Progress on Cantung and Mactung could come by end of April
The future of the Cantung mine and Mactung deposit may become a little clearer by the end of April after seven years in government ownership.
Formerly owned by North American Tungsten, the two properties in the western Mackenzie Mountains have been burning government money since the company folded in 2015.
The NWT government paid $2.5 million to acquire the Mactung exploration project after North American Tungsten filed for bankruptcy protection. The territory has spent another $200,000 in associated clean-up and maintenance costs, though ongoing costs are understood to be minimal.
The federal government, meanwhile, assumed responsibility for the old Cantung mine, which operated on and off between 1962 and 2015. A staff of 12 works at the site and costs since 2015 have now reached almost $44 million according to court filings this month.
By April next year, Ottawa will have spent more than $50 million on wages, clean-up work, consultants, fuel (which accounts for almost $7 million alone), insurance and other costs associated with Cantung.
The two properties have long been seen as an albatross around the necks of the governments, who agreed to market the pair as one package to interested buyers.
“There has been little to no interest over seven years,” Frame Lake MLA Kevin O’Reilly, who has closely tracked the properties’ fate, said earlier this month. “As far as I can tell … all attempts to sell the Cantung and Mactung properties have failed.”
Yet some form of sale could be imminent.
The latest report from North American Tungsten’s court-appointed monitor – an independent third party that guides insolvency proceedings and their aftermath – suggests developments are possible by the end of April.
A request for proposals that sought buyers for the properties closed on February 25, the report states, having been extended several times either by potential bidders or by Indigenous governments. At least a dozen governments – including the NWT, Yukon and federal governments – have some say in the process, making this a complex sale.
The monitor states “multiple submissions” were received from shortlisted companies before the February deadline.
A committee of various governments’ representatives met in Vancouver at the start of March “to identify a preferred proponent” but did not reach a conclusion, the report continues. A decision and further communication with the interested parties is now expected before May.
While Cantung’s tungsten reserves have dwindled after decades of mining, several years ago the old mine was being contemplated as a possible processing location for a nearby lithium deposit. Mactung remains one of the largest tungsten resources in Canada but opening a mine there is projected to cost half a billion dollars or more.
O’Reilly believes there is little chance of anyone taking on the two properties “without significant concessions and subsidies,” but NWT industry minister Caroline Wawzonek said earlier this month her department was “quite active right now in terms of doing their due diligence and hoping for a positive outcome on the sale.”
Wawzonek said the governments were proceeding “to a point where there is hopefully a final and solid proponent who could take over and move this forward.”
Both the territorial and federal governments have declined to reveal the identities of interested parties, describing the proposed transaction as sensitive.