Northern Canada emerging as a new gold mining and exploration hotspot

Northern Canada emerging as a new gold mining and exploration hotspot

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According to Wikipedia, “Northern Canada, colloquially the North, is the vast northernmost region of Canada variously defined by geography and politics. Politically, the term refers to three territories of Canada: Yukon, Northwest Territories (NWT), and Nunavut.”

With a total population estimate of 126,566 as of Q3 2020, the North already producing approximately 27 times more gold per capita than, for example, Ontario, the largest gold producing province or territory in Canada.

Nunavut is third largest Canadian gold producing province / territory with 465 koz of gold mined in 2019 and Yukon is eight with 84 koz.

Gold production in Canada in 2019, by province / territory (in thousand troy ounces). Sources: Natural Resources Canada; Statistics Canada.

The North is a home to the great Klondike Gold Rush from the late 1800s that engulfed the Yukon Territory. There is currently another gold rush taking place in Northern Canada. Today, it’s happening once again at a larger scale as both gold majors and juniors proactively staking their claims in the North.

This should not come as a surprise as the North consists of politically attractive, mining friendly and stable jurisdictions with enormous geological potential. 

The North has the potential to be a strategic mining and exploration hub for many gold miners, developers and juniors, with the ability to generate strong gold production and cash flows for many decades to come.

The most recent developments in gold mining sector as well as analysis of the largest gold deposits in the North are below.

Gold production in the North in Q2 2020.

In Q2 2020, the North produced 136.1 koz of gold, which was virtually the same compared to Q2 2019 figure (136.9 koz).

With 59.4 koz of gold produced in Q2 2020, Agnico Eagle’s Meliadine mine in Nunavut was the largest gold mine in Northern Canada. In response to the COVID-19 pandemic, activity levels at Meliadine were reduced from the end of March to early June. 

At the start of the second quarter the mill operated at lower throughput levels, processing low grade stockpiles and oversize material generated in the first quarter of 2020 as a result of the previously disclosed problems with the crusher apron feeder. 

The mill was gradually ramped-up through April and May to achieve more normal operating levels in June.  The reduction in activities for most of the second quarter of 2020 caused a substantial reduction in production and a corresponding increase in unit production costs.  

TMAC’s Hope Bay mine in Nunavut was second with 29 koz of gold mined in Q2 2020. TMAC has been successful in implementing and further updating its plan to operate at reduced levels during the remainder of 2020 and through 2021. The Company has successfully reduced its cost structure in line with the reduced operating levels to generate positive cash flows during the second quarter.

On July 1, 2020, Victoria Gold declared commercial production at the Eagle Gold mine in Yukon that has achieved a pre-commercial production of 28.4 koz Au during Q2 2020. All facilities required at this stage of the mine life are complete. Mining, crushing, processing and maintenance operations are performing at a high level. The Company’s first reporting period under commercial production is the 3rd quarter ended September 30, 2020.

Agnico Eagle’s Meadowbank mine in Nunavut produced 16.4 koz of gold in Q2 2020, or 56% less than in Q2 2019. The second quarter of 2020 started in reduced operating mode due to measures in response to the COVID-19 pandemic.  The open pit operation was reduced to 50% capacity in April. 

Operations were gradually ramped up in May as temporary workers were added to support mining activities.  The process plant was on care and maintenance for most of the quarter, re-starting on May 28, 2020, and returned to full production levels with higher grade ore by June 13, 2020.  The reduction in activities and suspension of the mill for most of the second quarter of 2020 caused a substantial reduction in production and a corresponding increase in unit costs, which results in comparisons to the prior-year period not being meaningful.  In addition, the mining operation has transitioned from the Meadowbank deposit to the Amaruq satellite deposit, which has an impact on the cost structure when compared to prior year periods.

Pembridge Resources operates Minto underground copper-gold-silver mine located in central Yukon, approximately 240 kilometres north of the capital Whitehorse along the Klondike Highway. Minto mine produced 2.9 koz of gold in Q2 2020. 

In March 2020, the COVID-19 pandemic broke out. Canadian and Yukon government measures have had significant impacts on the Minto mine, including mandatory quarantines of employees and contractors entering the Yukon. Such quarantines have disrupted operations and caused above normal operating expenses but have enabled operations to continue while ensuring the safety of the mine’s employees.

Northern Canada’s gold operations performance in Q2 2020.

MineRegionMajor owner / operatorQ2 2020 Au output, koztQ2 2019 Au output, kozt% change
1MeliadineNunavutAgnico Eagle59.461.1-3
2Hope BayNunavutTMAC29.038.5-25
3Eagle / Dublin GulchYukonVictoria Gold28.40.0n/a
4MeadowbankNunavutAgnico Eagle16.437.3-56
5MintoYukonPembridge Resources2.90.0n/a
Total136.1136.90-1

Largest gold deposits in Northern Canada.

