By Brent Bosker

Shore Gold inks MOU with Nipawin ethanol firm

Jun 22, 2011 | 7:12 AM

Two companies in Saskatchewan have found a way to turn waste into something useful.

Shore Gold and Nipawin Biomass Ethanol New Generation Co-operative signed a memorandum of understanding Tuesday which will benefit the future of their respective projects.

The MOU gives Nipawin Biomass the exclusive rights to purchase waste wood from the Fort-a-la-Corne Forest where Shore Gold is working to develop a diamond mine. Shore Gold would need to clear cut a portion of the forest when, and if, the mine goes ahead.

“What we saw is a win-win,” said Eric Cline, vice president of corporate affairs for Shore Gold.

Without an agreement such as this the wood would be cut and stock piled at the company’s cost, Cline said.

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“We save money by reducing our costs and it’s good for them. They save money by hopefully acquiring the waste wood at an economically advantageous amount.”

The agreement would help reduce some of the costs associated with building a mine, which is estimated to be over $1 billion, Cline said.

The MOU is the first of many supply contracts Nipawin Biomass company will need to support its proposed cellulose ethanol facility said Robin Woodward, project manager.

“What it delivers for us is a nice front end, secured fiber supply once both our plants get going.”

Nipawin Biomass and the Saskatchewan Research Council have jointly developed a proprietary conversion technology which will turn waste wood and waste farm fibre, such as flax or straw, into ethanol and other alcohols. The proposed ethanol plant will require approximately 200,000 oven dried metric tonnes of cellulosic fibre per year.

This contract is small in relation to what the plant will need over the long run, said Woodward.

“We will be working with other fiber suppliers and certainly all of the farmers in the Nipawin region to line up long term contracts to support the plant.”

The ethanol plant is at least two years away from construction. The technology will be demonstrated at a plant in the United States starting this fall before it’s brought to Nipawin, said Woodward.

Shore Gold is hopeful to begin construction on a diamond mine in 2012. The project is still subject to environmental approval by governments. A final feasibility study is expected to be released before the end of the month.

bbosker@panow.com