The Chronicle Herald (Provincial)
Report weighs gold mine benefits
Consultant figures provincial economy would benefit more than St. Mary's area
Cochrane Hill has nearly a billion dollars worth of gold in it.
The relatively poor Municipality of the District of
St. Mary’s wanted to know how much their residents would benefit if they let an Australian mining company dig it up.
The council has just received the closest thing it will get to an answer in the form of a 64-page consultant’s report they commissioned at a cost of $30,000 ($15,000 of which was covered by the province).
The Economic Impact Analysis of the Proposed Cochrane Hill Gold Mine prepared by consultant Jozsa Management and Economics paints an unclear picture of direct benefits for the sparsely populated municipality strong along the
St. Mary’s River and headquartered in Sherbrooke.
The municipality can expect to collect about $328,837 annually in property taxes from the proposed mine over its life expectancy of seven to nine years.
The report estimates that, at best, the municipality’s residents could hope to win 72 of the 220 jobs created during the peak operating years of the mine.
However, due to the municipality’s aging demographics — 31 per cent of whom are over 65, compared with 19 per cent for the rest of Nova Scotia — and limited number of trades people, the analysis finds that target unlikely.
Most workers will commute to the proposed mine site from outside the area.
The indirect job creation of the mine — estimated at nearly 200 — would also be largely outside the municipality.
“Based on the proponent’s project description it does not appear the operation of the mine would support significant, sustainable new business creation,” reads the analysis, stating that existing contractors to Atlantic Gold’s facilities near Moose River would be able to fill the company’s needs.
The provincial economy would benefit more.
According to the drilling update released by Atlantic Gold in March (purchased this summer by Australia-based St. Barbara Ltd.) there are 607,000 ounces of measured and indicated gold in Cochrane Hill. Its drilling program has shown another 73,000 ounces of inferred resources.
Split over six years, the province could expect royalties of $738,951 annually from 607,000 ounces.
Selling at $1,550 an ounce, St. Barbara would see gross revenues of $940,850,000 from that gold. Minus an average cost of production of about $950 per ounce, that yields a potential profit of about $364 million.
The mine would add $61 million annually during its six-year operating life directly and indirectly to the province’s gross domestic product, of which $27.14 million would be takehome pay for Nova Scotians.
The downsides, both real and potential, of the 241-hectare mine less than a kilometer from the St. Mary’s River would be largely borne by the residents and ecosystem of the district.
“The business and organizations with the highest rislk and potentially the most to lose are those in the tourism and recreation sector, particularly those that are closely aligned with the recreational use of the St. Mary’s River,” cautions the report.
"The proposed Cochrane Hill mine is a potential threat to the current sustainability and future growth of the tourism sector in the municipality.”
The mine would include a two-kilometre-long tailings pond maintained by a 70-metrehigh earthen wall.
As well, the analysis predicts an additional 128 vehicle round trips daily (primarily passenger cars carrying workers) on Highway 7. Eight-axle C-train trucks would make six round trips from the mine, carrying a maximum of 28.5 tonnes each of gold concentrate to the company’s Touqouy Facility for processing (142 kilometres each way).
The analysis stated that Highway 7 should be able to accommodate the increased traffic without an increased safety risk.
“Atlantic Gold is pleased with the positive, independent conclusions reached by the Municipality of the District of
St. Mary’s consultant’s report,” read a written response by St. Barbara spokesman Dustin O’Leary on Tuesday.
“Atlantic Gold has reviewed the report and sees areas where our company can focus on and further the opportunities for local residents.”
The report also noted that St. Barbara “did not acknowledge or respond to any elements” of their request for information to inform the report.
St. Mary’s River Association president Scott Beaver, who along with conservation groups from around Atlantic Canada is opposing the mine, took a dimmer view of the report’s findings.
“Significant risk and minimal benefit, that’s what I take from this economic impact report,” said Beaver.
"The report says clearly there will be minor potential benefits versus significant negative impacts. The impacts among others will hit existing tourism and future tourism the hardest. Specifically, the region’s most important asset, the St. Mary’s River. They found no mechanism for the municipality to use to ensure jobs at the mine would go to people of the municipality.”
The District of St. Mary’s council has promised to take the unusual step of making a motion to support or oppose the mine development once it has gathered all relevant data, of which the report provides a piece. Ccouncil is waiting for St. Barbara to file its environmental impact analysis with the Canadian Impact Assessment Agency. The company had initially planned to file that this summer past.
“Our company has commissioned additional studies to optimize the features of the proposed mine site,” said O’Leary.
“We will also provide a resilient and sustainable environmental plan that addresses concerns raised as part of our community outreach. When those studies are complete, Atlantic Gold will finalize and submit its environmental impact statement, but no definitive timetable has been set for that submission.”