“Between last summer up until January the situation has greatly degraded and the numbers have come down so the companies who at that time expected to be spending more money exploration-wise in Quebec were not able to raise the capital to do the work,” he said in an interview.
He said a lot of big mining companies were expecting to see metal prices remain high, but were squeezed by rising costs when they fell.
“The first thing that goes in this situation is always exploration budgets so some of these investments they were expecting to be doing on some of their projects they’re just sending that into the future,” Beullac said.
“Hopefully in the next two to three years they’ll come again looking at these projects and maybe at that time start investing again major amounts of money to bring them into production.”
More than 96 per cent of the investments last year were in Quebec’s mining regions of Abitibi-Temiscamingue, the North Shore and Northern Quebec, which all experienced decreases ranging between 27 and 37 per cent. Junior mining companies accounted for 65 per cent of all exploration expenditures last year.
Gold remained the most sought after metal. But its 37 per cent share of all exploration expenditures was down from 54 per cent in 2011. The price of gold fell to $1,225 (U.S.) per ounce in December, from $1,750 in September 2012.