Reviews

Jennifer Obleman
Monday, December 31, 2007

Previous columns 

The high Canadian dollar and rising commodity prices were two factors that drove the Northern economy last year.

Resource development and exploration continues to play a major role in the Northern economy and as we prepare to enter another year with many projects on the horizon News/North looks back at what made business headlines in 2007.

Mining

Yellowknife's Aboriginal Engineering was awarded a $6.8 million contract for remediation work at the former Port Radium mine on the east side of Great Bear Lake. More than 50 people were employed at the site this summer, mostly Deline beneficiaries.

An application to drill for uranium in the Thelon Basin was rejected after Lutsel K'e residents raised concerns about potential environmental, social and cultural impacts. National and territorial mining organizations protested the Mackenzie Valley Environmental Impact Review Board's recommendation not to allow the exploration program, but Indian and Northern Affairs Minister Chuck Strahl upheld the regulatory board's recommendation in the fall.

Ur-Energy president and CEO Bill Boberg said Strahl's decision could deter other companies from exploring in the area.

Cumberland Resources sold its Meadowbank project to Agnico-Eagle for $500 million net cash. A 110-kilometre all-weather road was built last year, connecting the mine site to the community of Baker Lake.

Australian mining giant Zinifex acquired Wolfden Resources, taking over all Nunavut projects including Izok and High Lake.

International gold producer Newmont Mining Corp. put forth a $1.5 billion takeover bid for Miramar Mining Corp.

Miramar's Doris North project received a six-year water licence last fall. The mine is expected to begin production in late 2008.

Baffinland's Mary River iron ore project and Shear Minerals' Churchill diamond project continued to advance.

Tahera's Jericho mine ran into some troubles last year, facing low grades early in the year, production delays and financial restructuring.

De Beers Canada's Snap Lake mine began production in August.

Only 72 new prospecting permits were issued in the NWT in 2007, covering 2.9 million acres of land - about half the number and scope of permits issued in 2006.

NWT/Nunavut Chamber of Mines general manager Mike Vaydik said the slow pace of the regulatory system could be one reason for the decrease.

In Nunavut, 150 permits covering 6.3 million acres were issued.

In March, the Government of Nunavut released its Mineral Exploration and Mining Strategy.

Close to 300 delegates attended the Nunavut Mining Symposium in Iqaluit in April.

Nunavut Tunngavik Inc. approved a new uranium policy in September that supports responsible uranium mining.

The policy emphasises the protection of human health, limiting impacts to the land and wildlife, and the provision of significant economic benefits and opportunities for Inuit.

Gold prices rose steadily throughout the year, topping $841 an ounce on Nov. 9 - a 27-year high.

Winter road

It was a record year for the Tibbitt to Contwoyto ice road, which closed April 9 after 72 days of operation.

A total of 10,922 loads were sent north and 810 loads went south last year.

For the first time in the road's 25-year history, a secondary route was built from Gordon Lake to Prosperous Lake, bypassing Waite Lake, traditionally the weakest section of the road.

In 2006, warm weather conditions allowed for only 42 days of driving on the winter road.

The Winter Road Joint Venture management committee looked at ice road alternatives in 2007, including a seasonal overland route adjacent to the ice road; the Bathurst Inlet Port and Road project, a proposed 211-kilometre link between Bathurst Inlet and Contwoyto Lake; and connecting the mines to the Taltson River hydroelectricity station near Fort Smith.

The committee wants a solution in place by 2011.

Taltson River project

Proponents of the Taltson River project filed for regulatory approval in May to triple the capacity of the existing Taltson hydro electricity station and build 600 kilometres of transmission lines to the diamond mines. The project will start in 2009 if regulatory approval is granted, and will take about three years and 400 workers to complete.

Total project costs are estimated to top $300 million.

Hunting/Trapping

Prices for almost all Nunavut and NWT pelts were down at the Fur Harvesters auction in February.

After a record-setting 2006, with marten averaging $115.55, the average price for marten dropped to $67.27 last year, a decrease of 42 per cent.

Fisher and mink also dropped, while lynx and muskrat increased slightly. Sales for timber wolf and wolverine pelts were strong.

Cambridge Bay's 2007 muskoxen hunt was hurt by poor weather conditions.

Storms kept Kitikmeot Foods' hunters off the land during the two-week harvest early in the year.In all, 246 muskoxen were harvested, compared to 287 in 2006.

Oil and Gas

Chevron Canada and BP Canada planned to drill two wells in the Beaufort Delta, and Paramount Resources planned to drill in the Cameron Hills.

