquet, in the Abitibi-Témiscamingue region. The study considers open pit mining of the gold deposit and of mine tailings at the former Beattie mine, for a capital cost of $394 million. The life of the project is estimated at 11 years at a production rate of 10,000 tonnes of ore per day. Since June 2014, Clifton Star Resources has been involved in a legal dispute concerning allegations of mining title transfers dating back nearly twenty years. This issue, as well as the difficult gold market, made it impossible for the company to raise the financing required to acquire the remaining 90% interest from Beattie Gold Mines and 173714 Canada, the legal owners of the two mining leases on the property.
The Fayolle project held by Typhoon Exploration and Hecla Québec is located 40 km northeast of Rouyn-Noran-da, near the southern limit of Parc national d’Aiguebelle. On March 28, 2013, a preliminary economic assessment was published. Two scenarios were considered: open pit mining and underground mining. The study considers a project with a mine life of three years at a production capacity of 750 to 1,000 tonnes of ore per day. Investments for the open pit and underground scenarios are estimated at $5.9 million and $22.7 million, respectively. On May 27, 2014, Hecla Québec acquired 50% interest in the Fayolle project and became project operator. The company may acquire 15% additional interest over the next two years by completing a feasibility study or investing $15 million on the property. The proximity of Parc national d’Aiguebelle represents a social acceptability issue. In addition to public presentations, Typhoon Exploration and Hecla Québec have undertaken discussions with local citizens and public representatives.
75 Report on Mineral Activities in Québec - 2014
On the Granada project, located 2.5 km south of the town of Granada and about 9 km south of Rouyn-Noranda, Gold Bullion Development Corporation (Gold Bullion) is planning two phases of mining, first by open pit then by under-ground methods. In May 2014, the company published a prefeasibility study for the first phase of the project. Investments to complete this phase are estimated at $6.7 million. The open pit mine has a projected mine life of three years at a production rate of 550 tonnes of ore per day, and the ore will be shipped to the Westwood mill for processing. Gold Bullion is planning to begin open pit mining operations in 2015, pending the issuance of environmental permits.
Since the end of 2010, QMX Gold Corporation has been involved in an arbitration process with Thundermin Resources concerning the Lac Pelletier property near Rouyn-Noranda. On May 20, 2014, a decision was announced in favour of QMX Gold Corporation.
In April 2014, Integra Gold Corporation (Integra) published a preliminary economic assessment for the Lamaque South project located in Val-d’Or, near the southeast city limits. This project involves underground mining in the Fortune, Parallel, No.4 Plug, and Triangle zones at a daily rate of 1,275 tonnes of ore over a period of more than four years. Investments for the construction of the mine were estimated at $69.2 million. However, this amount may be scaled down as Integra acquired the Sigma milling complex and the Sigma and Lamaque properties in October 2014. This acquisition gives the company access to an ore processing plant, a network of underground workings, and a number of certificates of authorization issued by the MDDELCC. Technical studies are being updated and the results are expected in early 2015.
Phosphate
Mine Arnaud is project operator on the Arnaud mining project, located about 15 km west of the city of Sept-Îles. The project involves an open pit mine and a concentrator, and will produce an average of 1.2 Mt of apatite concentrate per year over a period of 30 years. In February 2014, a report from the Bureau d’audiences publiques sur l’environnement (BAPE) was publicly released on this project. The report concluded that the project was not acceptable in the form presented during public hearings in 2013. Consequently, in 2014, Mine Arnaud focused on the preparation and presentation of complementary studies in an effort to document in greater detail certain aspects requested by the Québec government, the BAPE, and the population. A feasibility study was namely submitted to the Québec government in September 2014. In 2015, a government decree may be issued for the certificate of authorization. The capital cost of the project is estimated at about $855 million, and the project will create about 275 direct mining jobs.
