history of candian mining

8/6/2019 History of Candian Mining

1/51

Ressources naturelles

Canada

Natural Resources

Canada

Mining And Mineral

Exploration

A Historyof

And Outlook

For The Future


2/51

Ressources naturelles

Canada

Natural Resources

Canada

Mining And Mineral

Exploration

A Historyof

And Outlook

For The Future

Donald A. Cranstone


3/51

Minister of Public Work s an d Govern ment Services Can ada 2002

Cata logue no. M37-51/2002E

ISBN 0-662-32680-6

Additiona l copies of this pu blicat ion ar e ava ilable in

limited qua ntities at no charge from:

Minerals and Metals Sector

Natu ral Resources Canada

Ottawa, Ontario K1A 0E4

Telephone: (613) 947-6580

Facsimile: (613) 952-7501

E-ma il: dcra ns to@nr can.gc.ca

It is also available on the In ternet at:

http://www.nrcan.gc.ca/mms/topi-suje/hist_e.htm

Cette pu blication est au ssi disponible en franais, sous le titre

Historiqu e de lexploration m inrale et de lexploitation m inire

au Ca na da et perspectives pour lavenir

No de catalogue : M37-51/2002F

ISBN : 0-662-87640-7

This publication is printed

on recycled paper.


4/51


5/51

Foreword iii

1. Ear ly History of Canada 's Minera l Industry 1

2. History of Prospect ing and Minera l Explora t ion in Canada 5

3. Canada 's Minera l Product ion Through the Years 9

4. Explorat ion Expenditures in Canada for Non-PetroleumMinerals

4.1 Introduct ion 134.2 Influence of Changing Meta l Pr ices on Explora t ion 144.3 Discussion 15

5. Changing Rates and Costs of Ore Discovery in Canada 17

6. Ore Reserves and the Long-Term Future of CanadianMineral Production

6.1 Introduct ion 276.2 Canada 's Reserves of Meta l in Ore 276.3 Summary of Canada 's Ore Reserves in the Future 36

7. The Future of Minera l Explorat ion in Canada 39

8. Canada 's Petroleum Indust ry 41

9. Sulphur Product ion in Canada 45

10. Pr incipal Minera l Areas of Canada 47

11. List of References 49

List of Figures

1.1 Map of Canada Showing Locations of Places Mentionedin the Text 2

3.1 Value of Canada's Non-Petroleum Mineral Product ion,1886-2000 9

3.2 Canadian Silver Product ion , 1869-2000 9

3.3 Canadian Lead Product ion , 1887-2000 9

v

Table of Contents


6/51

3.4 Canadian Gold Product ion , 1858-2000 9

3.5 Canadian Nickel Product ion , 1889-2000 10

3.6 Canadian Pla t inum Group Meta ls Product ion , 1887-2000 10

3.7 Canadian Cobalt Product ion , 1904-2000 10

3.8 Canadian Copper Product ion , 1848-2000 10

3.9 Canadian Zinc Product ion , 1898-2000 11

3.10 Canadian Molybdenum Product ion , 1902-2000 11

3.11 Canadian Uranium Product ion , 1933-2000 11

3.12 Canadian Iron Ore Product ion, 1886-2000 11

3.13 Canadian Asbestos Product ion , 1880-2000 11

3.14 Canadian Gypsum Product ion , 1874-2000 11

3.15 Canadian Potash Product ion , 1958-2000 12

3.16 Canadian Salt Product ion, 1886-2000 12

3.17 Canadian Coal Product ion , 1867-2000 12

3.18 Canadian Peat Moss Product ion , 1941-2000 12

4.1 Prospect ing and Explorat ion Expenditures in Canada,1946-2000 13

4.2 Compar ison of Explorat ion Expenditures for Uranium inCana da an d the NUEXCO Ura nium Price, 1970-90 16

4.3 Total Explorat ion Expenditures in Canada and the MetalPr ice Index, 1969-2001 16

5.1 Nick el Discover ed in Ca na da by 10-Yea r P er iod, 1846-1985 17

5.2 Copper Discover ed in Ca na da by 10-Yea r Per iod, 1846-1985 17

5.3 Zinc Discovered in Canada by 10-Year Per iod, 1846-1985 18

5.4 Lea d Discovered in Can ada by 10-Yea r Per iod, 1846-1985 18

5.5 Molybdenum Discovered in Canada by 10-Year Period,1846-1985 18

5.6 Silver Discover ed in Ca na da by 10-Yea r P er iod, 1846-1985 18

