Northern Ontario is an Oasis of Mining Activity – by Dick DeStefano (Sudbury Mining Solutions Journal – August 2012)

Dick DeStefano is the Executive Director of Sudbury Area Mining Supply and Service Association (SAMSSA). This column was originally published in the August 2012 issue of Sudbury Mining Solutions Journal.

Northern Ontario is an oasis in the global mining market.  Northern Ontario is “booming” (some would say a mini super cycle) and will continue to do so for at least three years with an expectation to extend to five and some say for 95 years more. Others warn of a commodities downturn for a short period until China and India ramp up again. Its all about cycles.

The Honourable Joe Oliver, Minister of Natural Resources, Canada recently highlighted the importance of the mining industry to Canada’s economic growth and long-term prosperity. He acknowledged Sudbury as a centre of job creation and innovation in the Canadian mining sector.

We are talking about billions of dollars of capital and operating investments and major exploration activity in Northern Ontario. Highlighting every active mine and potential new mining enterprise is a difficult task, but we can offer some of the recent significant activity.

Canada saw its gold production increase last year, mining 110 tonnes compared to 91 tonnes in 2010. The majority of the nation’s gold comes from Ontario, which is the home of Goldcorp’s Red Lake gold mine in Northern Ontario. About half of the country’s annual gold production comes from Red Lake.

The Federation of Northern Ontario Municipalities (FONOM) recently received a report from the Ministry of Northern Development and Mines MNDM that outlined the following data.

About $500 million was spent on exploration in the northeast region in 2011.

There are 152,000 active claim units in Northeastern Ontario – representing almost half of Ontario’s total.

More than half of the region’s active claim units – 79,139 – are located in the Timmins area (Porcupine Mining District).
Approximately 300 active exploration programs in the region are being conducted by junior explorers and senior mining companies. More than 20 are at the advanced exploration-pre-development stage.

Kirkland Lake Gold, headquartered in the town of the same name, is raising $50 million with which to expand its gold mining operations.

Detour Gold’s Detour Lake project, currently in its $1.45-billion construction phase and on track for being operational in 2013, has the potential to become one of Canada’s larger gold mines.

Goldcorp’s Hollinger’s work is under way on this $70 million gold project in Timmins.

Aurico’s Young-Davidson gold project hopes to reach commercial production by the end of this year in Matachewan.

Vale’s Totten Mine is expected to open in 2013 at a cost of $750 million.

Lake Shore Gold recently announced plans to target a reduction in its 2012 capital spending program of $15 to $20 million while remaining on track to achieve its key production targets, including producing 85,000 to 100,000 ounces of gold in 2012 and achieving the production ramp up for the Timmins West Mine

Armistice Gold’s McGarry Mine in Virginiatown in North Eastern Ontario continues making solid progress and maintains forecast gold production of 25,000 ounces in 2012 and 40,000 ounces in 2013

Wesdome Gold Mines Ltd.’s Mishi Mine near Wawa is in pre-production development. The Wawa gold camp has two producing mines with nearby Wesdome Gold Mines, 50 kilometres to the west, and Richmont Mines, 83 kilometres to the northeast

The Victor Diamond Mine is the first Canadian diamond mine located in James Bay in the remote northern part of Northern Ontario and is very active with at least a five-ten year life. At Victor Mine, $101 million was spent on goods and services and $57 million (57 per cent) was supplied by Aboriginal businesses.

In 2010, Vale announced a planned five-year investment program of $10 billion across Canada to enhance and expand its Canadian operations. Approximately $3.4 billion of this expenditure is being spent on modernizing Vale’s Sudbury Operations, including the Clean AER Project.

In her June 2012 Annual Update to the community, Marianne Matichuk,  Mayor of Greater Sudbury, added the following. She touched on KGHM’s (formerly Quadra/FNX) $750-million Victoria deposit project, which she called “one of the most significant discoveries in the last four decades.”  As for Xstrata Nickel, the mayor highlighted its $119-million Fraser Morgan deposit, and the estimated $200-million investment into the company’s smelter, not to mention the $920-million Nickel Rim South project, Sudbury’s first new mine in 30 years, she said.

Worldwide demand for support services and products for mines is estimated at more than $300 billion/year. Northern Ontario has over 500 supply companies ready to meet local, regional, and international demands.

Northern Ontario with its cluster of mines, smelters, refineries, mining suppliers, educational institutions and research centres is one of the most active mining hubs in the world.

If we add the “Ring of Fire” and the huge chromite find potential in North Western Ontario, and the new $1.8 billion ferrochrome plant in Capreol in Greater Sudbury by Cliff Resources, Northern Ontario is fast becoming the global centre of mining and should be producing for the next 100 years.