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Falconbridge invests in phosphate project (6/02)

By Ian Ross News of nickel-mining giant Falconbridge Ltd.

By Ian Ross

News of nickel-mining giant Falconbridge Ltd.’s alliance with two junior mining companies seeking to develop a phosphate deposit in the Hearst area has heightened hopes of an operating mine, expected to be developed within the next few years.

Falconbridge has signed on with two junior mining companies, MCK Mining Corp. and Baltic Resources Inc., in a joint venture partnership to form an alliance to consider development of a fertilizer chemical plant processing thousands of tonnes of phosphate rock.

The ore would be drawn from a site still under exploration, known as the Martison Phosphate Project, located in a remote area about 70 kilometres north of Hearst.

An MCK press release indicates the current resource is capable of sustaining fertilizer production for 25 years, but provides no information on the size of the deposit still under exploration.

Falconbridge is investing $200,000 by buying shares in the two junior mining companies to finance a drilling program.

“We see this news as something very positive if Falconbridge is buying shares,” says Eva Gosselin, acting general manager of Hearst’s Nord Aski Non-Profit Development Inc., “But we realize it’s going to be a slow process because exploration is an eight to 12 year period before it goes into production.”

Still, it offers a chance to diversify an area economy heavily reliant on the forest products industry.

In the development plan, the companies propose building a fertilizer chemical plant capable of producing 800,000 tonnes of fertilizer a year from Martison.

The alliance represents a new business opportunity for Falconbridge for the millions of tonnes of sulphuric acid produced as a byproduct at their smelters in Timmins and Sudbury.

“The North American market for acid is extremely poor,” says Warren Holmes, Falconbridge’s senior vice-president of Canadian mining operations, but one use for sulphuric acid is in the chemical production of fertilizer.

Phosphate rock and sulphuric acid are the two main ingredients needed to make phosphate fertilizer.

But Holmes emphasizes Falconbridge has no intention of straying from its core business of mining for base metals.

“Quite frankly we are not interested in being in the phosphate business ourselves,” says Holmes. “Our business is in nickel, copper and zinc business.

The Martison project would use up to one million tonnes of acid a year.

Falconbridge is also assigning personnel to the project to be involved in evaluating the mining plan and reserves, metallurgical research, byproduct potential, transportation and plant site options.

MCK Mining president Stephen Case was not available for comment prior to Northern Ontario Business press time.

Though developers have said little publicly about their ongoing exploration efforts, Gosselin says the Martison deposit is known to be “quite extensive,” almost on par with Agrium’s Kapuskasing deposit which began production in 1999 and now employs 170.

The Martison Project site is 110 kilometres north of Agrium’s phosphate mine north of Kapuskasing.

“It’s a large phosphate rock deposit similar to what’s being mined in Kapuskasing by Agrium,” says Rob Ferguson, a development officer with the Ministry of Northern Development and Mines in the Timmins district, based on his private discussions with MCK.

“There’s great potential there and if everything comes together it could be a very sizable investment.”

MCK has also held talks with the Constance Lake First Nation to work out past grievances over Aboriginal rights issues concerning shared use of what is considered the Native community’s traditional hunting and trapping lands, along with their participation in any future development decisions.

“They have made good progress in coming to an understanding with the First Nations and things are positive,” says Ferguson.

The area has been studied since the 1940s when companies such as Shell Oil and Falconbridge periodically drilled for nickel, uranium and other commodities, but exploration has never approached the feasibility stage.

Over the years exploration programs have come and gone until the feasibility study at the Kapuskasing Agrium deposit sparked renewed interest in the area.

Ann Wilson, a provincial district geologist in Timmins, considers Hearst and the Kapuskasing structural zone, an area ripe for more exploration, but activity still remains spotty. Most of the claims staked in the region have strictly been for diamonds and exploration is strictly grassroots in the zone, a geological region which swoops from Wawa north to Attawapiskat.

“It’s a broad swath of territory and anything in there is fair game.”