Mineral exploration spending continues downward slide in North

New figures from Natural Resources Canada show that companies were spending less money exploring for new mineral deposits this year in all three territories, compared to 2015. The biggest drops in spending were in the N.W.T and Nunavut.

Spending figures for 2016 drop in all 3 territories, N.W.T. spending down the most

A camp at the Kennady North diamond exploration project, northeast of Yellowknife. According to figures from Natural Resources Canada, exploration spending in the N.W.T. this year will be a little more than half what it was in 2015. (Kennady Diamonds)

Exploration spending is on track to hit a five-year low in all three Northern territories this year, according to new projections from Natural Resources Canada (NRCan).

Every year, NRCan reviews the spending intentions of junior and senior exploration companies in each province or territory. The latest figures show the slump in exploration is having an impact on nearly every part of the country, with the North taking some of the biggest hits.

They also show that there's been a big drop in mineral exploration in the North since 2012, when commodity prices were booming. All three territories have seen temporary bumps or dips since then, but overall the trend has been steadily downward. 

Nationally, the trend has also been down since 2012, and the projection for this year ($1.465 billion) represents about a 20 per cent dip from 2015.

N.W.T. numbers 'extremely pathetic'

Of the territories, the N.W.T saw the biggest drop over the last year. In 2015, companies spent $100.9 million looking for and appraising new deposits in the territory. This year, that figure has been almost halved, to $53 million — a 47 per cent drop.

Gary Vivian, president of the N.W.T./Nunavut Chamber of Mines, says a lot of companies in the N.W.T. this year 'were just doing enough work to keep their claims in good standing.' (Claudiane Samson/RCI)

"It's extremely pathetic," said Gary Vivian, president of the N.W.T./Nunavut Chamber of Mines, about the figures for the N.W.T.

"It's even more pathetic because that $53 million was probably significantly spent on three projects.

"Sure, there was other work going on. But the mining incentive program for the N.W.T. paid for a lot of that, and a lot of the companies were just doing enough work to keep their claims in good standing."

Vivian also suggests the Gahcho Kue diamond mine's moving into production this year may be partly responsible for the dip in exploration spending.

Nunavut also sees big drop, Yukon slightly less

Nunavut also saw a lot of exploration work dry up this year, but it's still seeing the most spending of the three territories, at $122.1 million. In 2015, spending in the territory was at $215 million, meaning it's dropped by about 43 per cent this year. 

"There's no doubt, in Nunavut exploration has dropped," Vivian said.

He says the territory's lack of infrastructure continues to be a barrier.

"It's a very expensive place to work and it's very difficult to raise money in these markets, so companies think twice about that."

Yukon, meanwhile, has seen the smallest change in spending since last year, but the figures are still no cause for celebration. NRCan puts spending this year in the territory at about $82.6 million, a drop of about 10 per cent from last year (when companies spent about $92.2 million in Yukon).

Yukon has moved up, however, in the rankings of Canadian jurisdictions when it comes to projected exploration spending this year — moving to sixth place this year from seventh place in 2015. Nunavut is still ranked fifth, while the N.W.T. dropped to eighth this year, from sixth in 2015.

The provinces seeing the most exploration investment in 2016 are Ontario, Saskatchewan, Quebec and B.C., though they've all seen a drop since 2015. Only Manitoba and Alberta saw exploration spending go up slightly in 2016.

with files from Kate Kyle


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