Trent Ernst, Editor
Nearly 30 percent less was spent on exploring for new mineral deposits last year than in 2013, according to figures coming out of the Association for Mineral Exploration BC’s Exploration Roundup conference last week.
In 2013, the industry spent $476-million. Last year, they only spent $338-million.
That’s down from 2012, when companies spent $680 million exploring, or down over 50 percent in two years.
The news comes as many companies are trying to cut costs to weather the downturn that has affected not only coal, but a number of other mining industries.
This doesn’t bode well for the province or for the industry. Earlier, the Province announced that it is expecting to make about half of what it was expecting from mining this year.
In the second-quarter budget update, mining revenue was estimated at just $95 million, down from the $201 million forecast in the budget.
Low commodity prices have cut into the profits of mining companies, profits they might put into exploration. At the same time, investors are not interested in funding speculative prospecting right now.
However, both Anglo American and Walter continue to do exploration work in the Tumbler Ridge area, with the hopes that, when coal prices come back up, they will be well positioned to jump back into the game.
In the northeast, there were a number of exploration projects that happened. Drilling programs searching for copper and gold were undertaken by AuRico Gold Inc. at Kemess East, by Pacific Empire Minerals Corp. at Col-Later and by New Gold Inc. at Blackwater South and Key. Drilling for gold and silver took place at Fawn and Van Tine (New Gold Inc.), 3Ts (Independence Gold Corp.) and Green Gold (0902744 B.C. Ltd.), while Teck and Canada Zinc Metals Corp went drilling for zinc-lead-silver.
Walter Energy, Anglo American, Glencore and Jameson undertook drilling programs this year, with Glencore beginning feasibility-level exploration work in their Sukunka Properties. Walter’s drilling program happened at EB and on Mount Hermann, Anglo explored Roman Mountain, Roman Northwest and Waterfall, while Jameson drilled up in the Dunlevy area, north of Hudson’s Hope. And of course, HD Mining International started work on the decline to access their bulk sample.
East of Tumbler Ridge, Fertoz International submitted a small mine application while continuing trenching and bulk sampling for their proposed phosphate mine. All told, there were 27 exploration programs that happened last year, undertaken by 20 different companies.
All three coal mines in the Northeast were shuttered in 2014, leaving only the Endako molybdenum mine near Fraser Lake, and the Mount Milligan copper/gold/silver mine near Mackenzie still operating in the Northeast and Omenica Regions. But there are eleven proposed mines that are in the development or pre-development stage. AuRico Gold Inc. is working on developing the Kemess Underground Mine, which would mine copper and gold. New Gold Inc is working on the Blackwater project, a proposed gold/silver mine southwest of Prince George. Taseko Mines is working on what would be the second largest niobium mine in the world, called the Aley Project. Niobium is used in the manufacturing of light-weight steel. The mine would be located 140 km north of Mackenzie. Anglo is still planning on opening the Roman Mountain Project, and Teck has everything they need in place to re-open Quintette. HD is working on their Bulk Sample for the Murray River Project. Walter has Environmental Assessment Certificates for the EB Project on Mount Spieker and the Hermann property, and Glencore is in the pre-application stage for its Sukunka project.
Speaking at the Exploration Roundup conference, Premier Clark announced the province will extend the flow-through tax credit on exploration spending through 2015. The credit offers tax breaks to investors who put money into mineral prospecting and exploration.
She also announced a permanent increase to the mining division, to the tune of about $9-million extra, raising the Ministry of Mines’ budget to over $20-million. “we are going to take that money and do three things with that. First, we’re going to make existing contingency funding that has supported more inspections and we’re going to make it better and make the turnaround times faster. Second, we are going to establish a major mines permitting office. Its roll is to improve coordination across government so the Ministries aren’t tripping over one another. Third, we’re going to increase resources so we have more boots on the ground performing more inspections, making sure you get what you need but also, in light of Mount Polly, we all recognize our greater responsibility to work together to ensure that mining is done safely.”
Government has used contingency funding since 2011 to significantly increase geotechnical staff and inspections and improve permit turnaround times. The funding announced today will make these improvements permanent and create additional capacity to support the major mines permitting process, says Clark.
Since June 2011, five new mines have opened in British Columbia, creating over 1,300 new jobs, and seven major mine expansions have been approved. British Columbia’s mining industry employs 30,000 workers with an average annual salary of $114,000.
“Up to ten new mines are expected to proceed in the next few years and this new funding will make sure we are ready to support these projects and ensure the safety of this important industry as it continues to grow,” says the Premier. “BC’s mineral exploration and mining industry is a great comeback story and today we have a significant opportunity to create thousands of jobs by opening new mines and expanding existing ones.”
Miners know that their industry is cyclical, but as long as exploration is happening, “mines will eventually open,” she said.