NANISIVIK MINE AT THE TOP OF THE WORLD

In spite of English’s findings, more than half a century passed before anyone attempted to commercially mine the deposit. The reason, of course, is the area’s awkward location. Situated near the top of the world (700 km north of the Arctic Circle), and with no trees to offer protection from lacerating winds, the Arctic Bay area of Baffin Island is far from hospitable to human settlement. Come winter, the sun ceases to shine for five months out of the year and temperatures plunge to as low as minus 50 degrees C. What’s more, the rolling, mountainous terrain makes it sometimes impossible for planes to land and take off. All in all, it’s tough to imagine a harsher setting for a mining operation.

But if there is one lesson to be learned from the history of mining in the far north, it is that, given the right amount of skill and visionary determination, nothing is impossible.

Today, the Nanisivik mine is in its 13th year of zinc production (small amounts of lead are also produced, as well as silver and cadmium as by- products) and mine-planners say at least five more are virtually assured. In addition to being one of the northernmost mines in the world, (Cominco’s Polaris, a few hundred kilometres northwest, takes top billing), Nanisivik is a townsite which roughly 350 men, women and children call home.

When The Northern Miner Magazine touched down at this polar port, the mercury level had sunk to a bitter minus 35 degrees 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.

The mine is owned and operated by Nanisivik Mines, now a wholly- owned subsidiary of Mineral Resources International of Toronto. Mri, in turn, is a public company in which Conwest Exploration Co. has become the major shareholder.

A definite advantage for those companies is the recent upswing in the price of zinc. The metal was recently selling for 70 cents (us) compared with about 45 cents a year ago. “The strong price performance by zinc in 1988 resulted in Nanisivik Mines having its best year ever since coming into production,” Nanisivik President Graham Farquharson told The Northern Miner Magazine. “And the great thing about this price increase is that there’s nothing phoney about it; it’s based on good old supply and demand fundamentals.”

He added that operating profits have risen significantly with the improvement in zinc prices. Mri’s net income for the 9-month period ended Sept 30, 1988, was $18.2 million(c) (about $2 million of this is attributed to oil and gas interests) compared with $3.9 million for the same period last year. As a result, mri was able to declare its first dividend in 1988 and Nanisivik employees were informed of a special profit-sharing payment which Farquharson described as particularly rewarding to veterans of the operation.

However, the mining plan has not been altered significantly in response to the strong performance by zinc, he explained. “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.”

Production is expected to continue at least until 1993, with the earliest end to shipments of concentrates being made in mid-1994. This bright outlook is one reason why brokerage houses such as First Marathon Securites have been touting MRI’s stock (trading at around $5 per share at presstime).

“With strong zinc prices likely to continue next year, MRI will report very high earnings and cash flow in 1988,” states a recent First Marathon report. “Taking into account the strong working capital position of the company together with its investment and oil and gas interests (including a recently acquired 70% stake in Barons Oil Ltd.), we believe that investors are continuing to underestimate the potential cash flows from Nanisivik.”

(MRI’s long-term debt consists mainly of $24.5 million of convertible subordinate debentures yielding 6.75%, which is paid semi-annually.) History

While the first recorded investigation of the geology of the Strathcona Sound region was by English in 1910-11, a quarter of a century passed before anyone attempted to follow it up. In 1937, two brave souls, J. F. Tibbett and F. McInnes, made a 3,300-km journey by dog sled from Churchill, Man., to stake claims. But time did not permit any significant work to be done in these barren lands, and the claims lapsed. Once again, the area lay untouched, until 1954 when R. G. Blackadar and R. R. H. Lemon were engaged in regional mapping for the Geological Survey of Canada.

Soon after the publication of Blackadar’s report, Texas Gulf Sulfur sent geologists R. D. Mollison and W. Holyk to evaluate the deposit. Fifteen claims were staked, covering the Ocean View area north of Lake Kuhulu and the eastern outcrop of the main orebody. Before leaving the area, Mollison and Holyk decided to check one last outcrop, on the eastern extremity of the main orebody. Had this outcrop not been discovered, it is doubtful if Texas Gulf Sulfur would have continued with its exploration efforts in the area, according to a 1973 report by the consulting firm of Watts, Griffis and McOuat. In which case, commercial production would probably never have become a reality.

