Mining and the Nation: A review and forecast of the industry’s (March 01, 1991)

Preliminary data indicate that Canadian exploration expenditures totaled about $900 million in 1989, down from $1.35 billion in 1988. Although final data for 1989 were not available at the time of writing, indications are that, measured as a percentage of total exploration, base metal exploration accounted for more than 20% of expenditures in 1989, up from only 13% in 1988. However, as total exploration expenditures were down sharply from 1988, the amount spent in 989 on base metal exploration was about the same as in 1988. In 1989, a significantly lower percentage of total exploration expenditures was aimed at gold than the 82% in 1988. Expenditures for uranium exploration more than doubled as a percentage of the total in 1989, with dollar expenditures up by about 25% from 1988.

Energy, Mines & Resources’ estimate of exploration expenditures for 1990 is $750 million to $850 million. An estimated $205 million to $225 million was raised by the sale of flow-through shares in 1990, down from $350 million in 1989.

In order of decreasing expenditures, Ontario, British Columbia and Quebec were the main targets for non-petroleum mineral exploration in 1989. In 1989, exploration expenditures in Ontario were some 55% of the 1988 level; in Quebec, they were slightly more than half of the 1988 level; and in B.C., they were down by only 11% from 1988.

Although Canadian exploration expenditures in 1989 and 1990 were down relative to those of 1987 and 1988, they were still at relatively high levels by historical standards. In 1989 and 1990, exploration expenditures expressed as a percentage of Canada’s value of mineral production were at or above the long-term trend.

Although in aggregate, exploration expenditures by junior companies in both 1989 and 1990 were down relative to the peak years 1986 to 1988, they were still well above such expenditures in any year prior to 1986, in either current dollars or constant dollars.

Exploration Results

Although a record number of gold deposits and record quantities of gold were discovered in Canada during the second half of the 1980s, only a few of those deposits are outstanding. There appear to be few prospective new gold mines arising from the record exploration effort of recent years.

If recent discovery trends continue, it is unlikely that the mining industry will discover the new reserves that will be needed to maintain Canadian production. Although gold accounts for only 10% of Canada’s mineral production, three-quarters of the value of Canadian exploration effort was aimed at exploration for gold. The remaining quarter of Canadian exploration expenditures that were being directed at all the other mineral commodities is not adequate to provide the new mines that will be needed if the Canadiin mineral industry is to continue to produce all metals at current levels.

Lower gold prices are generally considered to be a significant factor in the recent decline of Canadian exploration expenditures. The price of gold averaged $C450 per oz. in 1990..That may seem low relative to prices that prevailed over much of the period 1979-89. But, when adjusted for inflation, the 1990 average price is still significantly higher than the price of gold was at any time before 1979, and higher than the gold price during all the previous periods of gold exploration, gold discovery and gold production in Canada.

If they wish to regain levels of mineral exploration effectiveness of the years prior to the 1980s, it may well be time for companies to reassess mineral exploration strategies.

Forecasted direct employment in mining and primary metals for 1990 was 150,255 jobs, down 3% from 1989. This follows two years of slight increases in total mining and primary metals employment.

This was a year of workforce reductions in each metal mine commodity group. Overall employment in metal mines dropped to 45,461 in 1990, a 7% decline from 1989. Major contributors to this decline were gold and nickel-copper-zinc mines, which decreased by 13% to 10,937, and by 5% to 18,672, respectively.

The 10,984 employees in non-metal mines represent a 5% reduction from the previous year. In contrast, employment in structural materials was 6,266, an increase of 6%. Coal mine employment increased by 12% to 12,068, the largest coal workforce since 1985.

This was a year of workforce reduction in each metal mine commodity group in Canada.

At 44,267, iron and steel mill employment in 1990 was the lowest in 20 years. Non-ferrous smelting and refining employed 31,209 workers, a small decrease from 1989.

Non-fuel semi-fabrication employed 94,425, a 5% decrease from 1989, metallic mineral manufacturing declined 1% to 142,773, and forecasted diamond drilling employment remained stable.

The 1990 collective bargaining calendar was among the busiest in years. Twenty-nine agreements were signed between Jan. 1 and Oct. 1, covering more t tn 23,000 employees.

Major minerals and metals bargaining units of 500 or more employees negotiated average annual wage increases of 5.9%, exceeding the average settlement in manufacturing and surpassing inflation.

Major metal mining increases averaged 6%%per year of the contract, and those in smelting and refining averaged 7.2%. Average settlements in non-metal and coal mines were 2.8% and 3.4%, respectively.

