Canadian Reserves

CANADIAN RESERVES OF SELECTED MAJOR METALS
INFORMATION BULLETIN, FEBRUARY 2011

Reserves of Selected Major Metals

In the 29-year period from 1980 to 2009, Canada’s reserves of base metals declined continuously at annual average rates varying from -1.3% for molybdenum to -9% for lead. This period of prolonged decline resulted in reserve levels of less than half of the known ore reserves reported at the end of 1980. Reserves in 2009 were 44% of 1980 reserves for copper, 40% for nickel, 39% for molybdenum, 15% for zinc, 19% for silver, and 5% for lead. Gold has seen an increase of 111% (Table 1 and Figure 1).

In the latter half of 2009, metal prices recovered from the collapse triggered by the financial meltdown and resultant global recession of late 2008 and 2009. Copper averaged US$2.34/lb,¹ nickel averaged US$6.65/lb, and zinc and lead averaged under US$1.00/lb each. Gold remained high throughout the economic turmoil at an average price of US$972.35/oz while the average price of silver was US$14.67/oz. All metal prices climbed steadily through the year to end with annual peaks in December. By year-end 2009, copper was selling for US$3.17/lb, lead for US$1.06/lb, zinc for US$1.07/lb, and nickel for US$8.91/lb. Gold and silver reached US$1134.72/oz and US$17.67/oz, respectively.

A number of marginal mines remained closed in 2009 and delays at expansion projects meant that any hope for a significant increase in reserve levels was dashed. Hence, Canada’s metal reserves continued to decline. In 2009, only silver reserves increased (+10%). Decreases were recorded in the reserves of zinc (-15%), molybdenum (-3%), lead (-16%), nickel (-8%), gold (-3%), and copper (-2%). Although copper and molybdenum reserves declined on an annual basis in 2009, the reserves of both metals have increased significantly since 2004. From 2004 to 2009, copper reserves increased from 5 546 000 tonnes (t) to 7 290 000 t (+31%) and molybdenum reserves increased from 80 t to 215 t (+169%). With continued elevated metal prices, copper and molybdenum reserves in Canada could continue on an upward trend.

The increase in silver reserves is due to reserves from the new Wolverine mine in the Yukon. The Wolverine mine is also responsible for significant additions in lead and zinc reserves. Vale Inco recorded significant decreases in nickel reserves at its Sudbury operations due to the reclassification of reserves at the non-operating Creighton 3 shaft and Kelly Lake deposits. Table 2 illustrates the main components of change in Canadian reserves in 2009.

At the time of writing, a tentative economic recovery was being tested and market confidence remained fragile. According to a July 2010 International Monetary Fund report, the challenge is to encourage an economic recovery without inadvertently impeding it. In 2011, the prices of most minerals and metals will be heavily dependent on continued growth in China and decreasing financial risk in Europe’s (and the Western World’s) fragile economies.

Reserves by Commodity

Gold

There were 918 t of gold contained in Canadian mine reserves in December 2009. This represents a decrease of 3% (29 t) compared to December 2008. In Timmins, Ontario, the new Black Fox mine and Porcupine mine added gold reserves of 41 t and 15 t, respectively. Decreases in gold reserves of 17 t were recorded at the Red Lake mine. Mine closures at Langlois, Copper Rand, and Sigma-Lamaque, all in Quebec, at QR in British Columbia, and at Pine Cove in Newfoundland and Labrador had detrimental effects on the gold reserve levels.

Silver

There were 6254 t of silver contained in Canadian mine reserves in December 2009. This represents a 10% increase (589 t) compared to December 2008. Silver reserves are estimated to have decreased by approximately 200 t at the Highland Valley mine in British Columbia because of lower grades and by an additional 200 t due to the closure of the Langlois mine in Quebec. Additions were made to silver reserves by the new Wolverine mine in the Yukon (1452 t) and by Vale Inco’s operations in Sudbury (120 t). Silver grades have been estimated for a number of mines to ensure continuity of reporting national levels from year to year.

