Worldwide venture slowdown can’t stop hunt for minerals in B. C.

Outlook rosy as province’s industry hits spending record of $ 680 million

Spending on mineral exploration in British Columbia hit a record high in 2012 for the second year in a row, surpassing $ 680 million despite a worldwide slowdown in venture capital spending that many expected would affect the province’s mining sector.

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CHRIS RATCLIFFE/ BLOOMBERG FILES

Premier Christy Clark announced the record spending — a 47- per- cent increase over last year’s record $ 463 million — Monday at the annual Vancouver convention of the Association for Mineral Exploration in B. C.

The 2012 numbers are viewed by the industry as a sign of what lies ahead for mining in B. C. and Clark’s announcement was greeted with applause by the convention delegates who packed the Westin Bayshore conference room where she spoke.

“It’s a huge vote of confidence in British Columbia,” said AIM B. C. chairman Michael McPhie. “Those are real numbers. The reality is that level of spending will result in new discoveries and major new mines in the province.

“I run a public company and I know how difficult it is go out there and raise money, particularly for new projects,” said McPhie, president and CEO of Curis Resources. “To get that level of spending at a time when the world economy is in such a great amount of turmoil and there is such a tepid nature in the investment business, really speaks volumes to B. C.’ s position as a global centre for exploration and mining. It bodes really well.”

Not only is spending up, said association president Gavin Dirom, but B. C. is attracting the world’s major players in the mining business and taking a bigger piece of overall Canadian exploration expenditures.

B. C. is now attracting 20 per cent of all expenditures in Canada, up from five to six per cent in the late- 1990s, he said.

“This is great news. This is exactly what we have been trying to do for many years now is to encourage that investment,” he said. “It’s the right policy measures in place and, yes, there has been a commodities boom, which is a factor, of course.”

The convention, billed as the world’s premier mineral exploration conference, has attracted more than 7,000 delegates. The message they heard Monday was what they came for — mining in this province is going through a renaissance, with three new mines in production since 2011, three under construction, and five approvals for expansion.

There are 50 to 55 advanced exploration projects, said Bruce Madu, director of mineral development at the provincial energy and mines ministry.

At the same time delegates were digesting the 2012 numbers, the Conference Board of Canada released a report forecasting a doubling of mining expenditures in Canada’s North over this decade, with northern B. C. expected to see the most growth.

“Mining output ( in northern B. C.) will increase by an impressive 300 per cent between 2011 and 2020, a compound annual growth rate averaging 17 per cent,” the conference board report stated. “With several new mines opening between 2013 and 2020, it is not surprising that employment will shoot up as well.”

Dirom also said the growth in the industry can be attributed to the fact that the B. C. industry and government have taken a leading role in Canada in addressing First Nations issues over resource use and revenue sharing. It has brought more certainty to the province’s mining sector. At Monday’s session, the audience was heavily sprinkled with aboriginal delegates and First Nations have their own pavilion at the convention.

Earlier in the day, New Gold president Bob Gallagher outlined to a breakfast meeting his company’s approach to First Nations. New Gold’s New Afton mine near Kamloops is one of several B. C. mining operations where First Nations have a wide range of agreements with the company and a revenuesharing agreement with the province. At New Afton, 20 per cent of the employees come from nearby First Nations. Financial considerations are critical, Gallagher said.

“You are making a huge impact on their land and are there for only a little while and then gone,” he said.

Companies need to talk often and talk early to First Nations, he said, if they expect to be successful in developing projects. “We all want to do the right thing; most of the time we do do the right thing,” Gallagher said of the industry. “But we have a pretty checkered history, to be frank.”

He said New Gold has a communications protocol with First Nations laying out who talks to whom about what. As president of New Gold, he is personally involved in discussions with leaders, he said.

Gallagher also briefed the delegates on the company’s Blackwater project, a major gold- silver discovery 110 kilometres south of Vanderhoof. He said New Gold spent $ 130 million on the project in 2012 alone.

“The deposit lay undetected for years and years because the whole Nechako plateau is covered by a relatively shallow covering of glacial till, so there is very little outcrop in the whole area. It’s basically unexplored so there is a lot of activity up there now.”

That region of B. C. is active for exploration, Madu noted. He also told delegates about a new technology being used in B. C. for outlining ore bodies that makes use of the fact that solar rays will pass through the earth but are stopped by certain ore bodies. The technology involves sub- atomic particles called muons.

“So if you can get underneath your ore body and look upward, the shadows of the muons will give you some indication ( of what is there),” Madu said.