Here is the list of top 10 largest gold deposits in the North ranked by the total volume of gold metal contained in Reserves and Resources. To avoid double counting, Reserves that reported as included in Resources were excluded from totals.

Top 10 largest gold deposits in Canada North. Gold Reserves (excluded from Resources) plus Resources, Moz.

Top 10 largest gold deposits in the North, based on most recent disclosed technical reports.

ProjectRegionOwnerStatusGold in Reserves, MozGold in Resources, MozTotal Resources plus Reserves (excluded), Moz
1CasinoYukonWestern Copper & GoldPermitting21.121.1
2Courageous LakeNWTSeabridge GoldPFS6.5*11.911.9
3MeliadineNunavutAgnico EagleProduction4.15.49.5
4Hope BayNunavutTMAC ResourcesProduction3.5*7.37.3
5Back RiverNunavutSabina GoldPermitting2.5*7.27.2
6MeadowbankNunavutAgnico EagleProduction3.32.76.0
7Eagle GoldYukonVictoria GoldProduction3.3*5.35.3
8CoffeeYukonNewmontPermittingn/a2.72.7
9RacklaYukonATAC ResourcesPEAn/a2.22.2
10Indin LakeNWTNighthawk GoldAdvanced Explorationn/a2.02.0
Total23.267.775.1

* Reserves reported as included in Resources.

1.Casino, Yukon. 21.1 Moz.

Casino project. Source: Western Copper and Gold.

Western Copper and Gold owns the world-class Casino project, located in the politically stable Yukon Territory.

The Casino porphyry copper-gold-molybdenum deposit is located in west central Yukon, in the northwest trending Dawson Range mountains, 300 km northwest of the territorial capital of Whitehorse.

Western has been developing the Casino project since 2008.  It has published two pre-feasibility studies and a full feasibility study was issued in 2013. 

A Project Proposal for the Casino Mine was submitted to the executive committee of the Yukon Environmental and Socioeconomic Assessment Board (YESAB) in January 2014 and underwent several rounds of adequacy review information requests from 2014 through 2016.  On February 18, 2016, the Executive Committee determined that the Casino Mine Project requires a Panel Review, the highest level of environmental and socio-economic assessment administered by YESAB.

2.Courageous Lake, NWT. 11.9 Moz.

Courageous Lake project. Source: Seabridge Gold.

Seabridge Gold’s Courageous Lake Project is located south of Courageous Lake, approximately 240 kilometers northeast of Yellowknife in Canada’s Northwest Territories. The site is north of the tree line in the zone of continuous permafrost. Courageous Lake is one of Canada largest undeveloped projects by gold reserves (6.5M oz Au at 2.2 g/t Au).

The property lies in a historic mining district and includes two past producing gold mines. Year round access is available by air, either by fixed wing aircraft to the airstrip at the former Salmita mine six kilometers to the south of the FAT Deposit or via float-equipped aircraft to several adjacent lakes. During mid-winter, access is available via a winter road which branches from the main winter road to the Lupin Mine. There are about 10 kilometers of gravel roads located on the property which served as access routes to conduct exploration.

The PFS was released in July, 2012 and demonstrated that Courageous Lake is an economic project at gold price of $1384 while also offering substantial leverage to higher gold prices.

3.Meliadine, Nunavut. 9.5 Moz.

Meliadine mine. Source: Agnico Eagle.

Agnico Eagle’s Meliadine Underground Gold Mine is located near the western shore of Hudson Bay in the Kivalliq District of Nunavut, about 25 kilometres north of Rankin Inlet and 290 kilometres southeast of our Meadowbank mine.

Meliadine includes seven gold deposits, six of which are part of the current mine plan. The 111,358-hectare property covers an 80-kilometre-long greenstone belt.

Commercial production began at Meliadine in mid-May 2019. The Company anticipates that mining at Meliadine will be carried out through several underground mining operations and open pits over a 14 year mine life. There are numerous opportunities to create additional value at Meliadine, both at the mine and on the large regional land package.

4.Hope Bay, Nunavut. 7.3 Moz.

Hope Bay mine. Source: TMAC Resources.

TMAC Resources’ Hope Bay Underground Gold Mine is located in Nunavut, Canada. 

Hope Bay is a fly in/fly out operation serviced from Edmonton, Alberta, Yellowknife, Northwest Territories and several Kitikmeot, Nunavut communities with supplies provided by annual sealift and regular aircraft. The nearest community and commercial airport are in Cambridge Bay, approximately 160 km by air.

5.Back River, Nunavut. 7.2 Moz.

Back River project marine port and camp. Source: Sabina Gold.