Zinc

During 2009, Canadian reserves of zinc declined by about 755 000 t (15%) to a year-end total of approximately 4.25 million tonnes (Mt). The greatest reductions in zinc reserves were due to the closure of the Langlois mine (494 029 t) in Quebec, lower grades at the Perseverance mine (216 800 t) in Quebec, the closure of the Scotia mine (163 800 t) in Nova Scotia, and the Brunswick No. 12 mine nearing the end of its mine life (153 800 t) in New Brunswick. Increases in zinc reserves occurred at the new Wolverine mine (498 082 t) in the Yukon and at the Chisel North mine (1414 t) in Manitoba.

Lead

In 2009, Canadian reserves of lead decreased by approximately 16% to a year-end total of 451 000 t. In the Maritimes, lead reserves decreased by 76 450 t at the Scotia mine (closed) and by 62 500 t at the Brunswick No. 12 mine. The Yukon’s Wolverine mine posted the only addition to lead reserves (64 796 t).

Copper

In December 2009, Canadian reserves of copper were estimated at around 7.29 Mt, a 2.23% decrease (166 000 t) from one year earlier. The addition of 189 880 t of copper reserves at Xstrata’s Sudbury operations in Ontario was the largest reserve change (due to the addition of reserves from the Nickel Rim South mine). Increases were also recorded at Vale Inco’s new Totten mine (155 400 t) and Levack Complex mines (84 762 t), also in Sudbury, Ontario. Modest increases were recorded at the Wolverine and Minto mines in the Yukon, at the Huckleberry mine in B.C., and at the Podolsky mine in Ontario. Copper reserves at Vale Inco’s Ontario operations decreased by 270 430 t due to mine depletion and the reclassification of reserves to resources at closed operations, while a decrease of 101 780 t at the Highland Valley mine was due to lower-grade ore. The closure of the Langlois mine reduced copper reserves by 32 727 t, and a reduction of 31 705 t at the Gibraltar mine further reduced copper reserve levels.

Molybdenum

Canadian reserves of molybdenum stood at 215 000 t in December 2009, a 3% decrease from 2008. Slight reserve gains were recorded at the Highland Valley mine (635 t) and at the Huckleberry mine (283 t). These gains were offset by decreases at the Endako mine (slightly lower grade, 7488 t) and at the Gibraltar mine (slightly lower tonnage, 1044 t) in British Columbia. Canadian molybdenum reserves are currently above their 1989-90 level.

Nickel

In December 2009, there were some 3.3 Mt of nickel contained in Canadian mine reserves, a decrease of approximately 8% from 2008 levels. The largest decrease in nickel reserves occurred at Vale Inco’s Ontario Division with reported nickel reserves of 359 650 t less than in 2008 (due to mine depletion and the reclassification of reserves to resources at closed operations). Decreases were also recorded at Xstrata’s Raglan mine (55 970 t) in Quebec and at Vale Inco’s Voisey’s Bay mine (40 000 t) in Newfoundland and Labrador. Reserves were added from the Totten mine (111 740 t) and from Xstrata’s Sudbury operations (42 590 t) (due to the addition of the new Nickel Rim South mine). There were also additions at Vale Inco’s Manitoba Operations, the Levack Mine Complex in Sudbury, the new McWatters mine and the re-opened Redstone mine in Timmins, and the Podolsky mine and the re-opened Shakespeare mine in Sudbury.

Nickel reserves in the Sudbury region decreased by approximately 224 000 t as the result of mine depletion and the reclassification of reserves to resources at suspended operations. In addition, a labour strike at Vale Inco’s operations may have had an impact on reserve levels. In 2009 and early 2010, Vale Inco and Xstrata intended to continue advancing new projects in the Sudbury region (except for Fraser Morgan). Vale Inco’s Totten project is still expected to begin production in the first half of 2011, and Xstrata’s Fraser Morgan mine was slated for re-activation in February 2010. Xstrata’s Nickel Rim South project began development production in May 2009.

