|Location||North America, bordered by the Pacific and Atlantic Oceans.|
|Capital||Ottawa (45° 19' N, 75° 40' W)|
|Climate||Full range of weather patterns including extreme cold conditions in Northernmost regions.|
Canada’s Role in Global Exploration and Mining:
Canada has played a very important and lengthy role in the global development of exploration and mining and has long been considered the industry leader of the world.
During the recent mineral booms, several other countries such as Australia, South Africa, Russia, China, Brazil and the UK have rapidly advanced their influence and position on the global mineral scene, but Vancouver British Columbia is still recognized as the ‘Exploration and Mining Capital of the World’ and Toronto Ontario, is world-renowned as the ‘Global Finance Capital of Mining and Exploration’.
“Over 800 (or 50%) of Canadian exploration and mining companies are based in B.C., with Vancouver having the largest concentration of exploration companies and mining professionals in the world.” (Source: Association for Mineral Exploration (AME) President’s Message - December 18, 2008)
“1335 Canadian and International mining companies are listed on the TSX and TSX Venture Stock Exchange in Toronto Ontario”. (Source: Gamah International - June 2007 - Compiled by TSX Group)
Canadian Mineral Development:
Canada is the second largest country in the world and has been abundantly endowed with very favorable geology and an abundance of natural resources.
To name just a few of the mineral rich regions and commodities of key note across Canada that have been discovered and developed (or are undergoing further development) are the deep-sea oil deposits off the coasts of Newfoundland and Nova Scotia; the huge nickel deposit in Voisey’s Bay Labrador, the prolific gold belt around La Ronde and Val-Dor in Quebec; nickel, copper and gold deposits in the Flin Flon and Thompson areas of Manitoba; the world’s largest potash production from the massive potassium deposit in Esterhazy Saskatchewan along with the richest high-grade uranium deposits in the world in the Athabasca Basin; the famous oil sands of Fort McMurray Alberta which are currently rated as the second largest deposit of oil in the world; the recent discovery and development of gem-quality diamond deposits in the North West Territories; gold, silver and zinc deposits in the Yukon; gold, copper, silver, lead, zinc and molybdenum deposits scattered throughout British Columbia as well as the huge coal deposits in Tumbler Ridge and the East Kootenays; and the famous nickel copper deposits in the Sudbury Basin along with an abundance of rich gold deposits in the Red Lake region of Ontario.
As stated in the Sudbury Mining Journal, “There are only two places in the world where you can drive to as many mines as we can. That’s Johannesburg and Sudbury. Johannesburg probably has more mines, but Sudbury is either a close second or maybe even first.” (Source: Sudbury Mining Journal - August 2008)
World’s Premier Mining Exchange:
Canada’s influence, expertise and credibility in the world of exploration and mining is greatly evidenced by the major role it plays in the financial sector of the industry.
A 2004 Government report states, “Ontario Canada is the mine-financing capital of the world. More mining companies are listed on the TSX and TSX Venture Exchange than on any other exchange in the world. They have over 1100 mining companies valued at $143 billion. Toronto Stock Exchange mining companies traded over 18 billion shares valued at CDN $140.7 billion in 2004 and an impressive $2 billion was raised by TSX Venture mining companies in 2004. (Source : website Ontario Ministry of Economic Development)
A report issued directly by the TSX Stock Exchange updated those statistics as of September 2007. A few key captions from the TSX brochure are as follows:
“The TSX Group (TSX and TSX Venture Exchanges) is home to more companies than any other exchange in North America. The TSX is number one in the world in public mining companies and growing. The TSX Group is the leading exchange group for mining financing.”
“The TSX’s unique strengths for mining companies are attracting explorers and miners from around the world”, which according to the TSX report includes “…almost 60% of the world’s mining companies list on TSX; a large analyst community that covers juniors and seniors; vibrant retail investor base; strong equity culture – 49% of Canadians own shares”; and “…$363 billion traded in mining stocks (TSX + TSXV).”
