Minnova sees major returns from Izok Lake project

Advances in trucking on winter roads and in arctic shipping make the Izok Lake copper-zinc project in the Northwest Territories viable today almost 30 years after its discovery, says David Watkins, president of Minnova (TSE).

“It is our conviction that the time has come to develop this deposit,” Watkins said at the company’s annual meeting here recently.

The company needs to replace its fast-depleting reserves in a hurry. Although average grade was not specified, the company’s annual report shows reserves declined to 2.5 million tonnes at the end of 1991 compared with 7.6 million tonnes three years earlier.

The Opemiska mine in northwestern Quebec was closed in 1991, the Lac Shortt mine in northwestern Quebec and Samatosum mine in British Columbia are scheduled to close this year, and the Ansil mine in northwestern Quebec is due to close in April, 1993, leaving only the Winston Lake zinc-copper mine in northwestern Ontario operating.

Minnova purchased Izok Lake from Falconbridge, an associated company, in 1991 for US$20 million plus a 3% net smelter royalty. The property, which includes two other smaller deposits, already boasts probable and possible reserves of 13.4 million tonnes grading 3.2% copper and 14.4% zinc with significant precious metal credits.

Recent drilling at Izok Lake indicates those reserves could be increased. Hole 147, drilled in early April, returned grades of 3.5% copper and 21% zinc over 125 metres.

Of the three mines Minnova started since 1987, only Samatosum has yet to yield a positive return on investment, and it may still do so depending on final reclamation costs and salvage values.

“Mining can still be a profitable business as Winston Lake and Ansil have both achieved acceptable rates of return,” said John Purkis, Minnova’s vice president mining.

Izok Lake could provide its first revenue by 1997, according to a schedule outlined at the meeting. Capital costs are expected to be about $300 million, although that does not include working capital requirements which could be substantial given the seasonal nature of shipping in the arctic. The project involves moving concentrate north along a 300-km winter road to a port to be built near Coppermine on Coronation Gulf. The port is expected to cost about $50 million, and although that entire cost is included in the project’s estimated capital cost, other companies active in the area, such as Echo Bay Mines and Kennecott, may contribute to the cost. Such a port could reduce the cost of shipping goods and fuel into the remote area north of Yellowknife.