Vale Inco had some 2.6 Mt of nickel in Canadian reserves at the end of 2009, or about 80% of the national total.

Canadian Reserves by Province and Territory

The same four provinces (Ontario, British Columbia, Quebec, and New Brunswick) continued to hold dominant positions in terms of Canada’s proven and probable mineable reserves of major metals in December 2009 (Table 3).

Ontario had 54% of the nickel, 48% of the gold, and 38% of the copper, plus 24% of the silver, 23% of the zinc, and 7% of the lead.

British Columbia had 100% of the molybdenum, 44% of the copper, 11% of the silver, 7% of the zinc, 7% of the lead, and 3% of the gold.

New Brunswick had 61% of the lead, 16% of the zinc, 13% of the silver, and less than 1% of both copper and gold.

Quebec had 30% of the gold, 23% of the zinc, 20% of the silver, 10% of the nickel, and 3% of the copper.

Manitoba had 16% of the zinc, 15% of the nickel, 7% of the silver, 5% of the copper, and 4% of the gold.

Newfoundland and Labrador had 21% of the nickel, 7% of the copper, 3% of the zinc, and 1% of the silver.

Nunavut had 12% of the gold.

The Yukon had 24% of the silver, 14% of the lead, 12% of the zinc, 3% of the copper, and 2% of the gold.

OUTLOOK

A strong gold price and a recovery in the price of nickel encouraged Canadian mine openings in 2009. For 2010, a recovery in demand for many metals, driven by the continued urbanization of China, is expected. Given the continued strong prices, and with some significant projects in the final stages of permitting and others under construction, a small increase in the reserves of some metals may materialize in the coming years.

_____________________

¹Metal prices from Kitco.com and metalprices.com. Back

Note: Information in this bulletin was current as of August 2010.

TABLE 1. CANADIAN RESERVES OF SELECTED MAJOR METALS, AS AT DECEMBER 31 OF EACH YEAR, 1980-2009
Metal Contained in Proven and Probable Mineable Ore (1) in Operating Mines (2) and Deposits Committed to Production
Year	Copper	Nickel	Lead	Zinc	Molybdenum	Silver	Gold (3)
Year	(000 t)	(000 t)	(000 t)	(000 t)	(000 t)	(t)	(t)
1980	16 714	8 348	9 637	27 742	551	33 804	826
1981	15 511	7 781	9 380	26 833	505	32 092	851
1982	16 889	7 546	9 139	26 216	469	31 204	833
1983	16 214	7 393	9 081	26 313	442	31 425	1 172
1984	15 530	7 191	9 180	26 000	361	30 757	1 208
1985	14 201	7 041	8 503	24 553	331	29 442	1 373
1986	12 918	6 780	7 599	22 936	312	25 914	1 507
1987	12 927	6 562	7 129	21 471	231	25 103	1 705
1988	12 485	6 286	6 811	20 710	208	26 122	1 801
1989	12 082	6 092	6 717	20 479	207	24 393	1 645
1990	11 261	5 776	5 643	17 847	198	20 102	1 542
1991	11 040	5 691	4 957	16 038	186	17 859	1 433
1992	10 755	5 605	4 328	14 584	163	15 974	1 345
1993	9 740	5 409	4 149	14 206	161	15 576	1 333
1994	9 533	5 334	3 861	14 514	148	19 146	1 513
1995	9 250	5 832	3 660	14 712	129	19 073	1 540
1996	9 667	5 623	3 450	13 660	144	18 911	1 724
1997	9 032	5 122	2 344	10 588	149	16 697	1 510
1998	8 402	5 683	1 845	10 159	121	15 738	1 415
1999	7 761	4 983	1 586	10 210	119	15 368	1 326
2000	7 419	4 782	1 315	8 876	97	13 919	1 142
2001	6 666	4 335	970	7 808	95	12 593	1 070
2002	6 774	4 920	872	6 871	82	11 230	1 023
2003	6 037	4 303	749	6 251	78	9 245	1 009
2004	5 546	3 846	667	5 299	80	6 568	787
2005	6 589	3 960	552	5 063	95	6 684	958
2006	6 923	3 940	737	6 055	101	6 873	1 032
2007	7 565	3 778	682	5 984	213	6 588	987
2008	7 456	3 605	534	5 005	222	5 665	947
2009	7 290	3 301	451	4 250	215	6 254	918

