President & CEO’s Message
Gavin C. Dirom M.Sc., P. Ag. President & CEO, AME
Although the global mineral exploration and development sector may still be in a multi-year commodity super-cycle, very challenging equity financing and bear market conditions were the reality during the second quarter of 2012. Members of AME, especially the prospectors and junior explorers, are experiencing the impact of these tough economic conditions. Gold companies, for example, were only able to raise $445 million through equity placements in May and June, which is the lowest two-month total since late 2008. Overall, the equity capital raised on the TSX-V in the mining sector during the January – May period was down 62 per cent from $3.376 billion in 2011 to $1.275 billion in 2012. Copper fell over 9 per cent from the previous quarter as global worries about Europe’s sovereign debt crisis continued to rise and China’s demand for copper lessened. India, the world’s biggest market for gold, has seen demand decline in 2012 as compared to 2011.
Indeed, it has been a tough year for some so far, but looking ahead to Q3 and Q4 there are positive signs of greater economic stimulus from China (who account for 40 per cent of global copper consumption), increasing demand for gold in India and steady gains in US growth. These indicators are keeping many members of AME optimistic about the prospects of rising commodity prices in the final months of 2012. An increase of mergers and acquisitions will also likely define the balance of this year. Recently, the Metals Economics Group also reported that eighty-two per cent of their survey respondents were bullish about the strength of the industry over the next three-year period. While the economic storm continues globally, as a relative safe harbour for investment, British Columbia’s economy is expected grow moderately by at least 2 per cent over the next year and outperform many other North American provinces and states, according to the B.C. Business Council. Activity in the B.C. mineral exploration and development sector, while down as compared to last year’s record breaking pace, continues to attract interest from intermediate and major international companies. As a province rich in metals and minerals, especially coal, copper and gold, B.C.’s fundamentals are strong and it is very well positioned to take full advantage of its geographic position on Canada’s Pacific coast and access to strengthening markets. And as a beacon of hope and prosperity, many projects in B.C. continue to move ahead. For example, expenditures of $120 million are estimated for New Gold’s Blackwater project in 2012 alone.In late March, Canada’s government released its Budget 2012. AME commended the federal government’s fiscally disciplined budget, thanked them for extending the Mineral Exploration Tax Credit until March 31, 2013 and requested that the Credit be made permanent. In mid-April, Joe Oliver, Minister of Natural Resources Canada, announced the Responsible Resource Development Plan as part of Bill C-38. Importantly, the federal budget committed $165 million over two years to support the Plan and resolved to:
- Set 45 day timeline for decisions on whether or not an environmental assessment is needed;
- Establish 365 day timeline for standard environmental assessments;
- Allow provincial environmental assessments that meet federal standards to replace federal reviews;
- Eliminate duplication between two orders of government; and
- Integrate aboriginal consultations into the environmental assessment and regulatory processes.
John Duncan, Canada’s Minister of Aboriginal Affairs and Northern Development made a follow-up announcement in B.C. in early June regarding the Responsible Resource Development Plan. Minister Duncan also supported industry’s request to sustain the federal funding of the highly successful BC Aboriginal Mine Training Association, which has seen over 1,000 aboriginal Canadians enroll in the program, with 330 becoming gainfully employed so far. A new multi-year commitment to BC AMTA demonstrates the federal government’s strong level of support to Aboriginal training and capacity building in B.C. The education and training that is provided, and the resultant careers that are developed, are forming an enduring legacy for Aboriginal Canadians, the industry and Canadian society as a whole. In late June, the decision of the British Columbia Court of Appeal in William v. British Columbia was issued and is considered the most recent pronouncement on Aboriginal title in Canada. This key decision goes to the heart of Aboriginal title and rights and will have important implications for Aboriginal groups, government and project proponents who are undertaking development in areas where Aboriginal title is claimed.
Over the last quarter, the dedicated staff at AME was very active promoting the mineral exploration and development sector in B.C. and undertaking outreach to members, Aboriginal communities, the public and government. During B.C. Mining Week 2012, for instance, another successful Community Fair was organized by AME and Dr. Sheila Stenzel’s Mineral Resources Education Program of BC (MREPBC). Over 400 elementary school students and members of the public navigated the 30 exhibits that mixed interactive educational activities with fun. Also during Mining Week, the industry celebrated the almost $1.3 million raised as part of Teck’s celebrity pie throw event in support of the Mining for Miracles campaign for the BC Children’s Hospital Charity. Together, AME and Mining Association of BC helped raise more than $130,000 towards the Charity. Later in May, AME hosted the 20th Annual Charity Golf Tournament in Richmond. This well-sponsored and sold-out event raised approximately $25,000 for the MREPBC.
Mineral explorers and developers based in British Columbia have a proud history and it is with tremendous pride and joy that we celebrate the Association’s 100th anniversary in 2012. Our centennial year will culminate with a special 100th Anniversary Gala at the Hyatt Regency Vancouver on November 27, 2012. This once-in-a-lifetime event will acknowledge and showcase the many accomplishments and contributions of AME and its members to British Columbia’s global mineral exploration and development industry. And with excitement, AME’s Roundup Organizing Committee has been actively preparing for the annual Mineral Exploration Roundup, the world’s premier technical mineral exploration conference. The theme of our 30th annual conference is “Resources for Life: Digging Deeper”. Online registration will be available in mid-September for the estimated 8,000+ delegates expected to attend Roundup in Vancouver at the Westin Bayshore from January 28 to 31, 2013. One of many special events at Roundup is the Awards Dinner, where we recognize outstanding achievements in the mineral exploration and development industry. As a reminder, the call for award nominations concludes September 30.
Today, our Association has almost 5,000 members – from across British Columbia and Canada, but also from many countries around the world. We are focused on being an advocacy organization that represents the mineral exploration and development sector based in British Columbia. AME is developing a new 5-year (2013-2017) strategic plan to serve our members in key priority areas such as Aboriginal engagement, land access and use issues, permitting, education and outreach. On behalf of the staff and board of AME, I thank the hundreds of volunteers and thousands of members of the Association for their valuable support and contributions in making AME one of the best industry advocacy associations for mineral exploration and development in the world. If you are not already a member, I encourage you to visit the Association’s website at www.amebc.ca and sign up to be a member of AME at your next opportunity.
Finally, as we celebrate 100 years strong as an Association, please remember to have a safe day, every day, wherever this message finds you!
Gavin C. Dirom, M.Sc., P. Ag.
President & CEO
Association for Mineral Exploration British Columbia