The latest British Columbia Mineral and Coal Exploration Survey finds exploration spending across the province totalled $660m in 2021, achieving a record high since spending peaked in 2012 at $681m. The total number of exploration projects and expenditure per project were also up 16% and 34%, respectively. This uptick was consistent nationally, as Canada’s exploration expenditure saw the highest growth and attracted the largest share of global budgets with an increase of 62%, ahead of both Australia and the US.
“Despite difficulties from forest fires and infrastructure disruptions from flooding, favourable market conditions helped the local exploration industry to propel forward and secure a record-setting year,” explains Iain Thompson, EY Canada Mining & Metals Consulting Leader. “While uncertainty still looms in the face of geopolitical turbulence and rising inflation, the sector is set to continue on its recovery as gold maintains its high value and demand for critical metals increases.”
Gold exploration spending was predominant; critical metals had significant growth
High expenditures in 2021 were largely driven by the gold sector. With prices hovering around US$1,800/oz gold, exploration spending in BC rose by 93% relative to 2020. Critical metal expenditure was also up, with copper exploration seeing the largest increase (16%) as prices rallied to new heights toward the end of 2021. Similarly, nickel and zinc bounced back from previous spending declines.
“As global supply chains continue to face disruption, there’s a big focus on securing metals considered essential to technologies that will enable the energy transition,” says Bruce Ralston, BC Minister of Energy, Mines and Low Carbon Innovation. “BC is a tier-one mining jurisdiction with the resources and expertise to be at the forefront, capitalizing on future demand and positioning Canada for long-term, sustainable economic growth.”
The Northwest continues to be the capital of BC exploration spending
The Northwest region continues to be the premier destination for exploration spending in the province, evidenced by interest from local companies and major international producers. The Northwest accounted for 55% of all exploration spending in the province, reaching a 62% increase in overall spending. The largest relative jump in spending occurred in the South Central region, which saw a 113% increase from 2020 levels. Together, these regions accounted for 78% of all exploration spending in BC.
A continued movement towards late-stage exploration
Exploration spending continued its trend towards the advanced and mine evaluation stages, as companies elected to focus more resources on maximizing the value of proven assets and operating sites rather than on riskier, grassroots prospects. In 2021, grassroots and early-stage exploration accounted for 24% of total exploration, compared to 76% of late-stage and/or mine lease exploration.
“It’s encouraging to see such positive growth across all facets of the industry,” shares Kendra Johnston, President and CEO, the Association for Mineral Exploration BC. “We’re optimistic that this growth will continue into 2022, driving further job creation, economic development in rural communities and investment that will continue to position BC as a global leader in mineral and exploration development.”
The survey is a joint initiative between EY Canada, the Government of British Columbia’s Ministry of Energy, Mines and Low Carbon Innovation, and the Association for Mineral Exploration BC, which includes insights collected from 326 exploration projects across the province.
