Exploration and deposit appraisal spending in Ontario rose to $321 million in 2005, up from $307 million the year before.
Spurred on by higher commodity prices, senior mining companies opened their purse strings for total spending of $215 million, representing an increase of
$45 million over the prior year. Spending by junior mining companies fell to $110 million in 2005, down from $141 million in 2004.
Ontario once again ranked first in exploration spending among Canadian provinces in 2005, accounting for 24.7 per cent of the $1.3 billion spent in Canada. British Columbia and Quebec ranked second and third at 16.3 and 16.1 per cent, respectively.
Ontario's Ministry of Northern Development and Mines expects the upward trend to continue this year with exploration expenditures reaching $340 million.
Globally, Canada attracted more exploration spending than any other country in the world in 2005, according to statistics reported by the Metals Economics Group (MEG).
Canada accounted for 19 per cent of the $5.1 billion spent globally, widening its lead over second place Australia, which accounted for 16 per cent of global spending. The United States finished third with 8 per cent, followed by Russia, Peru and Mexico tied at 5 per cent.
The $5.1 billion in global spending reported by the Metals Economics Group was just shy of the 1997 peak of $5.2 billion. A sharp decline in metal prices, exacerbated by industry scandals and the diversion of investment capital to the dotcom sector, resulted in five consecutive years of shrinking exploration expenditures, culminating in global spending of just under $2 billion in 2002.
Junior mining companies have accounted for much of the increase in exploration spending since 2002, surpassing spending by the majors for the first time in 2004.
"Social upheaval" in South America and Southeast Asia, and new tax and royalty burdens in South Africa and South America could also dampen exploration expenditures this year, warns MEG.
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