Pine Point could live again, says Darnley Bay after early assessment

The historical Pine Point mine outside Hay River, N.W.T.,is stillviable and "looks like it will make money," according to the company hoping to revive it.

Last week, Darnley Bay Resources Ltd. announced a positive preliminary economic assessment for the proposed zinc-lead mine.

The company saysthe project's net value is about $341 million before taxes over a 13-year, initial mine life; and it will cost $154million toconstruct the minewith a payback period of 1.4 years.

"It's a good time to finance a project like this," said Kerry Knoll, executive chairman for Darnley Bay Resources.

"The main reason, of course, is being that zinc prices have been a little bit stronger this year and last year than they have been in the several years previous."

On Monday, the price of zinc was about $1.18 US per pound much higher than the expected cost to produce zinc at the mine.

"This project looks like it will make money all the way down to 60-cent zinc," Knoll said.

Nearby infrastructure means lower costs

Knoll is also encouraged by thelow cost to construct the project compared to other projects in the territory.

"The main reason it is lower than other projects in the Northwest Territories and actually than most places is because where it happens to be locatedit has infrastructure," Knoll said.

"We got the highway,you are not far from the town of Hay River;you have got power electricity coming from the Taltson hydroelectric plant and you also got the railroad in Hay River."

The Pine Point project was an operatingmine up until the late 1980s.

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In the 2000s,TamerlaneVentures Inc. attempted to restart mining on the property, but ended up falling into debt and lost the claim in bankruptcy.

Last December, Darnley Bay Resources purchased the project for $8 million in cash and shares.

Knoll is confident Darnley Baywill fare better than its predecessors.

"They kind of cornered themselves. They didn't get into trouble building a mine. They got in trouble getting into debt," Knoll said, referring to Tamerlane Ventures.

Feasibility work continues

Darnley Bay raised about $10 million in late 2016 to fund the purchase of the property and fund a drilling and exploration campaign.

If constructed, the mine will employ about321 full-time workers, including staff and contractors.

Knoll saysthe company is talking with local Indigenous groups regarding hiring opportunities.

He saysthe company will work through the permitting process for the project while it develops a feasibility study.