MINERAL REVIEW AND FORECAST: EXPLORATION AND DISCOVERY

Canadian exploration expenditures totalled almost $800 million in 1990, compared with $828 million in 1989. A survey of companies carried out at the beginning of 1991 suggested that $646 million would be spent in 1991. However, funds raised from new stock issues by junior companies appear to have proved insufficient to support such a level. Energy, Mines and Resources Canada (EMR) now estimates that 1991 exploration expenditures were only $530-$580 million.

In 1990 exploration expenditures on precious metals (almost entirely for gold) accounted for about 58% of total expenditures, down from 67% in 1989. Expenditures for base metals, at 30% in 1990, were up from 23% in 1989, increasing both in percentage and in dollar terms.

Junior companies accounted for 23% of exploration expenditures in 1990, down from 33% in 1989. EMR estimates that this percentage fell again in 1991.

British Columbia, Quebec and Ontario (ranked in decreasing order of expenditures) jointly accounted for almost 75% of exploration in 1990, up slightly from 1989. Relative to 1989, expenditures in 1990 were up in New Brunswick, Quebec, Manitoba, British Columbia and the Yukon and considerably higher in Alberta. On the other hand, expenditures were considerably lower in Nova Scotia and lower in Newfoundland, Ontario, Saskatchewan and the Northwest Territories.

While it is still too early to properly evaluate Canadian mineral discovery information for 1990 or 1991, an overview of Canadian exploration successes during the 1980s is of interest. The emphasis on gold exploration during the 1980s led to record numbers of discoveries and quantity discovered. However, except for Hemlo, Golden Pond, Eskay Creek and a few other notable deposits, few Canadian gold discoveries of the 1980s appear to be especially significant and few prospective new gold mines are now in sight.

Despite the fact that during the 1980s base metal exploration expenditures averaged (in constant dollars) only about 20% lower than the average of the 20 previous years (a period in which there were many important finds) it did not prove to be particularly successful during the 1980s when only 13 important base metal deposits were discovered in Canada. About half of them are not currently viable. No “world-class” deposits were found. The Windy Craggy copper deposit, which apparently fits this description, was further explored in the 1980s but was originally discovered in 1965.

During the 1980s, an average of 1.3 large base metal deposits were discovered in Canada each year, about half the 2.3 deposits discovered annually over the preceding 31 years. Even if the largest Canadian base metal discoveries of the 1980s turn out to be twice their currently known size, the average metal content of each of the 1980s discoveries will amount to only half that of the largest base metal deposits discovered in Canada during the 1949-79 period.

Uranium discoveries represent a Canadian mineral exploration highlight of the 1980s. More than 25 deposits were found, all but one of them in Saskatchewan and many of them high-grade, world-class deposits. Unfortunately, uraniumprices, in terms of constant dollars, are now at their lowest level since at least the 1930s and this seriously undermines the viability of these deposits.