JUNIOR MINING — British Columbia exploration in a trough

Exploration expenditures in British Columbia continue to decline. The major companies at least have a barrage of claims from which to choose and the ready cash to hold tight until political prospects brighten. For juniors, however, the immediate outlook is bleak — unless a major takes an interest.

Expenditures in 1993 are expected to be less than the $50 million spent last year, laments Jack Patterson of the British Columbia & Yukon Chamber of Mines. “With any kind of luck, this will be the bottom.”

Companies outside the province still consider British Columbia a risky place to explore because of the uncertainty of tenure, compensation and high taxation. “Canada has the highest taxation rate in the world,” Patterson says, “while British Columbia has the highest rate in Canada.” Only companies with a committed interest are continuing to work properties within the province, adds Patterson. But some hedging is occurring as shrewd majors hope to be able to cash in on a new political climate. It is believed this new climate, whenever it settles in, will result from either attitudes in the provincial cabinet or electoral change.

“British Columbia stock is low,” says Patterson. “It doesn’t look as if it is going to be high in l994 either. Now is the time to buy.” He says he believes the majors are doing just that.

Teck, for example, is engaged in four or five exploration programs in the province this year, says Fred Daly, British Columbia exploration manager for the company. Geophysics is being carried out on a massive sulphide property in the Clearwater area, which is owned by a Vancouver prospector. Teck is not stockpiling claims, hoping political conditions will ease, Daly says. Rather, “we prefer to pick up properties and evaluate them. If we are not interested, we let them go.”

He says, however, that a lot of British Columbia claims are being submitted to companies for consideration and that prices are right. “They (claim prices) have come down a lot since the days of flow-through (shares of mineral exploration) and the high level of exploration around the Mt. Milligan and Eskay Creek.”

Junior mine developers Robert Dickinson and Robert Hunter have continued working two prospective, large, open-pit copper-gold projects — Fish Lake and Kemess South — during what Dickinson calls British Columbia’s “negative period.”

“People have indicated that they think British Columbia reached the bottom months ago and that the government’s attitude is changing,” says Dickinson. But he concedes it is too late to cash in on mine development, even if political winds shift.

The two developers believe theirs will be the first of the current crop of exploration properties to come “out of the chute.”

“Fish Lake and Kemess South (in south-western and north-central British Columbia respectively) are going to be the next major open-pit copper producers in the province,” asserts Dickinson, adding that their grade has a better net smelter value than any other mine in British Columbia. A release issued jointly by El Condor Resources (VSE) and St. Philips Resources (VSE) states that, by the year 2000, all but two of British Columbia’s major open pits will have their reserves depleted. A budget of $4 million is being divided equally between Fish Lake (Taseko Mines) and South Kemess, both of which will soon enter prefeasibility permitting.

The Siwash North gold project, near Merritt, will be further advanced this year by Fairfield Minerals (TSE). The junior is planning an expanded, $3.5-million bulk-sampling program to test a narrow, but high-grade, vein system. Underground and surface work is aimed at providing more metallurgical information, as well as hard data on underground conditions. “The company hopes this year’s bulk-sampling program will also produce enough ounces of gold to allow for a substantial recovery of costs,” says Fairfield President John Stollery. Limited bulk-sampling last year generated about $2.2 million from the sale of 8,650 oz. contained in 2,030 tons from Siwash North. The Northair group is also continuing work in British Columbia this year, says Vice-president Fred Hewett. Newhawk Gold Mines (TSE) has a $1.6-million budget allocated in two stages. About $1.1 million is being spent to continue surface diamond drilling and prospecting on the Bruceside area in the West zone. (The venture is a 60-40 agreement with Toronto-listed Granduc Mines, with Newhawk as operator.)

Associate company Tenajon Resources (VSE) is spending $600,000 in an equal partnership on the SB Project at Stewart. Work will involve underground drifting and drilling on the Kansas and West Kansas gold areas. International Northair Mines (VSE) still holds its Shear property at Aspengrove, near Merritt, but has allocated none of its budget to this porphyry play. “We are looking for a partner, a major company with which to joint venture,” says Hewett.

— Jean Sorensen is a freelance writer from Vancouver.