Avanti Mining’s planned Kitsault molybdenum mine could be part of a northwest economic development loop, says its president.
Speaking last week, Gordon Bogden said molybdenum, used as a steel strengthener, could end up in any number of pipelines being planned to carry liquefied natural gas across the Northwest to super-cooling facilities on the coast.
“Seventy per cent of molybdenum is used for steel alloys. Now wouldn’t that be a wonderful economic cycle,” said Bogden.
Bogden’s comments are rooted in off-take agreements already signed between Avanti and steel manufacturers in Korea and Germany.
“We’re not in the steel business anymore in Canada, so any steel would have to be brought in,” he added.
Those off-take agreements are crucial to Avanti’s securing of up to $650 million in financing to complete the nearly $1 billion package needed by the company to begin construction of its mine at Kitsault on the North Coast.
The company has assembled a group of six international banks that would lend money based partially on those off-take agreements and is anticipating a final financing agreement as early as this month.
A tour of the area and mine site two weeks ago by more than a dozen representatives from those banks and other agencies was part of the effort to secure that final arrangement.
“We’re not there yet, but we’re moving forward,” said Bogden.
Although the company received provincial environmental approval last year, it didn’t receive federal environmental approval until this year.
Based on final financing the company wants to start construction as soon as weather permits next spring, anticipating a two-year project aimed at completion in 2017.
Following the mine site tour, participants flew to Prince Rupert for an evening dinner and reception.
Prince Rupert Mayor Jack Mussallem, who provided a pep talk on economic activity in his city to the group, was pleased with one way the Avanti project could benefit Prince Rupert: Shipping Kitsault moly concentrate to Korean steel making customers through port facilities at Prince Rupert.
“I’ve been aware of this and have been talking to various people about this,” said Mussallem.
“Anything that adds to what is being shipped through the Fairview container port would be welcomed.”
The idea of shipping Kitsault moly through Prince Rupert had been considered early on in Avanti’s planning and then discarded in favour of trucking to Vancouver for shipment overseas to various countries.
But now, said Avanti’s Bogden, the idea of using Prince Rupert for shipping to Korea is in discussion.
“It’s certainly viable and we’re looking at that,” he said.
The Korean off-take sales agreement is for 20 per cent of the mine’s production for 13 years.