Thank you, Mr. Chairman.
Good morning to all. I thank you for the opportunity to speak to the committee today.
My name is Christopher Zahovskis. I'm the president and CEO of Northcliff Resources. Northcliff is a mineral development company that's listed on the Toronto Stock Exchange.
About six years ago, Northcliff acquired the Sisson deposit, which is situated approximately 100 kilometres northwest of Fredericton in the province of New Brunswick. The Sisson deposit is one of the largest undeveloped tungsten-molybdenum deposits in the world, and as Andrew mentioned earlier on, it's one of the junior mining companies or junior exploration companies that helped define that resource. Northcliff is one of those companies that comes along and takes it to the next step, and that's the stage we're in right now. We're trying to advance this project.
As I mentioned, it's a large, untapped deposit, and probably one of the largest in the western world. At the contemplated rate of production, it would be the largest or second-largest tungsten mine in the world.
The total projected capital cost for this project is in the area of $500 million to $600 million, and it would take approximately two years to build. During construction we would employ approximately 500 people, and during the life of the operation, which is projected to be about 27 years, we would employ approximately 300 full-time direct employees.
The tax revenue that's projected to come from this project over the life of the mine is just under $1 billion in combined provincial and federal taxes, so it's obviously not insignificant.
At present, the company has spent approximately $65 million in advancing this project, and approximately 40% of that has been spent in the province of New Brunswick.
The project right now is currently in the EIA review stage. The EIA report was submitted to both provincial and federal governments in July 2013, with advance copies provided to all 15 first nations two weeks prior to our submission to the governments. During that time, we responded to some 1,300 information requests, which were points of clarification or further questions that various parties had. These information requests came from the public, ENGOs, and provincial and federal governments with their various government department agencies, as well as first nations.
In December of 2015, New Brunswick provided a positive EA determination and gave us approval to proceed with this project, along with 40 conditions that we had to meet.
CEAA posted its CSR, its comprehensive study report, for public review in April 2016, thus concluding the 365-day review period. It took about three years to conclude that process.
The important discovery from the CSR is that it concluded there would be no significant adverse environmental effects as a result of executing this project. In other words, we received a clean CSR, but a federal decision is still pending.
I'd like to move over to the area of stakeholder and first nation engagement. I've always said that in developing any project, you can get all the technical pieces right, but if you don't get the social aspect right, it becomes difficult. This is where this company has spent a majority of its time in advancing this project. We've engaged with stakeholders early. We have formed working groups to ensure there is good participation from a variety of stakeholders. We have held open houses in communities, especially during the public comment periods of the various government processes during the EIA, so the public would have access to the company and its consultants and be better informed in providing any comments or questions they might have regarding the project.
We worked closely with community mayors, councils, chambers of commerce, and various business associations. I would say that over the five years we've been in the province, we received positive support from the communities at large.
Northcliff respects first nations and understands that there are cultural sensitivities regarding engagement with first nations. For these reasons, engagement began in late 2010, before we did anything, before we even arrived in the province. An introduction was sent to all the 15 chiefs, and that resulted in an initial meeting with the Assembly of First Nations. Since then, our relationship with the first nations has grown; obviously we have a deeper relationship with some first nations and with certain groups than we have with others.
Northcliff initiated the founding of the first nations environmental assessment working group. The intent behind this is to ensure that all first nations have a clear understanding of what is involved in an environmental impact assessment, what elements are studied within that, and, obviously, that any questions are asked and input provided during that whole process.
Membership of this committee is composed of representatives from all 15 first nations in New Brunswick, both provincial and federal governments, the consultant that was hired by the first nations to assist them with understanding the EIA and, of course, the proponent. Over two and a half years, we held approximately 14 to 15 meetings, an average of about one every two months. In considering the group and how difficult it might be to get all these people together, I think that's quite an achievement.
To date Northcliff has provided capacity funding to first nations. This is in addition to the provincial and federal government funding towards the EIA process. I won't go into the long list of things that we provided funding for, but just to give you an idea, we've provided funding for them to hire consultants to assist them with the EIA, for traditional knowledge studies, for sponsorships and scholarships, for community events, and so on and so forth.
As well, we extended an invitation to speak with the company towards the co-operation agreement, what is commonly known as an impact benefits agreement. We prefer to call it a co-operation agreement because it has a more positive connotation to it. One first nation has taken up our offer, and we have been in deep discussions and negotiations with this first nation now for about three and a half years. We're optimistic that we will be able to conclude an agreement with them very shortly.
Northcliff's record of consultation with first nations since 2011 is extensive and comprises over 300 pages and thousands of entries of events, meetings, and so on and so forth, which has been submitted to both the province and the CEAA through the EIA process.
In summary, Mr. Chairman, I would just like to say that developing a mining project is fraught with risks that are technical, market related, and geopolitical, but thankfully, despite these, the mining industry continues to take on projects in response to the ongoing demand for raw materials.
One of the most significant risks that is difficult to manage is the permitting and EIA approval risk. Sisson, which has already received provincial approval, continues to linger in the EIA approval process that has now been going on for three and a half years. In the meantime, the tungsten market has deteriorated, and when combined with the project uncertainty created by the approval process, it is increasingly challenging to secure project financing. Unfortunately, Sisson is not unique in this matter, and it's this kind of uncertainty that will continue to challenge investment in the mineral sector in Canada.
Thank you, Mr. Chairman.
I would be pleased to answer any questions.