Concern over dwindling base metal reserves in Canada has shifted a certain amount of attention away from companies exploring exclusively for gold to those with exposure to promising zinc, copper, and especially nickel projects.
One company riding the wave of renewed interest in exploration for nickel and copper has been Toronto-based junior, McNickel Inc. (COATS).
The discovery last year of significant base metal mineralization on the McNickel property near Lac St. Jean, Que., sparked a flurry of staking activity not seen since the days of the gold rush at Hemlo or Casa Berardi.
McNickel plans to spend about $3.5 million to assess the potential of its copper-nickel prospect in Quebec during the next three years. The recen tly formed junior is just one of the more than 20 companies with properties near Lac St. Jean where much exploration news is expected in the months ahead.
It was only in recent years, however, that nickel prices have been high enough to stimulate renewed exploration and the outlook by most metal analysts is that prices for nickel will fall to around the $4.00-$4.50(US) per lb range in the year ahead.
London-based metals analyst Shearson Lehman Hutton’s best estimate of next year’s average nickel price is $4.25.
Nickel prices had remained about $1.75 per lb through most of the early to mid-1980s. At the beginning of 1987, nickel was $1.60 per lb and rose by year-end to $4.24 per lb, a record high. Early last year, a combination of record consumption, low inventories and stoppage of nickel production from several countries, pushed the cash price to $10.84 per lb. Prices have decreased since the peak and have recently been around $7.00 per lb.
Renewed interest in base metals exploration by an increasing number of junior mining companies can only be regarded as an encouraging trend, given recent fears of declining base metal reserves in Canada.
Industry analysts have warned that the few base metal deposits currently recognized in Canada as “promising” will not be sufficient to take over from current mines that have less than a decade of production life left.
A recent report by the federal department of Energy Mines and Resources indicated that of the 161 current metal-bearing deposits classed as promising in Canada, only 22 are for base metals. Currently Promising Metal-Bearing Deposits PreciousBase Location Metals Metals Total Atlantic provinces 9 2 11 Quebec 40 3 43 Ontario 40 2 42 Prairie provinces 23 2 25 British Columbia 19 9 28 Territories 8 4 12
Canada 139 22 161
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