A prominent Thunder Bay contractor and mining executive has big plans to refurbish a derelict ore dock and put a former industrial brownfield back to work on the city's waterfront.
Pierre Gagne closed the acquisition of the former Northern Sawmill property this spring and picked up an adjacent dock with a steel trestle structure once used to load lake freighters with iron ore.
Gagne, who is also chairman of Rockex Mining with three iron ore properties about 300 kilometres northwest of Thunder Bay, has ambitious plans to use the combined 160-acre property for an ore storage and loading terminal.
“The port that I bought, even if I didn't have the iron ore, I would have bought it anyway,” said the Gaspé-born Gagne, who sealed the deal with GE Capital in late March for an undisclosed price.
The plan is to ship ore by slurry pipeline 85-90 kilometres from a future open pit and concentrator site to a location near Sioux Lookout, which has adequate power, natural gas connections and rail access. From there, Gagne said it can be shipped anywhere in North America, or to port in Thunder Bay, destined for steel mills on the Great Lakes or overseas.
If the mine's economics look positive, Gagne estimates ore could be shipped within two years.
The entire project has the potential to create hundreds of jobs in the region with 700-800 jobs at the pit and concentrator, 400 to 500 jobs at an iron ore pellet or nugget plant, and possibly 50 or more at the Thunder Bay loading facility.
Gagne has been a part-time prospector involved in the local mineral exploration scene for 20 years, including as a director of MetalCorp, a Thunder Bay precious and base metal junior miner.
He was familiar with the sawmill site and dock since the late 1990s. His heavy marine, civil and mining construction company – Pierre Gagne Contracting – performed some environmental remediation work there.
The 500-metre long dock was last used in the late 1970s, about the same time as the closure of the Steep Rock iron mines in Atikokan.
Though some building demolition has already occurred, Gagne said the long and high trestle used to load freighters will remain. Atop the structure, a mobile ship loader on rails will be installed and fed by conveyor from an iron ore pile on the property.
“With the belt loader, we're going to load 5,000 to 6,000 tonnes an hour.”
Four buildings on the property, including a 8,000-square-foot office, could be leased until operations begin, said Gagne.
With the four megawatts of available power and nearby rail connections to both CN and CP, Gagne is receptive to outside companies using the dock and already admits to having conversations with other iron ore juniors in northwestern Ontario, and even Cliffs Natural Resources, which has a chromite deposit in the James Bay lowlands.
“It's open to anyone who wants to load ore, but Rockex will have priority.”
The company's main project, Eagle Island, at the west end of Lake St. Joseph, was once explored by Algoma Steel (now Essar) and contains an estimated more than one billion tonnes of ore.
Gagne had been eyeballing those claims since the early 1990s. When bankrupt Algoma let the claims lapse in 2007, Rockex picked up the 5,300-hectare property a year later, along with all of the drill data.
The company even installed Armando Plastino, a former Essar Steel Algoma CEO, as a director.
“Every time we drill we find more,” said Gagne. “Now we're getting close to two billion tonnes.”
A preliminary economic assessment for a large open pit began last year.
Once that's released, Gagne said they'll need to raise $15 million for a feasibility study which will evaluate potential customers and if the final production will be iron ore pellets, nuggets or briquettes.
The company also needs to find a full-time CEO and secure a “strategic partner,” likely an international steel maker in North America or China, for an off-take agreement and to finance the development. Those early discussions have already begun.
Gagne said the freight rate quoted by CN to ship from Sioux Lookout to the Pacific port of Prince Rupert, B.C. was so favourable, they're confident they could easily ship to any destination in North America.
“There are many steel mills around the world looking at us, talking to us and following us.”