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Company blames regulatory process for loss of NWT mine operation

Guy Quenneville
Northern News Services
Published Monday, April 07, 2008

YELLOWKNIFE - North American Tungsten will shift its proposed Mactung mine from the NWT side of the border into the Yukon partly to avoid the NWT's complex and time-consuming regulatory process, the company's Cheif Executive Officer said.

NNSL Photo/Graphic

North American Tungsten has decided to locate the mill and tailings ponds for its Mactung mine in the Yukon. The ore body straddles the NWT/Yukon border. Pictured here is a workers' camp near Mactung. - photo courtesy of North American Tungsten

When working on the mine's feasibility study, which is due in June, North American Tungsten decided to build the mill and tailing ponds entirely in the Yukon.

The ore body straddles both borders, but the majority of it is located in the Yukon.

"The previous owners (AMAX Northwest Mining) had things like the mill located on the NWT side," said Stephen Leahy, CEO.

But many factors made North American rethink that strategy. Avoiding what many see as a slow, impenetrable NWT regulatory process was among those factors, he added.

"Certainly that was part. There's no question. It appears, from what we hear, that it is ... much more convoluted in the NWT."

Other issues included the logistics of drawing water for the mine from the NWT.

"(AMAX) was looking to use water from Cirque Lake (located in the NWT). Well, Cirque Lake isn't big enough, by our standards. That causes a big issue because, if you don't have enough water, and we can't maintain the environmental levels of water, it doesn't work."

North American has described Mactung as one of the largest known undeveloped high-grade tungsten deposits in the world, with 33 million tonnes of high-grade ore at the site.

Mined at 1,500 to 2,000 tonnes a day, Mactung would stay open for a few decades, which is crucial, given that the company's Cantung mine, near the Nahanni National Park Reserve, has only approximately two years of mining left.

The switch between territories hardly surprises Mike Vaydik, general manager of the NWT Chamber of Mines.

To him, North American's decision is just another sign that the regulatory process in the NWT, with its uncertain timelines, is driving away potential investment.

"It's slowing down development," he said. "I've heard from some users of the system that they almost don't care what the answer is. It's like, 'Just tells us when we're going to get (the answer).'"

The chamber, along with the Mining Association of Canada and the Prospectors and Developers Association of Canada, recently gave a short presentation to the Department of Indian and Northern Affairs comparing the regulatory system in the NWT to that of the Yukon.

"(The Yukon system) is much simpler. There are less opportunities for things to go sideways. Also, at virtually every stage of the Yukon process, there are timelines spelled out for every step in the process. That would bring considerable comfort to anyone who's using the system."