A Nolinor Aviation Boeing 737-200, registration C-GNLW performing flight N5-793 from Resolute Bay,NU to Mary River,NU (Canada) with 106 people on board, went around at Mary River due to weather conditions. The crew decided to divert to Iqaluit,NU and climbed out of Mary river, when climbing through FL350 the crew received indication of the cabin altitude climbing at about 1000 fpm, the cabin climbed to 10,500 feet. The crew stopped the climb, declared PAN PAN and requested a descent to FL230. Descending through FL280 the crew was able to regain control of the cabin pressure and stabilized the cabin altitude at 8000 feet. The aircraft maintained FL280 and continued to Iqaluit for a safe landing.
The Canadian TSB reported maintenance discovered the outflow valve heated gasket was inoperative.