Suppliers News (November 26, 2007)

BC power line should foster mine development

The B.C. government will spend $400 million to extend the provincial power grid along the Highway 37 corridor from Meziadin Junction to Bob Quinn Lake in northwestern B.C.

The measure is part of an overall effort to renew interest in mineral exploration in the region and give economic opportunities for communities hit hard by the downturn in forestry, says Dan Jepsen, president and CEO of the Association for Mineral Exploration British Columbia (AME BC).

“Extending the power grid in northwest B.C. will foster continued mine development, promote new mineral exploration activity, open new opportunities for independent power producers, expand tourism potential and eliminate costly, inefficient diesel-powered generators,” Jepsen says.

The new power line will span about 335 km, running from Terrace north to Meziadin Junction, then north to Bob Quinn Lake in an area geologists have labelled the “Golden Triangle.”

According to the B.C. Geological Survey, there are 935 documented mineral occurrences in the area — 67 of which are in the resource category — that will be serviced by the power grid extension.

Some of the advanced mineral exploration/mining projects in the area are NovaGold Resources (NG-T, NG-X) and Barrick Gold’s (ABX-T, ABX-N) Galore Creek copper-gold project; Imperial Metals’ (III-T, IPMLF-O) Red Chris copper-gold property; Fortune Minerals’ (FT-T, FTMDF-O) Mount Klappan anthracite coal project; Copper Fox Metals’ (CUU-V, CPFXF-O) Schaft Creek copper-moly-silver project; and Western Keltic Mines’ (WKM-V, WLKTF-O) Kutcho Creek polymetallic project.

AME BC says the projects could account for as much as $3.5 billion in development capital.

“There is no doubt that the extension of the power grid will be a major economic catalyst for northwestern B.C.,” Jepsen says.

AME BC represents more than 4,100 members including geoscientists, prospectors, engineers, entrepreneurs, exploration companies, suppliers, mineral producers and associations who are in mineral exploration in British Columbia and throughout the world.

SNC-Lavalin puts safety first at Ambatovy

Last month the engineering division of SNC-Lavalin Group (SNC-T, SNCAF-O) reached 2 million man-hours without a lost time incident at the Ambatovy bulk-tonnage nickel laterite project in Madagascar.

SNC-Lavalin is on-site designing and building a processing plant, 220-km slurry pipeline, port, 8-km railway, and more than 130 km of access roads. The US$3.2-billion facility will produce 60,000 tonnes nickel, 5,600 tonnes cobalt and 185,000 tonnes ammonium sulphate annually.

SNC credits co-ordination between the Sherritt International (S-T, SHERF-O) project management team and other contractors.

Ambatovy is 80 km east of Antananarivo, Madagascar’s capital. Probable reserves at Ambatovy are estimated to be in the 125-million-tonne range, grading 1.04% nickel and 0.099% cobalt.

Sherritt acquired Ambatovy through its takeover of Dynatec in June. Sherritt holds a 40% stake in the project, Sumitomo of Japan and Korea Resources each own 27.5%, and SNC-Lavalin, the remaining 5%.

Cementation sets boring record

North Bay, Ont.-based mine contractor and engineering firm Cementation says it has completed work on the longest and largest-diameter raise ever bored in the Canadian Shield — without incident or injury.

The bored raise is 694 metres (2,275 ft.) long and 5.52 metres (18.11 ft.) in diameter.

Cementation is conducting work for Goldcorp’s (G-T, GG-N) Red Lake Gold Mines in Red Lake, Ont.

“Delivering the larger-diameter bored raises to our clients provides them with new options for mine access and ventilation systems,” says Cementation president Roy Slack.

The raise boring records are:

1. Longest 380-mm-diameter (15 inches) pilot hole of 694 metres (2,275 ft.);

2. Longest 5.52-metre-diameter (18.11 ft.) raise of 694 metres (2,275 ft.);

3. Largest volume for a bored raise of more than 52,000 tons.

Cementation completed the second raise directly over its first record-setting raise finished in early 2007, making the combined length of the 5.52-metre-diameter (18.11 ft.) vent raise 1,010 metres (3,315 ft.) long.

Cementation, a division of South Africa’s Murray & Roberts, operates the two largest raise bore machines in North America, which are part of Murray & Robert’s 44-machine fleet.

SouthGobi gets trucks

SouthGobi Energy Resources (SGQ-V, SGQRF-O) now has a US$16-million fleet of coal mining equipment for an open-pit coal mine at its Ovoot Tolgoi project in Mongolia.

The company plans to start operations in the first quarter of 2008 and shipping Ovoot Tolgoi coal inside six months.

The Ovoot Tolgoi camp will service the mine during preproduction. The engineering and design for a permanent camp, maintenance facilities and offices is done.

Ovoot Tolgoi is SouthGobi’s most advanced coal project and is located in the Omnigovi Aimag in southern Mongolia, next to the Mak/Qinhua coal mine, about 45 km north of the China-Mongolia border. Ceke, on the other side of the border in China, will be the main distribution centre for Ovoot Tolgoi coal and is home to an automated coal-loading terminal and railway.

China is the world’s largest coal consumer and it now needs to import coal.

SouthGobi also has a new line of credit with Ivanhoe Mines (IVN-T, IVN-N), which owns about 87% of SouthGobi. The credit line allows SouthGobi to draw cash advances to a maximum of $32.5 million. The money will be used to fund operating, development and administrative costs. The loan is unsecured.