Transparency and Commitment

Compared to neighbours, does anyone else think that Ontario's commitment to the Ring of Fire, the First Nations and industry is "Mickey Mouse"?




Commentary: Plan Nord+ - Fresh breezes from the Belle Province

By: Éric Lemieux, P. Geo
Special to The Northern Miner
2014-09-25

Summary

• Under Plan Nord+ the new Quebec government has already committed nearly $5 billion in new funds to develop renewable energy sources north of the 49th parallel and $33 billion for investment in the mining sector, including building infrastructure such as roads, rail lines and airports
• Reviving a feasibility study on extending a Labrador Trough rail line that would complement the two railways that now connect the St. Lawrence River deep-sea port of Sept-Iles to the iron ore operations to the north
• Extending and repairing highways to the Côte-Nord region and as far north as James Bay
• Direct investment in mining and oil and gas companies by acquiring significant equity interests in a number of plays

Having just recently attended the Precious Metals Summit in Beaver Creek, Colo., and the Denver Gold Show, I was pleased to see that even with dampened enthusiasm on the show floors due to the downward-trending price of gold, there was plenty of good cheer to be found — most notably among my fellow Quebec delegates, excited by the renewed prospects for Plan Nord, the mega-economic development strategy for Quebec’s north that had stalled under the previous Parti-Québecois (PQ) government.

In fact, there was an undeniable perception among the delegates that the new Liberal provincial government’s pledge to revamp Plan Nord (or Plan Nord+, as it’s now being called in some circles) will, at the very least, succeed in stabilizing the mining and exploration sector in Quebec and provide the impetus to stop the province’s continuing slide in the Fraser Institute’s annual global mining survey. From 2007 to 2009, Quebec ranked first in the survey, then dropped to fifth in 2011, 11th in 2012 and finally 21st in 2013, due largely to changes in Quebec’s mining and tax policies under the PQ government.

Plan Nord is the economic development strategy launched by the Liberal government of Premier Jean Charest in May 2011 to develop the natural resources sector north of the 49th parallel in Quebec. The 25-year plan was intended to foster nearly $80 billion in energy, mining, and forestry investments and create quality jobs and infrastructure development.


As the centrepiece of the previous Liberal government’s political legacy, Plan Nord had received the full support of the mining industry, as well as the endorsement of most of the region’s First Nations.


However, with the election of the PQ in late 2012, Pauline Marois’ administration repositioned and re-branded many of the Plan Nord ideas. They even renamed Plan Nord as “Nord Pour Tous” (“North For Everyone”) in an effort to fend off opposition by environmentalist groups in the province.


The unfortunate reality is that the PQ’s downplaying — if not outright dismissal — of Plan Nord along with some ill-advised tinkering with the mining tax regime, led to Quebec becoming a less attractive global mining jurisdiction and fed into the general unease caused by the worldwide mining markets slowdown. It was, indeed, a blessing for some key junior exploration companies in the province that alternative financing solutions, such as the flow-through share donation program, were in existence to help keep at least some capital flowing in an extremely tight market.


However, the election in April 2014 of a new majority Liberal government under Philippe Couillard has brightened the future of the Quebec mining and resource sector.


Plan Nord+


Specifically, under Plan Nord+ the new Quebec government has already committed nearly $5 billion in new funds to develop renewable energy sources north of the 49th parallel and $33 billion for investment in the mining sector, including building infrastructure such as roads, rail lines and airports.


Some of the main highlights of Plan Nord+ that have already been announced by the Couillard government include reviving a feasibility study on extending a Labrador Trough rail line that would complement the two railways that now connect the St. Lawrence River deep-sea port of Sept-Iles to the iron ore operations to the north. It also includes extending and repairing highways to the Côte-Nord region and as far north as James Bay.


Finally, the government has also committed to increasing its direct investment in mining and oil and gas companies by acquiring significant equity interests in a number of plays. Plan Nord+ will also encourage the development and maintenance of smaller, local hydroelectric projects that should benefit remote northern communities.


While Plan Nord+ does address some of the relatively immediate needs for strategic infrastructure in Quebec’s northern region, it does still adhere somewhat to the hopeful mantra that “if you build it, they will come”. That said, there is a wealth of untapped opportunities in the Plan Nord region that still have the potential to captivate the interests of domestic and global mining companies.


The territory in question currently produces, or is in a position to produce, substantial nickel, zinc and iron ore extractions, and hosts a significant portion of Canada’s overall gold and mineral production capabilities, as attested by projects such as Raglan, Nunavik Nickel, Arnaud, Bracemac-McLeod, Strange Lake, Coulon, Eagle Hill’s Windfall property near Lebel-sur-Quévillon, Bachelor Lake, Goldcorp’s world-class Éléonore gold mine that is set to commence production this fall, and Stornoway Diamond's Renard diamond mine project, which is now under construction.


Meanwhile, some notable exploration plays taking place in the region, and which were active participants at the Beaver Creek and Denver shows, include projects like Eastmain Resources’ Clearwater and Eastmain gold projects, Virginia Mines' numerous projects in the James Bay area, Balmoral Resources' Martinière gold project and Grasset nickel-copper-paltinum group metals project.


Immediate impact


The Quebec Liberals’ renewed push on Plan Nord seems to be having an almost immediate impact on companies in the junior exploration sector — the lifeblood of the mining sector in this country — who are now finding interested investors knocking on their doors. This is a pleasant change for juniors, who have often had to look for alternative capital sourcing options to continue their operations.


For example, flow-through share donation financing (FTSDF), a program established in 2007 by my firm PearTree Financial Services to bolster the fundraising efforts of registered charities across Canada, has acted as a critical lifeline for many juniors in Quebec and elsewhere. The program provides access to otherwise unattainable, yet much-needed, institutional and offshore capital, with less dilutive impact than standard share offerings.


Now, with things looking like they might be ready to take off with Plan Nord+, the full social impact of a program like FTSDF can really take effect, as the prosperity of the Quebec mining sector gets passed along to the benefiting charities — a winning proposition for all stakeholders.


With an energized junior exploration sector in northern Quebec, combined with the ongoing work of the established majors such as Goldcorp, Hecla and “Osisko 2.0”, I believe the province, as a whole, is quickly re-establishing itself as one of the most favorable jurisdictions in the world for mine explorers, developers and producers.


Overall, the Plan Nord initiative can be viewed as a generational investment that could realistically propel Quebec to becoming a major supplier of commodities to the ever-growing Asia-Pacific region (particularly China and Japan). Add in the potential development of other strategic transportation corridors in Canada’s north, and the future prospects for Plan Nord+ are looking brighter than ever.


Commentary: Plan Nord+ - Fresh breezes from the Belle Province

By: Éric Lemieux, P. Geo
Special to The Northern Miner
2014-09-25


— Éric Lemieux, M.Sc., P. Geo, is a consulting technical advisor for PearTree Securities.(www.peartreefinserv.com) Prior to joining PearTree, Lemieux was a sell-side mining analyst with Laurentian Bank Securities. As a consulting geologist-analyst, he has worked with clients including the Quebec Securities Commission, the New Brunswick Securities Commission and the Montreal Exchange. Previously, as an exploration geologist, he managed projects for Cambior, Noranda and Soquem.


Lemieux owns the following stocks: Balmoral Resources, Eagle Hill Exploration, Eastmain Resources, Goldcorp, Stornoway Diamond, Virginia Mines.
- See more at