Arianne Phosphate is working on the development of the Lac à Paul project, located about 200 km north of the city of Saguenay. The project involves an open pit mine and a concentrator, an average annual production on the order of 3 Mt of apatite concentrate and a mine life of at least 26 years. The capital cost for the project is estimated at about US$1.2 billion, including costs to upgrade the road access and build port facilities in Sainte-Rose-du-Nord. The project will create some 375 direct mining jobs.
A feasibility study was made public in November 2013. In 2014, the company provided more details and better defined certain aspects of the project, namely the transportation component. Information sessions and public hearings by the BAPE are expected to begin in February 2015.
Rare earth elements
Commerce Resources Corporation completed metallurgical tests, environmental analyses, geotechnical drilling and definition drilling on the Eldor (Ashram) project in 2014, in preparation for a feasibility study. According to the preliminary economic assessment dated July 2012, the project, located in the Labrador Trough about 130 km south of Kuujjuaq, involves an open pit mine, a concentrator, and a hydrometallurgical plant. A mixed rare earth carbonate concentrate will be produced at a rate of 16.8 kt per year for at least 25 years. Capital costs for the project are estimated at $763 million, including the cost of building a road and port facilities. The project will create 230 jobs.
Quest Rare Minerals (Quest) continues development work on the Strange Lake project (B-Zone deposit), located 220 km northeast of Schefferville. Based on the prefeasibility study released on November 23, 2013, the project involves an open pit mine and a mill at Strange Lake, as well as a hydrometallurgical plant and a rare earth element separation plant in Bécancour. Production of a rare earth oxide concentrate is also considered. Quest raised $3 million in financing and is eligible for an equity financing of $600,000 from Ressources Québec, which would enable the company to complete the first phase of the feasibility study estimated at $50 million. The feasibility study and environmental permitting process for Strange Lake (north part of the project) are expected to begin in 2015. The commencement of mining operations is planned for 2019. This project, at an estimated cost of $1.531 billion, will create 500 jobs during the construction phase and 683 jobs during the mining phase. The company is seeking a strategic partner on the project. Quest is also negotiating an agreement with Native communities in Labrador.
76Report on Mineral Activities in Québec - 2014
In the Témiscamingue region, on the Zeus property, Matamec Explorations completed a feasibility study on the Kipawa rare earth project in September 2013, the first study of its kind in Québec. The project involves an open pit mine, a mill, and a hydrometallurgical plant, and targets a total annual production of 3.6 kt of mixed heavy rare earth concentrate and mixed light rare earth concentrate. At an estimated cost of $374 million, this project could create 230 jobs. In 2014, Toyotsu Rare Earth Canada (TRECan), Matamec Explorations’s strategic partner, withdrew from the project. Matamec Explorations is planning another phase of metallurgical testing, process optimization, and engineering over the next few months. The permitting process is underway and mining operations may begin over the course of 2016.
Also worthy of mention is the Montviel project held by GeoMegA Resources, an advanced exploration project located near Lebel-sur-Quévillon. This project will include a mine and a concentrator, but also entails the development of a new technology to separate rare earths by electrophoresis. A preliminary economic assessment is expected in 2015. In addition, Innovation Metals, which already operates a rare earth separation laboratory in Ontario, may build a rare earth separation plant in the Bécancour area.
5.2 Mine developmentDiamond
Stornoway Diamonds (Canada), a subsidiary of Stornoway Diamond Corporation, is developing the Renard project located north of the Monts Otish, about 360 km north of Chibougamau. Construction of the mine began in July 2014. Mining operations will take place by open pit and underground methods, and will produce an average of 1.6 million carats of diamonds annually. The expected mine life is currently estimated at 11 years, but is likely to be extended. Mining operations are expected to begin in 2016 and will create nearly 500 jobs.