5.7 Gold Discovered in Ca na da by 10-Yea r Per iod, 1846-1985 18

5.8 N ick el Discover ed in Ca na da by Th ree-Yea r P er iod, 1946-90 19

vi


7/51

5.9 Copper Discover ed in Ca na da by Th ree-Yea r P er iod, 1946-90 19

5.10 Zin c Discovered in Ca nada by Thr ee-Yea r Per iod, 1946-90 20

5.11 Lea d Discovered in Ca na da by Th ree-Yea r Per iod, 1946-90 20

5.12 Molybdenum Discovered in Canada by Three-Year Period,1946-90 20

5.13 Silver Discover ed in Ca na da by Th ree-Yea r Per iod, 1946-90 21

5.14 Gold Discovered in Ca nada by Thr ee-Yea r Per iod, 1946-90 21

5.15 U ra n iu m Dis cover ed in Ca n ad a by Th r ee-Yea r P er iod , 1946-90 21

5.16 Value of Metals Discovered in Cana da at 1987-91 AveragePr ices, by Three-Year Per iod, 1946-90 22

5.17 Explorat ion Expenditures in Canada by Three-Year Per iod,1946-90 22

5.18 Value of Metals Discovered in Canada Per Dollar Spent onMinera l Explora t ion, by Three-Year Per iod, 1946-90 22

5.19 Copper Discovered in Canada by Geological Deposit Type, byThree-Year Per iod, 1946-90 23

5.20 Zinc Discovered in Cana da by Geological Deposit Type, byThree-Year Per iod, 1946-90 24

5.21 Gold Discovered in Canada by Geological Deposit Type, byThree-Year Per iod, 1946-90 25

5.22 Uranium Discovered in Canada by Geological Deposit Type,by Three-Year Per iod, 1946-90 26

6.1 Value of Mine Product ion in Canada by Commodity, 2000 27

6.2 Canadian P roven a nd Probable Reserves of Nickel Metal inOre, 1974-2000 28

6.3 Canadian Nickel Reserves-to-Product ion Rat io, 1973-99 28

6.4 Canadian P roven a nd Probable Reserves of Copper Metal in Ore,1974-2000 29

6.5 Canadian Copper Reserves-to-Product ion Rat io, 1973-99 29

6.6 Canadian P roven a nd Probable Reserves of Zinc Metal in Ore,1974-2000 30

6.7 Canadian Zinc Reserves-to-Product ion Rat io, 1973-99 30

6.8 Canadian Proven and Probable Reserves of Lead Metal in Ore,1974-2000 31

vii


8/51

6.9 Canadian Lead Reserves-to-Product ion Rat io, 1973-99 31

6.10 Canadian Proven and Probable Reserves of Molybdenum Metal

in Ore, 1974-2000 32

6.11 Ca n ad ia n Molybd en u m Res er ves -t o-P rod uct ion R at io, 1973-99 32

6.12 Canadian Proven and Probable Reserves of Silver Metal in Ore,1974-2000 33

6.13 Canadian Silver Reserves-to-Product ion Rat io, 1973-99 33

6.14 Canadian Proven and Probable Reserves of Gold Metal in Ore,1974-2000 34

6.15 Canadian Gold Reserves-to-Product ion Rat io, 1973-99 34

6.16 Canadian Measured and Indicated Uranium Resources

Recover a ble a t P r ices U p t o $100/k g of U ra n iu m , 1975-2000 35

6.17 Ca na dia n Ur an iu m Resou rces-t o-P rodu ct ion Ra tio, 1974-98 35

8 .1 Volum e of Canadian P roduct ion of Cr ude Pet r oleum , 1881-2000 42

8.2 Volum e of Can adia n Product ion of Na tu ra l Ga s, 1913-2000 42

8.3 Volume of Canadian Production of Natur al Gas By-Products,1961-2000 42

8.4 Va lu e of Ca na dia n Cr ude P et roleu m P rodu ct ion , 1886-2000 42

8.5 Value of Canadian Natura l Gas Product ion , 1886-2000 42

8.6 Value of Canadian Natural Gas By-Products Product ion,1886-2000 42

9.1 Canadian Elemental Sulphur Product ion , 1956-2000 45

viii


9/51

1. Early History Of Canada'sMineral Industry1

The first Aboriginal inh abitan ts of the WesternHemisphere a rrived about 40 000 years a go, mostlikely from Asia dur ing a lat e Pleistocene int erglacialperiod, but possibly by boat a cross the Pa cific orAtlant ic ocean s. They used various minera ls to pro-duce tools, weapons an d decorat ive objects, includingpebbles an d cobbles for tools and weapons, a nd flint,chert , pipestone, nat ive copper, gold, silver an dtur quoise, many of which were tr aded a mongst theAboriginal peoples.

