Canadian Zinc hopes to start production at Prairie Creek mine in 2020
Feasibility study released Oct. 31 estimates $279 million to bring the mine into production
The Canadian Zinc Corporation believes production could start at Prairie Creek Mine by August 2020.
This is according to results of a feasibility study commissioned by the company, which was released Oct. 31.
The study, put together by mining consulting firm AMC Mining Consultants, estimates the Prairie Creek mine could pull in $1.2 billion over its 15-year mine life and create 330 full-time jobs in the Dehcho region.
All of this is dependant on two major things, according to Alan Taylor, chief operating officer of Canadian Zinc. The company must get final approval to build an all-season road to the mine — which is at an advanced stage of construction already — and it must raise the money needed to both build the road and revive the mine.
To do that, the company is out wooing investors to the tune of $279 million.
"It's somewhat encouraging," said Taylor of the the current state of investor appetite for mining projects. "It's a pretty cautious market out there. It's not easy — everything comes at a cost."
In September, the Mackenzie Valley Environmental Impact Review Board recommended the all-season road go forward, and passed the decision along to the federal minister of Crown-Indigenous Relations and Northern Affairs. Canadian Zinc expects to receive an answer by the end of February.
The Prairie Creek property is surrounded by the Nahanni National Park Reserve. It can operate there pending all required regulatory approvals.
The construction of the all-season road has received the support of the Nahanni Butte Dene First Nation, assuming certain conditions are met.
Tom Hoefer, executive director of the N.W.T. and Nunavut Chamber of Mines, described two key factors Canadian Zinc will need in order to attract investment — the health of the zinc market and the perceived risk of investing in the Northwest Territories.
"Right now the market is doing very, very well," said Hoefer of the cost of zinc.
"That's a result of a lot of zinc mines around the world having closed, so zinc supply has been drying up, but the demand is still there."
As far as risk goes, Hoefer said Canadian Zinc has done a lot of work negotiating with Dehcho communities and has worked with regulators.
"So they've derisked it a lot," he said.
Hoefer says he's optimistic about the viability of Prairie Creek mine, and the impact such an operation would have on the Dehcho region.
"Having a mine in that region is going to boost the economy a lot," he said. "All the spending goes around that — people spending their paycheques, paying rent, buying groceries and all of that would be a really good injection for that region."
Once Canadian Zinc gets permitting in place for the all-season road, Taylor says the focus will be raising money.
"[We'll] talk to financial institutions about our future needs for the operation and see if we can secure funding for development," he said.