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© Her Majesty the Queen in Right of Canada, 2010

This publication was prepared by:

Minerals, Metals and Materials Knowledge Branch
Minerals and Metals Sector
Natural Resources Canada
Ottawa, Ontario  K1A 0E4

Telephone: 613-947-6580
E-mail: info-mms@nrcan-rncan.gc.ca

It is also available on the Internet at:
www.nrcan-rncan.gc.ca/mms-smm/busi-indu/cme-omc-eng.htm

Cette publication est aussi disponible en français, sous le titre
Survol des tendances observées dans l’exploration minérale canadienne

COVER PHOTO REPRODUCED WITH PERMISSION FROM BHP BILLITON LTD.

The cover photo shows employees from drilling contractor Akita Drilling Ltd. and coring contractor Sebco Coring Ltd. pulling out the first potash core at BHP Billiton’s wholly owned Jansen potash project in Saskatchewan. With a pre-approved capital expenditure budget of US$240 million, the Jansen potash project is currently in the final stages of the Selection (pre-feasibility) study. It will move to the Definition (feasibility) phase in mid-2010, if approved, with a full investment decision expected in late 2011. With the completion of the January 2010 offer to acquire Athabasca Potash Inc., which has neighbouring properties, BHP Billiton will have access to over 14 000 km2 of exploration ground in the Saskatchewan potash basin.


Preface

The Overview of Trends in Canadian Mineral Exploration report is prepared annually by Natural Resources Canada (NRCan). The 2009 edition contains a review of mineral exploration and resource development, an analysis of recent indicators of exploration and deposit appraisal activity, an analysis of ore reserves and recent production decisions, a listing of informative provincial/territorial web sites, a review of the worldwide activities of the larger Canadian exploration and mining companies, and a statistics-based summary of Canada’s post-1980s mineral exploration history.

The information and analyses found in this report were prepared by officials from the Minerals, Metals and Materials Knowledge Branch of NRCan’s Minerals and Metals Sector. The report covers exploration, deposit appraisal, and occasionally mine complex development activities for metallic minerals, nonmetallic minerals, coal, and uranium (it does not refer to petroleum-related work). The information in this report was current as of December 2009. Please note that the information and analyses found on provincial/territorial web sites are the responsibility of the respective jurisdictions.

This report is available on the Minerals and Metals Sector’s web site at www.nrcan-rncan.gc.ca/mms-smm/busi-indu/cme-omc-eng.htm.

Note to Readers

This report has been prepared on the basis of information available at the time of writing. The authors make no warranty of any kind with respect to the content and accept no liability, either incidental, consequential, financial or otherwise, arising from the use of this document.


Contacts/Information Requests

For further information on specific issues related to this report, the reader is invited to contact the Minerals and Metals Sector of NRCan or one of the federal officers listed below. Contact information for the provinces and territories is provided in Chapter 4 (Regional Outlook) of this report.

NRCAN CONTACTS

Natural Resources Canada (Ottawa)
(Minerals and Metals Sector)
613-947-6580
www.nrcan-rncan.gc.ca/mms-smm

Louis Arseneau
(project coordinator and principal editor)
613-995-0959
louis.arseneau@nrcan-rncan.gc.ca

Ginette Bouchard
(Canadian exploration statistics and analysis)
613-992-4665
ginette.bouchard@nrcan-rncan.gc.ca

Arlene Drake
(Ore reserves, production decisions, and global presence)
613-992-7568
arlene.drake@nrcan-rncan.gc.ca

SOME NRCAN WEB SITES

Minerals and Metals Sector
www.nrcan-rncan.gc.ca/mms-smm

Mineral Exploration
www.nrcan-rncan.gc.ca/mms-smm/busi-indu/mex-exm-eng.htm

Minerals and Metals Markets
www.nrcan-rncan.gc.ca/mms-smm/busi-indu/mmm-mmm-eng.htm

Minerals and Mining Statistics
http://mmsd.mms.nrcan.gc.ca/stat-stat/index-eng.aspx

