Sisson Mine construction not happening this spring, spoiling minister's prediction

Northcliff won federal environmental approval for its project last June, clearing the way, Dominic LeBlanc said, for construction of the mine within a year.

Tungsten mine project undergoing additional public consultation but company remains hopeful

If developed the Sisson Mine would be in operation for about 27 years and cost an estimated $579 million dollars. Construction will not begin this spring as the project goes through the approval process. (Submitted Sisson Mining Ltd)

The company behind the proposed tungsten mine in central New Brunswick says ongoing environmental permitting requirements mean construction on the project — and the promised 500 jobs that go with it — will not begin within the next 10 weeks as federal Fisheries and Oceans Minister Dominic LeBlanc confidently predicted last year.

"There will be no construction this spring," said Greg Davidson, a spokesman for Northcliff Resources Ltd., the company hoping to develop the mine.

Northcliff won federal environmental approval for its project last June, clearing the way, LeBlanc said, for construction of the mine within a year.

"The federal cabinet approval of the environmental assessment was the last remaining critical piece in order to ensure this project sees the light of day," LeBlanc told reporters in Fredericton last June 23.

"We are very confident that the company will be able to get the financing in place over the next number of months. We're confident that construction will begin next spring."

On June 23, 2017, the Sisson Mine project got the environmental assessment approval from the federal government. At the time, Federal Fisheries Minister Dominic LeBlanc said he was confident construction would begin spring 2018. (Ed Hunter/CBC )

But the mine's environmental approval was not absolute and required numerous "mitigation measures" to lessen its impact on 12 areas of concern, including human health, water resources and fish habitat.  

In addition, the project needs changes to federal metal mining effluent regulations to move forward. That involves additional public consultation, which is underway.

Never the plan, says president

"We've known all along after the approval of the EIA that's what we'd have to go through," Northcliff President Christopher Zahovskis told CBC News on Monday.

"It's Environment Canada run and we'll just have to go through the process."

Zahovskis said he does not know where the idea the mine could be constructed this spring came from, but that has never been the company's plan.

President and CEO of Northcliff Resources Christopher Zahovskis pcitured at the Sisson project site, north of Fredericton.

"I can't comment on what Minister LeBlanc may have said. In fact, I don't even recall reading it," he said.

LeBlanc's office is not elaborating on what happened with the minister's prediction that work on the mine would begin this spring or speculate on an alternative timeline.

"Decisions on the timeline of construction are at the discretion of the proponent, and subject to whether an amendment to the Metal Mining Effluent Regulations is required," said the minister's press secretary Vincent Hughes in an emailed statement.

Federal Fisheries Minister Dominic LeBlanc did not speculate on a new start date for construction when asked Monday. (CBC)

Still, Zahovskis is confident the project remains viable and will move forward if and when it satisfies all of the regulatory requirements, secures financing and lines up buyers for what it produces.

Falling share price

At least one nagging problem, low metal prices, has recently been resolving itself.

In Northcliff's latest securities filings in March, the company documented the ongoing recovery of international tungsten prices — up 67 per cent over the last two years — all the way back to profitable levels outlined in the mine's 2013 feasibility study.

"We're delighted to see that after two years or three years of very soft pricing," said Zahovskis. "It's certainly better than it was a few years ago."

The Sisson mine project includes a tailings pond and ore processing plant, covering 12.5 square kilometre of Crown land. (Northcliff Resources Ltd.)

Although company and government officials are publicly optimistic the mine will happen, investors have not been sharing that enthusiasm.

Northcliff Resources share price has fallen more than 50 per cent since it won federal EIA approval last summer, and last week it briefly hit a 17-month trading low of 8.5 cents.  

"It's difficult to understand," said Zahovskis.