The beginning of 1990 marked the entrance of the Canadian economy into its eighth year of expansion since the 1981-82 recession. However, real economic growth was limited, with Gross Domestic Product increasing by less than 1% in 1990. This was in sharp contrast to the 3% growth achieved in 1989. After first-quarter growth, the economy then began a period of declining activity.

Consumer spending in real terms (after adjusting for inflation) was estimated to have increased by about 1.5%, considerably lower than the 4.3% average growth during the previous seven years. The decline in economic activity also was focused sharply on the business sector. Corporate profits had been sliding for more than a year, interest rates were still quite high, and businesses were having difficulty financing their investment intentions.

Housing starts in 1990 were estimated to have totalled about 182,000 units, the lowest level since 1985, and a major reduction from the 215,000 starts achieved in 1989. The unemployment rate rose to 9.3% by December, the highest rate in more than three years. The rate of inflation in 1990 was estimated at about 4.8%, down slightly from 5% in 1989.

Control of inflation continued to be the key policy concern of the Bank of Canada, which maintained its focus on high interest rates. A wide spread between Canadian and U.S. interest rates kept the value of the Canadian dollar at high levels relative to the U.S. dollar. The high Canadian dollar and weakening export markets had an adverse impact on Canada’s external trade during the year.

The Mineral Industry

With demand remaining relatively strong during most of the year, and supply constrained by a number of factors, metal prices stayed at relatively high levels from a historical perspective. However, as demand showed signs of weakening during the latter part of the year, commodity prices also weakened. Lower prices, in combination with higher interest rates and a strong Canadian dollar, resulted in poorer financial performance for most producers of metals.

The value of Canadian mineral production, including metallic minerals, non-metallic minerals, structural materials and fuels, totalled C$41.3 billion in 1990, compared with C$39.3 billion in 1989. This represented an increase of 5.2% over the previous year.

Copper became the leading metal in terms of its total value of output for the year ($C2.5 billion). Although mine production increased by 10.7% to about 780,000 tonnes in 1990, the value of production increased by only 4.4%. This reflected a lower average price of $US1.21 per lb. on the London Metal Exchange (lme) compared with $1.29 in 1989.

Nickel production increased slightly by 0.5% to about 197,000 tonnes in 1990. The value of production, however, was considerably reduced from the 1989 level of $C3 billion, falling to $2 billion in 1990. This decrease was the result of a much lower average price: $US4.03 per lb. on the lme in 1990 compared with $6.04 in 1989. The stainless steel sector, which accounts for 60% of nickel demand, was showing signs of slowing down in North America, but production in Europe and Japan continued to be reasonably strong.

Zinc production by 1% to almost 1.3 million tonnes in 1990. The value of production, however, fell by 9.6% to about $C2.5 billion, reflecting a lower average price for the year. The price averaged $US0.69 per lb. compared with US$0.78 in 1989. Although the price of zinc had dropped somewhat, it was still relatively strong due to a number of factors, including tight supplies, during much of the year.

Lead production fell by 16.7% to 224,000 tonnes in 1990, but its total value did not fall as drastically because of higher prices during most of the year. Prices eased somewhat during the last quarter. The average price for the year was $US0.37 per lb. compared with $0.31 in 1989.

Gold production increased by 3.4% to 165,000 kg in 1990. The value of output increased by 2.7% to almost $C2.4 billion. The price of gold averaged about $US384 per oz., only slightly higher than the average price in 1989. (Because of exchange rate fluctuations, the average price was slightly lower in Canadian funds.)

Silver production increased by 6.6% to 1,400 tonnes in 1990, but its value was down 7% to $C256 million. The price of silver fell to a 14-year low in December when it reached $US3.95 per oz. The price has been declining not only because of the lack of investment interest, but more importantly, because of the insensitivity of supply to market factors. About 80% of Canada’s silver is produced as a byproduct of base metal operations.

Iron ore production fell by 7.6% to 36.4 million tonnes in 1990. The total value of output declined by 4.2% to $C1.3 billion. Although there was a soft market for steel worldwide in 1990, iron ore prices were up.

Asbestos production continued to decline in 1990. The volume of production fell by 5.1% to about 665,000 tonnes in 1990, with a corresponding fall in value of 4.2% to $C256 million. The associated regulatory framework continued to have an adverse impact on some world markets for asbestos products.

