Yellowknife benefits from diamond rush

The exploration boom in the Northwest Territories is having a dramatic impact on select businesses in Yellowknife, but the capital city is not expected to enjoy any widespread economic fallout until mine development gets under way.

“There’s been a lot of spinoff, but it’s been fairly isolated,” says Joseph Auge, president of the Yellowknife Chamber of Commerce. “The geologists who were starving for work, for instance, are now up to their eyeballs in work.” Helicopter and airplane services, claim post suppliers, expediters and grocery stores are all reaping the rewards of a multimillion-dollar diamond hunt in the Territories, and, on a smaller scale, a renewed interest in the area’s base metal deposits.

Some of these local firms, initially anticipating a slow season, have been scrambling to keep up with the demand from miners like BHP Minerals Canada, Kennecott, Minnova (TSE) and Monopros. An estimated $35 million will be spent on exploration in the Territories this year.

“It’s done a lot for us,” says Teri Arychuk, owner and operations manager of Air Tindi. “We’ve doubled our business.”

Air Tindi’s four twin otters, part of a fleet of 15 planes, have been occupied around the clock flying claim posts, groceries and helicopter fuel to crews in the bush. Arychuk is expecting the demand to remain steady over the winter as drill programs get under way.

Bradenburry Expediting, which supplies the diamond exploration crews as well as camps at Izok Lake, High Lake and the Ulu project with everything from shampoo to drill bits, has added six people to its 4-man staff in order to keep up with demand. Business has rarely been so good, says 5-year owner and President Gordon Stewart.

But not everyone interviewed by The Northern Miner was as enchanted with the exploration boom. Some argue that the mining companies are favoring suppliers in southern Canada over those based in Yellowknife.

“A lot of the players are bringing in machines from down south,” says Robert O’Conner, president of Aero Arctic Helicopter Services. “It isn’t the benefit to the Territories that it should be.”

Representatives of the Dene, Metis, and Dogrib Nations, local native groups fighting for land claims in the area, declined to comment on the activity. But other sources say the Dogrib — who have yet to begin negotiations on a large block of ground north of Yellowknife, N.W.T. — have the most to lose from the staking rush, which has allocated up to 20 million acres of sub-surface rights to mining companies.

And the bush-based, temporary nature of exploration means its economic benefits are limited. Few of the companies involved in this year’s rush have established offices in town and their employees spend, at most, one or two nights in Yellowknife hotels before heading off to tent camps in the barrens. “People who are expecting a big boom from this don’t understand the nature of the business,” says Auge. “They think companies are building mines out there, but they’re not building mines, they’re exploring, and they’re pretty well self-contained.”

The first deposit to reach the development phase will likely be Minnova’s Izok Lake, about 225 miles north of Yellowknife, where engineers are currently sizing up the terrain before making plans for an open pit zinc-copper mine. And if a proposed mine access road to the Coronation Gulf is built, several other isolated deposits in the Slave Province may also be deemed economic.

A subsequent burst of mine development could lead to the economic domino effect for which Yellowknife residents have been waiting.