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Exploration

Exploration spending tops $500 million

Final statistics for 2007 exploration and deposit appraisal expenditures in Ontario were still being compiled at press time, but will be well over $500 million, a significant increase over the $346.5 million recorded last year.

“It’s probably as busy as it has ever been,” said Mark Smyk, the Ontario Geological Survey’s (OGS) acting regional manager for northwestern Ontario. “We’re seeing an unparalleled number of programs, projects and prospecting activity.”

As of December 2007, said Smyk, there were 100,000 active claim units in the northwest. In Ontario as a whole, there were 308,000 claims in good standing at the end of the year, almost double the number recorded eight years ago.

Much of the increase in staking activity is attributable to the discovery of nickel, copper and platinum group mineralization at Noront Resources’ Double Eagle project in the James Bay Lowlands (read full story).

High metal prices, driven by sustained demand from China, India and other developing countries, is spurring exploration for all metals.

“It’s not just gold and copper,” said Smyk. “It’s everything across the board: molybdenum, uranium, base metals, even iron ore.”

Exploration activity would be even more impressive if not for the shortage of geologists, drillers, linecutters and claim stakers.

Companies obliged to spend money to comply with flow-through financing requirements “are really behind the eight ball” if they haven’t planned in advance to book an airborne study or a diamond drilling contractor, said Smyk.

Among the most advanced projects in the northwest are Marathon PGM Corporation’s copper/PGM project on the north shore of Lake Superior, Rainy River Resources’ Rainy River Project near Fort Frances, and Canadian Arrow’s Kenbridge copper-nickel project near Kenora.

In the Red Lake gold camp, Gold Eagle Mines is planning to sink a 1,400-metre shaft to further evaluate a deposit a few kilometres from Goldcorp’s Red Lake Complex, said Smyk. Goldcorp itself has a number of joint ventures with junior miners in the camp and is looking at the feasibility of re-activating the Cochenour Mine.

Kodiak Exploration’s Golden Mile discovery at its Hercules Gold Project in the Geraldton-Beardmore belt is also generating excitement, said Smyk.

The company has raised $54 million based on its drill results and “everything in that 100-kilometre stretch from Beardmore to east of Geraldton is staked solid.”

Goldcorp is generating positive results from an ambitious exploration program at its Musselwhite Mine. “If their models are correct, they could be getting two million ounces per kilometer of strike length,” said Smyk.
Northeast

In northeastern Ontario, the commissioning of De Beers’ Victor Mine, Ontario’s first diamond mine, highlights an equally thriving mining sector (read full story).

“A lot of the people working at Victor are based out of Timmins,” said OGS Timmins resident geologist Brian Atkinson. “There are flights in and out of the airport on a regular basis and we see the economic benefits of that spilling out into the Timmins economy.”

Also creating a buzz in the Timmins camp is Lake Shore Gold’s advanced exploration project at its Timmins West property. The junior miner has already outlined a resource of 1.2 million ounces and is currently sinking a 700-metre shaft to take a bulk sample.

Liberty Mines has three properties in various stages of development in the Timmins area and recently commissioned a new mill, said Atkinson. Meanwhile, Goldcorp has a drill program under way to study the feasibility of reactivating the Hollinger Mine, which produced 19.4 million ounces of gold during its lifetime and has an estimated four million ounces remaining.

In the Sudbury area, Xstrata Nickel is one year away from start-up of its Nickel Rim Mine and both Vale Inco and FNX Mining are proceeding with several mine development projects.

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