Vikings from Iceland were t he first Eu ropeans k nownto have reached Canada . About the year 1000, asma ll group of th em sa iled from Green land to LAnseau x Meadows on th e northern peninsula of the islandof Newfoun dlan d, where t hey lived for several year s.Almost 500 years lat er, in 1497, John Cabot sailedfrom Bristol in En gland to discover, in J un e of th atyear, what was most probably the island of New-foun dlan d. Within only a few decades, thousa nds offishermen from Portu gal, Fra nce and En glan d werefishing on th e Grand Ba nks, an a rea of continen talshelf in t he Atlan tic Ocean to the sout h of Newfoun d-land. Some fishermen st ayed the winter in New-

foundlan d dur ing the 1500s, but t he first sm all per-ma nent E nglish settlement wa s established in 1610at Conception Bay in eastern Newfoundlan d. TheFrench ha d established the first perma nent Euro-pean sett lement in what is now Canada at QubecCity two years earlier in 1608.

The early settlers in Canada produced a limited num-ber of mineral commodities for local use, chieflybuilding st one, brick clay, san d, gravel, an d lime formortar an d plaster. Coal was discovered on CapeBreton Island, Nova Scotia, by th e Fr ench in 1672(Figure 1.1). The British Na vy first obta ined coalth ere in 1711. In New Brun swick, coal was firstmined by sett lers in 1782. Coal was discovered inAlberta in 1800 and, on Vancouver Island, BritishColum bia, coal deposits wer e discovered in 1835 an d1850.

Iron ore was foun d along the St . Lawrence River nearthe m outh of the Sa int-Mau rice River an d smeltedth ere t o produce iron for local use beginn ing in 1737.During a nd after th e American Revolution, Britishloyalists (United Empire Loyalists) from the UnitedSta tes moved in t he 1780s and 1790s to eastern

Cana da, including what is now southern Onta rio,wher e iron furna ces utilizing local ore were erected in1800, 1820 and 1822. The earliest recorded Cana -dian production of gypsum was in N ova Scotia in1789 and in Ont ario in 1822.

Initial Canadian nonferrous metal production, of cop-per, began in 1848 at a mine on the n orth shore ofLake Hu ron at Bruce Mines, Ontar io, mining adeposit th at ha d been discovered there in 1846.Can ada s first produ ction of gold was in t he lat e1850s from th e small Ea rly Bird m ine on the Qu eenCha rlotte Islands of British Colum bia. Placer goldha d been foun d on the Ch au dire River in QuebecsEa stern Townships in 1823, but production t here didnot star t u ntil 1862. Placer gold was discovered an dinitially produced in 1859 in t he Ca riboo region ofBritish Colum bia, which has yielded a tota l of some110 tonn es (t) of gold, with m inor a moun ts of goldstill being pr oduced from sma ll lode-gold depositsth ere. Gold was a lso discovered in Nova Scotia, withth e initial gold discovery th ere ma de in 1860. Overth e year s, some 45 t of gold were r ecovered in NovaScotia , all of it from sma ll gold deposits. Pet roleum,

found in 1857 at Oil Springs, Ont ario, near LakeErie, represent ed North Americas ea rliest commer -cial pet roleum d iscovery (see Chapt er 8, Can ada sPetr oleum Indust ry).

Cariboo gold, Ontario petroleum, and increased out-put of Cape Breton coal ma rked a tur ning point inCana dian minera l production from m inor local eventsto development s of grea ter significance. Dur ing the1870s, a ph ospha te industr y based on ap atite wasdeveloped in western Quebec an d adjacent ea sternOnta rio with by-product sheet phlogopite a nd sheetmuscovite production from m an y sma ll carbonat itedeposits located within 100 or 150 km of Otta wa, th e

1 The sources of the h istorical inform ation present ed in th is

chapter and in Chapt er 2, History of Prospecting an d Min-

eral Exploration in Canada , are: 1) the a uth ors know-

ledge, gathered from ma ny sources over the pa st 45 years,

and 2) a listing of Canadian mining events over the period

1604-1956 compiled an d publish ed in 1957 by th e Dominion

Burea u of Statistics - now Sta tistics Canada (see Dominion

Burea u of Sta tistics, 1957, in th e list of references).


