A recent $100 million investment in the Osisko Metals-owned Pine Point mine is paving the way for its potential reopening, 35 years after it closed.

Appian Capital Advisory LLP, a London-based investment adviser in mining and mining-related companies, will provide the funds over a four-year period to acquire a 60 per cent interest in Pine Point Mining Limited (PPML) to form a joint venture that will advance the project, pending regulatory approvals.

Jeff Hussey, president and chief operating officer of Osisko Metals will become the chief executive officer of PPML.

“We have created a joint venture and they (Appian Capital) will invest up to $75.3 million. The rest of the $100 million is an investment into the company of Osisko Metals,” Hussey said.

The fact that Pine Point was previously a mine bears no weight on whether the project goes ahead to become a new mine, he said.

“We have to do a lot of work just to get the permits in hand and have the feasibility completed. Then agreements with Indigenous communities have to be completed in order to then go and obtain project financing,” he said of the process.

“The project financing at this point we estimate at $650 million. We still have to go and raise that. It’s not a slam dunk. We have to do all of this work yet, but we wouldn’t be investing unless there was a good chance of it going ahead.

“But we have to get the support of the communities, support of the Indigenous communities, and go through the environmental regulation process. We have to get that done,” Hussey said.

Pedal to the metals

Tom Hoefer, executive director of the NWT and Nunavut Chamber of Mines, said the $100-million investment is good news for the South Slave region and the entire territory.

“Attracting such a significant investor to the project to help advance Pine Point to shovel-ready construction stage adds much confidence in its future potential to become an operating mine,” Hoefer said. “Those investors did their own due diligence on the project. They looked at it, the work has been done, the agreements are in place and they said, ‘This is a great project and we want in.’ That is a seal of approval from another company that has $100 million to put into it.”

What lies beneath

The Pine Point region, located between Hay River and Fort Resolution, first became a hub of exploration near the turn of the 20th century. The resource-rich land beckoned prospectors, adventurers and explorers to travel northward in anticipation of good fortune and employment.

The dream was to strike gold and silver during what was the height of the Klondike era, but the ground instead yielded disappointment and no such glittering riches.

The presence of lead was known, however, and Hoefer said people were melting it to use in the making of muskets.

Sporadic mineral exploration of the region continued over the next few decades up until the early 1950s, when the discovery of significant deposits of zinc and lead became the determining factor for mining to begin.

The Consolidated Mining and Smelting Company of Canada (Cominco) staked claims and began laying out plans for a mining operation.

To do so was not an easy task in the Northern wilderness, but neither was it a deterrent, Hoefer said, adding that as a result, the NWT acquired vital, long-lasting infrastructure from the mine that operated from 1965 until 1988.

“Because of that project, the NWT got the Great Slave Railway. At the same time, they said they needed power at the mine, and in those days, diesel electricity was not generated, so the federal government agreed to support the project by building Taltson power,” he said. “The value of those minerals, in mining them, paid off the power and the rail, which continue to serve the North today, 25 years after the mine closed.

“It is legacy infrastructure that mining can help with. That is a really classic example of it,” Hoefer added. “We were the winners.”

Going green

Although the mine shut down, the massive tailings pond reclaimed according to standards of the day, and the adjacent town of Pine Point shuttered and abandoned, interest in the mineral-laden earth did not disappear completely over the next few decades.

Climate change and concerns for the environment eventually became a global priority and a shift towards creating a greener economy was deemed essential.

To help achieve that goal, the use of both lead and zinc will be necessary.

In 2017, Osisko Metals decided to purchase the Pine Point mine, and since that time, there has been a keen upwards interest in acquiring the metals that have now become a sought-after commodity.

Ready to dig in

With the infusion of the multi-million dollar cash flow into the project, Hoefer said Osisko and its backers are continuing to advance the project through permitting and towards the “shovel-ready” stage.

He added that support for the project from Indigenous governments has been a significant factor in securing the Pine Point deal.

“I know the company is committed to continuing to earn local community support as the project advances. I understand from the company that they have also commenced developing agreements with Indigenous governments to advance the project through environmental assessment and permitting,” he said.

Pine Point is important not only to the NWT, but to Canada as well, according to Hoefer.

“It’s a critical mineral mine that would produce zinc, which Canada and the world need to help address global climate change objectives. Second, this project will also help to offset losses in our mining sector with the closure of the Diavik mine.”

“And not in descending order by any means, it will help to generate employment opportunities, business and other socio-economic benefits to the NWT and south of Great Slave Lake.”

According to the Osisko Metals website, historically, the resources (now called critical minerals) extracted from the Pine Point mine have been among the world’s cleanest and with few impurities, setting the project apart from the most current producers of lead and zinc.

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