“TSX is home to leading global mining companies; 47 TSX mining companies have a market cap greater than $1 Billion; and 48% of total world equity for mining in the first half of 2007 was raised for TSX/TSX Venture issuers.” (Source: TSX Mining Brochure - all statistics are at September 30 2007)
Investor Friendly Environment:
Many nations of the world carry a much higher degree of geopolitical risk which has unfortunately been seen in a number of developing countries over the last few years, but Canada has long been known as an investor-friendly and relatively risk-free environment for exploration and mining companies.
The attitude, policies and actions of the Canadian government towards the mineral industry are readily apparent in the 2008 year-end newsletter entitled “Province Enacts New Measures To Support Mining” from the Office of the Premier and the Department of Mines, Energy and Resources of British Columbia.
“Mining is an incredibly important industry for British Columbia families, workers and
Communities, and this government is dedicated to making sure it remains a strong part of our economy,” said Premier Campbell. “In this time of economic uncertainty it’s imperative that we do what we can to encourage business and mining in B.C.”
“The mineral exploration sector is pleased to see the B.C. government recognize the value of extending the Flow-Through Share Tax Credit,” said Association for Mineral Exploration of British Columbia (AMEBC) president & CEO Gavin Dirom.
“This measure, with the creation of the Economic Task Force, will help B.C. attract investment and remain globally competitive in this challenging time.”
“British Columbia’s $6 billion mineral exploration and mining industry is an integral part of the provincial economy. Competitive taxes, an ample supply of low-cost power, and government's commitment to the industry make this province an ideal place to invest.”
(Source: BC Ministry of Mines, Energy and Petroleum Resources - December 5, 2008)
Another prime example of Canada’s commitment to the mineral industry is evidenced in the government initiated program entitled Flow-Through Shares (FTS). The Canada Revenue Agency states:
“Junior resource corporations often have difficulty raising capital to finance their exploration and development activities. Moreover, many are in a non-taxable position and do not need to deduct their resource expenses. The FTS mechanism allows the issuer corporation to transfer the resource expenses to the investor. A junior resource corporation, in particular, benefits greatly from FTS financing.”
(Source: Revenue Canada Agency website - www.cra.gc.ca)
”Many companies in the resource and renewable energy sectors raise money through flow-through shares, which allow exploration companies to pass eligible expenses to investors. Under federal income tax rules, investors can deduct 100 per cent of the eligible exploration expenses.”
“The Mining Flow-Through Share Tax Credit was introduced in B.C. in 2001, paralleling a federal program. The 20 per cent B.C. Mining Flow-Through Share Tax Credit is available only to individuals. The combined effect of the flow-through share deduction, the federal credit and the provincial credit for an individual investor is to reduce the cost of a $1,000 investment to about $383.”
“Since the Mining Flow-Through Share Tax Credit was introduced, investment in mining
exploration spending in B.C. has increased by 1,300 per cent from $29 million in 2001 to a record high of nearly $416 million in 2007.”
(Source: BC Ministry of Mines, Energy and Petroleum Resources - December 5, 2008)
NI 43-101 Technical Standards:
Canada has also been an industry leader in establishing well defined standards to ensure that mining and mineral exploration companies operating in Canada follow specific guidelines for disclosure, designed to improve the accuracy and integrity of the information they provide.
National Instrument 43-101 is the Canadian Securities administrator’s policy that governs the scientific and technical disclosure by mining companies and is a global standard in mineral disclosure. (Source: TSX Mining Brochure 2007)
It requires that all disclosure be
based on advice by a "qualified person" and in some circumstances
that the person be independent of the issuer and the property.
A qualified person (QP) as defined in NI 43-101 is an individual who:
a) is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these;
b) has experience relevant to the subject matter of the mineral project and the technical report; and
c) is a member in good standing of a professional association.
(Source: Association of Professional Geoscientists of Ontario - January 2009)
Canada is also host to the world’s largest mineral conference called the PDAC, Prospector’s and Developers Association of Canada, an annual event held in Toronto Ontario for over 75 years since it was founded in 1932.
The PDAC International Convention, Trade Show and Investors Exchange is the annual meeting place of the world's mineral exploration and development community.
The 2008 conference, which was the largest ever, drew over 20,000 registered delegates and 1,212 exhibitors, including over 600 exhibition booths of exploration and mining companies from around the world, over 600 more supply and industry related company booths, and almost 200 presentations, technical sessions and short courses.
