Pine Point mine could be operational as early as 2023, says CEO

• Editor's note: This story has been updated on Jan. 10, 2020, to better reflect the interview with Osisko Metals CEO Jeff Hussey, and to correct the quotes.

A Northwest Territories zinc mine could be in operation as soon as 2023, but that could be affected by the next U.S. presidential election in 2020.

That's according to Jeff Hussey, CEO of Osisko Metals Inc., which owns the Pine Point zinc deposit and former mine near Hay River, N.W.T.

Zinc is mostly used to protect steel and iron from rust, through a process called galvanization. In 2017, the National Association of Corrosion Engineers found that rusted infrastructure projects, like bridges, cost $2.7 trillion US worldwide.

Osisko Metals bought the Pine Point project in December 2017. The original mine went out of production in the late 1980s.

Hussey said he is encouraged by the most recent mineral resources estimate report, which estimates that 5.3 billion pounds of zinc and 2.1 billion pounds of lead can be extracted from the mine — a 36 per cent overall increase from Osisko's 2018 numbers.

Osisko also has collaboration agreements with the Northwest Territory Métis Nation and Deninu K'ue First Nation, is in discussion with K'atl'odeeche First Nation, and the company now has twice the mineral claims than when it started, Hussey explained. 

All Osisko needs to do to make the mine operational, Hussey continued, is to build a new mill, buy a mining fleet and build a work camp.

"It's all pushing Pine Point forward to become a top 10 zinc producer."

Hussey said another reason why the company is trying to speed up the mine's development is to take advantage of high zinc selling prices and the low supply that he expects will exist in 2023.

"What we're trying to do is push Pine Point ahead as fast as is possible, to meet the low inventory." 

He said it's a turning point for the company: they can now prove that new mining operations at Pine Point could be viable for investors. 

But Hussey said the market could be affected by the next U.S. election.

In August 2018, China announced it was slapping a 25 per cent tariff on American zinc and copper products. The diplomatic spat continues to cause zinc prices to tumble on the London Metal Exchange (LME) in the last year, hitting a two-year low of $2,210 US per tonne in September. 

While the conflict is between China and the U.S., Hussey said the trade dispute creates uncertainty for investors who might be interested in the zinc market.

"If there is a major geopolitical scenario, either a war, or you know, a major thing like that — that can change market sentiment," Hussey said.

"In 2023, we are hoping that Mr. Trump will not be in power because of the uncertainty he causes, which works against the market."

'Probably optimistic'

Darcy Hirsekorn is a geologist at Uranium Energy Point in Saskatchewan. Before moving to the Prairies, he sat on the board of the NWT & Nunavut Chamber of Mines. He says a four-year timeline to revive Pine Point could be tight for Osisko Metals. 

"That's probably optimistic — as most exploration and mining companies tend to be," Hirsekorn said.

"It's not unusual for projects to take between five and 10 years."

However, Hussey said all of the supports for a modern mine are already on site: there is hydroelectric power there, the mineral plains are accessible by rail and there are paved roads to the site.