BC exploration breaks record in 2007

Vancouver — Exploration spending in British Columbia hit an alltime high of $416 million in 2007, more than doubling last year’s record-breaking level and showing a 1,300% increase over the $29 million spent during the mining doldrums of 2001.

The whopping $416 million was spent on 472 exploration projects for minerals, coal, industrial minerals and aggregates. Of those, 102 projects had exploration budgets in excess of $1 million, up from only 43 in 2006. Another indicator of exploration success — metres of exploration drilling — increased significantly in 2007, with 1.25 million metres drilled through the year compared with 830,000 metres of drilling in 2006.

“Vancouver is a global centre for mineral exploration and what we’re seeing is more and more of those companies are now working in their own backyard,” said Robert Stevens, incoming chairman of the Association for Mineral Exploration B.C. “And we are confident that the numbers we’re seeing today and over the past few years will result in new mines opening as we go forward. That, of course, will benefit everybody in the province.”

The northwest region of the province saw the most activity, taking in $107.2 million in exploration investment for 144 projects. The central area of B.C. attracted $94.6 million in exploration spending over 88 projects, while the 119 projects of the south-central region brought in $84.4 million.

The province now hosts 57 producing mines — 11 mining metal, 10 producing coal, and 36 focused on industrial minerals — and during 2007 the Ministry of Energy, Mines, and Petroleum Resources saw 23 new mine proposals. Four smallscale mines began production in B.C. last year.

It has, however, been more than 10 years since a major new metal mine opened in the province. The project with the best chance to change that was Galore Creek, until NovaGold Resources (NG-T, NG-X) and Teck Cominco(TCK.B-T, TCK-N) shelved the giant copper-gold project late last year due to rising costs.

And the exploration boom is causing problems in terms of the availability of skilled workers and equipment. A Ministry of Mines and Mineral Exploration overview report for the year notes that many companies saw their progress stalled due to a shortage of drills, drillers, field crews, and helicopters, as well as long waits for assay results.

In announcing the record numbers, Mining Minister Kevin Krueger looked to fixing those issues in the future by urging high school and university students with an interest in geology to seriously consider mining as a career.

“British Columbia is steadily gaining a greater share of Canada’s exploration activity, providing a tremendous boost to local economies,” Krueger said. “Job opportunities are everywhere.”

Some 17% of Canadian mineral exploration investments during the last year went to B.C., up from only 7% in 2000.

Sixty per cent of Canadian exploration and mining companies are based in B.C., which is home to the world’s largest concentration of exploration companies and mining professionals. In 2007, the province’s 735 publicly listed exploration companies raised $6 billion in equity capital.

Mining is an important economic driver in B.C., bringing in roughly $6 billion per year in production value. The province ranks third in Canada for the value of its mineral and coal production, with a forecast value for solid mineral production of $5.9 billion in 2007. Coal is the most important commodity by value, with copper second.

The Mining Exploration Tax Credit Program and Exploration Investment Tax Credit for flowthrough investors provide added incentives to attract risk capital to the province. When added to the regular 100% deductions, the provincial and federal tax credits are equivalent to a 141% exploration expense deduction for income tax purposes. The Mining Exploration Tax Credit, usually set at 20%, has been increased to 30% for exploration in areas of the province affected by the Mountain Pine Beetle.