Mining Taxation
www.nrcan-rncan.gc.ca/mms-smm/busi-indu/tax-fis-eng.htm


Executive Summary

This report covers the years 2008 and 2009, a period that will be remembered for the major financial and economic crisis that shook the world and forced the introduction of massive government fiscal and monetary stimulus packages, including the Government of Canada’s Economic Action Plan. The worldwide crisis had a significant and immediate impact on the Canadian and global mineral exploration and mining industry. Collapsing minerals and metals prices, a tightening of both debt and equity, and uncertainty about the future economic outlook resulted in mine closures, production cutbacks, project deferrals, slashed exploration budgets, and other measures aimed at preserving cash and flagship properties.

In terms of mineral exploration and deposit appraisal activity, statistics from the federal-provincial/territorial Survey of Mineral Exploration, Deposit Appraisal and Mine Complex Development Expenditures show that, while 2008 still ended with a record $3.3 billion in exploration and deposit appraisal spending, 2009 was a different story as expenditures declined by 44% to $1.8 billion. This reduced spending interrupted a record-breaking trend of eight consecutive years of increasing expenditures that saw the emergence of a strong junior mining sector and a widely distributed exploration effort among commodities and regions.

In fact, this period of intense activity led to the announcement of numerous mineral occurrences and discoveries, the advancement of many projects, and upgrades in resources and reserves. While companies had to adjust their plans in 2009, work still continued on significant properties, but often at a reduced pace. Up-to-date information and analysis on these developments can be found on the provincial/territorial web sites that are listed in Chapter 4 of this report.

When adding mine complex development expenditures, capital, and repair and maintenance costs, total investment amounted to almost $13 billion in 2008 and an estimated $10 billion in 2009. The group of projects in the mine complex development and deposit appraisal stages is counted on to provide Canada’s future mines. Some of these projects will be particularly important in helping address the long-term decline in base-metal reserves in some of Canada’s better-known mining camps.

In the midst of all this economic turmoil, Canada continued to be the top destination in the world for exploration capital, accounting for a 16% share of global budgets in 2009. In addition, Canadian companies were once again planning to spend more than those from any other country, accounting for 34% of all planned exploration programs in the world in 2009.

Going forward, factors that will influence the performance of the Canadian mineral exploration sector include: the price of gold; the outlook for base metals; interest in potash, uranium, and rare earth elements (REE); the receptiveness of debt and equity markets; capital infusions from new project owners/partners; and positive exploration results. Barring any further economic turmoil, 2010 could mark a return to exploration and deposit appraisal expenditure growth with total spending climbing over the $2 billion mark.


Table of Contents

Preface

Contacts/Information Requests

Executive Summary

1. MINERAL EXPLORATION AND RESOURCE DEVELOPMENT IN CANADA - 2009 REVIEW

Introduction

Economic Context

Impact of the Economic Crisis
Year-End Economic Conditions

Activity Levels

Mineral Exploration and Deposit Appraisal
Mineral Resource Development
Observations From the Preliminary 2009/Spending Intentions 2010 Survey
Canada’s Contribution to Global Exploration

Financing

Trends and Developments

Project Ownership
Commodities of Interest

Outstanding and Emerging Issues

Declining Base-Metal Ore Reserves
Land Access and Security of Tenure
Infrastructure

Projects in the News

Outlook

2. MINERAL EXPLORATION, DEPOSIT APPRAISAL, AND MINE COMPLEX DEVELOPMENT ACTIVITY IN CANADA

Introduction

Survey of Mineral Exploration, Deposit Appraisal and Mine Complex Development Expenditures

Generalized Model of Mineral Resource Development
Key Definitions

Mineral Resource Development

Total Investment

Property Distribution
Expenditure Fluctuations
Project-Specific Impacts
Regional Trends

Exploration and Deposit Appraisal

Activity Drivers - Prices
Activity Drivers - Financing
Activity Drivers - Discoveries
Activity Indicators - Claim Staking
Activity Indicators - Drilling
Activity Indicators - Expenditures