Back River is Sabina Gold’s flagship project.  The project is advanced, large, district scale, fully permitted with social license in hand and is in Nunavut, Canada. 

At US$1150 gold (2015 Feasibility Study) the Project delivers a 24.2% IRR: at 6g/t, these are the highest grade undeveloped open pits in the world.  Pre-development construction has begun with the Project’s Port Facility and Winter Ice Road being completed. 

The Project has been through the debt process and reviewed by the lender’s independent engineer and it is currently undergoing detail engineering.  In addition, only 8km of the 80km district is the focus of the first mine (Goose Project) where an additional 1.2km of mineralized trend has been found since the last resource update in 2014.  The Company is now currently working on infill drilling to update its resource estimate as well as an updated Feasibility Study to update costs and Project economics at current gold prices. 

6.Meadowbank, Nunavut. 6 Moz.

Meadowbank mine. Source: Agnico Eagle.

Agnico Eagle’s Meadowbank Open-pit Gold Mine is located approximately 300 kilometres west of Hudson Bay and 110 kilometres by road north of Baker Lake in the Kivalliq District of Nunavut, Canada.

Meadowbank was Agnico Eagle’s first Low Arctic mine. The discovery and development of the Amaruq satellite deposit 50 kilometres away has extended the life of the Meadowbank Complex by supplying a new source of ore to the existing Meadowbank mill.

The Meadowbank Complex refers to the mining, processing and infrastructure at the Meadowbank mine site combined with the mining and infrastructure at the nearby Amaruq site. The remote Meadowbank mine camp, with recreational and fitness facilities, can host more than 500 employees at a time. The Amaruq camp can host an additional 350 employees.

7.Eagle Gold, Yukon. 5.3 Moz.

Eagle Gold mine. Source: Victoria Gold.

Victoria Gold’s Eagle Gold Mine is the newest mine and largest gold mine in Yukon history.

The Eagle Gold Mine produces gold doré from a conventional open pit operation with a three-stage crushing plant, in-valley heap leach and carbon-in-leach adsorption-desorption gold recovery plant. The mine has year-round road access and personnel, who work a fly-in / fly-out work rotation, are accommodated in a 300-person all-season well-equipped camp. The mine in connected to the Yukon power grid, and a commercial airstrip used to transport personnel, is located 80 km to the south near the village of Mayo.

The mine is ramping up production and personnel and will, in full operation, employ 350-400 people which makes Victoria Gold a significant economic contributor to the local communities and the Yukon.

8.Coffee, Yukon. 2.7 Moz.

Coffee project. Source: Yukon News.

Newmont aims to develop a hard rock gold mine at Coffee Creek, about one hundred kilometres south of Dawson, on the far side of the Yukon River.

Proposed by Goldcorp Kaminak Ltd., a subsidiary of Newmont, the Coffee Gold mine would consist of four open pits, waste rock storage areas and a cyanide heap leach supported by crushing, solution processing, consumable storage, and camp facilities. Access to the site is via air, barge, and an all-season access road south from Dawson City.

The Coffee Gold mine is currently under review by the Yukon Environmental and Socio-economic Assessment Board, which just closed its second public engagement period.

If built, the project could become the largest gold mine in the territory’s history.

9.Rackla, Yukon. 2.2 Moz.

Rackla project. Source: ATAC Resources.

ATAC Resources focused on developing Canada’s only Carlin-type gold discoveries at its 100% owned Rackla Gold Project that is centrally located in Yukon, not far from the Eagle Gold mine.

In 2020, the company keeps exploring the central portion of the property. In addition, ATAC has completed a PEA analysis on the Tiger Gold deposit located in the Rau portion. The project has a pre-tax NPV of $118.2 million and a pre-tax IRR of 54 percent.

10.Indin Lake, NWT. 2 Moz.

Indin Lake project. Source: Nighthawk Gold.

The Indin Lake Greenstone Belt, is home to one of the few remaining under-explored gold camps in Canada – the Indin Lake Gold Camp. It’s host to several gold deposits and showings, the most significant being the past-producing Colomac open-pit gold mine, located within the north-central portion of Nighthawk Gold’s Indin Lake Gold Property.

Consolidation of the gold camp began in 2010 and culminated with the acquisition of the Colomac Mine and surrounding mining leases in 2012. Nighthawk has secured all the gold mines, deposits, and showings to become the first company to combine the camp’s best assets and prospective opportunities under one ownership.

Indin Lake is geologically similar to many historic Archean gold camps renowned for their prolific production profile, with the exception that it has not been the subject of focused and continuous exploration. Indin Lake is underlain by stratigraphy similar in composition and age to the Timmins Gold Camp of northern Ontario, Canada (> 75 million ounces of gold production to-date), and the Kalgoorlie Goldfields of Western Australia (> 60 million ounces of gold production to-date)

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