Find can provide 10 to 20 per cent of Saskatchewan's power needs
By Cassandra Kyle
When Goldsource Mines Inc. first set its eyes on the Hudson Bay areaof east-central Saskatchewan, the company had its heart set on findingdiamonds.
Instead, Goldsource discovered a major coal resourcethat, on average, is as thick as a seven-storey building is tall and islarge enough to provide 10 to 20 per cent of the province's power needs.
"Tome, it's an energy source, and whether it's in the form of electricitythrough power generation or in the form of petroleum products generatedthrough the gasification of coal, the numbers are very, very large,"said company president Scott Drever.
The development of theVancouver-based company's Border coal project is still in the veryearly stages -- only 10 per cent of the site has been explored -- butpreliminary figures show Goldsource may have found a resource that'snot as pretty as a diamond but could be an economic gem in its ownright.
"From a long-term perspective, this is an energy sourcefor Saskatchewan that didn't exist two years ago until our discovery,"Drever said.
An initial resource estimate for the Border projectof around 170 million tonnes of coal could power a 300-megawatt powerplant for 50 years or a 600-megawatt plant for 30 years. The site hasan estimated worth of $1.7 billion to $3.4 billion, Drever said.
Thetonnage at the site, if converted to petroleum products through agasification process, is exciting for the company as well, he said.
"Ifyou do the math on what we have right now, we've probably got somethingin the order of the equivalent of 400 to 500 million barrels of oil,"Drever added.
In addition to work on a resource estimate forBorder, the company is moving ahead with a scope study in 2010 todetermine the best environmental and economic use for the coal resource.
"Whatwe want to do is build a resource base that's sufficiently large tosupport the kind of production development that you would expect,"Drever said, adding options for the coal also include exporting it outof province.
Drever said he has met with Saskatchewan government ministers, along with SaskPower, to discuss options for the deposit.
"I'vehad a number of conversations -- they're very preliminary, obviously --and we really need to get a decent handle on what the resource base orthe reserve base might be there before we can pick a direction in whichwe might want to go," he said.
Energy and Resources Minister BillBoyd said the Border discovery holds huge potential for the province,which is already the third-largest producer of coal in Canada.Saskatchewan generates about 55 per cent of its power from coal, headded.
"Goldsource's recent discovery would appear to be a very,very significant resource of sub-bituminous coal, which is a prettygood grade of coal, better than anything we have in the province atthis point in time," Boyd said.
"It looks very, very positive.They're assessing that resource ... and I'm sure there's going to bepretty significant investor interest in this area."
The ministersaid the province looks at all types of resource development "aspotentially very positive." Companies looking to develop resources inSaskatchewan, however, must meet environmental criteria. "People expectthese projects to be sustainable, to be ... handled in anenvironmentally responsible fashion," Boyd said.
The minister said the province looks at all types of resourcedevelopment "as potentially very positive." Companies looking todevelop resources in Saskatchewan, however, must meet environmentalcriteria.
"People expect these projects to be sustainable, to be. . . handled in an environmentally responsible fashion. All of thosethings are part of that, any of these discussions," Boyd said.
Coalexploration in the Hudson Bay area is exciting for the community of1,800, said town administrator Rick Dolezsar. Goldsource isn't the onlycompany exploring for coal in the region, but the Border find holdssignificant long-term potential for Hudson Bay, he said.
"There'sno doubt we're very excited about the discovery and, I guess, lookingforward to an opportunity for some diversification away from theforestry industry here in the Hudson Bay region," Dolezsar said.
Townofficials say they would like to see the coal deposit power anelectricity plant in the area, although any value-added use for theresource would be welcomed.
"If a coal-fired power plant wereconstructed, there would be 500 to 800 construction jobs for a coupleof years and probably 200 to 300 operating (jobs), including themining, thereafter, so that definitely could be huge for the wholeregion," Dolezsar explained.
The Border site is located about 60 kilometres from Hudson Bay.
Even if the timing, and type, of the development at Border isn't yet settled, Drever said one thing is clear.
"It's got, I think, some serious economic implications for Saskatchewan," he said.