Mining exploration hot in BC
The mining and oil and gas sectors offer a promising vein of prosperity for people and communities in central and northern British Columbia. Exploration activity is at or near record breaking levels, indicating a healthy confidence in the future. BC had captured about 18 per cent of Canadian mineral exploration expenditures by 2006 and that interest has only accelerated, points out Rob Pease, chairman of the Association for Mineral Exploration in BC.
A record $416 million was spent on mineral exploration in BC during 2007. About $95 million of that was invested in 88 projects in central BC. Gold, silver, copper, molybdenum and zinc are the big five commodities whose prices remain high.
“China, India, Brazil and some of the former Soviet Union countries are drivers of commodity prices and that speaks well to the demand for our metals,” notes Pease. It also helps explain why early in 2008 there were 33 mine development projects under review in BC.
The mountain pine beetle is playing an unwitting role in the surge in mineral exploration in the region between Williams Lake and Mackenzie. GeoScience BC, an industry-led applied geoscience organization, has initiated the Quest strategy to collect and distribute the results of geochemical and geological surveys to stimulate exploration in the region. The Quest program is being expanded west to the Smithers area.
The provincial government is playing its part with $25 million and in offering exploration companies a 30 per cent enhanced tax credit for working in beetle kill areas. More than 750,000 hectares have been staked in the Williams Lake-Mackenzie region. The closest major project to Prince George is Terrane Metals Corp’s proposed Mt Milligan gold and copper mine, about 155 kilometres northwest of the city. The $827 million mine is in the environmental review process. If it gets the green light from the regulatory authorities and First Nations, it will create about 350 permanent jobs and 600 during construction.
Five major metal mines are in production in the region from the Cariboo north, and there is a handful of coal producers concentrated in the Chetwynd and Tumbler Ridge areas. But it’s not all been joy and roses for the provincial mining exploration sector. Pease says mining is a very risky global business and money is flighty. It’s a business with a long lead time with perhaps 15 to 20 years to develop a new mine, he adds.
The high flying Loonie is no advantage and serious labour shortages are looming. The $200 million Kemess North mine was scuttled by a federal/provincial environmental review panel. Northgate Minerals Corp, the mine’s proponent, has since made investments in Australia. The mining industry was shocked when NovaGold Resources and partner TeckCominco announced last November they were halting construction on the flagship Galore Creek mine project after estimated costs exploded from $2.2 billion to $5 billion.
Rick Van Nieuwenhuyse, NovaGold’s president and CEO, said earlier this year the partners were committed to the project located in a remote area of north western BCand a new development plan to make it work is underway. “We’re going to be turning over a lot of stones in the next 12 to 18 months,” he vowed. The oil and gas sector continues to drive the economy of northeastern BC. The provincial government is a huge beneficiary, taking in more than $1 billion from the auctions of natural gas and oil lease rights during 2007.
North American natural gas inventories were high during the 2007-08 winter, but drilling in BCfrom Fort Nelson to Tumbler Ridgewas boosted by a planned increase in royalties imposed by the Alberta government on producers there.
Favourable geology in the Nechako and Bowser basins (the latter north of Terrace) has re-ignited exploration interest. And in the south, the Dawson Creek area is hot. Companies are super keen to explore further in the West Dawson and Sunrise fields near Groundbirch. The new darling of the north is the shale gas play in the Horn River Basin east of the Liard Highway in northeastern BC.