10/51


11/51

A History of Mining and Mineral Exploration in Canada 3

na tional capit al. In th e 1880s, asbest os was discov-ered in t he Ea stern Townships of Quebec to the southof the St. Lawrence River, an d th is area is still aworld-class asbest os-produ cing r egion. Nickel-copperdeposits were discovered a t Sudbur y, Ontar io, afterminera lization was exposed in 1883 in a rock cut du r-ing const ru ction of th e Can adia n P acific Railway to

western Cana da, near what became th e Murraymine. The Frood mine, also at Su dbury, where pro-duction comm enced in 1887, was still in operat ion in2000 but with its en d in sight a fter yielding an esti-ma ted 5 million tonn es (Mt) of nickel, 5 Mt of copper,900 t of silver, 55 t of gold, and su bsta nt ial qua nt itiesof platinum group elements, selenium, tellurium, ironore pellets, an d sulphu r dioxide gas used t o producesulphur ic acid and liquid SO2.

Prospecting in souther n British Columbia led to thediscovery of a su bsta nt ial nu mber of gold, silver an dbase-met al deposits, including, in 1893, the excep-tionally lar ge Sullivan lea d-zinc-silver deposit atKimberley, British Colum bia, which closed in 2001after yielding 10 Mt of lead, 10 Mt of zinc, 9900 t ofsilver, and m uch sma ller qua ntities of an timony, tin,bismuth , cadmium , gallium, german ium an d indium.In 1896, th e discovery of placer gold on th e KlondikeRiver in t he Yukon Territory resulted in the biggestgold rush in Ca na dian h istory. Some 430 t of placergold have been recovered from th e Yukon where t heprodu ction of placer gold ha s cont inued from va riousrivers and st ream s over a per iod of more tha n 100year s an d from recent ly developed lode-gold mines .

In 1903, silver was discovered a t Cobalt, Onta rio,during ra ilway construction. Many high-grade butrelat ively s ma ll-sized vein -type silver-cobalt-nickel-

ar senide dep osits wer e discovered in t he vicinity ofCobalt, which becam e one of the worlds m ajor silver-produ cing distr icts. More tha n 18 000 t of silver, plusqua nt ities of cobalt a nd n ickel, were recovered atmines in t he vicinity of Cobalt between 1903 a nd1989 when production was su spended at the onerem ainin g mine because of low prices. Additiona l sil-ver produ ction a t Cobalt is likely in the fut ur e, if an dwhen the silver price increases.


12/51

2. History Of Prospecting andMineral Exploration In Canada

P rior to th e 1870s or 1880s, nea rly all of th e signifi-cant m ineral deposits in Ca na da were discoveredaccident ally by individua ls who were not activelysear ching for dep osits. The discovery of placer gold inthe Cariboo district in 1859 resulted in gold a nd ba se-meta l prospecting in t he moun tainous r egions ofBritish Columbia an d a lso in gold prospecting in theYukon Terr itory. Similar ly, the discovery of lode-golddeposits in Nova Scotia r esulted in widespreadprospecting activity th ere. Pr ospecting activityslowly spread t o other par ts of Cana da. In 1909,prospectors found high-grade gold qua rtz veins in thePorcupin e District of Ont ar io (now the City of Tim-mins ). More tha n 2200 t of gold ha ve been producedfrom this district and production continues frommines th ere, both old an d new. In 1911, prospectorsdiscovered a noth er m ajor gold deposit, which becam ekn own as th e Golden Mile, at wha t is now th e townof Kirklan d Lake, Ont ar io. Some 800 t of gold ha vebeen r ecovered from the six or more m ines on th issingle gold deposit. Pr oduction ha d cont inu ed thereun til 1999 from t he one rema ining mine, the Macassamine, which is cur ren tly closed awa iting higher goldprices. In th e province of Quebec, immed iately to the

east of Onta rio, man y importa nt gold deposits, thelarge Noran da copper-gold deposit, and other base-metal deposits were discovered, beginning in the1920s, by prospectors working along what becamekn own as th e Rouyn Val-dOr gold belt. Additiona ldiscoveries ar e still being ma de along th is belt.Prospectors spread th rough norther n Quebec,Onta rio, Man itoba an d Saskat chewan, making dis-coveries an d ar riving at th e Yellowknife gold districtin the Northwest Territories in the mid-1930s. Manynew orebodies were discovered in t hese pr eviouslyun known gold-bearing ar eas.

In t hese ear ly days of the industr y, many prospectorswere grubst aked (tha t is, their pr ospectingexpenses wer e fina nced by local bu siness people, insome cases by individua l business people and some-times by syndicates of severa l people in r etu rn foran interest in an y discoveries made by th e prospec-tors). Sma ll compa nies, known as junior compa-nies, were form ed t o explore for discoveries a ndhopefully to develop mines on deposits foun d. Theyobtained the needed funding by selling compa nyshar es to the public.