Potash production was seven million tonnes in 1990, unchanged from the previous year, but its value of output fell by 10.8% to $C907 million, due to world overcapacity.

Economic indicators at the onset of 1991 suggested that the recession would continue until at least the second half of the year. The downturn in the U.S. economy, which began in the last quarter of 1990, also served as notice that the Canadian economy could remain virtually flat for much of the year. With some of the world’s economies already in recession, and others entering a period of slower economic growth, 1991 could be a challenging year for the industry. A further weakening in world demand would put downward pressure on commodity prices.

In addition to the technological and competitive challenges facing the industry, there is increasing pressure regarding environmental protection. In December, 1990, the government of Canada released its long-awaited Green Plan. While most of it does not focus on minerals and metals production, many of the initiatives will have implications for the mining industry.

Canada’s mineral industry is reasonably well-positioned to meet the challenges of the months to come. As in the past, it will continue to be a source of strength to the Canadian economy and will make a significant contribution to economic growth.

The preliminary estimate of the value of Canadian production of metals, non-metals, structural materials and coal in 1990 is C$19.6 billion, a decrease of $1.7 billion from 1989. The metals sector showed a decrease of 8.6%, non-metals decreesed by 7.6%, strctural materials were down by 8.9%, and coal decreased by 2%. However, when natural gas, natural gas byproducts and crude petroleum are included, the total value of production was $41.2 billion in 1990, an increase of 5.1% from last year’s $39.2 billion.

Newfoundland and Labrador

In 1990, the estimated value of mineral production from Newfoundland and Labrador was $862 million, a 4% decrease from 1989.

The mining industry in Newfoundland suffered several setbacks in 1990. Newfoundland Zinc Mines closed, St. Lawrence Fluorspar closed, and Baie Verte Mines’ open pit mining operation is expected to close in the first half of 1991.

Baie Verte Mines Reprocessing will continue to operate with the new wet-process mill to recover asbestos from tailings. The Iron Ore Co. of Canada has committed $100 million to upgrade its facilities. This company will be developing a new dolomite deposit in 1991 in western Labrador. The Hope Brook Gold mine produced 110,000 oz. gold in 1990 and forecasts production oo 150,000 oz. for 1991. The Cape Ray gold deposit is still at the feasibility study stage.

A new $17.5-million, 4-year Co-operation Agreement on Mineral Development was signed in 1990 between the federal and provincial governments.

New Brunswick

In 1990, the value of mineral production in New Brunswick, including coal, was $886 million, an increase of 2.5% over 1989.

Last fall, the Caribou lead-zinc mine closed; however, in January, 1991, it reopened, announcing proven reserves of almost two million tonnes (t).

Workers at Brunswick Mining & Smelting (BM&S) went on strike in July, 1990, and were still on strike at year-end. Meanwhile, operations at Heath Steel Mines, a BM&S subsidiary, continue. Marshall Minerals has received approval for its environmental impact assessment screening and plans to continue development of its Restigouche base metal and silver property, in northern New Brunswick.

NovaGold Resources Inc.’s Murray Brook gold and silver operation opened in October, 1989, and is still in steady prrduction. NovaGold is studying expansion to include the underlying massive sulphide body, which may contain more than 300,000 t grading better than 4.5% copper.

Stratabound Minerals currently is obtaining required government approvals and is discussing a illing contract with Heath Steele for its Captain North Extension lead-zinc deposit.

The 5-year, $10-million Canada-New Brunswick Co-operation Agreement on Mineral Development was signed in 1990.

Nova Scotia

In 1990, the value of mineral production, including coal, in Nova Scotia increased by 2.4% from 1989 to $452 million.

Westminer Canada’s production of zinc and lead from the Gays River mine and renewed efforts by Falconbridge Ltd. at the Jubilee deposit have contributed to the comeback in the base metal sector.

Although 1990 was not a particularly good year for gold, there is still a great deal of interest in gold exploration in Nova Scotia, particularly in the Cape Breton Highlands. Minnova Inc. has signed a letter of intent to spend $5 million on exploration over the next three years at Orex Exploration’s Goldboro deposit.

The Westray Coal mine is expected to come on-stream by mid-1991. Production should reach the planned rate of 700,000 t per year by 1992.

A new Canada-Nova Scotia Co-operation Agreement on Mineral Development was signed. The term of this agreement is from April 1, 1990, to March 31, 1992, with a total funding of $9 million.

