Although most metal prices have remained at or near 10-year averages throughout 2013, many AME BC members, particularly the juniors, have continued in survival mode due to the historic and unprecedented downturn in the venture capital market. For many in the industry, the year 2013 will define their ability to build strategic partnerships; raise venture capital and private equity; enter into joint agreements; and successfully explore – not just here in B.C. – but anywhere in the world. These difficult times also present an opportunity for our members and for AME BC to step up even more as leaders and advocates for the mineral exploration and development sector in important public policy areas such as taxation, land access and security of tenure, permitting, and community and Aboriginal engagement.
Given the ongoing global economic uncertainty, this is a critical time for AME BC to champion the investment, exploration and development potential of B.C. and to strengthen and reinforce strategic connections with government, business and industry leaders. Indeed, the B.C.-based mineral exploration and development industry must continuously work to seize global demand and compete for international investment. As such, this past summer, AME BC reinitiated discussions with the B.C. government about its tax policy, including relative tax competitiveness between jurisdictions. Since the B.C. mining exploration tax credit was first introduced in 2000, and the B.C. mining flow-through share tax credit was established in 2001, B.C. mineral exploration expenditures have grown from $32 million in 2001 to $680 million in 2012. While the overall growth in expenditures is positive, most of those expenditures are occurring at advanced mineral and coal exploration and development projects and not in grassroots exploration projects. Mineral exploration, especially work undertaken by junior companies, is the lifeblood of the mining industry. Sustained investment in grassroots exploration and geoscience is required to discover new deposits.
AME BC is also addressing the increasing cost of consultation with First Nations during all phases of exploration, even though it is the duty of the Crown to consult with First Nations. In fact, a recent sample study by Ernst & Young found that the weighted average of consultation costs borne by representative companies as a percentage of their total exploration expenditures in 2012 was estimated at over 21 per cent. This increasing cost of consultation is not currently defined as a qualifying expense under the B.C. Mining Exploration Tax Credit, unlike expenses incurred in the course of prospecting, carrying out geological surveys, trenching, digging test pits or preliminary sampling. Given this, AME BC has recommended that the B.C. government change the definition of qualifying expenses eligible under the mining exploration tax credit to include expenses incurred as a result of consultation with local and First Nations communities. Also, the B.C. mining flow-through share tax credit expires on December 31, 2013, and AME BC has recommended that the B.C. government extend this tax credit to December 31, 2016, and consider making it permanent to encourage exploration in British Columbia.
Aboriginal relations and engagement continues to be a top priority area for AME BC and we are busy preparing to host another successful Aboriginal Engagement Forum and Gathering Place Pavilion at Mineral Exploration Roundup 2014. As well, the completion of AME BC’s new Aboriginal Engagement Guidebook will be a key deliverable for our membership. Importantly, AME BC members should be aware that we intervened in the William v. British Columbia case heard by the Supreme Court of Canada in November 2013. Communications on this critical legal matter will reflect industry’s need for legislative and regulatory clarity, while recognizing the constitutionally enshrined rights of Aboriginal Peoples in Canada as well as our business reasons for recommending early and respectful engagement with Aboriginal communities.
As we heard from the Hon. Bill Bennett, minister of energy of mines, at the October 4 AME BC Speaker Series lunch, there is pressure from some communities in B.C. to amend the Mineral Tenure Act, which many do not realize was significantly amended in 2005 and again in July 2012. To help bring a more common understanding to this key issue, AME BC will be redoubling public relations and communications efforts to better explain the modern mineral tenure system and the lifecycle of mineral exploration and development in British Columbia.
At the time of writing, preparations are well underway for AME BC’s Mineral Exploration Roundup 2014 conference, to be held January 27 to 30, 2014. This will be our 30th anniversary of Roundup and an opportunity to bid farewell to our longtime host, The Westin Bayshore, before we transition to our new home at the Vancouver Convention Centre East in 2015. I welcome you to read through the Roundup preview in this winter issue of Mineral Exploration, as well as related articles on the Aboriginal Engagement Guidebook, corporate social responsibility, health and safety, and the annual B.C. mineral exploration and development review. This issue – the thickest of the year at 120 pages – also offers insight on topics ranging from the role of technology in B.C.’s mineral exploration and development sector to the surprising and innovative new uses for common minerals.
On behalf of the staff and board of AME BC, I thank the many hundreds of dedicated volunteers of AME BC and I wish you a prosperous winter season and a safe day, every day, wherever this message finds you!