Mining Projects
Overview
       The   use   of   air   transport   in   mining   development   started   early   in   Canada.   Bush   planes,   like   the Beaver   aircraft,   were   crucial   to   the   development   of   gold,   silver   and   nickel   mining   in   northern Quebec, Ontario and Manitoba.
       Air   transport   enabled   people   and   equipment   to undertake   resource   exploration   and   development in    areas    that    are    virtually    inaccessible.    Roads and   railway   lines   were   eventually   built   to   the richest    of    these    deposits.    But    even    today, Canada    has    the    renown    of    being    the    largest single market for helicopter services.
       Despite   their   success,   bush   planes   and   helicopters   have   limitations   in   both   payload   and   flight distance.   Development   of   large-scale   mines   or   energy   exploitation   was   only   possible   in   the southern fringes of the north where rail lines or road links could be built economically.
         Many    types    of    cargoes    are    required    for    mine    development    and    operations.    The    main categories    include    construction    materials,    fuel,    equipment,    machinery,    cement,    explosives, camp   supplies,   food,   etc.   Fuel   is   the   largest   single   input   requirement   that   limits   northern development.   Supply   shortages   of   some   mining   provisions   may   be   a   nuisance,   but   a   fuel shortage   can   be   a   catastrophe.   A   mine   that   is   forced   to   shutdown   its   concentrator   for   lack   of fuel   may   never   be   re-opened.   The   camp   would   face   some   very   significant   safety   issues   without heat and electricity.
         Transporting    fuel    is    costly    and environmentally   risky.   Typically   fuel   is transported   in   bulk   using   rail,   truck   or barges.    Mines    that    have    no    railway, gravel    roads    or    marine    access    must operate   using   ice   roads   during   a   short winter season.
       Known   mineral   deposits   and   operating mines   near   Yellowknife,   NWT   is   identified on   Map   1.   A   seasonal   ice   road   serves   two operating   mines   and   a   third   mine   under re-development.   Two   of   the   properties   are diamond   mines   (Ekati   and   Diavik)   and   the third is a gold property (Lupin).
       These   mines   require   approximately   200   million   litres   of   fuel,   annually.   The   years   supply   of fuel   is   trucked   over   an   ice   road   that   operates   for   a   12-16   week   period.   In   addition   to   the   fuel,   a whole   years   supply   of   grinding   balls,   explosives,   plant   supplies,   non-perishable   camp   supplies, etc.   must   be   moved   over   the   400-kilometer   ice   road.   The   transportation   cost   for   fuel   is   about $40   million.   The   total   cost   for   all   freight,   including   building   and   maintaining   the   ice   road,   would be much higher.
       The   capacity   of   the   ice   roads   out   of   Yellowknife   could   easily   be   reached   if   the   season shortens,   one   of   the   mines   expands   (which   is   a   realistic   possibility   for   Lupin),   or   another property   tries   to   connect   to   the   existing   road.   Adding   more   lanes   over   the   lakes   could   extend capacity, but ultimately, safety concerns would impose an upper limit on traffic.
Transportation Challenges Affecting Mining in the Territories
       Diamond   and   gold   mines   require   large   volumes   of   fuel   and   other   supplies   to   be   trucked   in   to their   operations,   but   the   monthly   output   can   be   carried   out   by   air.   This   is   not   the   case   for   base metal   mines   (copper,   zinc,   nickel,   etc.)   that   have   much   larger   volumes   of   outbound   materials   to transport.   This   means   that   for   economic   operations,   they   have   better   transportation   service.   An example   is   the   undeveloped   Izok   Lake   discovery   that   is   located   in   central   Nunavut.   This   mineral deposit   is   of   world-class   proportions.   The   grade   of   zinc,   lead,   copper   and   gold   (16.5   million tones)   would   have   been   mined   long   ago,   if   it   were   accessible.   This   property   is   owned   by   a   large publicly    traded    international    mining    company    (Inmet    Mining)    would    produce    350,000    to 400,000   tons   of   concentrate   annually   and   employ   250   persons.   A   pre-feasibility   study   suggests that the mine would have a minimum life of 13 years based on known reserves.
       Several   major   mining   companies   have   considered developing   the   Izok   Lake   reserve   but   all   have   failed   to overcome    the    transportation    challenges    associated with   economically   moving   mining   supplies,   principally fuel, into the mine site and concentrates back out.