(Source: PDAC Convention report - www.pdac.ca)
Two additional Canadian mineral conventions that have global impact are the Canadian Institute of Mining (CIM) convention held in one of Canada’s major cities each year, and the Mineral Roundup (AME) convention held annually in Vancouver BC each January, both of which draw thousands of enthusiastic delegates and exhibitors from around the world.
In addition there are numerous exploration and mining conventions held both provincially and locally in various mining districts across Canada.
Vancouver History of Investment and Discovery to World Capital of Mining
Junior exploration companies were originally drawn to Vancouver because of the Vancouver Stock Exchange (VSE). Even though the Stock Exchange is gone, companies still choose to locate here due to the available pool of technical expertise and the large number of companies servicing the exploration industry.”
One of the reasons why Vancouver is such an important mining finance centre is that there is a strong core of retail investors here. “Compared to other countries, Canada is full of retail investors…Approximately 35 percent (TSX 2007 report states 49%) of all Canadians are active in the stock market. That’s a very high rate of participation.”
“Since the 1950s, Canada has been a major recipient of international exploration expenditures. Vancouver’s stature as a mining finance centre rose even higher in the 1980s as South American governments started to invite private capital into their countries. “That’s when the mining industry began to go global,” Keep says. “Real capital led to real mines.”
“Globalization has made Vancouver a more important mining financial centre. Everything’s become bigger, including the size of the deals.”
Rob Pease, incoming chair of the Association for Mineral Exploration British Columbia (AME BC 2006), says Vancouver ranks alongside Melbourne, Perth, London, Johannesburg and Toronto as a world centre of mineral exploration and mining. “The main reason for Vancouver’s importance is its long-time role as a centre for raising risk capital,” Pease says. “This is traditionally where mining entrepreneurs come to raise money.”
“Over the years, Vancouver-based exploration companies have helped discover numerous productive ore bodies that have produced an astonishing amount of wealth.”
“David Caulfield, president of AME BC (2006) says a very partial and incomplete list of discoveries made by B.C. based exploration companies in the last 25 years would include Hemlo, the huge gold discovery in northern Ontario; the Eskay Creek gold-silver mine in northern B.C.; Diamond Field Resources Inc.’s Voisey’s Bay nickel project in Labrador; the DiaMet/BHP discovery that initiated the diamond rush in the NWT; and the Diavik diamond project at Lac de Gras, NWT.”
(Source: Vancouver Junior Venture Capital article - Spring 2006)
As Vancouver’s influence grew and more mineral companies made it their headquarters, the natural result was a growing number of associated industries. Not only did the industry directly employ thousands of professionals in the exploration field and development of mines, but a great many more are employed by equipment and service providers.
Professionals in the fields of finance, accounting and law with experience in the mineral exploration industry contribute significantly to the industry's growth and wellbeing. Financial and brokerage firms assist in raising capital from investors. Accounting firms report financial information. Lawyers prepare contracts and resolve disputes. Federal and provincial government ministries create a business environment conducive to exploration.
The mineral exploration industry hires the services of consultants and contractors specialized in various fields, including geologists, geophysicists, engineers, consulting companies, analytical laboratories, drilling companies and more. Mineral exploration also requires a wide range of goods produced in Canada, such as geophysical instrumentation, drilling equipment and specialized software.
(Source: Canadian Trade Commissioner in cooperation with the Department of Foreign Affairs - March 2003)
Leading edge technologies have given Canadian equipment and service providers unparalleled expertise in identifying unseen mineral deposits from the air, the ground and below the surface.
Canadian suppliers of exploration goods and services benefit the exploration industry by incorporating scientific advances and applying them in practical ways to offer high-value technology, not only in Canada, but also to the exploration industry globally.
Many advances in the fields of geology, geophysics and geochemistry were first designed, tested and proven successful by Canadian companies. Hundreds of Canadian companies service the global exploration industry by offering distinctive specialized services and products that are scientific or technical in nature.”