Until float-equipped aircraft became generally usedfor tra nsportat ion into remote areas of Cana da,prospectors sear ching for minera l showings in theCana dian Sh ield norma lly traveled by can oe an dlived in tent s. In th e 1920s and 1930s, man y miningcompa nies formed their own exploration depart -men ts, employing their own geologists an d prospec-tors.

Except for gold an d silver, meta l prices were lowduring t he Grea t Depression of the 1930s, an d,as a result, exploration for non-precious metalswas severely reduced. In 1934, the Un ited Statesincreas ed th e gold price from US$20.67 toUS$35.00 per tr oy oun ce (31.103 gram s), leading t o ama jor in crease in gold explora tion, gold mine d evel-opment an d gold production in Can ada . In 1939, warsoon brough t explorat ion to a h alt, except explora tionfor strategic minerals not normally available fromsources in North America, such a s chromite, man-ganese, tin an d tun gsten. At most mines, work toreplace the ore mined by new reserves either ceasedor was cut t o an absolute m inimum.

When the war with Germa ny began, the Un itedStates was a neutra l nation an d Canada h ad to payfor needed wa r ma teria l imports with U.S. dollars orwith gold. As a result, the m anpower, equipment a ndsupplies needed for gold mining in Ca na da r eceivedCan adia n governm ent priority. In 1941, a lend-leaseagreement was worked out so that war ma terialscould be obta ined from th e United St at es on credit.Gold minin g lost its p riority an d it became imp ossiblefor ma ny gold mines t o obta in th e people an d supp liesth at were needed to cont inue to produce. The resultwas r apid closur e of ma ny of th e gold mines inCana da, and employment a nd pr oduction were cutback at th ose gold mines th at did continu e to produce.

When t he wa r en ded, gold exploration r esumed inCana da in 1945 an d 1946, but inflation a nd a fixedgold price soon m ade it un at tr active to explore forgold. New explorat ion opportu nities soon app ear ed.There were urgent military requirement s for ura-nium. Explorat ion for tha t metal was great lyassisted during the 1940s by use in Can ada a ndelsewhere of the Geiger counter, invented in Ger-many in the 1920s and adapted in Canada in theearly 1940s as a field instr umen t for ur an ium


13/51

6 A History of Mining and Mineral Exploration in Canada

exploration. Subsequent ly, the Can adian inventionof the much more sensitive scintillometer as a m in-eral explorat ion instr umen t in t he ear ly 1950s pro-vided a sensitive radiation detector t ha t could detecturan ium from mu ch greater distances than had beenpossible with th e Geiger counter. The subsequentinvention of the gam ma ray spectrometer ma de it

possible to distingu ish r adia tion from specificradioactive elements, m aking it possible to determ inewhether t he radiat ion came from uran ium, thoriumor other elements something tha t th e Geigercoun ter a nd scintillometer ha d been u na ble to do.

Radioactive minerals could n ow be much m ore read-ily detected an d important ura nium deposits weresoon discovered at Beaverlodge Lake, Saskatchewan(the first orebody was discovered t her e in 1948), inth e Ban croft Dist rict of Ont ar io (first ore discovery in1949), and at the major Elliot Lake, Onta rio District(first ore discovery in 1953). Can ada s origina l ura -nium m ine had been discovered in 1930, at wh atbecame k nown as Port Ra dium, on th e east sh ort ofGreat Bear Lake in the North west Territories. Unt ilthe early 1940s, radium was th e principal product ofthe m ine, used for the tr eatm ent of cancer, with th eura nium being a by-product u sed in colouring glassan d in ceramic glazes, but th e empha sis shifted in1943 to ura nium for the production of nuclearweapons. Reactor-produced nu clear isotopes are nowused for medical an d en gineering inspection purp osesand t he mark et for radium h as disappeared.

The a bility to detect ra dioactivity was n ot th e onlynotable development of new geophysical instruments.During the war, the airborne magnetometer wasdeveloped to detect subma rines. It was recognized

that such a n a pparatu s might be used in exploringfor meta l deposits conta ining the magn etic mineralsmagn etite an d pyrrh otite, an d possibly for petroleumexploration purposes as well.