The following year, more exploration was carried out, but not without considerable hardship, as the Watts, Griffis and McOuat report explains:

In 1950, Texas Gulf Sulfur sent a party of seven men and two helicopters to further investigate the area. The men and their equipment were flown by DC-4 to Hall Beach, and then ferried into the property by a DC-3 on skis, which landed at Kuhulu Lake. On one of these trips the DC-3, descending through cloud, south of Adams Sound, flew into an ice field on a mountainside at cruising speed. The cockpit, with three men inside, was bent under the fuselage and buried in the snow. The aircraft immediately caught fire, but the remaining passenger, G. Podolsky, a geophysicist, although he had two broken ankles, was able to dig the three men out of the cockpit with a shovel that had been thrown clear of the aircraft. He later fortuitously found four sleeping bags ejected from the aircraft and was thus able to sustain the three men, seriously injured, for three days until the weather cleared sufficiently for rescuers to find the wreck. The site of the crash is now named Mount Podolsky. Over the next 10 years, Texas Gulf Sulfur conducted extensive diamond drilling and geophysical programs, exploring several anomalies and delineating the main orebody. The exploration program was slowed down throughout the mid-1960s because the company was bringing into production the newly discovered Kidd Creek mine, near Timmins, Ont.

Once the Kidd Creek project was sufficiently advanced, attention was again focused on the Strathcona Sound area, and in 1969, an exploration adit was driven 650 m into the east end of the main orebody. The arrival of heavy equipment by sea facilitated operations, and in 1970 a 50-ton bulk sample was shipped to Timmins for metallurgical testing.

In 1972, Texas Gulf was approached by MRI, then based in Calgary, Alta., with a proposal to assume a long- term option on the Strathcona Sound property in exchange for the rights to a sulphur deposit in Mexico. An agreement was reached and a feasibility study was initiated involving ad
ditional drilling, bulk-sampling and detailed mapping. The deposit proved to be economically sound.

The next stage was the formation of Nanisivik Mines, the company that was assigned 100% interest in the mineral claims. This new company consisted of five contributors each of which was assigned equity: MRI held 54%, the federal government 18%, Metallgesellschaft of West Germany 11%, Billiton of the Netherlands 11%, and Texasgulf Inc. held the remaining 6%. With such diverse interests, a separate managing team was needed, so in 1974 Strathcona Mineral Services took over and began construction of the project. Only two and a half years later, the production of zinc and lead concentrate was started and by 1978 the townsite, dock, airport and mine facilities were completed. Although it was built during a period when inflation was at its peak, the mine came in on schedule at a cost of $65 million.

Despite many reservations within the industry about the viability of the project when it was first being considered, Nanisivik has turned out to be one of the lowest-cost zinc producers in the world. Over the past 12 years, it has provided between 1% and 2% of the Western world’s zinc. But back in 1973 and 1974, North American mining companies were non- believers in a mining project situated in the High Arctic, which meant that Frank Agar (president of MRI at the time) and Graham Farquharson had to fly around the world searching for financial support. Fortunately, in late 1973, there was a spike in the zinc price similar to what occurred in 1988 and interest was found with European custom smelters who needed new sources of zinc concentrate. At the same time, Jean Chretien, then minister of Indian and Northern Affairs, was keen to encourage development in the far north, and this led to federal government participation in the project as an equity owner. Mri has since bought out the government and all other shareholders in Nanisivik. The Mine

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 degrees .

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 the main mine, with 40% coming from “satellite zones” (mining blocks which are close to, 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 (this and subsequent reserve figures 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 current 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 overall 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 — Situated 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 continues on at least three other satellite zones (the Western Lower Lens, Southern Lower Lens and K-Baseline zone).

“It’s necessary that we mine more heavily from these zones in order to extract 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.”

