Utilities and infrastructure company Atco (TSX: ACO.X) is investing C$10 million ($7.2 million) for a 40% stake in Inuit-backed West Kitikmeot Resources (WKR), which is developing a project that would open new areas to mineral exploration by connecting Nunavut with Canada’s road network.
Proponents of the Grays Bay Road and Port Project (GBRP) are seeking to build a deepwater port on the Arctic Ocean, an airstrip and a 230-km all-season road that would run through Nunavut and into the Northwest Territories. The road is designed to connect the Izok zinc and High Lake copper deposits in Nunavut – as well as diamond, gold and base metal deposits – with the Grays Bay port.
“This project broadens our port and logistics assets, connecting northern resources to global markets,” Atco CFO Katie Patrick said in a release on Monday. “Alongside WKR and with Inuit and government stakeholders, we are proud to be a strategic partner in this visionary project, to make it a reality and cement the importance of Canada’s northern territories in national security and identity.”
Enhancing mineral access
Atco’s backing helps build momentum for the ambitious project, which in addition to opening up new areas of the mineral-rich but remote north would help reduce the cost of goods in Nunavut by improving transportation options. With minimal road infrastructure in the territory, communities rely exclusively on barge and air transport for daily goods and construction materials.
The GBRP will also have the potential for dual-use military and civilian capabilities, Atco said. Grays Bay is about 1,600 km west of the territorial capital Iqaluit.
Atco shares gained more than 1% to C$65.89 apiece on Tuesday morning in Toronto, for a market capitalization of C$6.56 billion ($4.76 billion).
West Kitikmeot CEO Brendan Bell described Atco as a company bringing deep experience in northern infrastructure, port operations and defence.
“They are a champion for the region and share our vision of Inuit-led Northern security and prosperity,” he said.
Major link via NWT
The GBRP is to be complemented by the Arctic Economic and Security Corridor (AESC), a 400-km all-season road that would connect the NWT with the GBRP and whose proponents are the Tłı̨chǫ, Dene and NWT governments. Canadian Prime Minister Mark Carney added both initiatives to the Major Projects Office earlier in March.
West Kitikmeot and the NWT government estimate the two projects will cost at least C$2 billion. Construction could start in 2028 and be open to traffic by 2035, West Kitikmeot says. AESC’s backers haven’t yet given a construction timeline for their project.
