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B.C. explorers boost spending for first time since 2012

by Greg Klein | March 5, 2018

Despite a bad year for wildfires, it’s British Columbia’s first mineral exploration spending increase in four years and a substantial increase at that. The sector spent over $41 million more in 2017 than the previous year, a 20% jump to total $246 million province-wide. Most of the activity took place in two regions, with the northwestern Golden Triangle accounting for more than $11 million of the $41-million increase, showing a regional total of $82 million. In the southern Interior’s Cariboo, exploration increased by $19 million, 70% more than in 2016.

The data comes from the second annual British Columbia mineral and coal exploration survey released at PDAC on March 5 by EY, B.C.’s Ministry of Energy, Mines and Petroleum Resources, and the Association for Mineral Exploration. Twenty prospectors and 175 companies contributed responses.

“Although still considerably down from the peak years of 2011-12, there is cause for optimism that the upward trend will continue given the outlook for continued price stability, an overall strengthening of global market sentiment towards exploration, improvements in the capital markets for financing mineral and coal exploration, and a more favourable future market outlook,” the report stated.

The 2017 bleak spot was the province’s northeast, where exploration plunged 75% to $2.4 million last year, mostly due to diminished demand for Peace district coal.

Diamond drilling in B.C. more than doubled from 300,000 metres in 2016 to over 600,000 metres last year, accounting for 37% of total exploration spending.

Although the report cautions that it’s too early for a conclusion, the results seem to indicate the province has set a “reset” button on the mining cycle, as projects advance through the early stages. Grassroots work accounted for 41% of activity in 2016 but only 23% in 2017. Instead, last year saw an increase to 60% of exploration at the early and advanced levels, described by the report as the two stages following grassroots and preceding stages four and five: mine evaluation and mine lease.

The quest for gold accounted for 87%, or $37 million, of the province’s $41-million increase. Silver exploration spending more than doubled to $9.8 million, while zinc saw a nearly 50% leap to $8.2 million.

“It’s reassuring to see exploration spending returning to B.C., particularly as resource depletion returns to the list of industry risks,” commented AME director of corporate affairs Jonathan Buchanan. “We’re also encouraged to hear survey respondents remain committed to working with First Nations when sourcing new resource deposits to ensure benefits extend to the local or surrounding communities.”

Noting that the province’s mining revenues are “expected to approach $9 billion annually,” Gordon Clarke of the B.C. Mineral Development Office added, “It’s important to identify new development opportunities and encourage the continued development of a robust exploration industry.”

Among other encouraging signs for the sector, a November PricewaterhouseCoopers report pronounced an increase in market caps, financings, M&A and IPOs for TSXV-listed mining/exploration companies.

Download the British Columbia mineral and coal exploration survey 2017.

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