Drop in exploration spending, regulatory burden, energy prices among the major concerns
The Ministry of Northern Development and Mines got an earful from disgruntled mining company representatives, prospectors and First Nation leaders at 16 public workshops seeking input this spring for a refresh of Ontario’s mineral development strategy.With risk capital drying up, commodity prices down, and new regulatory requirements slowing exploration activity, junior mining companies, prospectors, diamond drill contractors and assay labs are feeling the pain. Operating mines in Ontario have been less affected, but are also taking advantage of the opportunity to share their concerns.
“This is an important update and review of our mineral development strategy and we think the time is right for doing it,” said Michael Gravelle, Minister of Northern Development and Mines.
Garry Clark, executive director of the Ontario Prospectors Association, couldn’t agree more.
“We need some kind of incentive program to get prospectors back on the ground to counteract the (planned) move to map staking and to get some stimulus for the junior mining companies,” he said. “Quebec, Manitoba and New Brunswick all have a rebate system for exploration dollars spent. If you spend $40,000, you can get up to $20,000 back. The maximum you can get back is $100,000.”
According to Clark, the exploration industry is in worse shape than the Ministry of Northern Development and Mines lets on when it cites 2014 exploration expenditures of $507 million.
“Not all of that is exploration,” said Clark. “They always forget to add ‘and deposit appraisal’ because that’s what the number is. The drilling off of a deposit like Borden Lake – that’s deposit appraisal. The real number for exploration is closer to $300 million.”
The OPA’s formal brief to the Ministry will also zero in on the efficiency and certainty of the regulatory process, which requires prospectors and junior mining companies in Ontario to apply for plans and permits prior to commencing exploration activity.
“The process needs to be tightened up,” said Clark. “Some of the permitting that gets hung up needs to be looked at. For example, if you’re going to apply for a permit to do a bunch of drilling, you’re probably going to be doing some downhole geophysics as well, but the way the legislation is set out, the geophysics is covered by a plan, so they make you get a plan and a permit.”
Clark applauds the efforts the Ministry has made to help First Nation communities cope
with plan and permit applications, but notes that some First Nations are “overwhelmed by information.
“If there’s no response, you’re supposed to get your plan, but in some cases, the Ministry has gone out and solicited a response because they’re not sure if they reviewed it, didn’t have time, or if the documents didn’t get to the right person.”
The OPA will also urge the Ministry to inject new life into the Ontario Geological Survey.
“We need to revamp and work on our geoscience databases,” said Clark.
“Expenditures on mapping and collection of geoscience data has been dwarfed by the money the Ministry has spent on everything else, and it’s a very greying group. There are a lot of quality geologists at the OGS who have been there for 30 years, but they’re starting to retire. We need to open up the pipeline and get some fresh blood in the field because, as with everything in our industry, people are more reliant on computers and looking at maps than they are going out and breaking rock.
“They’re still doing good work and producing good material, but from what I can tell, the number of people on the ground isn’t what it used
to be.”
Clark also urges more creativity in promoting the resident geologist program.
