Despite the current level of uncertainty, Canada remains a treasure trove of mineral resources, a Federal government official said Monday.
However, the amount spent on exploration and deposit appraisal in Canada is expected to fall by about 14% this year to $3 billion, said Arlene Drake, an exploration analyst with the Natural Resources Canada.
Speaking to the Prospectors & Developers Association of Canada mining conference in Toronto, Drake said much of the decline is attributable to the restricted availability of funding for early stage exploration.
“The jurisdictions most affected by the decline include the Canadian Yukon and Ontario,’’ said Drake, who was participating in cross-country check up of exploration across the country.
However, further decreases in exploration spending are expected in all provinces, except for New Brunswick, Saskatchewan, Nova Scotia and Quebec.
Still, a roster of advanced projects is expected to keep exploration spending above the $3 billion level.
Over 80 companies have indicated their intention to spend over $10 million in 2013, Drake said.
In Manitoba, for example, HudBay Minerals Inc. (TSX: T.HBM, Stock Forum) is developing its flagship Lalor gold-zinc-copper mine near Flin Flon at a cost of over $700 million. The first full year of production is expected in 2015, the company has said.
In Quebec, provincial mining officials are looking ahead to the development of four new mines. They include Stornoway Diamond Corp. (TSX: T.SWY, Stock Forum)’s Renard project in north central Quebec. Canada Lithium Corp. (TSX: T.CLQ, Stock Forum), which is raising $20 million from a bought deal financing, is developing its Quebec Lithium mine near Val d’Or. Goldcorp Inc. (TSX: T.G, Stock Forum)(Eleonore) and Iamgold Corp. (TSX: T.IMG, Stock Forum) (Westwood) are also developing gold mines in Quebec.
In Newfoundland, the province’s next gold mine is expected to be Marathon Gold Corp.’s (TSX: T.MOZ, Stock Forum ) Valentine Lake project.
“They have outlined something like one million ounces and there is the potential for quite a bit more,’’ said Peter Dimmell, President and CEO of Silver Spruce Resources Inc. (TSX: V.SSE, Stock Forum), which is exploring the Big Easy gold/silver project in eastern Newfoundland.
“Precious metals (mainly gold) remain by far the most important commodity group in terms of dollars spent, said Drake.
Gold accounted for 46% of the exploration spend in 2012, with base metals accounting for 19%. A further 9% of the total was devoted to iron ore exploration, which is experiencing something of a revival.
Spending on chromium exploration has also jumped from zero in 2007, thanks to some recent discoveries in northern Ontario.
Drake said there are currently 3,000 active projects in Canada, including 84 which have reached the feasibility or pre-feasibility stage, 92 which have reached the preliminary economic assessment stage and 250 with technical reports attached.