B.C. eyeing $9.5 billion in mine development spending

Vancouver – British Columbia kicked off the most important conference on its mining calendar, by predicting that the province will draw $9.5 billion in mine development spending in the next four years.

The forecast comes from B.C.’s Geological Survey Branch, which expects that money to be invested in roughly 50 projects, potentially generating as many as 8,000 jobs.

That includes up to seven mines, which are likely to reach the production threshold in 2007, an increase from three in 2006, according to Tom Schroeter, the survey branch’s senior regional geologist.

“These are very exciting times for all of us,” said Mr. Schroeter during the first day of the Roundup 07 Mineral exploration conference in Vancouver.

Following a speech to some of the 4,500 delegates who are attending this week’s conference, Mr. Schroeter tempered his remarks, telling reporters that they are based on ballpark estimates.

The B.C. Ministry of Mines is not quite that optimistic, saying only that it expects to see up to half a dozen mines hitting the production stage within the next two years.

But regardless of the final number, Mr. Schoeter said these forecasts indicate how “robust” the province’s exploration scene is likely to be in the next few years.

Driven by rising investor confidence, soaring commodity prices and lower taxes, exploration spending in B.C. hit a record high of $265 million in 2006, according to Bill Bennett, B.C.’s Minister of State for Mining. That marked an increase of 20% from the previous year.

At current rates, B.C. has seen its share of exploration activity across Canada rise to about 16% in 2005, from 6% in 2001.

Exploration officials say they are particularly pleased to see that nearly 72 of the 617 exploration projects carried out in the province last year involve budgets of more than $1 million, a 67% increase from the previous year.

Another pleasing sign, they say, is the number of projects that have entered the environment review phase 23 in 2006, up from 18 the previous year.

“These are the kinds of numbers that we need to see to sustain the industry here,” said Rob Pease, Chairman of the Association for Mineral Exploration, B.C.

Still, the news from B.C. isn’t all good. While U.S. giant Hecla Mining (HL-N) of Coeur d’Alene, Idaho, is set to open a corporate office in Vancouver, Mr. Schroeter said he is unhappy with the level of spending in the province by senior mining companies.

“The number of major mining companies involved in exploration here is nowhere near what we would like to see,” he said, adding the lack of activity is partly attributed to the merger and acquisition activity, which has swallowed up former B.C.-based giants like Placer Dome.

B.C. mining officials worry that the pace of exploration and mine development in the province, will likely lead to bottlenecks, caused by a lack of skilled labour, drilling equipment and infrastructure.

“The lead time needed to obtain equipment, means that people are going to have to be very innovative,” said Schroeter.

Mining sector officials are also concerned about the complex bureaucracy in Ottawa that they are required to deal with in order to get mining permits.

“We really to have to fix the regulatory quagmire,” said Mr. Pease.