Market indicators strong despite impact of historic wildfire season
VANCOUVER – British Columbia’s mineral and coal exploration industry grew last year for the first time since 2012, according to the second annual British Columbia mineral and coal exploration survey conducted by EY, the Government of British Columbia’s Ministry of Energy, Mines & Petroleum Resources (EMPR) and the Association for Mineral Exploration British Columbia (AME).
The survey, released today at Prospectors & Developers Association of Canada (PDAC) Convention in Toronto, found that exploration expenditures across BC totaled $246 million in 2017, up $41 million (20%), from the year before. Gold exploration accounted for $37 million (87%) of that increase, driven by increased activity in the province’s Golden Triangle and Cariboo gold belt regions. Gold’s dominance in BC exploration is consistent with the global trend: gold accounted for more than three-quarters of the year-over-year increase in worldwide exploration expenditure in 2017.
“Last year we saw a revitalization of the BC exploration industry, primarily due to a stronger Canadian economy and an improved commodity price outlook. And, without the impact of the devastating wildfire season, expenditures would have likely been even higher,” says Iain Thompson, EY Canada Mining & Metals Advisory Services Leader. “Looking ahead, we expect these favourable conditions to extend into 2018.”
Other metals also saw a surge in activity. Exploration expenditure on primary-silver projects more than doubled to $9.8 million, while zinc grew by almost 50% to $8.2 million, driven by increasing prices. Coal exploration, however, decreased by 18% or $7 million. This had a significant impact on the province’s Northeast region, where exploration spend declined by almost 75% to $2.4 million.
By contrast, the province’s Northwest and Southeast regions were hotbeds of exploration activity, accounting for more than three quarters (77%, or $33 million) of the increased overall exploration expenditure.
“The mining industry is critical to the health of the BC economy,” says Gordon Clarke, Director, BC Mineral Development Office. “With mining revenues expected to approach $9 billion annually, it’s important to identify new development opportunities and encourage the continued development of a robust exploration industry.”
“It’s reassuring to see exploration spending returning to BC, particularly as resource depletion returns to the list of industry risks,” says Jonathan Buchanan, Director, Corporate Affairs at AME. “We’re also encouraged to hear survey respondents remain committed to working with First Nations when sourcing new resource deposits to ensure benefits extend to the local or surrounding communities.”
To access the complete report, visit ey.com/ca/bcminingsurvey.
About the report
The British Columbia mineral and coal exploration survey is a joint initiative between the Government of British Columbia’s Ministry of Energy, Mines and Petroleum Resources (EMPR), the Association for Mineral Exploration (AME) and EY. The survey has been conducted to provide a view of the current state of the mineral and coal exploration sector in BC.
The survey examines a wide range of economic, sociopolitical and organizational issues that impact companies and prospectors exploring in the province, and has been designed to provide previously unavailable insight into the mineral and coal exploration industry in BC. This 2017 report (and accompanying survey) follows on the back of the pilot study conducted in 2016 and looks at the progression of the sector year-over-year.
Data and analysis presented in this report are for the period 1 January through 31 December 2017 and are based on a survey that was completed1 by 20 prospectors and 175 companies operating in BC. From the mining companies that adequately responded to the survey, 159 collectively represent 219 projects across the province.
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
EMPR is the provincial government agency responsible for overseeing mineral and coal exploration activity in BC. Ministry staff helped in the design of the survey and collected additional information about exploration expenditures from companies and prospectors that did not complete the online survey. Expenditure data was solicited directly from the companies and prospectors or estimated by the EMPR regional geologists and British Columbia Geological Survey (BCGS) staff under the direction of the BC Mineral Development Office.
AME is the lead association for the mineral exploration and development industry based in BC. Established in 1912, AME represents, advocates, protects and promotes the interests of thousands of members who are engaged in mineral exploration and development in BC and throughout the world. AME encourages a safe, economically strong and environmentally responsible industry by providing clear initiatives, policies, events and tools to support its membership. AME’s participation has facilitated the collection of previously unavailable insight into the industry.
Director, Corporate Affairs, AME