Summary and Conclusion

3. CANADIAN RESERVES OF SELECTED MAJOR METALS, AND RECENT PRODUCTION DECISIONS

Reserves of Selected Major Metals

Reserves Policy
Reserves by Commodity
Canadian Reserves by Province and Territory
Canadian Reserves by Industry Classification
Apparent Life of Canadian Reserves
Reserve Trends

Recent Production Decisions

Outlook

4. REGIONAL OUTLOOK

Introduction

Provincial/Territorial Information on the Internet

5. CANADIAN GLOBAL EXPLORATION ACTIVITY

Introduction

Global Market for Mineral Exploration

World’s Larger Companies

World’s Smaller Companies

Larger Canadian-Based Companies

Larger-Company Exploration Market in Canada

Larger Canadian-Based Companies in Canada
Foreign-Based Companies in Canada

Larger Canadian-Based Companies Abroad

United States
Latin America and the Caribbean
Europe and the Former Soviet Union
Africa and the Middle East
Asia-Pacific

Summary and Outlook

6. HISTORICAL EXPLORATION AND DEPOSIT APPRAISAL STATISTICS

Introduction

Historical Summary

Exploration and Deposit Appraisal Levels

Metal Prices
Commodities
Companies
Regions

List of Figures

  • Figure 1.1: Exploration and Deposit Appraisal Expenditures in Canada, by Type of Company, 1979-2009
  • Figure 1.2: Natural Resources Canada’s Monthly Metals Price Index, 2003-09
  • Figure 2.1: Total Mineral Resource Development Expenditures in Canada, 1997-2009
  • Figure 2.2: Total Mineral Resource Development Expenditures in Canada, by Mineral Commodity, 2008 ($12.7 billion)
  • Figure 2.3: Total Mineral Resource Development Expenditures, by Province and Territory, 2008 ($12.7 billion) and 2009 ($7.5 billion)
  • Figure 2.4: Exploration and Deposit Appraisal Expenditures in Canada, by Type of Company With Number of Active Project Operators, 1997-2009
  • Figure 2.5a: Area of New Mineral Claims Staked or Recorded, 1985-2008
  • Figure 2.5b: Surface Diamond Drilling Statistics, 1985-2008
  • Figure 2.6: Exploration and Deposit Appraisal Expenditures in Canada, by Mineral Commodity, 1997-2009
  • Figure 2.7: Exploration and Deposit Appraisal Expenditures in Canada, by Mineral Commodity, by Type of Company and by Work Phase, 2008
  • Figure 2.8: Exploration and Deposit Appraisal Expenditures, by Province and Territory, 2008 and 2009
  • Figure 2.9: Exploration and Deposit Appraisal Expenditures, by Province and Territory and by Type of Company, 2008
  • Figure 2.10: Exploration, Deposit Appraisal, and Mine Complex Development Expenditures in Canada, by Work Phase and by Type of Activity, 2008
  • Figure 2.11: Exploration and Deposit Appraisal Expenditures, On- and Off-Mine-Site, 1997-2009
  • Figure 3.1: Generalized Model of Mineral Resource Development
  • Figure 3.2: Canadian Reserves of Selected Major Metals, 1983-2008
  • Figure 3.3: Main Components of Change in Canadian Reserves of Selected Major Metals, 1987-2008
  • Figure 5.1: Distribution of Global Exploration Budgets, by Location, 2009
  • Figure 5.2: Distribution of the World’s Larger Exploration Companies, by Domicile, 2009
  • Figure 5.3: Exploration Budgets of the World’s Larger Companies, by Domicile, 1999-2009
  • Figure 5.4: Exploration Budgets of the World’s Larger Companies for Selected Regions of the World, 2008 and 2009
  • Figure 5.5: Exploration Budgets of the World’s Larger Companies for Canada and Elsewhere, 1998-2009
  • Figure 5.6: Exploration Budgets of the Larger Canadian-Based Companies, 2009 – Countries Accounting for 90% of Canadian Budgets
  • Figure 6.1: Exploration and Deposit Appraisal Expenditures in Canada, Field and Overhead Costs by Type of Company, 1978-2008
  • Figure 6.2: Exploration and Deposit Appraisal Expenditures (Field Work and Overhead) in Canada, and Natural Resources Canada’s Monthly Metals Price Index, 1995-2009 (Constant Dollars)
  • Figure 6.3: Exploration and Deposit Appraisal Expenditures in Canada, Field and Overhead Costs, by Mineral Commodity, 1985-2008

