By IAN ROSS
Exploration activity in northwestern Ontario is at its highest in Garry Clark’s memory.
“Every greenstone belt has some active exploration project,” says the Thunder Bay-based executive director of the Ontario Prospectors Association.
One of the most highly prospective areas is McFaulds Lake in Ontario’s Far North on the edge of the James Bay swamps.
Noront Resources has Bay Street tongues wagging about their major copper-nickel platinum group metals discovery half-way between the De Beers Victor diamond project and Webequie First Nation.
Clark says there’s a “phenomenal” amount of exploration money being spent in Ontario this year with the provincial forecast for 2007 at $370 million, more than three times the numbers of $118 million and $114 million spent in 2000 and 2001 respectively.
“Because that’s happening, there’s a lack of drills, geologists and just about everything."
Many drillers want an advance of almost 50 to 60 per cent from some junior miners because of the availability of so much work.
Clark says with so many new juniors popping up, many established drilling companies don’t want to get burned if a junior goes bankrupt.
“People and companies are flush with money. It’s not hard to raise money if you’ve got a good project with a good concept.”
Skilled people are able to move from job to job really quickly.
Some of the exploration hotbeds in northwestern Ontario include Marathon PGM’s advanced Coldwell platinum group metals project in Marathon.
Rainy River Resources in the Fort Frances area makes frequent news by expanding its gold zone.
Brett Resources is spending $5 million in gold exploration this year at their Hammond Reef near Atikokan. It’s a potential joint venture with Kinross Gold who will make a decision whether to earn-in.
“It’s a big gold project that’s been around since 1895,” says Clark, who knows the area well. Back then, $5 million was raised on the New York exchange to a high grade vein that went into production for a short period.
Brett are looking at low grade potential with big tonnage.
The Geraldton-Beardmore area is a popular place for Kodiak Exploration which is expanding its land holdings and seeks to raise $55 million to fund exploration on its Hercules gold project.
Superior Canadian Resources, with which Clark serves as a director, is also in the area searching for nickel and gold, the latter on a past producing mine in Beardmore.
In Shebandowan, west of Thunder Bay, North American Palladium is planning to extract more ore on a copper-nickel property at the site of a former Inco mine.
Red Lake is booming with Gold Eagle Mine working on an advanced underground exploration program. Premier Gold Mines has a deal with Goldcorp on all their perimetre properties around the mine complex.
Staking activity is “the highest it’s ever been,” says Clark. The number of active claims reached record levels in 2006 at 229,000, compared with 162,329 in 2000.
What’s down, Clark says is the number of big miners investing money into exploration. Juniors make up 40 per cent of Ontario’s exploration spending compared to 25 per cent in 2000.
“The juniors are spending more than the seniors.”
Clark says big miners are banking on finding huge deposits to move the financial bottomline. That trend allowed FNX, the junior-turned-mid-tier miner, to take over former Inco properties in the Sudbury basin and develop something that’s profitable.
One of the ongoing challenges is access to property and dealing with First Nation communities to explore on traditional lands.
The Platinex-Kitchenuhmaykoosib First Nation confrontation at Big Trout Lake is a high profile case, but Clark says there are many success stories, including at McFaulds Lake, which lies within traditional areas and juniors are operating there without problems.
But the best example is Kinross Gold’s Musselwhite Gold Mine, north of Pickle Lake, which has functioned since 1997 through an agreement with five communities.
“It’s no different then being in southern Ontario and wanting to put in a gravel pit or garbage dump,” says Clark. “If the community is against it...you have to work at it to try and make them understand.”
Many people, Native and non-Native, are leery about mining and mineral exploration in general, says Clark. “They think exploration means mining. They think there’s going to be a headframe popping up.”
It usually takes 10 to 12 years, if ever, to develop a mine from grass roots work.
Residents in Native communities will see juniors fly-in, spend significant dollars, then disappear, sometimes leaving a mess in the bush and local bills unpaid when the company goes bankrupt. “That’s a sore point in the community,” says Clark, “and some of it is political.”
“For some communities, this is the only thing in their area that is developable and if they can draw focus to community problems -- for example, potable water -- maybe they can get these things fixed.”
Clark says the Ministry of Northern Development and Mines has worked hard toward establishing a proper consultation protocol, “but it’s a big nut to crack,” and it’s the responsibilities of all parties to agree before exploration takes place.
“Part of the problem is (the mining industry) is a very competitive and secretive organization of companies.”
There’s also a long-standing problem of traditional lands overlapping which are not marked on any maps.
For juniors, the biggest financial burden can be unexpected costs for an extensive community consultation process. But there’s been a change in federal revenue guidelines allowing companies to use their flow-through money for community consultation costs.
