LandKeepers News Archive
Mining slowdown expected
December 29 2008 | News Articles | Prince George Citizen
Mining slowdown expected
Written by GORDON HOEKSTRA
Citizen staff
Monday, 29 December 2008
The revitalized mining sector in B.C., after successive record annual exploration spending, including in the north and central regions of the province, is expected to slow down in the coming year.
The slowdown is a direct response to tumbling mineral prices, stock values and tightening credit precipitated by the global financial crisis. Signs of the slowdown can already be seen.
Terrane Metals has delayed the start date of its proposed $917-million gold and copper mine northwest of Prince George until 2010 at the earliest. Originally, given the mine received the green light for its environmental assessment from the province and Ottawa, the Vancouver-based company had hoped to start building in the fall of 2009.
Thompson Creek Mining also halted its $374-million expansion of its Endako molybdenum mine west of Prince George. Western Coal took a similar step on its $100-million Willow coal mine project north of Prince George.
Cross Lake Minerals is also halting production at its small gold mine south of Prince George.
All of these development have happened quickly and recently.
In his year-end message, Gavin Dirom, the president of the Association of Mineral Exploration of B.C., noted simply that the “boom we have enjoyed is over.” Although exploration started strongly in the year, it has slowed since, and now spending on exploration is expected to be just more than $300 million. Mineral exploration spending had surged to a record $416 million in 2007 — the majority spent in north and central B.C. — after hitting a low of $29 million in 2001.
The mineral exploration association is forecasting that that spending will drop again in 2009, as many companies curtail discretionary spending to weather the current economic crisis. The association — which represents many companies working in northern B.C. — notes that most analysts continue to predict a recovery in the commodity prices beginning in mid-2009, with the industry returning to another protracted upturn, possibly greater than the previous one, driven by the rapid industrialization of emerging markets like China and India.
“However, until the anticipated turnaround occurs, the mineral exploration industry must brace itself for a difficult period ahead of fiscal restraint,” said Dirom.
Still, the exploration association pointed out that many of the facts and fundamentals that make British Columbia a safe haven for mineral exploration dollars have not changed.
The province has world-class geology and professional expertise in geoscience, exploration, mining engineering and technical operations, including key areas of environment, health and safety. More than 800, or 50 per cent, of Canadian exploration companies are based in B.C. with Vancouver having the largest concentration of exploration companies and mining professionals in the world.
Geoscience B.C. — created with $20 million in seed money from the provincial government — has also been trying to enhance mineral information in north and central B.C. with high-flying helicopter surveys.
Recently, the B.C. government announced the creation of a new Economic Task Force for Mining meant to bring together industry leaders to monitor the economic situation and recommend measures to mitigate the effects of the global downturn on the mining industry.
Other changes include increasing the mountain pine beetle-affected area that the provincial mining exploration tax credit is available. Companies like Serengeti Resources are able to use the tax credit because they have projects in the pine beetle area, including north of Prince George. Serengeti president David Moore estimates the tax credit will give them $2 million to $3 million to spend next year.
“That’s an important part of our budget next year. We just put it back into exploration,” he said.
Serengeti Resources Inc., a Vancouver-based company, made a new gold discovery about two years ago in B.C.‘s Northern Interior, north of Fort St. James. The Kwanika discovery — about 250 kilometres northwest of Prince George — set Serengeti’s stock soaring, and enabled the company to raise more than $25 million to carry out additional drilling and exploration.
Just recently, Serengeti Resources and partner Fjordland defined a high-priority drill target located near Terrane Metals’ Mount Milligan copper-gold deposit. The site, 15 kilometres southwest of the Mount Milligan deposit, where Terrane has proposed building a $917-million mine, is within two kilometres of a major resource road. The target area is one of six that Serengeti and Fjordland pinpointed as part of a joint venture to explore for precious and base metals in a 950-square-kilometre area in the Northern Interior.
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