List of Tables

  • Table 1.1: Total Mining Equity Financing Raised in Canada and Flow-Through Share Financing, 1995-2009
  • Table 2.1 : Total Mineral Resource Development in Canada, by Work Phase, On- and Off-Mine-Site, 2007-09
  • Table 2.2: Metal Prices of Selected Commodities, 2006-09
  • Table 2.3: Exploration and Deposit Appraisal Expenditures in Canada, by Type of Company, 1997-2009
  • Table 2.4: Summary of Claim Statistics, 2007 and 2008
  • Table 2.5: Exploration and Deposit Appraisal Activity, by Province and Territory, 2008
  • Table 2.6: Exploration and Deposit Appraisal Expenditures in Canada, by Range of Expenditures and by Type of Company, 2006-09
  • Table 2.7: Exploration and Deposit Appraisal Expenditures, by Specific Commodity of Interest, 2006-08
  • Table 2.8: Exploration and Deposit Appraisal Expenditures, by Province and Territory and by Mineral Commodity, 2008
  • Table 2.9: Exploration and Deposit Appraisal Expenditures, by Province and Territory and by Mineral Commodity, 2009
  • Table 2.10: Exploration and Deposit Appraisal Surface and Underground Drilling, by Province and Territory and by Mineral Commodity, 2008
  • Table 2.11: Exploration and Deposit Appraisal Expenditures, in Canada by Work  Phase (Off- and On-Mine-Site), by Type of Company and by Mineral Commodity, 2008
  • Table 2.12: Exploration and Deposit Appraisal Expenditures, by Province and Territory, by Work Phase and by Type of Company, 2008
  • Table 2.13: Exploration and Deposit Appraisal Expenditures by Province and Territory, by Work Phase and by Type of Company, 2009
  • Table 2.14: Number of Projects by Mineral Commodity in the Off-Mine-Site Deposit Appraisal Stage, 1997-2008
  • Table 2.15: Exploration and Deposit Appraisal Expenditures in Canada, by Work Phase (On- and Off-Mine-Site) and by Type of Company, 1997-2009
  • Table 2.16: Exploration and Deposit Appraisal Expenditures, by Province and Territory and by Work Phase (Off- and On-Mine-Site), 2008
  • Table 2.17: Exploration and Deposit Appraisal Expenditures, by Province and Territory and by Work Phase (Off- and On-Mine-Site), 2009
  • Table 3.1: Main Components of Change During 2008 in Canadian Reserves of Selected Major Metals
  • Table 3.2: Tonnages and Grades of Operations Included in Canadian Reserves of Selected Major Metals, as at December 31, 2008
  • Table 3.3: Production Decisions Added to Canadian Reserve Totals as at December 31, 2008
  • Table 3.4: Canadian Reserves of Selected Major Metals by Province and Territory, as at December 31, 2008
  • Table 3.5: Canadian Reserves of Selected Major Metals by Industry, as at December 31, 2008
  • Table 3.6: Canadian Reserves of Selected Major Metals as at December 31 of Each Year, 1977-2008
  • Table 5.1: Worldwide Exploration Budgets for Precious Metals, Base Metals and Diamonds, by Type of Company and by Domicile of Company, 2009
  • Table 6.1: Exploration and Deposit Appraisal and Expenditures in Canada, Field Work and Overhead, by Type of Company, 1969-2008
  • Table 6.2: Exploration and Deposit Appraisal Expenditures, by Province and Territory, 1993-2008 (Current Dollars)
  • Table 6.3: Exploration and Deposit Appraisal Expenditures, by Province and Territory, 1993-2008 (Constant Dollars)