All underground drilling is done without water, and entails mounting dust-collectors on the drills. This is necessary because the entire mine is in permafrost which extends as far as 600 m below surface and the rock temperature is a steady minus 10-12 degrees C. The water that is usually used to control drilling dust freezes in these conditions, and the brine solution sometimes used in underground drilling causes equipment to severely corrode. (Dry drilling is also faster and cheaper than wet drilling.) Since there is virtually no silica in the mine, respirable dust limits of 5 mg per cubic cm are achieved, using modified Atlas Copco DCT 160 dust-collectors. In using this device, Nanisivik became the world’s first underground mine to successfully work with dry drilling. (Note: a brine solution consisting of calcium and water is used for diamond drilling at Nanisivik.)

The pattern for a drift round is 0.6 x 0.7 m; for a slash round it is 1 x 1 m; and for a bench round it is 1 m high by 1.2 m wide.

All blasting is done with ANFO in combination with Nonels, B-line and electrical detonators. Powder factors vary from 0.3 to 0.6 kg per tonne.

Ore is hauled to ore passes by the use of five DJB 330 rear-dump haul trucks (30-tonne capacity) and one Wagner M439 haulage truck. Truck loading is done by two Caterpillar 980 loaders and one Wagner ST 8 Scooptram. Other equipment used in the mine includes two Eimco Jarvis Clark RBM 11 rock-bolters, a Jarvis Clark scissor lift truck/giraffe, a Jarvis Clark ANM 12 ANFO truck, an Atlas Copco Diamec 250 diamond drill and a Caterpillar 1406.

An underground diamond drilling exploration program is planned through to June, 1989, and a limited surface program will be continued. “But,” said Dumka, “we’ve basically pulled in our horns as far as exploration in the region 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 another big one.”

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 Nanisivik deposit consists of massive sulphides within dolomite of the Society Cliffs Formation of Helekian age. While sphalerite and galena are present in ore-grade proportions, pyrite is the main mineral.

“We have well over 100 million tonnes of pyrite that has no ore with it,” stressed Dumka. “That’s probably more pyrite than at any other mine, an abundance which is unusual for a carbonate-hosted, Mississippi Valley Type deposit. The South Boundary zone alone has 40 to 50 million tonnes of pyrite — with no zinc.”

The main goal for 1989 is to me
et 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 overall mining plan, and completing the extraction of the Oceanview deposit.”

Overall operating costs stand at $35 per tonne. Included in this figure are mining, milling, local site services, transportation, and off-site costs in Toronto.

Unlike most Canadian minesites, Nanisivik has the atmosphere of a genuine community, which is largely due to the fact that many of the workers’ wives and/or families live on-site.

Nanisivik is a non-union mine. Turnover for workers from southern Canada is 35% while for northerners it is more than 100%. This is mainly due to the fact that many northerners opt to leave the worksite in the summer to hunt and fish. Many of these employees return after being away longer than the normal vacation cycle and this tends to inflate the turnover figures. More than 25% of Nanisivik’s 350 residents are Inuit, who are principally from the Baffin region although some come from as far away as Rankin Inlet and northern Quebec. All signs are in the native language of Inuktitut as well as English.

“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.”

McNeil said the challenges involved in running Nanisivik range from running a deep-sea port to supervising a day care centre. On-site facilities include a well-equipped recreation centre, gymnasium, Hudson Bay store, elementary school for grades kindergarten through eight, library, 2-man Royal Canadian Mounted Police unit with a jail, ecumenical church, volunteer fire department, and catering service. Adds McNeil: “We also have the most northerly tennis courts in Canada.”

Nanisivik Mines maintains 64 family accommodation units ranging from one-bedroom apartments to 4-bedroom detached houses. The government has 15 houses for its employees (the town is administered by the Government of the Northwest Territories as a development area).

Nanisivik’s function as a mining centre is expected to cease in 1994, when the ore reserve is exhausted. The mine will have then lasted 18 years. However, plans are already being made by the Canadian Forces to use the 2-sq-km townsite as the location for a permanent military base. About 100 instructors and their families will be stationed at the base for 2-year tours of duty. The purpose of the base will be to train soldiers and test equipment for Arctic warfare.

Since the military will be taking over most of the existing facilities from Nanisivik Mines, it can be said that this unique community in the High Arctic has a secure future.

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