Unlocking Northern Resource Potential: The Role of Infrastructure

A report commissioned by the PDAC, and presented in Ottawa October 2016

The Prospectors & Developers Association of Canada (PDAC) commissioned MinEx Consulting to assess the impact of remoteness on the mining industry, and to identify those districts in Canada where strategic investments in enhanced infrastructure could stimulate the development of new mines. The final report (48 pages long) was published in October 2016 and can be downloaded from the PDAC’s website at:http://www.pdac.ca/pdf-viewer?doc=/docs/default-source/publications—papers-and-presentations/pdac-national-infrastructure-study.pdf

And attached is a copy of a PowerPoint presentation I gave at a workshop for industry & government in Ottawa the time of the launch

A key part of the study involved modelling a set of really neat “heat maps” of Canada showing the relative cost of building and operating different sized gold and base metal mines across Canada. This highlighted huge impact of remoteness and the associated lack of infrastructure in the far north. To work there, the head grades need to be 50%-100% higher than an equivalent project in southern Ontario or British Columbia.

The key message was:

  • The North suffers from the tyranny of distance: Some of the most remote places in the world are in Nunavut, NWT and Yukon.
  • The far north is under-explored and underdeveloped: 40% of Canada’s land mass is above 60o latitude, but only hosts 12% of all known projects; and 76% of these are currently underdeveloped.
  • Capital and operating costs are extremely high in the far north: Capex costs are up to 100-170% higher than an equivalent project in the south. Opex costs are 40-80% higher. As a result only the richest/highest grade deposits are economic.
  • Investing in better infrastructure can unlock new projects: a 10% reduction in the required ore grade will increase the proportion of projects developed by 5-7%. There are currently 126 undeveloped projects in Nunavut, NWT and the Yukon. With sufficient investment in better infrastructure this would translate into 6-9 new mines
  • Many of the undeveloped projects are clustered together: This creates the opportunity to build an infrastructure corridor to (efficiently) simultaneously develop several new projects at the same time
  • 7 infrastructure corridors have been identified – 3 of which are in the far north: These are: Yellowknife to a port on the Beaufort Sea, Rankin Inlet to Baker Lake to Repulse Bay, and Selwyn Mountains
  • Building these corridors will generate additional benefits: including stimulating additional exploration and projects in the local area as well as benefiting local communities

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