Cold Comfort Baffin Island zinc mine generates profits for MRI

With the sun retreating from sight almost completely and temperatures plunging to as low as minus 50 C, it’s difficult to imagine a harsher winter setting. But here on the rocky north shore of Baffin Island, surrounded by rolling hills and snow drifts, a mining settlement is thriving.

Nanisivik, one of the northernmost mines in the world and home for roughly 350 men, women and children, is in its 12th year of zinc production (small amounts of lead and silver are also produced). And mine-planners say at least five more are virtually assured.

When The Northern Miner touched down at this polar port (about 700 km north of the Arctic Circle), the mercury level had sunk to a bitter minus 35 C. But that didn’t prevent the ice-breaking carrier MV Arctic from reaching port for a 24,000-tonne shipload of (frozen) zinc and lead concentrates, bound for Europe. Nor did it cause underground workers to deviate from Nanisivik’s 2,400-tonne-per- day mining rate.

A definite advantage for owner Mineral Resources International (TSE) is the recent upswing in the price of zinc. The metal was recently selling for 70 (US) compared with about 45 a year ago. “The great thing about this price increase is that there is nothing phoney about it,” said Graham Farquharson, president of Nanisivik Mines (which has operating control of the mine). “It’s based on good old supply and demand fundamentals, and the demand is definitely there. Every zinc smelter in the Western World — and in the east bloc as well — is going flat out to produce all the zinc it can. And the market is gobbling it up as fast as possible.” (Demand is fueled mainly by the use of zinc in galvanizing automobile parts. Iron is coated with zinc in order to protect it from rust.)

MRI has taken advantage of rising zinc prices by cleaning out most of its concentrate inventory, Farquharson told The Northern Miner. “As a result, shipments in 1988 were the third-highest of our 12 years of production.”

He added: “Because Nanisivik is a low-cost producer with no debt, operating profits have risen significantly with the improvement in zinc prices.” MRI’s net income for the 9-month period ended Sept 30, was $18.2 million(C) (about $2 million of this is attributed to the company’s oil and gas interests) compared with $3.9 million for the same period last year.

However, the mining plan has not been altered significantly in response to the rise in price, Farquharson said.

“The mine calls the shots, not the market. Because we are a low- cost producer, the orebody is being mined in a logical manner to maximize recovery and therefore extend the life of the operation for as many years as possible.”

Lying in a hill 300 m above sea level, the orebody is in permafrost; it extends 3 km and averages 100 to 150 m wide and up to 20 m high. Similar to zinc/lead deposits of the Mississippi Valley Type, the Nanisivik mine is carbonate-hosted and flat-lying, with a maximum incline of 1 to 2 .

Inside the mine, a 5-cm layer of bright frost coats the walls and pillars, giving new meaning to the term “deep freeze.” Most of the ore is extracted using room-and-pillar mining, while small outcrops at the west and east ends have been almost mined out during past summers. Room-and-pillar, which is a standard mining method for such flat-lying deposits, is so-called because the mined areas (or rooms) are separated by pillars of roughly equal size.

In fact, Nanisivik is one of Canada’s largest room-and-pillar operations, according to mine manager Bill McNeil. “It is certainly the most efficient and affordable way to mine this deposit,” he explained. “Little waste development is required for the accesses and the rock structure permits the use of large underground equipment. Also, a very high first-pass recovery is achievable — in the order of 75% to 80%.”

Since start-up, in 1976, 6.9 million tonnes have flowed through Nanisivik’s mill. Proven and probable reserves now stand at 2.6 million tonnes grading 10.1% zinc, 0.3% lead and 45 g silver per tonne.

At the time of our visit, 60% of all ore was being mined from throughout the main mine, with 40% coming from “satellite zones” (mining blocks which are close, but separate from, the main mine). However, emphasis is shifting more and more toward these zones so that, by mid-1990, the 60/40 ratio will be reversed in favor of the satellite zones.

Ore is being extracted from five of these zones at present:

* Shale Hill — Perhaps the most promising of the satellite zones, Shale Hill hosts reserves of 120,000 tonnes (all reserve figures heretofore are proven, probable and possible) grading an impressive 15% to 20% zinc; no lead is present. Cut- and-fill mining is used because of the zone’s fault-related, sub-vertical structure, explained geologist Doug Dumka. The current mining rate is 4,000 tonnes per month.

* Central Lower Lens — With reserves of 600,000 tonnes (most of that, possible), the grade here averages 7%-8% zinc. Cut-and-fill may be employed here also (again, because of irregularities), though room-and-pillar is the cu rrent mining method. Mining rate: 8,000 tonnes per month.

* Eastern Lower Lens — The estimated 350,000 tonnes in this zone will probably be mined via cut-and-fill because the ore here is subvertical. Grade is close to the over-all average of 10%, with about 7,000 tonnes per month being mined.

* Oceanview — Consisting of 100,000 tonnes at 8% zinc, this zone is in the process of being developed. Development ore is being extracted at the rate of 8,000 tonnes per month.

* 0406 Shale zone — Located near the ore pass, this zone is being mined at a rate of 2,000 tonnes per month. Reserves: 120,000 tonnes at 12% zinc.

Assessment and development work on at least three other satellite zones (the Western Lower Lens, Southern Lower Lens and K-Baseline zone) is ongoing.

“It’s necessary that we mine more heavily from these zones in order for us to mine all the known metal by the end of our projected mine life, on the basis of 680,000 tonnes a year,” Dumka said. “We’ve already mined a lot from the main mine.”

An underground diamond drilling exploration program is planned through to June, 1989, and a limited surface program remains a possibility. “But,” said Dumka, “we’ve basically pulled in our horns as far as exploration is concerned.”

“We don’t believe there is another Nanisivik-size ore zone near surface in this area. We’ve scoured the area and looked at all the promising geophysics and haven’t come up with much.”

McNeil agreed: “We’ve pretty well abandoned the Big Onion theory that there may be a major zinc orebody within a 10-mile radius of Nanisivik.”

The main goal for 1989 is to meet the target of producing 100,000 tonnes of zinc concentrate per year, McNeil stressed. “Other objectives include mining as close to the average grade as possible without compromising our over-all mining plan, and completing the extraction of the Oceanview deposit.”

Over-all operating costs stand at $35 per tonne. Included in this figure are mining, milling and off-site (Toronto) costs.

Unlike most Canadian minesites, Nanisivik has a strong community atmosphere, which is largely due to the fact that many of the workers’ wives and/or children live on-site. Most of the wives work on surface while the children attend day care or elementary school classes. About 40% of Nanisivik’s 350 residents are Inuit, who seem generally well-integrated with the non-Natives.

“In order to survive in this environment, people have to be able to work together as a team,” explained administration superintendent Jack Haynes. “That’s why when we recruit workers, we look for team players; people who don’t work well as team players usually don’t stay.”

On-site facilities include a well- equipped recreation centre, gymnasium, Hudson Bay store, day care centre, elementary school for grades kindergarten through eight, library, 2-man RCMP unit with a jail, volunteer fire department, and catering service.

Adds McNeil: “We also have what must be the most northerly tennis courts in Canada.” Nanisivik town centre, in northern Baffin Island, with mine in background. (set cutline across 3 columns) MV Arctic, the ice-breaking concentrate bulk carrier, recently touched port at Nanisivik, N.W.T. It took on a 24,000-tonne cargo of zinc and lead concentrates, bound for Europe.