There are 25 million ounces of gold under the region’s feet ready to be taken out in the next five years.
Even without major discoveries in the Ring of Fire, the region will have a mining boom industry experts say. There are 11 mining projects outside of the highly publicized Ring of Fire that are expected to be operational by 2017 with an expected total life of more than 100 years.
Rubicon Minerals, which is mining for gold under Red Lake, is expected to start late next year and hit 2.8 million ounces of gold in its high-grade deposit over a dozen years. A lower grade deposit, which in industry terms is about a gram of gold for every tonne of rock mined, like Rainy River Resources’ 5.72 million ounces will run for 13 years.
Those two projects alone represent almost a billion dollars in capital costs with more than 700 construction jobs and nearly 900 operations jobs.
As of May 15, the Thunder Bay Community Economic Development Commission estimates the mining projects ready to go will create at least 4,000 new jobs.
That doesn’t include expansion plans for the region’s five active mines, which include Canada’s largest three gold mines, already employing 3,500 people.
CEDC project manager of mining services John Mason said it’s an optimistic for an industry that usually has about 1 in 10,000 odd of finding deposits worthy of mining.
“We haven’t seen this type of discovery rate in the past. Usually mines are very difficult to find,” he said. “Rewards are tremendous but the odds are poor you’d have better odds at a casino in terms investing your money as an individual or corporation.”
Ontario Prospectors Association director Gary Clark agrees. He said the province has about 350,000 stake claims out there right now, a record number.
“I’ve ever seen it this busy and I’ve been in the industry since ’83 in Northwestern Ontario so yeah it’s kind of a monumental time we’re in right now,” he said.
Clark is also hoping Osisko Resources’ Hammond Reef deposit near Atikokan, which is expected to bring in 5.13 million ounces of gold starting in 2016, will prove to others wanting to start exploration in the region that low-grade gold deposits can be worth it.
“It could prove that there’s more potential in lower grade deposits in Northwestern Ontario and that’s what we’re looking for, more of those,” he said.
Clark and Mason are quick to point out the cyclical nature of the industry, proven Wednesday as prices like gold continue to dip.
Production costs can as much as double between a low and high grade gold deposit, meaning some mines would no longer be worth it once gold hits a certain price point. Mason said that’s one of the reasons the industry is expecting a labour shortage.
In the early 90s, the sometimes fickle and hard industry went bust, leaving a whole generation looking for work in other places and other industries.
“It’s hard to believe,” Mason said. “You essentially lost a generation.”
But the region has a diversity of minerals besides gold ready to be mined as well. Stillwater Canada is looking to mine 91 million tonnes of platinum/palladium near Marathon while Bending Lake Iron Group and Rockex Mining are going for iron.
That’s on top of 70 million tonnes of chromite Cliffs Natural Resources is looking to haul out of the Ring of Fire along with Noront Resources’ 11 million tonnes of copper/nickel.
There are still challenges facing the industry along with a labour shortage. Clark said negotiations with First Nations communities need to improve so that exploration can continue.
“We do a lot of exploration and don’t find mines so we spend a lot of money in exploration and then when we find a mine we spend a lot of money on a mine but we need access to land and that’s the biggest thing is access,” he said.
Mason said along with consultation, infrastructure is always a challenge. While he doesn’t doubt the region can supply these projects with an anticipated 550 megawatts of power, transmission lines, roads and other things need to be addressed.
Places like Manitoba and Quebec are examples of governments that have provided the necessary infrastructure to their northern mines.
“We expect the province and the federal government to be part of this solution as well,” he said. “It has to be done right it can only be done once and it has to be done right.”