Quebec

On the basis of 1990 preliminary statistics, the value of mineral production in Quebec reached $2.94 billlon, up by 4% from the 1989 level. Copper production increased by 44%, which is mainly attributable to renewed production at Mines Gaspe as well as to the growing activities at the Ansil and Mobrun mines.

The Golden Pond West, Bousquet No. 2 and Silidororines began production during the year, yielding an additional 190,000 oz. gold yearly. The Estrades base metal mine in Joutel and the Ruth Lake manganese mine in Schefferville were also brought into production. Aur Resources and Louvem Mines settled their legal dispute over the Louvicourt base metal property and proceeded to devise a $4.6-million exploration program.

The Chapais-Chibougamau region is threatened by a nearly 50% loss in its employment. Campbell Resources Inc. closed the S-3 and Cedar Bay mining operations. Camchib Mines had previously closed the Cooke and Henderson II mines. In addition, 250 jobs will be lost in the summer of 1991 as Minnova closes its Perry and Springer operations.

The funding allocated to the Canada-Quebec Subsidiary Mineral Development was increased by $5 million, for a total of $112 million. The expiration date of the agreement is extended by an additional year for all of the programs except for asbestos, which will expire in 1993.

The Financial Assistance Program for Prospecting in the Bas-Saint-Laurent and the Gaspesie is in its last year. The program has proven successful and renewal is being considered.

Ontario

For 1990, the total value of mineral production in Ontario is estimated to be $6.32 billion, down 13.5% from 1989. Of this total, metals contributed $4.91 billion, down 14% from 1989; structural materials contributed $1.19 billion, also down 14% from 1989; and non-metals $220 million, down 9% from 1989 production levels.

In 1990, the Ontario mining industry saw a net loss in direct mine employment. Northeast Ontario was particularly affected. However, while a number of mines closed in 1990, an almost equal number opened, thereby somewhat offsetting overall production levels province-wide.

Despite the general reduction in activity, there are several promising exploration plays. These include: the Hemlo Gold Mines and Central Crude Mishubishu gold deposit known as the Eagle River project; the Noranda Inc. and Freewest Resources gold deposit near Matheson; and the large, low-grade gold deposit near Thunder Bay belonging to the Moss Lake joint venture (Central Crude, Hemlo Gold, Tandem Resources, and Storimin Exploration).

The provincial government continues to encourage mineral exploration through the Ontario Prospectors Assistance Program (opap) and Ontario Mineral Incentives Program (omip). The $8 million set aside for omip has been fully subscribed. More than 400 applications have been approved for the $4 million available under the opap program.

Activities under the Canada-Ontario Mineral Development Agreement (comda) ended on March 31, 1990, although publication of results continue this year.

Negotiations are proceeding toward signing a new 5-year agreement.

Manitoba

In 1990, the value of Manitoba’s non-fuel mineral production is estimated at $1.21 billion, a decrease of 23% from 1989.

Inco Ltd. has earmarked $287 million for expansion at its Thompson operations and $7 million for nearby exploration. Talks continued through the year between federal and provincial governments and Hudson Bay Mining & Smelting (HBM&S) over modernization at the company’s Flin Flon smelter.

An attempt by Royal Oak Resources to buy up the assets of LynnGold Resources and put the Mclellan gold mine back in production failed.

* The value of Ontario’s mineral production is down. But despite the general reduction in activity, there are several promising exploration plays, including the Eagle River, Matheson and Moss Lake projects.

The Manitoba government is preparing a new mines act. As a part of this exercise, a joint industry-government task force will work toward revision of the Mining Tax.

The Manitoba Mines Department will be releasing a paper on mineral strategy, which will outline the mineral policy for the province and government direction in achieving sustainable mine development. The department is also looking at ways of encouraging more prospecting through a propector’s assistance program and prospector training.

The Canada-Manitoba Mineral Development Agreement (mda) expired in March, 1989. Work toward a new agreement is under way.

Saskatchewan

In 1990, the value of non-fuel mineral production in Saskatchewan is estimated at $1.11 billion, a decrease of 21% from 1989.

TTe Cameco Corp.-Uranerz Exploration and Mining Rabbit Lake uranium mine remained closed throughout 1990. However, this has enabled the Key Lake mine to operate at high levels of capacity. The Cameco Corp.-Amok Ltd. Cluff Lake operation was suspended in 1989 and, although grades are low, it resumed production early in 1990. The development of the high-grade Cigar Lake deposit of Cigar Lake Mining continued during 1990. Feasibility and environmental studies are to be completed by 1993.

