President's Message - January to March 2014
President & CEO’s Message
Gavin C. Dirom M.Sc., P. Ag. President & CEO, AME BC
Following AME BC’s opening of the TMX markets in Toronto on January 14, this year started on a cautiously optimistic note as AME BC’s Mineral Exploration Roundup 2014 conference held at the end of January attracted over 6,600 participants from 37 countries. I thank the Roundup Organizing Committee chaired by Victoria Yehl for its efforts in making the final conference held in The Westin Bayshore Vancouver a great success. Roundup once again injected approximately $8 million into the local Vancouver economy, an impressive accomplishment. In addition to providing opportunities for our members to learn and network at Roundup’s Technical Sessions, Trade Show, Prospectors’ Tent, Core Shack, Map Tent, Policy Forum, Gathering Place Aboriginal Pavilion and Poster Session, AME BC also released the new Aboriginal Engagement Guidebook: A Practical and Principled Approach for Mineral Explorers and the fifth edition of Safety Guidelines for Mineral Exploration in Western Canada. Preparations are well underway for AME BC’s Mineral Exploration Roundup 2015: Intelligent Exploration, to be held January 26-29, 2015 at our new venue under the Canada Place sails at the Vancouver Convention Centre East.
In mid-February, AME BC joined the Mining Association of BC and Mining Suppliers Association of BC at Mining Day at the Legislature in Victoria, where staff and members of the three associations met with 60 out of 85 members of the BC legislature as well as key staff. From AME BC’s perspective, key discussion issues included land access and use, permitting and the very challenging venture capital market.
With reported exploration expenditures of $476 million in 2013 (down from the record $680 million in 2012) BC now attracts over 20% of all exploration dollars spent in Canada, compared to just 6% in 2001. While the overall growth in expenditures in BC is positive, it’s vital to understand that most of the expenditures (approximately 98%) are occurring at advanced copper-gold and coal exploration and development projects, and not in grassroots exploration projects. This is an important issue because exploration, especially the work undertaken by junior companies, is the lifeblood of the mining industry. Most of the major mining companies rely on the prospectors and junior exploration companies to find new deposits and advance projects. However, sustained investment in prospecting and early-stage exploration at a 20%, not the current 2%, level of BC’s 2013 total exploration expenditures is required to discover new deposits that eventually lead to advanced projects, construction and ultimately new mines in production, where the most significant revenue to the BC Government is generated. It is important to recognize that prospecting and exploration activities do not generate cash flow for the prospector or explorer. These activities are dependent on attracting risk capital. Without a steady and healthy influx of capital, prospecting and exploration activities are scaled back dramatically or cancelled completely.
That is why AME BC believes that the Mines Act permit application fees as proposed by the BC Government will set a dangerous precedent and be a major disincentive to prospecting and exploring for new deposits in BC. The permit application fee proposal, although hinted at in the Government’s 2012 Mineral Exploration and Mining Strategy, was informally introduced at Roundup 2014 and formally outlined in a discussion paper issued in late February. But as outlined in AME BC’s response of March 31, we believe that imposing fees on mineral exploration permits will have the immediate effect in BC of: 1) reducing venture capital investment even further, 2) reducing prospecting and exploration work on the ground, and 3) decreasing the opportunity for new significant discoveries to be found in BC. Instead, AME BC recommended the following to the BC Government:
Industry and Government must work together to build reasonable public policy and promote BC as a jurisdiction of choice that is open for business and attractive to venture capital investment in prospecting and exploring for new deposits. We will continue to work with Minister Bill Bennett and the Ministry of Energy and Mines staff, along with many others, regarding this important AME BC members’ issue.
- That all prospecting and exploration activities be exempt from any Mines Act permit fees given that these activities produce no revenue for prospectors and explorers and are necessary to sustain the industry;
- That the BC Government rebuild the Ministry of Energy and Mines, including re-incorporation of First Nation consultation, by allocating an additional $10 million annually to address permitting and regulatory issues in a timely manner; and
- That the BC Government continues to undertake focused work with industry towards reducing red tape and increasing permitting efficiency.
In late February, federal Environment Minister Leona Aglukkaq announced the federal government’s decision to not proceed with the approval of the New Prosperity copper-gold mine project near Williams Lake, BC. We are disappointed with this outcome, and also expressed our concerns that the decision appears to have relied on an incorrect model that predicted seepage from the New Prosperity tailings storage facility in its recommendation. AME BC reaffirms that environmental assessment decisions should be science-based, and we look forward to a re-evaluation of the scientific facts related to this matter.
March was a busy month for AME BC as we exhibited together with the BC Ministry of Energy and Mines at the PDAC convention, and held our fourth annual Exploration Safety for Project Managers workshop, and eleventh annual Introduction to Exploration Safety Workshop. We also launched our annual Canadian Mineral Exploration Health & Safety survey in conjunction with the PDAC to track trends in the industry and for the first time also provided a template for managers to track incidents and follow-up; to download the form and complete the survey visit http://220.127.116.11/survey.aspx?RD=1.
We look forward to the many events scheduled for this spring, where we will have an opportunity to further engage with our members as well as elected officials and the public. We will be attending the Kamloops Exploration Group conference April 8-9, CIM/Mining Week May 10-16 and Minerals North in Vanderhoof May 21-23, as well as many local government conferences throughout the province. We are also preparing for our 22nd annual golf tournament at Mayfair Lakes in Richmond on May 27.
On behalf of the staff and board of AME BC, I thank the hundreds of volunteers and thousands of members of the Association for their valuable support and contributions in making AME BC one of the best industry advocacy associations for mineral exploration and development in the world. Finally, please remember to have a safe day, every day, wherever this quarterly message finds you!
Gavin C. Dirom, M.Sc., P. Ag.
President & CEO
Association for Mineral Exploration British Columbia
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