After th e war , Aero Service Corpora tion, of Ph iladel-phia, P ennsylvania, obtained exclusive rights for useof the a irborne magnet ometer in minera l exploration,an d th e Gulf Oil Compan y of the United Sta tesobtained exclusive rights for its us e in petr oleumexploration. In 1947, the Inter na tiona l Nickel Com-pan y of Can ada Limited (now Inco Limited) acquireda t wo-year exclusive cont ra ct for t he u se of Aero Ser-vice Corporations one an d only airborne m agn etome-ter system an d flew it in Manitoba (and in one or two

other ar eas of Cana da) over what h as subsequent lybecome known as the Thompson Nickel Belt whereth ere is very little outcrop exposed. The ma gnet icmap s produced there showed nu merous and exten-sive elongate magnet ic anomalies, too numerous t otest by drilling. Inco was n ot exploring for iron oredeposits, but it was clear from the results th at t herewas n ow a h ighly effective met hod of rapidly explor-ing large ar eas for ma gnet ite-bearing oxide-faciesand pyrrhotite-bearing sulphide-facies iron formation

orebodies. At first, it was not clear t o Inco wha t usecould a ctua lly be ma de of th ese dat a (H.D.B. Wilson,personal communication).

Massive sulphide and vein-type orebodies are electri-cally condu ctive. Dur ing the 1930s, Sta n Davidson,who was t hen Chief Geologist for F alconbr idge Lim-

ited, Cana das other importa nt nickel producer,developed th e first ground electr omagn etic (EM) sys-tem for t he detection of electrically conductive ore-bodies. This appara tus was very cumbersomebecau se, for every reading t o be taken, a separa tetower ha d to be built to support t he receiving coil. Inthe early 1940s, a portable EM receiver was devel-oped. This made it possible to use a t ran smitting coilsuspended from a ma st together with a sm allportable receiving coil-detecting unit, a system thatwas mu ch more efficient to use. Inco was able toobtain one of th ese systems a nd su ccessfully test ed itover a known nickel-copper orebody at the Murraynickel-copper mine a t Sudbu ry, Ontario. Inco thenpurcha sed more of these porta ble units, which wereused t o discover severa l lar ge nickel deposits nea rThompson. A single out crop of ultr am afic rock founddur ing th e 1930s by an In co geologist working bycanoe ha d initia lly led Inco to explore t he Th ompsondistrict, but it ha d tak en persistence and 10 years ofcont inu ous explora tion work from 1946 to 1956before the large an d r ich Thompson orebody wasfound an d a production decision wa s ma de(H.D.B. Wilson, persona l commun icat ion).

Subsequent ly, airborne EM equipmen t developed inCana da du ring the 1950s was used to survey largearea s of Cana da a nd m an y nickel, copper, zinc andlead sulph ide orebodies were discovered. Airborne

magnetometer a nd E M survey equipment u sedtogether provided an effective meth od of exploring fornickel because m ost nickel-copper orebodies ar e bothmagn etic, becau se of their pyrr hotite conten t, an delectr ically condu ctive.

In overburden-covered regions of Canada, whereprospectors or geologists would oth erwise ha ve ha dlittle cha nce of discovering deposits, EM explora tiontechnology an d its continu ous refinemen t a ndimprovement provided a pa na cea for Can adian base-met al exploration, especially for ba se-meta l depositsin overbur den-covered a reas of the Cana dian S hieldan d Appalachian regions, area s th at are m ostly suffi-cient ly topogra phically flat for th em t o be sur veyed

usin g fixed-wing aircraft. Pr ospectors an d geologistswould oth erwise ha ve ha d little chan ce of discoveringdeposits in such out crop-poor regions. Man y newbase-met al orebodies were discovered usin g this newexplora tion t echnology.

Extensive area s of Cana da a re covered by tens ofmet res of glacial debris. Even in ar eas of exten siveoutcrop, considera bly less tha n 50% of th e rocksurface is generally exposed. There ar e areas,


14/51


thousa nds of squar e kilometr es in extent, with, atmost, a fra ction of a per cent of outcrop exposure a nd,over about 4 m illion km 2 of Canada, outcrop exposureprobably avera ges considera bly less th an 5%. Mostbase-metal deposits are not as ha rd as t he rocks sur-rounding th em ar e, so they ten d to be hidden becau sethey h ave been eroded by th e action of continenta l

glaciers rath er tha n exposed. Explorat ion byprospectors is restr icted t o area s of rock out crops, butma gnetometer an d EM-equipped aircraft ma de it fea-sible to detect base-metal orebodies with their uppersurfaces buried at dept hs of 100 metres or more.

When a n airborne geophysical anomaly of potent ialinter est is det ected, follow-up ground geophysicalsurveys are carried out to more accura tely determineits exact nat ure an d location. Drilling with tu bulardiamond-impregna ted bits is used t o obtain rock dr illcore an d determine the cause of the a nomaly. Manyarea s conta in hu ndreds of individua l conductors;therefore, only the more promising ones can be testedby drilling. EM condu ctors can be caused by massivesulphide meta l ores, by barren sulphide (pyrite orpyrr hotite) zones, or by sulphide zones with low an dth erefore un economic cont ent s of base met als. Low-grade su lphide sections can change along strike or atdept h to ore-gra de sections, ma king it impossible towrite off an extensive sulphide zone as being barrenwith only a single drill hole. The grea t ma jority ofEM conductors ar e caused by th in graph ite-coat edshea rs th at ar e electr ically conductive but of no eco-nomic inter est.

