Future of B.C. exploration in question

A much discussed topic at the 12th Annual Cordilleran Geology and Exploration Roundup was the role played by junior companies and by the Vancouver Stock Exchange in the discovery and development process.

Most of the 41 presenters at the Vancouver show were juniors who are either listed on the VSE or are somehow associated with it. And many of these companies expressed concern that regulatory changes at the exchange would prompt many Vancouver-listed juniors to flee to other exchanges. John Kaiser, who writes the Kaiser Bottom-Fishing Report out of Moraga, Calif., expressed grave concern over the future of the exchange: “Unless the VSE makes it resource listings the top priority, pegs its identity to the role of raising venture capital for resource exploration and development, tailors its rules to accommodate resource listings, and dedicates its resources to vetting resource company acquisitions and financings, the ensuing exodus by resource juniors will lead to the VSE’s extinction.” John Brock, chairman of the Western Prospectors Group and public governor of the VSE, estimates that the exchange raised $1.3 billion last year, second only to 1987. Of that total, $800 million went to more than 100 exploration companies with projects throughout the world.

Brock estimates that $100 million of the money raised in 1994 will stay in Vancouver to maintain corporate headquarters, but he conceded that much of what was raised will be spent outside Canada. For example, as of last October, well over half of the 813 exploration companies listed on the VSE had reported activity in South and Central America.

Brock’s concern was shared by Gerry Carlson, president of the British Columbia & Yukon Chamber of Mines, who said that “business is booming, but the trouble is, it’s all offshore.”

The Chamber is alarmed that exploration activity in British Columbia — particularly early-stage work — is at an all-time low. It maintains this is a direct consequence of negative land use decisions, such as Windy Craggy and the Kemano Completion project.

Exacerbating the problem is the government’s treatment of mining and exploration in land-use forums such as the Commission on Resources and Environment. “The value of mining activity per hectare of land disturbed is 15 times greater than cents that] for forestry and 100 times greater than cents that] for agriculture, yet it is these industries that dominate land use planning,” Carlson added.

One of the biggest problems faced by the industry is that although a mine uses little land, successful exploration requires a broad land base. Brock estimates resource financings on the VSE will drop to $400 million in 1995, with an emphasis on advanced exploration. He also anticipates an increase in takeover offers for selected juniors by major mining companies as the better projects begin to take shape.

By Brock’s count, there were 25 “new acquisition” and “corporate development” representatives circulating at the Roundup.