An environmental impact statement has been filed for the Denison Mines project and one is expected very soon for the Wolly joint venture at McClean Lake.

The potash industry operated at about 60% of capacity with the largest firm, the Potash Corp. of Saskatchewan, operating at bout 50%. International Minerals and Chemical Corp. (Canada) (imcc) announced ongoing activities for a new potash mine in the Esterhazy area. Production could occur by the mid- to late-1990s.

Interest in diamond exploration remained high, particularly eaat of Prince Albert where Uranerz Exploration and Mining announced finding macro-diamonds on its Fort a la Corne property.

At year-end, negotiations were well advanced on a new federal-provincial 5-year, $10 million mda.

Alberta

In 1990, the value of mineral production was up 17.5% to $19.3 billion in Alberta. Included in this amount is $18.7 billion for mineral fuels, of which coal accounted for about $486 million.

Minerals have been incorporated into the Alberta government’s agenda on the environment. Alberta proposes legislation to achieve the national objectives of attaining clean economic development; working with industry on projects; and creating a new watchdog, the Natural Resources Conservation Board.

A magnesium plant was opened near High River by Magnesium Co. of Canada. Raw material comes from a deposit near Radium Hot Springs, B.C.

Negotiations are under way for the first federal-provincial mda with Alberta.

British Columbia

In 1990, the value of British Columbia’s mineral production was down 0.4% to $4.11 billion. Included in this amount is $1.97 billion for fuels, of which coal accounted for $1.05 billion.

The legal future of the Quintette Coal mine is uncertain, as it continues to seek court protection to reorganize its business. The price received by the company is below its cost of producing and transporting the coal.

The “Golden Triangle,” north of Stewart, which contains the Eskay Creek discovery, continues to be an active exploration area. Production will begin early in 1991 at the Snip gold mine in the Iskut River area. Construction of a toll road from the Cassiar Highway will vastly improve access to properties in the area. Work on the road is expected to begin in the spring of 1991.

New projects under development include the Mount Milligan, Cirque, and Windy Craggy mines. Probably the most controversial development is the Windy Craggy copper-gold project, which is opposed by environmental groups. A first-stage study by Geddes Resources was deemed inadequate by the provincial mine development steering committee.

Proposed environmental legislation, such as the B.C. Development Assessment Act, will subject both minesite facilities and off-site infrastructure submissions to impact assessment and an acceptable environmental protection plan. New projects subject to review will include coal and non-fuel mineral mines producing more than 10,000 t per year, and may also include placer and quarrying operations.

Environmental regulation is an integral part of the mines act, which ws updated in 1989. It requires mining firms to post bonds with the province until they leave the mine site. In this regard, Equity Silver Mines has posted a bond to cover the projected costs of treating runoff water.

The B.C. government has reversed a 119-year-old policy and recognized the validity of Indian land claims. This decision has raised some uncertainty in the province’s mining and mineral exploration business.

At year-end, negotiations have started on a new federal-provincial MDA.

Northwest Territories

In 1990, the value of mineral production was up 1.6% to $1.17 billion in the Northwest Territories. The value of non-fuel mineral production is estimated at $906 million, a decrease of 6% from 1989.

Seven mines were in production in 1990. NorthWest Gold’s Colomac mine opened in 1990. However, lower-than-anticipated recoveries have created financing difficulties and this mine may have to close.

Shipments of concentrates from Pine Point, which was closed in 1988, are nearly completed, and zinc and lead production are expected to drop next year as a result.

The Environmental Rights Act was passed in November. It allows any person access to information on environmental spills and allows examination of licences, permits, approvals, orders or notices. Individuals may apply for an investigation of a contaminant release and may commence court action against the responsible party. The act will have to be considered seriously in development plans.

The Dene-Metis comprehensive land claim negotiations fell through and work is continuing toward settling this claim in smaller areas. The land claims should be settled between the federal government and the Tungavik Federation of Nunavut in the Eastern Arctic.

Work under the Canada-N.W.T. MDA continued in 1990, and has started to wind down.

Yukon Territory

In 1990, the value of Yukon mineral production was $541 million, up marginally from 1989 by 0.2%.

Although gold production was slightly down from last year, lead-zinc-silver production was up, thereby maintaining overall mineral productionnat about the same level as last year. Placer gold operations were down to 194 active projects from 226 in 1989.

