A fast-moving wildfire has destroyed the Nechalacho mining camp southeast of Yellowknife, Northwest Territories, erasing cabins and infrastructure at a rare earths project owned by Vital Metals (ASX:VML).
The blaze swept through the camp at Thor Lake on August 30 after strong winds carried it 16 kilometres overnight.
Vital Metals CEO Lisa Riley said the company believed the site was safe until conditions shifted suddenly. “And from one second to the next, it went from being relatively safe to being completely gone,” she told CBC.
The camp, which had been empty since April, was reduced to charred ground, with only one cabin left standing. No workers were injured, but a dock, a boat and a diesel storage tank were destroyed.
Vital Metals holds the project through its Yellowknife subsidiary and is advancing a preliminary economic assessment for deposits containing rare earth metals and niobium, a material used in high-strength steel for cars and pipelines.
Riley said the fire will not significantly delay the project, but acknowledged that logistics will be more difficult in the short term. With the cabins gone, workers expected back in the coming weeks will have to live in tents.
“The biggest change at the moment in terms of moving the project forward (is) that there won’t be a big impact,” she added. “It would have been a lot more costly if the equipment had gone up.”
A helicopter inspection this week showed that some of the most expensive equipment escaped damage. A bulldozer, loader, ore sorter, helipad and airstrip remain intact, with the fire appearing to stop just short of those installations.
Vital Metals reported the incident to the ASX on Thursday (September 4), saying equipment, stockpiles and drill core are safe, and that damage was “modest” and “not anticipated to have any material impact on the Group’s ability to operate.”
NWT Fire said crews are still working to contain the fire this week, with hot spots persisting at Thor Lake.
The destruction at Nechalacho adds another incident to one of the territory’s most challenging fire seasons in recent memory. Currently, multiple communities are either under evacuation orders or alerts.
In Fort Providence, residents were forced to leave over the weekend as fire approached within a kilometre.
Among them was Michael McLeod, the Northwest Territories’ former Liberal MP, who sharply criticised the territorial government’s handling of the crisis. Speaking at an evacuation centre in a video shared online, McLeod confronted Premier RJ Simpson over what he described as a lack of urgency in preparing communities.
In an interview with CBC, he said the government’s strategy amounted to “wait and see.”
“It should have happened three weeks ago. We should have had the community plastered with fire retardant all around, all the trees in the area, but it didn’t happen and that’s no different from what’s happening in Whatı̀,” McLeod said.
“It should have happened sooner. That isn’t acceptable.”
McLeod, who represented the territory for a decade in Ottawa before stepping down earlier this year, further suggested that the Canadian government may need to take over fire response if the territory can’t cope on its own.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
