The 2018 “gold rush” sees a shift to copper
The Golden Triangle of northwestern BC continues to attract exploration activity, as investors capitalize on high-grade discoveries supported by investment from major firms, partnerships with Indigenous groups and continued infrastructure development. Survey results reveal the region incurred $180m in exploration expenditure in 2019, a 10% increase over the prior year and more than double 2016 levels.
The Northwest also accounted for 55% of total exploration spend in the province in 2019. However, gold exploration experienced a 39% decline in spending from 2018, with copper exceeding gold exploration and posting an increase of more than 150% from the previous year.
The exploration diversity trend continued in 2019
In 2018, gold accounted for 43% of total exploration expenditures, almost double that of copper. In 2019, investors broadened their focus and shifted spending across commodities, with gold, copper and coal contributing 82% to total spending.
Although much of the increase in diversity can be attributed to copper and nickel exploration in the Golden Triangle, there were also investments in coal projects in the province’s Southeast, Northwest and Northeast regions.
BC poised for a future of diversified metals
In 2019, base metals comprised 39% of total exploration activity, accounting for $143m, an increase of 39% from 2018. Copper was the leading base metal, contributing 72% of total metal spend, up from $79m to $103m, an increase of 31% year on year.
Global demand for base metals has seen a significant increase, likely driven by an increased demand for electric vehicles and green energy.
Despite an uptick in coal exploration in 2018 and optimism surrounding future growth, 2019 saw a 20% decline in investment, with all regions except the Northeast experiencing declines.
Mining lifecycle “reset” complete?
The outlook for the mining and metals sector in BC is largely influenced by the success of early-stage exploration. In 2019, the sector’s reset trend may be complete, as early-stage exploration decreased relative to 2018 levels.
2019 marks the first year that consecutive early-stage exploration has not increased as a share of total exploration. Grassroots and early-stage exploration accounted for 40% of total exploration in 2019 compared with 44% in 2018 and just 14% in 2014, as exploration spend moved to advanced and mine evaluation stages.
Despite flat exploration figures in 2019, a shift in investments toward copper and other base metals provides reason for optimism in BC. Many factors will continue to influence exploration activity in the province in 2020, such as a strengthening of the economy, trends in other resource sectors, global trade tensions, demand for base metals and commodity price volatility.