Mineral Exploration is the official publication of the Association of Mineral Exploration British Columbia.
Issue link: http://digital.canadawide.com/i/428696
• Photograph : W I N T E R 2 0 1 4 9 President & CEO's Message Gavin C. Dirom While they are some of the most resili- ent and innovative people I know, folks within the B.C.-based mineral explora- tion sector continue to face a prolonged venture capital crisis. Many A ME BC members, particularly the juniors, have continued in survival mode due to the historic and unprecedented downturn in the venture capital market. Uncertainty in the global economy has led to significant capital-raising chal- lenges for juniors. As recently reported by t he Prospectors & Developers Association of Canada, the total num- ber of financings on the TSX Venture Exchange in 2013 was one of the lowest since 1999, and year-to-date 2014 figures indicate a continued downturn. The lim- ited amount of financing that did take place on the TSX Venture Exchange in 2013 was primarily for very small amounts – more than 50 per cent of all financings in 2013 were for $500,000 or less (compared to 13 per cent in 2010). A significant portion of all financings was barely enough to keep the lights on – 12 per cent of financings in 2013 were for $100,000 or less, compared to only 0.5 per cent in 2010. And according to Kaiser Research Online, approximately 60 per cent of Canadian-listed juniors had working capital balances under $200,000 as of October 2014. Given that it costs a minimum of $200,000 simply to remain a listed company, companies are in sur- vival mode. Furthermore, SN L Mining and Metals recently stated that exploration budgets for all juniors globally dropped 29 per cent in 2014, after falling 39 per cent in 2013. As a result, juniors are expected to account for only 32 per cent of global exploration budgets in 2014, down from a high of 55 per cent in 2007. Nationally, exploration expenditures from early through the preliminary eco- nomic assessment stages have declined from $2.86 billion in 2011 to $1.2 bil- lion in 2013, with a marginal recovery to $1.25 billion expected for 2014. The B.C.-based mineral exploration and development industry must con- tinuously work to compete for interna- tional investment. With reported exploration expen- ditures of $476 million in 2013, B.C. attracted an estimated 20 per cent of all exploration dollars spent in Canada, compared to just six per cent in 2001. Based on 2013 expenditure levels, 18 of the top 100 exploration projects in Canada are in B.C. As of August 2014, approximately 58 per cent of the mineral exploration and mining companies listed on the TSX and TSX Venture exchanges – 882 out of 1,527 – are headquartered in B.C., and two-thirds of equity capi- tal raised in 2013 on the TSX Venture Exchange ($2.6 billion out of $3.9 billion) was raised by B.C.-based companies. Given the ongoing global economic uncertainty, this is a critical time for AME BC to champion the investment, exploration and development potential of B.C. and to strengthen and reinforce strategic connections with government, business and industry leaders. For exam- ple, AME BC continues to advocate for the industry during government consul- tations about proposed application fees for Mines Act permits. AME BC holds the position that prospecting and explo- ration activities should be exempt from any such fees because these activities produce no revenue for prospectors and explorers. No other jurisdiction charges exploration permit fees, and such fees would be counterproductive to encour- aging more investment in prospecting and exploring for new deposits in B.C. To date, permit fees have not been deter- mined, although the government has already indicated that some exploration activities would be exempt. We have also recommended that the B.C. government rebuild the Ministry of Energy and Mines by allocating an addi- tional $10 million annually to address permitting and regulatory issues in a timely and effective manner. In addition, we advocated an increase in the annual funding of the Geological Survey of BC to $4 million and Geoscience BC to $10 million to support enhanced public geoscience for mineral exploration and development as well as improved geo- technical and geohazard assessment in British Columbia. As you are likely aware, final prepa- rations are being made for A ME BC's Mineral Exploration Roundup 2015 The B.C.-based mineral exploration and development industry must continuously work to compete for international investment. Photograph : AME BC W I N T E R 2 0 1 4 9