FORT FRANCES, Ont. — The mayor of Fort Frances is keeping her fingers crossed for the long-term viability of New Gold's Rainy River mine, 65 kilometres northwest of town.
When it started up in late 2017, the mine's projected life expectancy was 14 years.
That may change, however, when New Gold issues a Mineral Reserves and Resources update in the first quarter of 2020.
Fort Frances residents, including many former workers at the shuttered Resolute paper mill, are among the hundreds of people employed at the mine.
Mayor June Caul says a New Gold official gave the impression at a meeting last spring that the mine was likely to operate for seven more years "at the most."
Tbnewswatch contacted the company for clarification, but did not receive a response.
According to New Gold's recent third-quarter report on operating results, the company successfully stabilized operations over the past year, and is looking for an external consultant to help identify additional efficiencies aimed at improving open pit productivity and cost performance.
Results of a review of alternative open pit and underground mining scenarios – aimed at reducing capital and improving the return on investment over the life of the mine – are expected to be released by mid-February 2020.
As New Gold President Renaud Adams acknowledged in an interview with BNN Bloomberg earlier this year, the Rainy River mine faced some early challenges, including issues with the tailings dam, a significant capital overrun during construction, and a longer-than-expected commissioning.
"This is all behind us," Adams said in February. "We had a wonderful [fourth quarter], we put out a very good result...it is possible to make this asset work."
He had stated a month earlier that the mine would be repositioned "for long-term success."
Last August, Adams told the Fort Frances Times he is still optimistic.
"I don't look at the life of mine today with the view that this is cast in stone... What I do is to create the span that we feel extremely solid about, that we can deliver," he said, adding that the company will be "aggressive" with the drilling program that it reinitiated this year.
In a decision New Gold announced last January, underground mining that was originally scheduled to start this year was deferred to next year.
Mayor Caul said the mine has helped Fort Frances survive the shutdown of its paper mill.
"We haven't really felt any negative impact at all from the mill at this point, and it's basically because people have been able to go and work at the mine," she told Tbnewswatch, adding "our population has stayed pretty steady."
Asked if she's concerned about the possibility of a shortened life for the Rainy River mine, Tannis Drysdale, the town's economic development officer, said "if you work on economic development in northern Ontario, you are constantly concerned about everything."
But Drysdale said Fort Frances can only plan its development strategy on things that are "real" and "official."
"There's been all sorts of speculation over the whole arc of time, from when they were going to be an open pit, and then to an underground mine. I think it's been a constantly moving target," she said.
Drysdale said diversifying the local economy will always be a goal regardless of what the mine's termination date turns out to be.
She said town Fort Frances officials maintain "an ongoing dialogue" with New Gold.
Referring to speculation in the community about the mine's future, Councillor Doug Judson said "it is always troubling when word of mouth casts a chill on local economic activity... I think we have to wait for the facts before rushing to conclusions."
Judson said "New Gold has become part of our economic backbone. We want to be partners in their longevity and success and to advocate for conditions which support their local operation."
He agreed with Caul that the mine has allowed Fort Frances to do well despite the mill shutdown, but said worries about the mine's longevity underscore how quickly circumstances can change in the Rainy River district.
Judson said that while the provincial government can't control the global economic factors that affect a mine, "it can control natural resource policy," and can take steps to ensure the local Crown forest is utilized for local economic benefit.