       Unlike   a   diamond   or   gold   mine   where   the   finished product   can   be   brought   out   in   a   small   airplane   on   a weekly   basis,   base-metal   mines   have   to   stockpile   their inventories   for   9   to   10   months.   In   addition   to   the direct   costs   of   ice   roads,   the   indirect   costs   of   financing inventories   contribute   to   the   total   logistics   costs   of   the mines.    Inmet    provided    the    following    comparative costs.
         Mining   companies   have   examined   many   creative   solutions   to   the   Izok   Lake   transportation dilemma.   Considerable   study   was   made   of   building   a   deep-water   port   on   the   north   shore   of   the continent   at   Bathurst   Inlet.   This   port   would   be   the   terminus   for   a   265-kilometer   all-weather road   to   the   mine.   The   cost   of   constructing   a   deep-water   port   and   building   the   road   is   estimated to be $250 million.
       In   addition   to   transporting   the   concentrates   to   a   point   where   they   can   be   shipped   to   a smelter,   there   is   a   requirement   to   haul   fuel   and   supplies   into   the   mine.   Also,   for   an   air   only option   to   be   feasible,   the   aircraft   must   also   be   able   to   transport   the   equipment   and   construction materials   to   site   as   part   of   the   facilities   construction.   An   Inmet   representative   has   estimated that   to   be   competitive   with   ground   transportation,   excluding   the   cost   and   maintenance   of   the road, the airship would have to offer a price of $50/ton.
            Isok   Lake   is   only   one   example   of   where   transportation   has   prevented   a   mine   from   being developed.   The   lack   of   access   from   mining   sites   to   conventional   transportation,   such   as   a   port, is   widespread.   In   an   attempt   to   resolve   this   issue,   the   Federal   Government   and   the   mining companies   with   interests   in   the   area   sponsored   a   $6   million   study   to   consider   developing   an   all- weather   road   that   would   connect   with   the   existing   ice   roads.   In   addition   to   the   commercial aspects   of   this   project,   there   are   important   social   issues.   Who   will   pay   for   the   road?   Do   the economic   benefits   offset   environmental   impacts?   How   will   a   road   affect   the   aboriginals   living   in the area?
Skyfreighter Canada Ltd
Mining Projects
Overview
       The   use   of   air   transport   in   mining   development   started   early in   Canada.   Bush   planes,   like   the   Beaver   aircraft,   were   crucial to    the    development    of    gold,    silver    and    nickel    mining    in northern Quebec, Ontario and Manitoba.
       Air   transport   enabled   people   and   equipment   to   undertake resource    exploration    and    development    in    areas    that    are virtually   inaccessible.   Roads   and   railway   lines   were   eventually built   to   the   richest   of   these   deposits.   But   even   today,   Canada has    the    renown    of    being    the    largest    single    market    for helicopter services.
       Despite   their   success,   bush   planes   and   helicopters   have limitations   in   both   payload   and   flight   distance.   Development of   large-scale   mines   or   energy   exploitation   was   only   possible in   the   southern   fringes   of   the   north   where   rail   lines   or   road links could be built economically.
       Many   types   of   cargoes   are   required   for   mine   development and    operations.    The    main    categories    include    construction materials,   fuel,   equipment,   machinery,   cement,   explosives, camp    supplies,    food,    etc.    Fuel    is    the    largest    single    input requirement     that     limits     northern     development.     Supply shortages   of   some   mining   provisions   may   be   a   nuisance,   but a   fuel   shortage   can   be   a   catastrophe.   A   mine   that   is   forced   to shutdown   its   concentrator   for   lack   of   fuel   may   never   be   re- opened.   The   camp   would   face   some   very   significant   safety issues without heat and electricity.
         Transporting    fuel    is    costly    and    environmentally    risky. Typically   fuel   is   transported   in   bulk   using   rail,   truck   or   barges. Mines   that   have   no   railway,   gravel   roads   or   marine   access must operate using ice roads during a short winter season.
         Known    mineral    deposits    and    operating    mines    near Yellowknife,   NWT   is   identified   on   Map   1.   A   seasonal   ice   road serves    two    operating    mines    and    a    third    mine    under    re- development.   Two   of   the   properties   are   diamond   mines   (Ekati and Diavik) and the third is a gold property (Lupin).
