Permit delays top concern among CEOs

CEOs of small and mid-cap companies are optimistic about the future of Canada’s mining industry despite frustrations with government red tape and land claim issues and a shortage of skilled workers, a new survey says.

Blue Note Mining (BN-T), a junior company based in Montreal, sent an email questionnaire to 175 Canadian mining companies in May and June and received 33 responses. Companies with a quoted market value between $50 million and $300 million were targeted.

Blue Note president and CEO, Michael Judson, says the company conducted the survey out of curiosity about the outlook of other companies. He also said there was a public relations element to conducting the survey to make connections with other companies.

“We were attempting to enhance our profile among our peers and enhance the possibility of dialogue so that was the first goal and to see what everyone’s collective concerns were in this business,” Judson says.

A strong proportion of CEOs say they are optimistic about the industry’s prospects for success with 44% optimistic and 16% very optimistic while 12% rated themselves pessimistic.

The industry isn’t perfect though. CEOs say that getting a mining permit is one of the top barriers to success with 33% ranking it as the top barrier followed by government regulations and community resistance at 21%.

Nearly three-quarters of CEOs are concerned about the shortage of skilled workers with 42% saying it’s the most important issue facing the mining industry. Aboriginal land claims and government regulations were also rated as key issues.

Judson says he wasn’t overly surprised the by the results, especially concern over the length of time it takes to get a mining permit.

“The process of obtaining a mining permit is notoriously slow,” Judson says. “The kiss of death for a public company is having to wait on something because your shareholders don’t want to wait they want to see movement and progress.”

Judson says the Blue Note will possibly conduct more surveys in the future. He says he’d like to dig deeper into how government regulations are affecting companies.

The survey results will be sent to the Canadian Institute of Mining, Metallurgy and Petroleum and the Prospectors and Developers Association of Canada.

Blue Note operates the Caribou zinc mine in New Brunswick. The company recently cut its workforce by 75 to 300 and lowered capital spending to $17.8 million from $28.3 million due to lower metals prices.