(Source: Canadian Trade Commissioner in corporation with the Department of Foreign Affairs - March 2003)
Cities like Toronto, Sudbury, Perth and Johannesburg all have large numbers of professionals involved in the industry, but as already stated, Vancouver British Columbia still has the highest concentration of exploration companies, mining professionals and mineral service providers in the world and over its decades of growth and development has earned the title of Mining Capital of the World.
Why Explore BC?
ü Rich resource potential + variety of target types
ü Access to an excellent body of geosciences scienctific data
ü Reliable and skilled labor force
ü Established infrastructure and good access for international trade
ü Positive trends in taxation and regulation
ü A good environmental record
ü Vancouver & BC – Center of excellence in mining, exploration and finance
ü Government supports resource developments
(Source: Geoscience BC - www.empr.gov.bc.ca/Publications/Documents/PDAC_05_presentation.pdf)
“Over the last seven years, B.C. experienced a period of sustained growth in its modern mineral exploration and mining sector, with over $400 million in exploration expenditures and almost $7 billion in gross revenues from mining in 2007.
With over 600 exploration sites and 18 major mines in safe operation, the sector employs almost 30,000 people earning on average $101,000 per year (PWC 2007).
According to Natural Resources Canada, B.C.’s share of Canadian mineral exploration climbed from 5.7% in 2001 to 17.6% in 2006, but dropped in 2007 to 16.9%, and its rank moved from second behind Ontario to third behind Ontario and Quebec.
Many of the facts and fundamentals that contribute to make B.C. a relatively safe haven for mineral exploration dollars have not changed. B.C. has world-class geology and professional expertise in geosciences, exploration, mine engineering and technical operations, including key areas of environment, health and safety.
B.C. has a growing inventory of over 12,000 mineral and coal occurrences and more than 20 new mines seeking permitting approvals from provincial and federal agencies. But we also know that B.C. is underexplored and disturbed less than 0.05% (~50,000 out of 95,000,000 hectares) of its land base for mining purposes.”
(Source: website - Association for Mineral Exploration (AME) President’s Message - December 18, 2008)
“After over a century of mining activity, the Kootenay-Boundary region is still BC's premier mining region producing 56% of 2004 mining revenues and accounting for 60% of our province's mining employment.” (Source: Nelson Chamber of Mines website)
Canadian exploration worldwide:
A 2003 report by the Canadian Trade Commissioner states, “Canadian companies are a dominant driving force in international mineral exploration. According to figures from Natural Resources Canada, in 2000 Canadian exploration companies were involved in more than 6,000 projects in over 100 countries around the world. (By mid 2007 the number of global projects undertaken by Canadian companies had grown to almost 9,000)
Domestically, large Canadian companies accounted for approximately 70% of the exploration expenditures, or approximately $280 million of the total $400 million. Internationally, large Canadian companies spent several hundred million dollars
on foreign projects, primarily in Latin America and the United States, but also the Asia Pacific region, Europe, the Former Soviet Republic and Africa.
There is a direct correlation between the size of the supply industry and the size of Canada's exploration industry. It is estimated that more than half of the world's 2,300 mining and exploration companies are listed on Canadian stock exchanges. The second ranked country is Australia, which is home to approximately 200 mining and exploration
As noted above, junior exploration companies do not generate revenues and must therefore use equity financing to fund exploration programs. In 2000, 44.3% of $3.2
billion raised for worldwide exploration was raised in Canada via equity financing. Between 1998 and 2000, 54% of the $9.7 billion raised for worldwide exploration
was raised in Canada.” (Source: Canadian Trade Commissioner in corporation with the Department of Foreign Affairs - March 2003)
The continued growth in Canada’s influence on the global scene of exploration and mining over the last few years, especially for junior exploration companies, is further evidenced by the updated report dated August 2007, in the TSX Mining Brochure which states, “32% of the 8,879 mineral projects held by TSX and TSXV are outside of North America.” (Source: InfoMine, Compiled by TSX - August 2007)
In conclusion, it is obvious that Canada with its own rich geology and extensive mining experience, investor friendly environment, government support of industry, highly skilled workforce, ability to attract and raise capital from around the world, and implementation of high industry standards, coupled with its entrepreneurial drive and willingness to take calculated risks in anticipation of substantial gain, remains the most dominant force in the global mineral sector, both at home in Canada, and around the world.