Winnipeg Free Press - PRINT EDITION

After the gold rush

Snow Lake bursting at its seams as mining activity transforms town

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SNOW LAKE, MAN. -- The timing of Gerard and Roxane Lamontagne's decision to return to their home town of Snow Lake after 14 years in Edmonton couldn't have been better.

The young couple, in partnership with Lamontagne's cousin, bought the Snow Lake Motor Inn and will eventually invest about a half million in the Main Street watering hole that Gerard spent plenty of time in during his youth.

 

The tiny downtown strip the hotel is on is a little down on its heels, to put it kindly, and Lamontagne is spearheading an effort to spruce things up. He's proud to point out that J.S. Redpath Ltd., the large mine contractor, is opening its first Manitoba office across the street from his business in what had been an abandoned storefront.

"We're already seeing business pick up," he said. "We're hoping to be part of the rebirth of the town."

The fact is, Lamontagne is investing in his Snow Lake business simultaneously with hundreds of millions of dollars being spent creating a full-on boom town.

That's right. Snow Lake, population 800, a town that had been on a backward slide for many years, is about to become the poster child for a northern mining-town revitalization.

It helps when one of the stalwart Canadian mining companies with a long legacy of activity in Snow Lake -- HudBay Minerals Inc. -- made one of its biggest finds in decades near the town and is in the midst of spending $700 million to build a new mine and concentrator.

It also helps that warning bells continue to ring throughout the global financial markets, keeping gold prices ridiculously high.

That means the town's long-standing gold mine, closed since 2005, is in the process of being reopened by QMX Gold Corp. once it raises enough capital to do so.

Another company, Bactech Environmental Corp., is well underway in its planning process to spend about $18 million to set up a bioleaching plant to extract the gold from a decades-old concentrate pile as well as remediate the pile that is slowly leaching arsenic into the ground.

To get ready for what may be more than a tripling in its population, the isolated town, 685 kilometres north of Winnipeg and almost equidistant between Thompson and Flin Flon, has been very busy.

A new water treatment plant has been built, a $9-million waste-water plant is under construction (with the help of a $2-million grant form HudBay as well as an $800,000 loan) and the town has issued three different requests for proposals to clear lots for about 150 new homes.

In addition to the Lamontagnes' investment, the owner of the town's lone grocery store is preparing for a $1-million expansion.

Clarence Fisher, Snow Lake's mayor, said it is nothing short of a transformation of the town.

"What's going on is going to change the history and trajectory of the town," Fisher said. "For a number of years, Snow Lake was on a fairly slow downward slide. This is an opportunity to return to what we use to be -- the jewel of the north."

Developments in Snow Lake are a bright spot on the eve of the Manitoba Mining and Minerals convention that started yesterday.

With the industry facing falling metal prices once again -- nickel prices are down 28 per cent since the beginning of the year, copper is down 16 per cent and zinc is off 13 per cent -- exploration companies are having a hard time raising money.

A First Nations protest Thursday at the conference underlined the dysfunctional dynamic and the increasing dissatisfaction expressed by the exploration companies and First Nations over the manner in which the province of Manitoba is handling the duty to consult First Nations over exploration work taking place on traditional lands.

Manitoba has been sinking like a tonne of ore in the Fraser Institute's Survey of Mining Companies. In its listing of how miners rank global jurisdictions on a number of criteria, Manitoba was No. 1 in 2007. In 2011 it was No. 9. In its 2012 report, the Fraser Institute had Manitoba down in 20th place.

One senior industry official said it's likely the province will sink even further in the 2013 list.

But that kind of doom and gloom is lost on the folks in Snow Lake.

HudBay has a 200-bed temporary camp in Snow Lake during the construction phase of Lalor. Brad Lantz, HudBay's vice-president of its Manitoba business unit, said the camp is not even big enough to handle the construction workers who are still coming on stream.

Construction of the concentrator has not yet begun, and at its peak, Lantz said it will need about 350 people. He said the mine itself will need 250 to 300 people when it is fully operational by 2015, along with another 70 to 80 at the concentrator. That's more than twice the number of HudBay employees at Snow Lake a year ago.

QMX, formerly Alexis Minerals Corp., just raised $17.5 million in bridge financing but still needs about $20 million in equity infusion in order to fire up the Snow Lake Mine (formerly New Britannia). When the gold mine was last in operation in 2005, it employed about 250 people.

Ross Orr, CEO of Bactech, said, the massive pile of concentrate sitting beside QMX's Snow Lake Mine headframe contains about 92,000 ounces of gold. When Bactech's plant is up and running, it will need a workforce of about 20 people.

"If all goes well, we'll be producing gold by August," said Orr.

martin.cash@freepress.mb.ca

Snow Lake

The Little Town That Could

-- Including the $700 million in development costs for HudBay's Lalor mine and concentrator, the industry is planning to spend about $800 million in Snow Lake over the next few years.

-- The town has built a new water treatment plant, is building a sewage treatment facility and there is an 18-unit retirement condo under construction.

-- Requests for proposals are out to develop as many as 150 new residential lots.

-- The town is floating a proposal to build a mine closure and remediation centre.

-- Snow Lake also has a study underway to redevelop its modest airport.

Republished from the Winnipeg Free Press print edition November 16, 2012 B4

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