Advanced Explorations Inc. ADEXF

Diesel Fuel Costs are Killer

[Greenandgold.]

Natural gas from where? LNG brought in by ship to the Arctic Circle? This hasn't been done by another mine, has it? Sounds like another technically "innovative" solution by Gingerich, just like the "innovative" iron nugget process, which they wasted a PEA on.
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No, if the Roche Bay mine gets built, it will be powered by diesel gensets, just like Meadowbank gold mine (which is the only currently operating mine in Nunavut). Roche Bay, because of its location, doesn't have access to hydroelectric, which will power just about every other major iron ore project in Canada, including Oceanic Iron Ore, which is 1000km from the nearest generating station. But AXI will go its own expensive path.
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How much will all that diesel fuel cost? We can do a rough estimate based on Oceanic Iron Ore's recent PEA for its concentrate operation. Oceanic estimates that total plant power of 58.6 kwh is required for each tonne of iron ore produced. If that ratio holds true for AXI's 5 million tonnes per year operation, then Roche Bay will require 293 million kwh each year (58.6 X 5 million). Each kwh consumes about 0.4 litres of diesel fuel, so the annual diesel consumption will be 117.2 million litres. 
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Given the premium for delivery to a remote location, and the need for "arctic" quality diesel that works at 50 below, that fuel will cost $2 to $3 per litre. So Roche Bay will chew through $234.4 million to $351.6 million in fuel costs alone each year. That's $46.8 to $70.32 per tonne.
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Mines that require diesel generators have a more difficult time with permitting than mines with access to hydroelectric or natural gas pipelines. Nobody wants the pollution, that's reality.