Quebec’s Ministry of Natural Resources has granted a mining permit to Montreal-based
A feasibility study, completed two years ago, proposes a $100-million complex comprising a 2,500-tonne-per-day underground mine, mill and ferroniobium-conversion plant.
Annual production would consist of 2,800 tonnes of niobium, contained in 4,500 tonnes of ferroniobium. The complex would operate for at least 15 years and employ 160 people, plus another 200 during construction.
Proven and probable reserves in the main orebody, named S-60, are estimated at 10.7 million tonnes grading 0.66% niobium pentoxide (down to 500 metres depth), while reserves in the secondary orebody, HWM-2, are pegged at 1.5 million tonnes of 0.56% niobium pentoxide (to 350 metres depth).
Although the project is wholly owned by Niocan, two more partners will likely participate: Quebec government-owned
Under its option agreement, Teck has carried out due diligence and has already advanced $500,000 in cash to Niocan. The major will complete its earn-in by paying another $500,000, due upon the receipt of key environmental permits.
Teck is no stranger to the niche niobium market, having long served as operator of the Niobec niobium mine, near Chicoutimi, Que., which is equally owned by Teck and
Niocan Chairman Ren Dufour says his company’s option deal with Teck was designed to entice the major into granting Niocan access to data from the Niobec mine. Using that access, Niocan performed a due diligence review and, together with Teck and Soquem, made a $34-million offer for Cambior’s 50% interest.
Cambior, though financially crippled by last September’s hedging losses, turned down the offer and turned instead to Japanese investors who provided a US$13-million mortgage on the mine.
Meanwhile, the Oka project has met with some opposition in the local parish and village, which were amalgamated last year.
In the spring, in a non-binding referendum held only in the parish, about 60% voted against the project while 40% voted in favour. Some 60% of eligible voters cast their ballots.
In the village, a follow-up survey found 92% supporting the mining project. Dufour says Niocan also has support from the local business community and the Chamber of Commerce.
Still, he says Niocan will invoke article 246 of the province’s Law of Development and Urbanism, which will override local regulations and allow the project to proceed.
Dufour believes the local opposition, led by a retired high-school teacher and a citizen’s committee, is more of a reaction to past niobium mining at the nearby St. Lawrence Columbium & Metals mine, which operated from 1961 to 1976.
“That mine started before the environment ministry was created in Quebec, so they didn’t give a damn about the people.” says Dufour, noting that there were problems with dust and depressed water levels in residential wells.
Today, one of the major health concerns in the region is excessive radioactivity, both in the form of uranium in wells and radon gas in basements.
Dufour says the citizen’s committee has tried to blame the region’s radioactivity problems on niobium mining when, in fact, the radioactivity is naturally occurring and persistent over a much wider area than the St. Lawrence and Oka project sites.
Dufour stresses that the development of the Oka project will actually improve the quality of water delivered to nearby residents because they will be able to tap into an aqueduct Niocan will build along Ste. Sophie Road. That aqueduct will pump water from wells near Lake Demontagne, a clean source.
As well, Niocan plans to decontaminate and rehabilitate the St. Lawrence site by removing radioactive slag and by filling open pits with calcareous sand.
While the obtaining of a mining permit is a milestone for the company, Niocan must still secure various permits. Dufour hopes these will be in place by year-end, at which time financing discussions would begin.
Niocan has already signed three distribution agreements with ferroalloy companies in Europe, North America and Japan. These companies are expected to buy 70% of Niocan’s first three years of production, at the going market rate.
Oka is on the north shore of Lac des Deux Montagnes.
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