Exploration licences worth $15.7 million were approved in the Sahtu in May.MGM Energy Corp, aspin-off of Paramount, bid$8.6 million for rights to 63,300 hectares of land south of Fort GoodHope.

Husky Oil OperationsLtd., working as a partnerwith International FrontierResources Corporation(IFRC) bid nearly $4.9 million for 91,000 hectares south of Tulita.BG International bid $1.1 million on about 75,000 hectares near Colville Lake.

The company, partneringwith IFRC, also bid $1.1 million for more than 81,000 hectares near Fort Good Hope.

More than 700 participants attended the Inuvik Petroleum Show in June.

Topics discussed included the Mackenzie Gas Project, the regulatory process and the need for training.

A federal court ruling in July found the federal government violated Kakisa's Ka'a'gee Tu First Nation's right to meaningful consultation before a final decision was made on a modified land use permit granted to Paramount Resources Ltd. in 2005 for work in the Cameron Hills.

Pipeline

In January, Mackenzie Gas Project proponents signed a socio-economic agreement with GNWT that committed them to providing new employment, training and business opportunities for NWT residents if the proposed Mackenzie Gas Project becomes a reality.In March, Imperial Oil announced costs to build theMackenzie Valley pipelinehad jumped to $16.2 billionfrom $7.5 billion in 2004.

Escalation of costs for fuel, materials and labour and delays in the regulatory process were blamed for the increase.

Bridge/barge

The Deh Cho bridge will go ahead by 2010, Premier Joe Handley said at the legislative assembly in August.

The $150 million project would be funded partly through a $6 a tonne toll on commercial vehicles.

A snag in a permit renewal nearly spelled the end of the project.

The Deh Cho Bridge Corporation was informed by Transport Canada that the extension of its permit was temporarily halted due to serious talks among oil companies about using the route under the bridge to transport large shipping containers from Asia to Fort McMurray.

But Transport Canada approved the bridge construction project at the end of November.

Dollar

The Canadian dollar topped $1 US in September 2007 for the first time in more than 30 years.

While the high dollar was good news for travellers and consumers, for the mining community, the high dollar drove up export prices, making it harder for Canadian commodities to compete on the international market, said Mike Vaydik, general manager of the NWT and Nunavut Chamber of Mines.

The exchange rate also caused struggles for outfitters serving American clientele.Bob Long, president of theBaffin Regional Chamber ofCommerce, said the tourism industry would feel the effects of the high Canadian dollar.

Business briefs

The North West Company opened a new Northern store in Tsiigehtchic in April andplanned renovations and additions to outlets in Cape Dorset, Iglulik and Kugluktuk.

The company also purchased High Arctic Enterprises in Pangnirtung last spring.

NorTerra, a company owned by the Inuvialuit Development Corporation and Nunasi Corporation, purchased industrial supplier Northern Metalic Sales' operations in Yellowknife, Hay River, NormanWells and Inuvik.

NorTerra also acquired Braden Burry Expediting.

Members of 30 Arctic Co-ops from across the North attended the organization's three-day AGM in Winnipeg last spring. Fourteen resolutions were passed, including the need to explore energy alternatives such as wind power and the need for training in the communities.

Canadian North began flying to the Kitikmeot region in June, serving the communities of Taloyoak, Kugaaruk, Gjoa Haven and Kugluktuk.

According to a report released in June by the Canadian Mortgageand Housing Corporation (CMHC), Iqaluit had the lowest vacancy rate in Canada - zero - and the highest rents.A two-bedroom apartment in Iqaluit cost $2,094 per month. Fort McMurray was next, at $1,478. Yellowknife was third, with rents of $1,365.

The Government of Nunavut published an action plan last summer for the development of a soapstone industry, which includes hiring a full-time co-ordinator for the soapstone industry, ensuring carvers have access to stone, and providing funding to help quarriers buy tools.Don Yamkowy, who served three terms as president in the 1990s, was again acclaimed as president at the NWT Chamber of Commerce AGM in August.

Infrastructure, recruiting and retaining workers, and reducing government largesse were the issues topping Yamkowy's agenda.In October, Krista Uttak, 31, a partner in Igloolik Isuma Productions, was announced as the winner of the Business Development Bank of Canada's 2007 Young Entrepreneur Award for Nunavut.

Attendance was down by about 100 delegates at Prospects North 2007 in September. Organizers are considering a spring conference date and a revised schedule to bring numbers back up at the conference and the trade show in 2010.