In some areas, so ma ny anomalies are detected thatit is not economically feasible to ground-test an d drillmore tha n a small fra ction of th em. Geophysicists

an d geologists m ust select the a ppar ently mostpromising ones for groun d follow-up. Un doubtedly,some anomalies cau sed by mineral deposits tha t ar epotent ial orebodies are n ot followed up becau se th eydo not look su fficient ly promising.

More effective and sensitive airborne EM equipmentha s been developed t ha t is capa ble of detectingdeposits that ea rly equipment could not. Greaterdepth penetr ation is now possible, which h as m adeairborn e surveys more effective. Areas flown usingfirst-genera tion airborne geophysical equipment arebeing reflown an d previously undet ected orebodiesar e being discovered in some of th ose area s.

The Canad ian minera l industr y was essentiallyimmat ure before th e early 1950s. The availability ofnew geophysical methods, requiring sophisticatedequipment, tr ansformed t he na tur e of exploration,while genera lly attr active metal prices and t he sub-stan tial num ber of world-class base-metal an d ur a-nium orebody discoveries being made in var ious p art s

of Cana da soon resulted in a r apid rise in explorat ionexpenditures in Cana da dur ing the first h alf of the1950s (Figur e 4.2). Since 1946, more th an 2000met al deposits, for wh ich su fficient explora tion workha s been done to measure tonna ge and grade, havebeen discovered in Can ada , an a verage of about 40deposits ann ua lly. Only some of th ese deposits con-stitute orebodies.


15/51

3. Canadas MineralProduction Through the Years

E xplorat ion expenditur es in Cana da (Figure 4.1)ha ve risen thr ough the years as Cana das mineraloutput ha s risen (Figure 3.1) becau se increased pro-duction ha s made it clear t hat Canada is an att rac-tive explorat ion t arget and becau se increased m iningprofits from Ca nad ian m ines ha ve provided moremoney for explora tion.

While Cana da h as produced base and pr ecious met alsfor a lmost 150 years, by curren t st and ards of large-scale production, Canada did not become a majorprodu cer unt il more recently: of silver since theear ly 1900s (Figure 3.2); of lead sin ce the 1920s(Figure 3.3); of gold since the 1920s or 1930s(Figure 3.4); of nickel since the 1930s (Figure 3.5); of

Figure 3.1Value of Canadas Non-Petroleum MineralProduction, 1886-2000

Sources: Statistics Canada; Natural Resources Canada.

Note: Production value statistics prior to 1886 are incomplete.

($ billions)

2000 dollars

Current dollars

1855 1875 1895 1915 1935 1955 1975 1995

0

200

400

600

800

1 000

1 200

1 400

1 600

Figure 3.2Canadian Silver Production,1869-2000

Sources: Natural Resources Canada; Statistic s Canada.

(tonnes)

1855 1875 1895 1915 1935 1955 1975 1995

0

50

100

150

200

250

300

350

400

Figure 3.3Canadian Lead Production, 1887-2000

Sources: Natural Resources Canada; Statistics Canada.

(000 tonnes)

1855 1875 1895 1915 1935 1955 1975 1995

0

20

40

60

80

100

120

140

160

180

200

Figure 3.4Canadian Gold Production, 1858 -2000


(tonnes)


16/51


platinum group meta ls since about 1935 (Figure 3.6);of cobalt since about 1955 (Figure 3.7), with a briefproduction peak after 1905 that resulted from peakproduction from th e cobalt-nickel ar senide-richna tive silver deposits a t Cobalt, Ontar io, where th einitial discovery wa s ma de in 1903; of copper an d zincsince th e 1960s (Figures 3.8 a nd 3.9); of molybdenu m

since th e mid-1960s (Figur e 3.10); of ura nium sinceth e 1950s (Figure 3.11); an d of iron ore since th e1950s or 1960s (Figur e 3.12).

For the more importa nt indust rial minerals, Cana daha s been a ma jor pr oducer of asbestos since the 1940sor 1950s (Figure 3.13), of gypsum since the 1950s(Figure 3.14), of potash since the 1960s (Figure 3.15),an d of salt since th e 1960s or 1970s (Figure 3.l6).

