The May Twenty Four: British Columbia’s exploration resilience

The mining and metals industry plays a key role in the British Columbia economy.

Today 24 May 2024 – coinciding with Queen Victoria’s birthday – the last instalment of The May Twenty Four series focuses on the fourth main mining region in Canada – British Columbia.

According to the Mining Association of British Columbia (MABC), the industry supports more than 35,000 jobs and over 3,700 small, medium, and indigenous businesses in every corner of the province by spending nearly C$3 billion on goods and services annually.

Some 16 proposed critical mineral mines – representing $36 billion in near-term investment, 300,000 person-years of employment and $11 billion in tax revenues – are at a key juncture, based on a new independent economic impact analysis conducted for MABC.

The study examines 14 potential critical mineral mines and two mine extensions and finds the long-term economic impact of operating these mines over several decades could be nearly $800 billion.

Association President and CEO Michael Goehring says the realisation of benefits from these critical mineral projects is dependent on British Columbia having competitive fiscal and regulatory policies to attract the investment necessary to grow and sustain the sector.

“This is a generational opportunity which must be seized and could position BC as a leading global supplier of responsibly produced critical minerals,” Goehring says.

“We want to move forward with the governments of Canada and British Columbia, First Nations, local governments, and labour, to unlock critical mineral developments for the benefit of all British Columbians.”

Resilience in face of global headwinds

British Columbia’s exploration industry was resilient last year in the face of global headwinds, remaining strong through climbing interest rates, economic turbulence, and geopolitical tensions.

Despite these challenging times with drilling decelerating and exploration marking its first decline in almost 10 years, the fourth major province covered in The May Twenty Four series still managed its third-highest exploration expenditure in a decade.

According to the British Columbia Mineral and Coal Exploration Survey, this is largely thanks in part to the continued strength of copper exploration and the province’s northwest region, where a surge in exploration activity was responsible for 69% of spend in 2023.

The survey is a joint initiative between the Government of British Columbia’s Ministry of Energy, Mines and Low Carbon Innovation (EMLI), the Association for Mineral Exploration (AME) and EY. The survey’s data and analysis are from 1 January through to 31 December 2023.

Using data published by Natural Resources Canada (NRCan), the province’s contribution to national mineral exploration and deposit appraisal expenditure based on spending intentions was forecast to decrease significantly in 2023.

Exploration expenditure was tracking to see a 32% decrease from $997 million in 2022 to $680 million in 2023.

Total metres drilled decreased by 35% from 2022 – falling from 1.15 million metres in 2022 to 748,000m last year. This continues the trend of declining drilling activity in the province seen from 2021 to 2022 – a 20% decrease year-on-year.

Last year, 35% of exploration in British Columbia could be characterised as grassroots — prospecting, sampling, airborne geophysics — or early stage — geophysics, geochemistry, trenching and drilling. This is compared to 65% late-stage — advanced stage, mine evaluation — and/or mine lease exploration.

This ratio of spending between the identified stages has been relatively consistent over the past five years, with the exception of 2021, the British Columbia Mineral and Coal Exploration Survey notes.

British Columbia is enriched with precious and base metals deposits, as well as uranium projects, among some others.

Precious metal and porphyry deposit projects represent 90% of total exploration spend in the province. These project types are predominantly explored for in the northwest region, which accounts for 77% and 71% of total spend for porphyry and precious metal projects, respectively.

Porphyry deposits (Cu-Mo, Cu-Au-Ag) in the province received 43% of exploration spend in 2023 – a 10% increase in market share compared to 2022, and a 14% increase in overall spend year-on-year.

Regionally, the northwest — with its proliferation of porphyry and precious metal deposits — continued as the most prominent region for exploration representing 69% of all exploration spend in the province. This continues the trend of increasing focus in the region as it accounted for 61% and 56% of provincial exploration spend in 2022 and 2021, respectively.

The northwest region – also home to the informal Golden Triangle – received continued interest from local and major international companies last year. It’s the home of the projects with the largest exploration spend in the region, namely the Galore Creek Project operated by Galore Creek Mining (50:50 partnership between Newmont and Teck Resources) and Eskay Creek operated by Skeena Resources (TSX:SKE).

Companies with notable precious metals projects in the province include Blue Lagoon Resources (CSE:BLLG), Skeena Resources, Ascot Resources (TSX:AOT), and American Creek Resources (TSX-V:AMK).

Spending in the gold sector, which has previously driven record high levels of exploration expenditure over the past two years, fell by 23% from C$422 million in 2022 to $326 million in 2023.

The British Columbia Mineral and Coal Exploration Survey notes this follows three years of consecutive increases in provincial exploration spend in the sector. The decline in gold exploration spend is in line with global trends.

Despite experiencing its first year-on-year decrease in nearly 10 years, the mineral exploration industry in British Columbia in 2023 was recorded at $643 million, representing a 13% decrease compared to the record year of $740 million in 2022.

The impact of this decreased overall spend was softened by the continued interest in copper exploration, which saw a 4% increase in spending from $234 million in 2022 to $244 million last year.

This increase in spending was largely concentrated on known deposits rather than grassroot opportunities, as 71% of copper exploration spend focused on projects in the later stages of the exploration lifecycle.

By comparison, the proportion of overall copper exploration spend focused on the later stages of project was 56% in 2021 compared to 64% in 2022.

Nevertheless, the province recorded its third-highest expenditure in a decade, proving the mineral exploration industry in British Columbia is robust.

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Images: British Columbia Mineral and Coal Exploration Survey & MABC
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Written By Adam Orlando Editor-in-Chief Adam Orlando has more than 20 years’ experience in the media having held senior roles at various publications, including as Asia-Pacific Sector Head (Mining) at global newswire Acuris (formerly Mergermarket). Orlando has worked in newsrooms around the world including Hong Kong, Singapore, London, and Sydney.