A strong exploration year for British Columbia

The British Columbia & Yukon Chamber of Mines, founded in Vancouver in 1912, recently held its 79th annual general meeting at the Eighth Annual Cordilleran Geology and Exploration Roundup. A record number of nearly 2,000 delegates attended the technical sessions, poster sessions, supply and service displays and core shack displays at the 4-day meeting in Vancouver arranged by the British Columbia & Yukon Chamber of Mines with strong technical input and support from the British Columbia Ministry of Energy, Mines and Petroleum Resources and the Geological Survey of Canada. ~A highlight of this year’s meeting was the Old Timers Lunch” hosted by the chamber for 60 geologists and prospectors — all over 70 years of age. This group represented an impressive array of exploration talent responsible for the discovery and development of British Columbia and Yukon mineral resources between 1940 and 1980.

The Chamber of Mines presented the Edgar A. Schulz Medal for outstanding contribution to mine development to Albert Bert” Reeve for his work in taking the Black Dome Mountain gold mine through exploration development and feasibility to successful production.

John Stollery, president of Cordilleran Engineering, was presented with the H.H.Spud” Huestis Award for prospecting and geoscience technology in recognition for his contributions to the discoveries of lead-zinc at Robb Lake, B.C. (1971), lead-zinc at Goz Creek, Y.T. (1973), lead-zinc at Gayna River, N.W.T. (1974), tungsten-molybdenum at Logjam Creek, Y.T. (1979), zinc-silver at Logan, Y.T. (1979), and zinc-silver-lead-barite at Midway, B.C. (1980).

Total Canadian exploration expenditures declined significantly in 1990 compared with 1989. Much of this decline could be attributed to decreased exploration by non-producing junior exploration companies whose ability to raise financing was severely impaired by the new tax flow-through share regulations introduced by the federal government in early 1990.

These new rules dramatically altered the risk-return equation for flow-thorough shares and made them much less attractive to the investor. The decline in exploration during 1990 was mainly experienced in Eastern Canada, especially in Ontario where the impact of the loss of flow-through financing was felt the most.

In British Columbia, flow-thorough private placements arranged through the Vancouver Stock Exchange amounted to $92 million – essentially unchanged from the $92.7 million financed during 1989. Preliminary estimates of total 1990 exploration spending in British Columbia are about $160 million, slightly higher than the 1989 expenditures of $150 million.

Continued high levels of exploration investment in British Columbia during 1990 can be directly related to the confirmation of two significant mineral discoveries at Eskay Creek and Mount Milligan. During 1990, the control of these deposits passed from the VSE junior companies that discovered and developed them to the major mining companies that will organize production of metal: Corona and Placer Dome at Eskay Creek and Placer Dome at Mt. Milligan.

Financed by a rising Vancouver stock market in the first six months of 1990, extensive exploration plays developed in northwestern British Columbia and around Prince George. It is estimated that $83 million alone was spent in 1990 in exploring for gold and base metals in the region extending north from Stewart, B.C., through the Unuk River, Iskut River, Galore Creek and Telegraph Creek districts.

As we enter 1991, investors of exploration risk capital in British Columbia are closely watching developments at Windy Craggy, Eskay Creek and Mt. Milligan to see whether these three deposits can move forward to production without undue delay and financial loss resulting from environmental permitting. In addition, exploration activity in the 1990s is bound to be influenced in some way by the British Columbia government’s major policy initiatives that involve proposals to set aside large areas of the province for parks and forest wilderness areas.

Add this to the current economic downturn and uncertainties connected with resolution of the British Columbia Indian land claims and you can see why it’s hard to find anyone who will predict that 1991 will be a better year for exploration in British Columbia than the year just past. W.J. Wolfe is president of the British Columbia & Yukon Chamber of Mines.