EXPLORATION ’94 — Mining sector in Newfoundland on recovery

It has been a while coming, but Newfoundland’s mining recession is starting to lift, says the province’s mines minister, Rex Gibbons.

Mining companies and individual prospectors are expected to spend a combined $15-16 million on exploration this year, about $4-5 million more than was spent in 1993.

“I think we’re on the growth side of the curve now and things will start to get better,” says Gibbons, who has presided over Newfoundland and Labrador’s mining industry since 1989.

While last year was a slim one for mineral exploration (only $11 million was spent), it had nothing on the previous year.

“In 1992, we hit bottom,” Gibbons says.

This year promises to be auspicious for several reasons. Not only will prospectors spend more money picking over stones, but 1994 could well be the year the Pine Cove gold property is brought into production. The project, on the Baie Verte Peninsula, is owned by NovaGold Resources (TSE). Noveder (ME), meanwhile, plans to spend about $4 million in the next couple of years on underground development at its Nugget Pond property, also on Baie Verte.

Major General Resources (VSE) is also scheduling extensive underground work, at its Hammerdown prospect near Springdale.

“Both Nugget Pond and Hammerdown promise to be small gold mines,” says Gibbons.

The year may also bring good news for the Hope Brook gold mine, on the southwest coast. Royal Oak Mines (TSE) expects to produce 120,000 oz. at the remote operation.

In addition, iron ore production in Labrador is expected to increase slightly over last year.

While 1993 was not a record year for exploration in the province, some significant developments could pay off down the road.

The number of claims pegged jumped 37%, while the amount of drilling climbed to 45,000 metres, well up from the 22,000 metres recorded in 1992. Last year also saw the start of diamond exploration in Labrador, still somewhat of a virgin territory, given its size, isolation and scarce population.

The provincial government launched a $500,000 mineral exploration assistance program in 1993 and continued slashing regulatory red tape. As well, growing interest was shown in the province’s prospector training program. “So there are a lot of good things happening on the mining side,” says Gibbons, who is part of a government that has had precious little of economic import to boast about lately, given the downturn in the cod fishery and the flagging forestry industry.

“When you look around the province, one of the few sectors on the resource side that seems to have some potential for growth and new development is mining,” the minister says.

— The writer is a journalist in St. John’s.