The health of this country’s junior mining sector improved steadily in 2000 and 2001, according to an annual survey by the Prospectors & Developers Association of Canada. More companies were active, more projects were being explored and more money was raised and spent.
After several years in which international exploration predominated, the junior sector has redirected its focus to Canada, pursuing diamonds and platinum group elements, as well as the traditional precious metal and bas metal targets.
Of the 1,000 juniors contacted for the 2001 survey, 25% responded. These companies reported average exploration expenditures of $811,000 in 2000, compared with the 1998 low point of $676,000. Also, they raised more financing than they spent, reversing the previous trend.
Last year, the Canadian junior sector spent $185 million (plus or minus 15%) domestically and $400 million worldwide, compared with Natural Resources Canada estimates of $141 million in 1999 and a $149 million in 2000.
The sector raised $1 billion in 2001, compared with $700 million in 2000. Much of the increase is due to flow-through share financing, a large portion of which consists of super flow-through shares. Flow-through financings increased more than 70% compared with 1998-1999.
The percentage of total worldwide spending directed at projects in Canada is forecast at 46% in 2001, up from a low of 28% in 1997. During the same 4-year priod, Latin America’s share declined to 22% from 35% and Africa fell to 9% from 19%. The U.S. rose to 9% from 4%.
The PDAC study was performed by Toronto-based Gamah International.
— The preceding is from the Prospectors & Developers Association of Canada.
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