VANCOUVER, March 7, 2017 /CNW/ - The focus of exploration in British Columbia (BC) is shifting to grassroots and early-stage exploration, according to a new survey – a joint initiative between EY, the Government of British Columbia's Ministry of Energy and Mines (MEM) and the Association for Mineral Exploration British Columbia (AME).
"We're seeing a number of projects that supported exploration expenditure over the past five years now evolving into the mine development phase, resulting in a drop in expenditure in the capital intense later stages of the exploration lifecycle" says Iain Thompson, associate partner with EY's Canadian Mining & Metals practice. "But importantly, the survey indicates a swing in focus with a rise in expenditure in the early stages of exploration. The resilience of the exploration industry in BC over time reflects the province's favorable geology, good infrastructure, and stable policy environment."
While the overall downward trend in exploration in BC continued in 2016, led by low commodity prices, market uncertainty, and another sharp drop in advanced-stage exploration, the British Columbia Mineral and Coal Exploration Survey found that grassroots and early stage projects actually experienced significant growth in exploration expenditure in 2016:
- Grassroots expenditure increased by 24% to just under $15 million
- Early stage expenditure increased by 48% to just under $42 million
"BC's share of national exploration expenditure has demonstrated a long-term upward trend," says Gordon Clarke Director, BC Mineral Development Office. "Notwithstanding the current downturn, the industry remained an important source of jobs and was – and continues to be – an economic contributor to communities throughout the province."
"Exploration companies continue to demonstrate their commitment to local communities and First Nations engagement through targeted activities, investment, employment and procurement," says Jonathan Buchanan, Director, Information & Public Affairs at AME. "In fact, a significant percentage of exploration budgets remain in the local community."
According to the survey, 66% of those who responded indicated that 50% or more of their budget was spent locally, with nearly 30% indicating 90% or more was spent in the local community.
The survey suggests that exploration in BC may be nearing or experiencing a mining exploration lifecycle "reset."
EY, MEM and AME agree: "Looking forward, the outlook for the exploration sector in BC will largely be influenced by the success of grassroots and early-stage exploration. It will also be influenced by commodity prices and the ability of exploration companies to raise capital."
About the report
The British Columbia Mineral and Coal Exploration Survey is a joint initiative between EY, the Government of British Columbia's Ministry of Energy and Mines (MEM), and the Association for Mineral Exploration (AME) that has been conducted to provide a view of the state of the mineral and coal exploration sector in British Columbia (BC).
The survey examines a wide range of economic, sociopolitical, and organizational issues that impact companies in 2016 and prospectors exploring in BC, and has been designed to provide previously unavailable insight into the mineral and coal exploration industry in BC.
Data and analysis presented in this report are for the period 1 January through 31 December 2016 and are based on data collected directly from 30 prospectors and 177 companies operating in BC.
To read the full report, visit: British Columbia Mineral and Coal Exploration Survey
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
For more information, please visit ey.com/ca. Follow us on Twitter @EYCanada.
EY refers to the global organization and may refer to one or more of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.
MEM is the provincial government agency responsible for overseeing mineral and coal exploration activity in BC. Ministry staff helped in the design of the survey and collected additional information about exploration expenditures from companies and prospectors that did not complete the online survey. Expenditure data was solicited directly from the companies and prospectors or estimated by the MEM regional geologists and British Columbia Geological Survey (BCGS) staff under the direction of the BC Mineral Development Office.
AME is the lead association for the mineral exploration and development industry based in BC. Established in 1912, AME represents, advocates, protects and promotes the interests of thousands of members who are engaged in mineral exploration and development in BC and throughout the world. AME encourages a safe, economically strong and environmentally responsible industry by providing clear initiatives, policies, events and tools to support its membership. AME's participation has facilitated the collection of previously unavailable insight into the industry. Visit amebc.ca. Follow us on Twitter @AME_BC.
SOURCE EY (Ernst & Young)
For further information: Please contact: Sasha Anopina, email@example.com, 416 943 2637; Julie Fournier, firstname.lastname@example.org, 514 874 4308