EDITORIAL PAGE — A banner year

The takeover of Diamond Fields Resources by Inco, the acquisition of Arequipa Resources by Barrick Gold, the green light for diamond mining in Canada’s North, and the blossoming of the Busang gold deposit in Indonesia helped make 1996 a remarkable year for the mining industry.

Inco’s development of the Voisey’s Bay nickel-copper project in Labrador will bring new jobs and prosperity to a part of Canada in desperate need of them. A new smelter will be built in Newfoundland, the first to be constructed in North America for decades. In addition, the proposed diamond mine in the Northwest Territories will bring an important new industry to this country, as well as greater self-sufficiency and increased economic independence for northerners.

In each case, jobs and economic benefits will be shared with local aboriginal communities, which are also plagued by unemployment.

Voisey’s Bay and the NWT Diamond project have generated increased exploration spending in Canada. By current estimates, close to $1 billion will have been spent here this year by Canadian and foreign companies enthusiastic about this country’s mineral potential.

North American stock exchanges (a weakening of the gold price and a slight year-end trading slump notwithstanding) also enjoyed a heady year. But it was also a year that saw such former high-flyers as Timbuktu Gold, Cartaway Resources and Canadian States Gas suffer an embarrassing induction into the Crash-And-Burn Hall of Shame.

Canadian exchanges became the place to raise capital for both domestic and international mineral exploration and development. During the past year, resource companies from as far afield as Africa and Australia sought listings on North American exchanges in order to raise both funds and their profile.

An estimated 60% of the capital raised for mineral exploration worldwide is generated on Canadian exchanges, a trend that is likely to continue in the years ahead.

International exploration also came of age this year, with many new projects being advanced to mine development. That list includes Sadiola Hill in Mali, which expects to pour its first gold by year-end, and Cameco’s Kumtor gold mine in Kyrgyzstan. Mexico enjoyed a resurgence of exploration activity, and a number of companies ventured into the former Soviet Union to revive existing operations and develop new mines. Although culture shock is becoming more common in an increasingly global mining industry, the benefits for all parties involved cannot be denied.

South African mining houses took a cue from their North American counterparts and began pursuing foreign projects en masse. Some of those firms formed “strategic alliances” with junior companies working in Africa or elsewhere in the world.

Closer to home, Nevada experienced an exploration revival in 1996. Barrick Gold opened a new mine, and royalty sisters Franco-Nevada Mining and Euro-Nevada Mining reminded everyone that discoveries could still made in this mineral-rich part of the world.

1996, however, was also the year that U.S. President Bill Clinton bowed to pressure from preservationists and killed the New World gold-copper project in Montana. Recent political unrest in Peru and the Indonesian government’s interference in the Busang gold project served to remind investors that international projects are not without risk.

Although 1996 was not without its disappointments, many new mineral discoveries helped make it a good year for the mining industry. The supply side appears to be in great shape, and it is our hope that the demand for metals and minerals, as well as the economies of developing nations, will strengthen in 1997.