A company drilling in the neighbourhood of the former Pine Point mine says results from its most recent core samples are exciting.

Osisko Metals now hopes to continue drilling in the area but must wait for the relevant permits to be granted.

The local Deninu K’ue First Nation, in a letter lobbying regulators to get on with approving the company’s plans, said the process was “too complicated” and hindered economic investment in the region.

Advertisement. Story continues below

Osisko, which owns Pine Point Mining Limited (PPML), has already completed a winter drill program after acquiring the lead-zinc project from Darnley Bay Resources in February.

Killian Charles, vice-president of corporate development at Osisko Metals, said: “We are fairly confident we are going to identify a deposit that will be attractive enough to bring to development, construction, and eventual production.”

Core samples are split in half once retrieved, with one half sent to storage and the other sent to a lab for tests known as assaying. So far, Charles said, Osisko is “very happy” with the percentages of zinc and lead indicated in results.

The original Pine Point lead-zinc mine ran from 1964 until 1987, when the price of metal dropped, rendering the project too costly and shuttering the town. The data from that era doesn’t meet today’s standards, so PPML is completing more drilling to convert and upgrade the historical resources.

Prices for lead and zinc are once again favourable, the company believes. Pine Point is particularly appealing as there is infrastructure already in place, including road access, a railroad in nearby Hay River, and a power substation on-site.

“It does help control the potential cost of building such a mine,” said Charles, who believes that will score Pine Point extra points with potential investors. Reopening a mine there will require substantial investment – the company is already planning to spend $10 million on the project in 2018.

So far, the company has drilled 129 holes and retrieved almost 8 km of core samples through this program, with a goal of drilling an additional 40 km of samples from 700 more holes this year. PPML is working toward a new land use permit and water licence for that drilling, which it hopes will be issued in early July. The company says the next step is “confirmation drilling” to verify the historical resources.

Licensing delays

PPML submitted water licence and land use permit applications to the Mackenzie Valley Land and Water Board at the end of March. In late May, the board requested the company amend its application as the various types of drilling cannot use more than a certain amount of water.

In an email to Cabin Radio, Shelagh Montgomery – the board’s executive director – said: “The land use permit PPML currently holds allows them to conduct exploration drilling on 40 leases and 13 claims, but is limited to the use of three drills.

“The confirmation drilling they are seeking approval for would allow them to increase drilling activity by using an additional nine drills on a subset of their leases and claims.”

More drills equals more water used – but also means PPML can work more efficiently to get the drilling done.

PPML has since responded with a commitment to use no more than 300 cubic metres of water per day across its drilling programs, which is the maximum allowed under the type of water licence in question.

A public review process is now taking place, with the board due to make a decision after June 18. Charles is confident the requested licences and permits will be approved.

Earlier this month, the Deninu K’ue First Nation (DKFN) sent a letter to the board questioning its second call for comments on the project’s application.

“It is a simple, straightforward application, but [the regulator] seems to be making the permitting process too complicated. This is bad for DKFN because we are missing out on the economic activity we depend on to benefit the community of Fort Resolution,” wrote Chief Louis Balsillie.

Balsillie claimed the delay reflects poorly on the Northwest Territories and may discourage other companies from exploring similar opportunities in the North.

Of the approximately 11 people on the job site, six are local employees.