Curragh Resources’ Faro lead-zinc-silver mine operated throughout the year and the Vangorda operation was recently brought into operation. Currently, production from the two pits is 13,000 t per day, making it the world’s largest lead-zinc mine. Near Watson Lake, Curragh began developing its Mount Hundere lead-zinc deposit; production is expected to begin in mid- to late-1991. The gold contained in the Vangorda and Grum deposits will also make Curragh a very large gold producer. These developments will offset the August, 1990, closure of the Canamax Resources gold mine at Ketza River.

An umbrella final agreement for the Council of Yukon Indians (cyi) land claim was concluded in March, 1990. It established the common elements of the comprehensive land claim and the final agreements to be negotiated with individual bands. Ratification of the agreement was scheduled for March, 1991.

The Dept. of Indian and Northern Affairs is proceeding with negotiations with the Yukon Territorial government to develop a new MDA for the Yukon. The last MDA expired in March, 1989, and was replaced by a Canada-Yukon Economic Development Program.

Canadian reserves of gold contained in proven and probable minable ore stood at 1,748 tonnes (t) in January, 1990, down some 70 t compared with revised estimates for 1989. Although the decrease is less than 4%, it is the first significant reversal in the strong growth in gold reserves that took place during the 1980s. Overall, mine-site exploration and development did not replace all of the gold mined in Canada during 1989, and an amount of gold-in-ore equal to about half of what was mined in that year is no longer counted in reserves.

New mines committed to production during 1989 and counted for the first time contributed more than 60 t to gold reserves. These are the Silidor mine (about 30 t), the Casa Berardi Ouest mine (16 t), and the Bousquet No. 2 mine (another 12 t).

The mines with the largest decreases in proven and probable reserves of gold during 1989 were Golden Giant (about 17 t) and Williams (about 16 t). However, the Hemlo deposits are open at depth, and the proven and probable reserves at the Williams mine, for example, are reported sufficient for at least 15 years of production.

Canadian reserves of zinc rose for the second year in a row. They stood at 21,688,000 t in January, 1990, some 600,000 t (almost 3%) more than in the previous year.

The largest single addition to zinc reserves, some 1,400,000 t, resulted from the inclusion of the Heath Steele-Stratmat operation. Also, counted for the first time were the reserves of the 1100 lens at the Mobrun mine. This contributed the second-largest addition.

By contrast, the largest decrease in Canadian zinc reserves, about 570,000 t, occurred at Curragh Resources’ Faro mine, mainly because the company now reports minable reserves for the Grum open pit rather than geological reserveve Another significant decrease in zinc reserves occurred at the Brunswick No. 12 mine.

Canadian reserves of lead stood at 6,941,000 t in January, 1990, a decrease of less than 1% from the previous year. Counting the reserves at the Heath Steele-Stratmatatperation added more than 450,000 t. The reserves of the Gays River mine contributed another 70 t.

The largest single reduction in Canadian reserves of lead, about 350,000 t, occurred largely because of Curragh’s changed method of reporting. Another significant decrease took place at the Brunswick No. 12 mine.

In January, 1990, Canadian reserves of copper amounted to 12,258,000 t. There were two outstanding additions to copper reserves during 1989. About 172,000 t came from the inclusion of the Heath Steele-Stratmat operation. A further 141,000 tonnes resulted from changes in the designs of the Valley and Lornex open pits.

* The past year has seen the first significant reversal in the strong growth in gold reserves that took place during the 1980s.

There were, however, significant reductions in reserves at a number of producers, and overall, Canadian reserves of copper d dreased by more than 2% during 1989 (more than 290,000 t) compared with the previous year.

Canadian reserves of molybdenum increased by almost 2% during 1989, rising to some 234,000 t in January, 1990. This was due to an increase in tonnage and grade at Placer Dome’s Endako mine and to the changes made to the Lornex and Valley open pits.

Canadian reserves of nickel amounted to some 6,132,000 t in January, 1990. Only about half of the metal mined during 1989 was replaced with new ore. Inco Ltd.’s reserves of nickel decreased by some 100,000 t overall, down by about 1.6% compared with the previous year. Canadian reserves of nickel were down by more than 2% from 1989 to 1990. However, in Canada, the ratio of reserves to production continues to be substantially higher for nickel than for any other major metals.

The largest single addition to Canadian nickel reserves resulted from the first-time inclusion of the reserves of the Redstone mine. This mine added about 10,000 t of new metal to reserves.

Canadian reserres of silver stood at 26,800 t in 1990, down about 2% from 1989. The most noteworthy addition to silver reserves resulted from the inclusion of the reserves of the Heath Steele-Stratmat operation.