Opinion: Exploration developing into strong catalyst for B.C. economy
Rising to the challenge: Industry now on upswing based on determination, creative thinking and experience
Written by Gavin Dirom for The Vancouver Sun, January 26 2014
Although most metal prices remain at or near 10-year averages, over the last two years there has been a major downturn in the venture capital market. With virtually no access to venture capital, the strength, resiliency and experience of the industry were put to the test, and not surprisingly, the resilient mineral exploration and development industry rose to the challenge in 2013. For many mineral explorers, particularly the junior companies, last year was about building strategic partnerships, entering into joint venture agreements, raising private equity and successfully exploring — not just here in B.C. — but around the world.
There was an estimated 29 per cent drop in global exploration spending for the year 2013. And the majority of respondents to a fall Association for Mineral Exploration British Columbia survey reported a decline in their exploration spending. But the industry is well acquainted with the cyclical nature of the business, and many AME BC members have been taking this opportunity to prepare for the next upswing in the markets. While most have made changes to their exploration programs and reduced spending for the short term, it rarely dampens their optimism for the future. Because of this optimistic spirit, combined with experience, creative thinking and a determined mindset, many advanced projects in B.C. were able to make significant progress last year.
Internationally, B.C. is increasingly seen as a safe haven for investment in mineral exploration compared to other jurisdictions because of its mineral development potential, supportive government, infrastructure and improvements in permitting. It’s estimated that B.C. attracted nearly 20 per cent of the exploration spending in Canada in 2013, compared to just six per cent in 2001. On top of that, we expect to see continued strong demand from Asia for B.C.’s natural resources, such as copper, gold and steelmaking coal. And perhaps not widely known, the majority of the mineral exploration and mining companies listed on the TSX and TSX Venture exchanges — 945 out of 1616, are headquartered in B.C., and two-thirds of the equity capital ($2.6 billion out of $3.9 billion) raised on the TSX Venture Exchange was by B.C.-based companies.
Access to land and sustained investment in grassroots exploration and geoscience are required to discover rare and valuable new deposits, which eventually may lead to the new major mines in B.C., such as Mt. Milligan, a $1.5-billion copper and gold mine that was opened in 2013 by Thompson Creek Metals Co. and employs 350 people north of Prince George.
And the industry will be further buoyed this year by seeing the opening of B.C.’s next major copper and gold mine, Red Chris, owned by Imperial Metals Corp. There is also the 287 kV Northwest Transmission Line under construction by BC Hydro with a planned completion date for this May.
Gavin C. Dirom is president and chief executive officer of the Association for Mineral Exploration British Columbia.
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