New B. C. mines called best indicator of successful exploration

Global financial uncertainty casts a shadow on future of junior ventures

A big question for companies right now, is ‘ can we weather this storm? Do we have enough cash to ride it out?’
MICHAEL MCPHIE
AME B. C. CHAIRMAN

British Columbia is going through a boom of new mines coming onstream just as the Association for Mineral Exploration B. C. stages its 30th annual convention, which kicks off Monday in Vancouver.

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An aerial picture showing the road being built to access Thompson Creek Metals Co.’ s Mount Milligan copper- gold mine in B. C.’ s central interior.

Two new mines, Thompson Creek Metals’ Mount Milligan mine and Imperial Metals’ Red Chris project are under construction, and in 2012 New Gold reopened its New Afton mine.

Further, there is the potential for 30 mining projects to be developed in B. C., a province described as still largely unexplored by the association. B. C. is home to 962 mining companies.

The development of new mines coupled with record exploration spending in 2011 is countered this year, however, with declining investment capital in junior venture companies. Global financial uncertainty is taking its toll on investments in the companies that do much of the exploration and development work.

After hitting a record high of $ 463 million in 2011, the province’s mineral exploration and development sector is expected to have done as well in 2012. ( Premier Christy Clark is to announce the numbers during the conference.)

But the investment mood is changing, according to AME BC chairman Michael McPhie.

He described it as “tepid and a little bit wary.”

Among the conditions making it difficult for companies to raise money, McPhie said, is the “noise in the U. S.” about whether the government would hit a damaging impasse over its federal budget “caused a lot of people to sit on their hands.”

A big question for companies right now, McPhie added, is “can we weather this storm? Do we have enough cash to ride it out?”

“Not all of our members are in that position right now.”

Joint ventures between juniors and major mining companies are one of the ways the B. C. sector is adapting to less direct investment. The province’s recent record for bringing new projects online is helping.

“As explorers and developers competing internationally for investment, we know the best indicator of successful mineral exploration and development is seeing a new mine open,” Dirom said in a recent message to association members.

“The widely- held dream of so many explorers ( and investors) of moving a prospective discovery through exploration, permitting and into construction and production is becoming a reality in B. C.”

Exploration is the lifeblood of the mining sector in B. C. Association statistics show that 60 per cent of all Canadian exploration companies are headquartered in B. C. and are responsible for the largest share of exploration spending in Canada, the U. S., South and Central America, Europe and Africa.

The 2013 Roundup, from Jan. 28 to 31, is themed Resources for Life, Digging Deeper. The conference, billed by organizers as the world’s premier technical mineral exploration conference, attracted 8,000 people last year and is expected to be as successful this year.

To mark the convention and the province’s mining sector, AIMBC president Gavin Dirom was in Toronto Friday to officially open the Toronto stock exchange.