       These   mines   require   approximately   200   million   litres   of   fuel, annually.   The   years   supply   of   fuel   is   trucked   over   an   ice   road that   operates   for   a   12-16   week   period.   In   addition   to   the   fuel, a    whole    years    supply    of    grinding    balls,    explosives,    plant supplies,   non-perishable   camp   supplies,   etc.   must   be   moved over   the   400-kilometer   ice   road.   The   transportation   cost   for fuel    is    about    $40    million.    The    total    cost    for    all    freight, including   building   and   maintaining   the   ice   road,   would   be much higher.
       The   capacity   of   the   ice   roads   out   of   Yellowknife   could   easily be   reached   if   the   season   shortens,   one   of   the   mines   expands (which   is   a   realistic   possibility   for   Lupin),   or   another   property tries   to   connect   to   the   existing   road.   Adding   more   lanes   over the    lakes    could    extend    capacity,    but    ultimately,    safety concerns would impose an upper limit on traffic.
Transportation Challenges Affecting Mining in the Territories
       Diamond   and   gold   mines   require   large   volumes   of   fuel   and other   supplies   to   be   trucked   in   to   their   operations,   but   the monthly   output   can   be   carried   out   by   air.   This   is   not   the   case for   base   metal   mines   (copper,   zinc,   nickel,   etc.)   that   have much   larger   volumes   of   outbound   materials   to   transport.   This means    that    for    economic    operations,    they    have    better transportation   service.   An   example   is   the   undeveloped   Izok Lake   discovery   that   is   located   in   central   Nunavut.   This   mineral deposit   is   of   world-class   proportions.   The   grade   of   zinc,   lead, copper   and   gold   (16.5   million   tones)   would   have   been   mined long   ago,   if   it   were   accessible.   This   property   is   owned   by   a large   publicly   traded   international   mining   company   (Inmet Mining)     would     produce     350,000     to     400,000     tons     of concentrate    annually    and    employ    250    persons.    A    pre- feasibility    study    suggests    that    the    mine    would    have    a minimum life of 13 years based on known reserves.
           Several     major     mining     companies     have     considered developing    the    Izok    Lake    reserve    but    all    have    failed    to overcome     the     transportation     challenges     associated     with economically   moving   mining   supplies,   principally   fuel,   into   the mine site and concentrates back out.
       Unlike   a   diamond   or   gold   mine   where   the   finished   product can   be   brought   out   in   a   small   airplane   on   a   weekly   basis, base-metal   mines   have   to   stockpile   their   inventories   for   9   to 10   months.   In   addition   to   the   direct   costs   of   ice   roads,   the indirect   costs   of   financing   inventories   contribute   to   the   total logistics   costs   of   the   mines.   Inmet   provided   the   following comparative costs.
         Mining   companies   have   examined   many   creative   solutions to   the   Izok   Lake   transportation   dilemma.   Considerable   study was   made   of   building   a   deep-water   port   on   the   north   shore   of the    continent    at    Bathurst    Inlet.    This    port    would    be    the terminus   for   a   265-kilometer   all-weather   road   to   the   mine. The   cost   of   constructing   a   deep-water   port   and   building   the road is estimated to be $250 million.
       In   addition   to   transporting   the   concentrates   to   a   point where    they    can    be    shipped    to    a    smelter,    there    is    a requirement   to   haul   fuel   and   supplies   into   the   mine.   Also,   for an   air   only   option   to   be   feasible,   the   aircraft   must   also   be able   to   transport   the   equipment   and   construction   materials   to site     as     part     of     the     facilities     construction.     An     Inmet representative    has    estimated    that    to    be    competitive    with ground   transportation,   excluding   the   cost   and   maintenance   of the road, the airship would have to offer a price of $50/ton.
            Isok   Lake   is   only   one   example   of   where   transportation   has prevented   a   mine   from   being   developed.   The   lack   of   access from   mining   sites   to   conventional   transportation,   such   as   a port,   is   widespread.   In   an   attempt   to   resolve   this   issue,   the Federal   Government   and   the   mining   companies   with   interests in    the    area    sponsored    a    $6    million    study    to    consider developing   an   all-weather   road   that   would   connect   with   the existing   ice   roads.   In   addition   to   the   commercial   aspects   of this   project,   there   are   important   social   issues.   Who   will   pay for   the   road?   Do   the   economic   benefits   offset   environmental impacts?   How   will   a   road   affect   the   aboriginals   living   in   the area?
Skyfreighter Canada Ltd