Company takes steps to reopen Kitsault mine

  • Mar. 1, 2011 7:00 p.m.

BACKERS OF a plan to revive a molybdenum mine at Kitsault northwest of here expect to submit it to the provincial government for environmental approval this year.Avanti Mining, based in Colorado, has spent the better part of the last three years working on the plan it says will provide 360 jobs over 15 years by extracting molybdenum, which is prized as a steel alloy strengthening agent.An information session here March 15 will provide more details on the project and studies required and is part of the BC Environmental Assessment Office procedure leading up to a formal application for approval.Although not required to do so, Avanti CEO Craig Nelson says the company will also hold sessions in Prince Rupert and in New Aiyansh.“Our goal is to be very progressive in our approach,” he said.Avanti has the benefit of existing power, roads and other infrastructure, which will help ease some of its development costs.Because an active mine existed there in the late 1970s/early 1980s before closing due to poor markets, the Avanti proposal would not normally have been required to go through a renewed provincial environmental approval.But Nelson said the company asked for its proposal to be vetted through the provincial system because it provides a review structure that is familiar for provincial, federal and Nisga’a Lisims Government environmental and other officials.“We’re really getting a sense of a renewed sense of cooperation for this project,” said Nelson of discussions with regulatory authorities.He said the Nisga’a Lisims Government specifically stated the only review process that would comply with the Nisga’a treaty was the provincial one.Developing a close relationship with the Nisga’a is important for Avanti because of the proximity of the mine property to the Nass Valley, added Nelson.“We see jobs and business opportunities [for the Nisga’a]. We’re making a considerable effort,” he added.Avanti has had general discussions with the Nisga’a about economic benefits but nothing formal has been concluded yet. The Avanti mining property is approximately 80km by road from the Nass Valley and is at the head of Alice Arm. From Terrace, the distance is approximately 200 kilometres.Avanti will maintain a camp at the location with workers rotating in and out on a regular shift schedule.Molybdenum concentrate will be trucked out to Terrace for onward shipping.Nelson’s particularly excited about sales opportunities to Asian steel makers, saying it has a letter of intent signed with one Korean company and another with a company in a country he won’t yet identify.The focus is on lining up investors to help cover development costs and customers agreeing to buy the product.The advantage in dealing with Asian companies is that their resident countries can provide investment monies through what Nelson calls “para-statal development banks” at very attractive rates.“What they want to do is help their local steel makers to secure raw materials. Except for China, these companies don’t have their own raw materials,” said Nelson.Overall, Nelson says investors would also be attracted by the property’s quality and by the security of doing business in Canada.