April 27, 1998
(Mines and Energy)

The following statement was issued today by Charles Furey, Minister of Mines and Energy. It was also read in the House of Assembly:

I am pleased to announce today the results of the Calls for Proposals for development of the former Baie Verte asbestos mine in Baie Verte. Four proposals were submitted in response to the Call for Bids which closed on March 6. They ranged from the purchase and removal of milling equipment to the development of a new magnesium metal plant.

I was pleased with the range and calibre of proposals received for the property. It was evident from these proposals that a lot of time, effort and money was invested in each of them.

Upon a review of each of the proposals it was determined that two of the projects were worthy of further consideration. The first proposal was submitted by Geotech Surveys Inc. on behalf of the Canadian Magnesium Corporation. A key principal of this proposal is Mr. Christopher Verbiski, one of the co-discoverers of Voisey's Bay. Canadian Magnesium Corporation intends to develop a commercial magnesium plant to extract and produce magnesium metal or mangesium oxide from the large asbestos tailings pile on the site, subject to a positive feasibility study and the development of a pilot plant on site, to confirm the extraction process. The concept is very similar to that proposed by Noranda and SNC Lavalin for the development of a commercial magnesium plant at an asbestos mine site in eastern Quebec where the technology has been proven through to the pilot plant stage.

This proposal is well researched and presented and the proponents have identified many of the challenges to bringing their concept to fruition. In the coming months, the company will be completing a feasibility study and pilot plant testing to determine the possibility of continuing with this proposal. If successful, this project will result in several hundred millions of dollars being invested in the area and create in the range of 300 jobs. Therefore, I have decided to award the mineral licence for the 800 hectares of exempt mineral lands to the Canadian Magnesium Corporation.

It is possible that a second project may be compatible on this site. However, it does require some further study. Northco Forest Products Ltd. of Baie Verte proposed to lease one of the large buildings at the site for the establishment of a new modern integrated sawmill operation. The property was rated as a prime site for such an operation given the existing infrastructure, strategic location, opportunity for expansion, and reduced capital costs.

Therefore, I have asked senior officials of the Department of Mines and Energy, in conjunction with an independent consultant, to conduct a preliminary study to determine the practical feasibility of approving a sawmill operation adjacent to a magnesium plant. If compatible with the magnesium proposal, the sawmill project will proceed this summer. The project will bring together three smaller independent sawmill operations on the Baie Verte Peninsula to develop a new modern integrated sawmill operation at the site. This project would create 14 new positions in Baie Verte.

This is a positive announcement for the Baie Verte area which I hope will result in renewed economic activity for the area.