Source: Natural Resources Canada, based on company reports and the federal-provincial/territorial survey of mines and concentrators.
(1) No allowance is made for losses in milling, smelting and refining. Excludes material classified as "resources." (2) Includes metal in mines where production has been suspended temporarily. (3) Excludes metal in placer deposits because reserves data are generally unavailable.
Note: One tonne (t) = 1.1023113 short tons = 32 150.746 troy oz.

TABLE 2. MAIN COMPONENTS OF CHANGE DURING 2009 IN CANADIAN RESERVES OF SELECTED MAJOR METALS
Metal	Units	Revised Opening Metal Balance, January 2009	Metal in Ore Mined During 2009	Metal Apparently Written Off During 2009	Metal in New Reserves Found During 2009	Net Change During 2009	Closing Metal Balance, December 2009	% Change During 2009
Copper	000 t	7 456	557	- 349	740	- 166	7 290	-2.23%
Nickel	000 t	3 605	165	- 386	248	- 304	3 301	-8.42%
Lead	000 t	534	120	- 77	114	- 83	451	-15.56%
Zinc	000 t	5 005	770	- 744	759	- 755	4 250	-15.09%
Molybdenum	000 t	222	11	- 2	6	- 8	215	-3.43%
Silver	t	5 665	904	- 586	2 078	589	6 254	10.39%
Gold	t	947	109	- 102	181	- 29	918	-3.07%

Source: Natural Resources Canada, based on company reports and the federal-provincial/territorial survey of mines and concentrators.

TABLE 3. CANADIAN RESERVES OF SELECTED MAJOR METALS BY PROVINCE AND TERRITORY, AS AT DECEMBER 31, 2009
Metal Contained in Proven and Probable Mineable Ore (1) in Operating Mines (2) and Deposits Committed to Production
Metal	Units (3)	N.L.	N.S.	N.B.	Que.	Ont.	Man.	Sask.	B.C.	Yukon	N.W.T.	Nunavut	Canada (5)
Copper	000 t	488	–	31	224	2 767	374	–	3 178	226	–	–	7 290
Nickel	000 t	677	–	–	341	1 781	501	–	–	–	–	–	3 301
Lead	000 t	–	–	277	45	33	–	–	32	65	–	–	451
Zinc	000 t	140	–	688	963	961	684	–	317	498	–	–	4 250
Molybdenum	000 t	–	–	–	–	–	–	–	215	–	–	–	215
Silver	t	85	–	830	1 226	1 505	415	–	676	1 517	–	–	6 254
Gold	t	1	–	1	272	445	35	6	30	14	–	114	918

Source: Natural Resources Canada, based on company reports and the federal-provoncial/territorial survey of mines and concentrators.
– Nil or less than one unit.
(1) No allowance is made for losses in milling, smelting and refining. Excludes material classified as "resources." (2) Includes metal in mines where production has been suspended temporarily. (3) One tonne (t) = 1.1023113 short tons = 32 150.746 troy oz. (4) Excludes metal in placer deposits because reserves data are generally unavailable. (5) May not balance due to rounding at the provincial/territorial level.

Figure 1: Canadian Rserves of Selected Major Metals, 1987-2009
Metal Contained in Proven and Probable Mineral Ore in Operating Mines and Deposits Commited to Production, as at December 31 of Each Year