Manitoba mining industry looks to the future

Hey there, time traveller!
This article was published 16/01/2024 (637 days ago), so information in it may no longer be current.

A number of new mineral exploration drilling projects have begun this winter, including what is likely the largest lithium exploration project in the province, as Manitoba continues to lag other provinces with similar geologies in exploration activity.

At least two companies are starting lithium exploration work close by the Tanco lithium mine near Lac du Bonnet, the oldest lithium producer in the country and only the second operating mine.

New Age Metals Inc. has commenced a 15,000 metre program, funded by is joint venture partner, Mineral Resources, an Australian company that is the fifth largest lithium producer in the world.

Late last year Snow Lake Lithium acquired a property right next to Tanco and will be using some of its $7.7 million recently raised to explore that property.

Frank Wheatley, the president of Snow Lake Lithium, said, “As they often say in the mining industry, the best place to look for a mine is beside an existing one.”

Snow Lake is also on schedule to produce a pre-feasibility study on its property in Snow Lake whose resource has an estimated net present value of $1.7 billion.

Canadian Gold Corp., a newly named company that acquired Satori Resources last year, is starting the second phase of drilling at its Tartan Mine gold project near Flin Flon. It is the site of a mine that operated for a few years in the 1980s.

“It is going to be a busy winter,” said Ed Huebert, CEO of Canadian Gold.

Huebert and others in the exploration business are happy with the current cold spell. Moving drill rigs around on ground that’s not completely frozen can be tough work.

Harry Barr, the CEO of New Age Metals, said he believes his company’s $7 million drilling plan for this year is the largest among the 19 companies currently active in exploring for lithium in the province.

He said that while lithium prices have come down by about 80 per cent from about a 200 per cent spike in 2022, New Age’s funding partners are still committed to the project.

“I wouldn’t say our partners are not concerned but this is the biggest budget we asked for and we got it,” Barr said. “They are also looking at other projects in Canada.”

Snow Lake’s Wheatley said that lithium is still not a mature market and as such, that kind of price volatility should be expected and it will be moderated when the electric vehicle market becomes more established.

But the spate of new drilling projects is not enough to make everyone in the industry declare that the province has turned the corner.

MaryAnn Mihychuk, president of the Manitoba Prospectors and Developers Association, said that while she and the industry are optimistic, there is still evidence that the province is lagging its neighbours.

“We do have more companies that have taken out position in Manitoba than ever before, but it is still significantly less than comparable provinces like Ontario, Quebec, B.C. and Yukon,” she said.

Recent data from a company called DigiGeoData, which accesses all the publicly available information from provincial mineral regulators, show that there are 69 companies active in Manitoba, compared to 393 in Ontario and 111 in Yukon.

DigiGeoData counts 120 projects (in all stages from grassroots to production) in Manitoba compared to 1,020 in Ontario.

Dan Subtelny, DigiGeoData’s vice-president of business development, said, “There is significantly less activity in Manitoba than in those other jurisdictions.”

While there has been progress made, Mihychuk believes Manitoba is still behind other provinces when it comes to the ability of exploration companies to forge partnerships with First Nations.

Mihychuk points out that while Ontario is obviously a much larger province, its geologically interesting territory is not much larger than Manitoba’s.

She believes there are a couple of important issues holding Manitoba back. One is regarding the lack of access to potential mineral deposits in remote areas of Manitoba and there continues to be far fewer successful partnerships with First Nations than there is elsewhere in the country.

“In the projects where the company has a good relationship with the First Nation, the projects are doing very, very well,” she said. “Our geology is absolutely the best. We clearly have the resources. We’re hopeful that more and more partnerships can develop between First Nation communities and companies.”

Other provinces have instituted royalty sharing with First Nations. And even though many exploration projects will not generate revenue for up to 15 years after a discovery, Mihychuk said implementing such revenue sharing would be an important signal to First Nations about the sincerity of the partnerships.

As well, Mihychuk said her organization intends to urge the new NDP government to consider re-visiting a continuation of construction projects on the roadway on the east side of Lake Winnipeg.

“It is our No. 1 priority,” she said. “We think it will provide a significant boom to our ability to search for critical minerals. The province wants us to search for critical minerals and the geological basis is there for us to go in but the economics just don’t work without access.”

martin.cash@freepress.mb.ca