Canadian Malartic Corp (CMC) is not giving up on the Hammond Reef gold project.
“It’s by no means a mine, but there has been a lot of movement on the EA [environmental assessment] and permitting process,” Bud Dickson told Council February 27.
He and geological engineer Sandra Pouliot gave a detailed overview of where the project is at now – a few months away from a successful completion of the EA process – and what comes next.
As Brett Resources and Osisko Mining developed the project (2008-2012), they believed it could build a mine for $800 to $900 million. It now appears the cost will be more like $1.5 billion, a big enough increase to give developers significant pause. But there is a proven gold reserve of 4.7 million ounces, which is worth over five and a half billion dollars at $1,200 an ounce (the average gold price over the past four years; all figures are U.S. dollars).
The property is owned now by Canadian Malartic Corp., which is a partnership governed by executives (three each) from Agnico Eagle and Yamana Gold. Both are successful gold miners; earlier this month, Agnico Eagle announced it would invest $1.2 billion to develop two gold mine sites in Nunavut.
At Hammond Reef, the company is expected to conduct an opportunity study once the EA process is complete. This will explore different options for the project to find the best (i.e., most profitable) way to develop it.
But first, the EA has to be completed, and both Dickson and Pouliot, who has been working on the project for a year, expressed confidence that Canadian Malartic will be able to resolve all of the outstanding issues.
“We had a very positive day-long meeting with MNRF,” said Dickson. “And we will have more studies starting on site in the spring.”
“It’s not an easy business, but things do get done,” said Poliot. “This is [only] an EA; we are not yet into detailed engineering yet. EA approval is not the final go-ahead. For a mine [to go into operation] 78 more permits will be required.”
The company has worked through a wide range of options to come to a set of preferred alternatives for the project.
It will process the ore, which contains low-grade (i.e., about 0.66 grams per ton) quantities of gold, with cyanide, and will use a cyanide destruction circuit to minimize the risk of contamination.
The Hardtack-Sawbill Road, which has seen a $7.5 million upgrade during the exploration stage of the project, will remain the main access, with the power line to the site following the road, and then crossing over Sawbill Bay.
A camp for workers – about 450 will be employed during production – will be established about 13 km from the main mill, northeast of Sawbill Bay and west of the tailings management facility. The company expects that some of the workforce will want to live in Atikokan, and will bus to work.
The mine will include dedicated sewage treatment plants for the camp and for the mine site area.
Water used in the mining process, once treated, will be discharged to the south end of Sawbill Bay.
The mine’s waste rock facility will be located immediately east of the open pit and mine processing plant, with low grade ore stockpiled together in case it one day becomes economically worthwhile to process. The tailings management facility – the ore after the gold has been extracted – will be located 9 km northeast of the processing plant.