Stornoway Diamond Corporation concluded a new agreement for the financing of the Renard project with various financial partners. This new financing package totals $944 million, and includes financial commitments from Orion for $407 million, from Ressources Québec for $240 million and from the Caisse de dépôt et placement du Québec for $105 million. The financing package also calls for a public placement of $132 million as well as an equipment financing facility from Caterpillar for an amount of $39 million. Stornoway had already contracted a loan of $77 million from the Ministère de l’Économie, de l’Innovation et des Exportations for the road and of $13 million from the Cree Nation of Mistissini. The total amount of financing required is $1.034 billion.
Stornoway Diamond Corporation completed construction of segments C and D of the Route 167 Extension, as well as an airport on the mine site.
Iron
Tata Steel Minerals Canada, a joint venture between New Millennium Iron Corporation (20%) and Tata Steel (80%), continued construction of its processing plant for the DSO project near Schefferville. Although the plant is located in Labrador, part of its iron ore feedstock will come from open pits located within Québec. Commissioning and ramping up of the processing plant are expected to begin in the spring of 2015.
Lithium
In the Abitibi region, near the town of La Corne, Québec Lithium, a subsidiary of RB Energy, attempted to commis-sion its concentrator and lithium carbonate chemical production plant. Despite its efforts and the production of a few tonnes of lithium carbonate, RB Energy announced in 2014 it was temporarily suspending operations and placed itself under the protection of the Companies’ Creditors Arrangement Act. Subsequently, the company permanently ceased operations and went into receivership.
Nickel, copper, cobalt, and platinum group elements (PGE)
The Nunavik Nickel mine held by Canadian Royalties reached commercial production during the third quarter of 2014. It is now considered, since the summer of 2014, an active mine.
77 Report on Mineral Activities in Québec - 2014
Gold
The Elder project held by Abcourt Mines is located 10 km northwest of Rouyn-Noranda. Despite the production of a first gold bar in October 2013, the company was unable to reach commercial production before the end of 2014, due to the need to strengthen pillars following the discovery of new ore shoots. Ore extracted at the mine was processed at the Aurbec mill until October 2014, and subsequently at the mill operated by QMX Gold Corporation.
In the Baie-James region, a first gold bar was poured in October 2014 on the Eleonore project. Les Mines Opinaca, a subsidiary of Goldcorp, expects to reach commercial production before the end of March 2015. Investments for the construction of this underground mine and the processing plant reached $2.04 billion and the project has created 900 jobs. In 2015, the plant is expected to process 3,500 tonnes of ore per day, and this rate will be increased to 7,000 tonnes per day in 2018.
78Report on Mineral Activities in Québec - 2014
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Gaspé
Québec
Salluit
Fermont
Kuujjuaq
Radisson
Wemindji
Matagami
Val-d'Or
Montréal
Saguenay Rimouski
Gatineau
La Tuque
Sept-Îles
Puvirnituq
Sherbrooke
Chibougamau
Kangiqsujuaq
Schefferville
Rouyn-Noranda
Trois-Rivières
Thetford Mines
Havre-Saint-Pierre
Sainte-Anne-des-Monts
Îled'Anticosti
Îles de laMadeleine
Lebel-sur-Quévillon
PRINCE EDWARD
ISLAND
NOVASCOTIA
NUNAVUT
NEWFOUNDLAND
AND LABRADOR
ONTARIO
NEWBRUNSWICK
UNITED STATES
1927 boudary by the Private council (non definitive)
23- Arnaud (Mine Arnaud)24- Lac à Paul (Arianne Phosphate)
Lithium, lithium and tantalum
Iron, iron and titanium, vanadium
11- Authier (Glen Eagle Resources)12- Rose Tantalum-Lithium (Critical Elements Corporation)13- Whabouchi (Nemaska Lithium)
2- BlackRock (BlackRock Metals)3- Fire Lake North (Champion Iron)4- Hopes Advance (Oceanic Iron Ore Corporation)5- Iron Hills (Barlow Mine)6- Lac Duncan (Century Iron Mines Corporation)7- Lac Otelnuk (Lac Otelnuk Mining)8- Taconite - KéMag (New Millennium Iron Corp.)