Diamond mania hits Arctic
Prospecting firms stake record claims in Nunavut, NWT
By WENDY STUECK
00:00 EST Tuesday, February 03, 2004
VANCOUVER -- In a new wave of diamond lust, prospecting companies have laid claim to record tracts of the Canadian Arctic, snapping up permits for more than 70 million acres in the Northwest Territories and Nunavut, drawn by hoped-for diamond riches.
Nunavut issued a record 1,518 prospecting permits covering more than 64 million acres -- a huge jump from last year when just 190 permits were issued covering about nine million acres. Permits are issued once a year in February based on applications filed in December.
The biggest swaths in Nunavut went to De Beers Canada Exploration Inc., a division of South African diamond giant De Beers, which was granted 633 permits covering 28 million acres, according to the Nunavut Mining Recorder. BHP Billiton Diamonds Inc., the Canadian exploration arm of Australian minerals conglomerate BHP Billiton, snapped up 394 permits, covering 16.4 million acres. Vancouver-based junior Stornoway Diamond Corp., which kicked off interest in the region with its staking and exploration activities last year, secured 154 permits, covering 5.5 million acres.
"It's an all-time high, a crazy amount," Anna North, mining recorder for Nunavut, said yesterday from Iqaluit. "We knew it was going to be busy, but we didn't know it was going to be this busy."
John Robins, a partner in the three-man Vancouver-based Hunter Exploration Group, says the number of permits issued this year, and the area they cover, far exceeds the diamond-staking rush that followed the discovery of diamonds in the NWT in 1991.
"You're looking at four times the land size that was staked in the first diamond rush," Mr. Robins said. "Without a doubt, what's happening today in Nunavut and the NWT is one of the largest dispositions of mineral rights in Canadian history." NWT officials were still tallying results yesterday, but said they had granted about 600 permits, up from 200 last year.
The permits are the end result of work done last spring and summer, when companies pored over maps and sent out exploration crews to pinpoint potential target areas. There is a one-month window, beginning Dec. 1, to apply for the permits, and would-be prospectors begin lining up around the clock in front of mine offices in Yellowknife and Iqaluit in November in the hopes of nabbing them. Lineups are outside, and team members spell each other off every hour or so, depending on the weather. Traditional claims involve going to a site, usually by helicopter, and pounding claim stakes into the ground. For prospectors, the difference in costs can be enormous.
"You're looking at a cost of 10 cents an acre to register a claim, whereas if you are going to stake a claim, that will cost somewhere around $1.50 to $2.00 an acre," Mr. Robins said.
Mr. Robins, who said members of his team were in line for seven days in Iqaluit in December -- Mr. Robins went in 2002 -- were "80 per cent successful" in securing the permits they were after.
Companies base their applications on previous, preliminary exploration work and must pay a $25 fee for each block they claim under a grid system that covers the whole region, as well as a 10-cent-an-acre deposit that is refunded after they conduct exploration work.
If two companies apply for the same piece of land, the applicant first in line gets the ground.
If more than two prospectors apply, the application is not granted and the land becomes up for grabs again.
Ms. North said many of the permits were granted in the area around Melville Peninsula in Nunavut.
The prospecting permits system is set up to encourage exploration in remote areas. Prospecting permits are not granted for any property that is subject to an existing mineral claim or beside an already-claimed block.
Mr. Robins was part of a joint exploration venture that early last year announced a diamond discovery and the securing of a big land position in Nunavut, sparking a lot of interest in the region.
Stornoway spent about $5-million on its seven-million acre Aviat diamond project in Nunavut last year. BHP Billiton, which owns 80 per cent of the Ekati diamond mine in the NWT, last year paid $7.1-million to acquire a 20-per-cent interest in the project.
Canada is expected to become the world's third-biggest diamond producer by value, and diamond exploration and mining has pumped millions into the northern economy. Canada has two diamond mines, Ekati and Diavik, both in the NWT. Snap Lake, under development by De Beers and also in the NWT, is expected to come into development some time in the next few years. Tahera Corp. is also developing the Jericho diamond mine in Nunavut.
GEM FEVER GRIPS ARCTIC
Mining companies have staked millions of acres across Nunavut in hopes of hitting the next big diamond find
PERMITS ISSUED: 1,518
De Beers Canada: 633 (42%)
BHP Billiton Diamonds: 394 (26%)
Stornoway Diamond: 154 (10%)
Other: 337 (22%)
TOTAL AREA: 64 million acres
De Beers Canada: 28.1-million
BHP Billiton Diamonds: 16.4-million
Stornoway Diamond: 5.5-million
Other: 14.1-million
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