Despite challenges Canadian Royalties has encountered on the Nunavik Nickel project, “We’ve continued to move forward and make progress,” Vice President of Exploration Grant Arnold asserts.

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To say the Nunavik Nickel Project is in a hostile environment might be an understatement. Vice President of Exploration Grant Arnold explains the standalone nickel and copper mine – located in northern Quebec, Canada – is on a high plateau in the tundra.

“There are no trees and only about 20 frost-free days a year,” Arnold explains. “We’re in permafrost country and so we have to look very closely at how we will go forward with construction on-site.”

The Nunavik Nickel project is owned by Canadian Royalties Inc. , which is moving forward with permitting applications and exploration for additional resources.

“We’re going through the permitting process, and everything is underway,” Arnold says. “We’re getting ready for the consultative period coming up, but we don’t expect many issues in that regard.”

Making Progress
Although the process has been relatively smooth, moving forward on Nunavik Nickel wasn’t without its challenges. “We feel we have an excellent project, but it certainly wasn’t as easy as it could have been – especially in regards to securing financing in a down market,” Arnold notes.

“But we’ve continued to move forward and make progress,” he asserts.

Arnold points out that nickel sulfide – the mineral that is being mined at Nunavik – is a more attractive mineral than nickel laterite, which enhances the project’s appeal.

“Laterite nickel projects require huge capital before they produce their first pound of metal, and they frequently overrun budget,” he says. “The order of magnitude for the capital investment doesn’t yield a return right away.

“But nickel sulfide provides a faster return on investment,” Arnold says. “Our capital costs equate to about $10 per pound of nickel produced on a yearly basis vs. approximately $30 per pound produced on a yearly basis for laterite.”

Mounting Up
Canadian Royalties first started working the Nunavik Nickel project in 2001. “That’s when we mounted our first program up there and began the modern exploration effort,” Arnold says.       

“Other explorers went up to prospect the site in the 1930s, and then there was another wave in the ‘50s,” he says. “Some limited drilling went on in the ‘60s and ‘70s, but sustained exploration and investment really didn’t get started until Canadian Royalties came in.”

Diverse Drilling
Although Nunavik Nickel is the company’s flagship property, Canadian Royalties has investments in other mines. “Nunavik is our first mine and our flagship project, so the majority of our efforts are going into developing the Nunavik site and seeing it through to production,” Arnold explains. “But, we do have other base metal and gold properties.”

Founded 20 years ago, Canadian Royalties became public through an IPO in 1998. The company owns property interests in five regions, including the South Trend Nickel Belt in Nunavik, northern Quebec; properties in the Labrador trough; the Abitibi Greenstone Belt in Quebec and Ontario; the James Bay Region in northern Quebec; and the Thompson Nickel Belt in Manitoba.

The company explores for base metals such as nickel, copper and cobalt; and precious metals, including platinum, palladium and gold.

Playing Host
The company’s South Trend Nunavik Nickel project hosts nickel, copper, cobalt, platinum and palladium deposits. It consists of 2,504 claims for a total of 1,049 square kilometers.

As of Dec. 31, 2006, Canadian Royalties held direct royalty and property interests in approximately 118 mineral properties consisting of approximately 1,882 square kilometers. In addition, the company’s target commodities also include gold, uranium and diamonds.

Canadian Royalties holds 100 percent interest in the Ivakkak deposit and a 70 percent interest in the Expo-Ungava property, which will increase to 80 percent with the delivery of a bankable feasibility and a non-recourse loan.  The Expo Ungava property hosts the Mesamax, Mequillon and Expo deposits.