Mr. Speaker, as Minister responsible for Energy, Mines and Petroleum Resources, I would like to tell Members about some recent developments that give us reason to be encouraged about the future potential of our economy.
Despite the economic downturn that is hurting all regions of Canada, there are a number of positive developments happening in the non-renewable resource sector of the Northwest Territories. There are, for instance, a few very promising mineral properties. Some of them continue to be explored and may be approaching the development stage.
The operators of the George Lake Gold Property, after almost 10 years of regional prospecting, detailed exploration, intensive diamond drilling and $25 million of investment, have been encouraged by the results. The operators expect, in the near future, to decide whether or not to increase their investment in the North by funding a costly underground exploration program, and that program should tell them whether they do or they do not have an economic mineral deposit.
Other gold properties in the Northwest Territories that have warranted continued exploration include the Nicholas Lake deposit north of Yellowknife and the Crown-Ulu deposit north of Lupin Mine. Both are being drilled intensively in hopes of justifying the next stage of evaluation, an underground exploration program. At Meliadine River, north of Rankin Inlet, a more recent and less well advanced gold exploration target is rated very highly.
Mr. Speaker, 75 per cent of the value of mineral shipments from the Northwest Territories are zinc and lead. A series of these base metal deposits have been discovered over the years. The best known is the Izok Lake zinc, lead, copper, silver deposit located 250 kilometres south of the Coronation Gulf. Transportation, or more correctly the lack of transportation facilities, is the critical factor as to why very little work has been done on these particular properties. If the transportation hurdle can be overcome, then the prospects for a new zinc-lead mine will increase significantly.
As most of you probably know, local, national and international press has picked up on the announcement that diamonds have been discovered in the Northwest Territories. The announcement that the first drill hole yielded 81 diamonds, some of them gem quality, must be viewed as very encouraging. Even before the announcement, word of the
diamond discovery had spread, and there has been a tremendous surge in staking of mineral claims.
Recent scientific research on diamonds, how they are formed and how they are found, suggests that the Northwest Territories should be considered a good place to explore for them. We must realize, however, that it will take a lot of time and money to determine the true significance of this diamond discovery.
Mr. Speaker, in the oil and gas sector, I am pleased to inform Members of the results of a recent call for bids for exploration rights in the Mackenzie Delta and Beaufort Sea areas. Shell Canada, the successful bidder on three land parcels in the Mackenzie Delta, has promised a work commitment totalling in excess of $53 million on lands in the Delta surrounding their Unipkat discovery. This is very welcome news to a region that has seen a very severe economic downturn over the past several years. The bids are encouraging because they come at a low period for the oil and gas industry. They provide a signal that the major players in the industry recognize the exploration potential of the Delta area.
Mr. Speaker, other planned oil and gas activities include Esso Resources' three million dollars seismic program this winter. Three boreholes will also be drilled this winter in the Delta for research purposes. This work will be done jointly by the Geological Survey of Canada, Shell and Esso. Esso Resources will also be continuing with delineation drilling at Norman Wells this winter.
In the Sahtu Region, the Chevron Fort Good Hope block has, unfortunately, been relinquished. This has resulted in a very significant loss to the region, and to Fort Good Hope in particular. The lack of exploration success does not, however, mean that there is a lack of potential in this region.
The Mackenzie Great Bear Development Impact Zone Society is working with the Department of Energy, Mines and Petroleum Resources on the development of an oil and gas rights issuance proposal in the Sahtu region. Through the issuance of new exploration rights, we hope to replace some of the opportunities that have been lost as a result of the shutdown of the Chevron-Fort Good Hope venture.
Meanwhile, the Norman Wells project is pumping oil at the rate of 30,000 barrels a day and is now earning the federal government revenues in excess of $55 million per year. The fiscal and financial benefits for the Northwest Territories from this project are minimal. With the successful completion of the Northern Accord, however, a portion of these revenues should accrue to the Government of the Northwest Territories.
There will also be other opportunities for the generation of fiscal and economic benefits that we will be able to realize through the sound management of our oil and gas resources once the accord has been signed and implemented.
In conclusion, Mr. Speaker, we can certainly be encouraged by these developments in the mining, oil and gas sectors, despite low prices, industry lay-offs, and regulatory uncertainties. The challenge now is to seize these opportunities to ensure maximum benefits for Northerners and minimal impact on the environment. Thank you.