Cana da h as been a large producer of coal since the1970s or 1980s (Figur e 3.17). Alth ough coal pr oduc-tion was a r ecord 75.95 Mt in 1996, Can ada is not oneof th e worlds ma jor p roducers, n ot because of a la ckof coal resour ces, but because m ost Can adia n coal islocated in western Can ada where local deman d islimited by a relat ively low population a nd by exten -

sive developed an d un developed res ources of chea phydro-electric power in British Columbia and Mani-toba, which m eans tha t t he u se of significantam ount s of coal for electric power gener at ion a rerequired only in Alberta an d Saska tchewan. Most ofCan ada s coal an d coal mines a re locat ed in Albert aan d eastern British Columbia where tran sportationto foreign m ark ets requ ires long ra il haulage (600 kmor more) to ocean ports, thus increasing shippingcosts a nd t her eby limitin g export p ossibilities.

1855 1875 1895 1915 1935 1955 1975 1995

0

50

100

150

200

250

300

Figure 3.5Canadian Nickel Production,1889-2000


(000 tonnes)

1855 1875 1895 1915 1935 1955 1975 1995

0

5

10

15

20

25

Figure 3.6Canadian Platinum Group Metals Production,1887-2000


(tonnes)

1855 1875 1895 1915 1935 1955 1975 1995

0

500

1 000

1 500

2 000

2 500

Figure 3.7Canadian Cobalt Production,1904-2000


(tonnes)

1855 1875 1895 1915 1935 1955 1975 1995

0

200

400

600

800

1 000

Figure 3.8Canadian Copper Production,1848-2000


Note: Canada produced a cumulative total of 100 000 t of copper

from 1848 to 1885 that is not shown in this graph.

(000 tonnes)


17/51


1855 1875 1895 1915 1935 1955 1975 1995

0

300

600

900

1 200

1 500

Figure 3.9Canadian Zinc Production, 1898-2000


(000 tonnes)

1855 1875 1895 1915 1935 1955 1975 1995

0

3

6

9

12

15

18

Figure 3.10Canadian Molybdenum Production, 1902-2000


(000 tonnes)

1855 1875 1895 1915 1935 1955 1975 19950

2

4

6

8

10

12

14

Figure 3.11Canadian Uranium Production, 1933-2000


(000 tonnes)

1855 1875 1895 1915 1935 1955 1975 19950

10

20

30

40

50

60

Figure 3.12Canadian Iron Ore Production, 1886-2000


Note: Does not include about 50 Mt mined in Newfoundland between

1893 and 1949 before Newfoundland joined Canada.

(million tonnes)

1855 1875 1895 1915 1935 1955 1975 1995

0

300

600

900

1 200

1 500

1 800

Figure 3.13Canadian Asbestos Production, 1880-2000


(000 tonnes)

1855 1875 1895 1915 1935 1955 1975 1995

0

2 000

4 000

6 000

8 000

10 000

Figure 3.14Canadian Gypsum Production, 1874-2000


(000 tonnes)


18/51


Alth ough Can ada produces coal in th e provinces ofSaska tchewan, Alberta an d British Columbia in thewest, an d in Nova Scotia (where pr oduction ceased inthe fall of 2001) and New Br unswick in th e east,mu ch of th e coal used a t th erm al electric powerplants in th e province of Ontario is imported from t heUnited St ates (from Pen nsylvania) becau se th e costof freight from Cana dian coal mines is high as aresult of the long haulage distance involved.

Therma l power plants in eastern Ont ario purchaselow-sulphu r lignite coal from sur face str ip mines insoutheast ern Saska tchewan, but this coal must beha uled by rail unit tr ain a dista nce of 1000 km to

Thun der Bay, Ontar io, and t hen loaded onto shipsan d tra nsported an a dditiona l 1300 km along theGreat La kes-St. Lawrence Seaway system. Not onlyare t ran sporta tion costs high, but the St . LawrenceSeaway a nd some of the Gr eat Lakes ar e closed tona vigation for two or th ree month s each year as aresu lt of winter ice conditions. This mean s tha t suffi-cient coal m ust be stockpiled at each coal-fired p owerplant to last un til new supplies can be obtained inthe next shipping season, which makes coal fromCana dian sources even more expensive as a result ofthe capital tha t is tied u p in coal stockpiles over th efall and winter season.

On th e other ha nd, the r elatively low sulphur conten tof coal from western Canada (about 0.5% sulphur)mak es it much m ore environment ally accepta bletha n is the h igh-sulphur coal from Penn sylvania(about 3% sulphur).

Spha gnum peat m oss, used largely for horticultur alpurposes, began t o be produced in Cana da in 1941an d production h as grown steadily since then(Figure 3.18). In add ition to pea t moss, a cumu lat ivetota l of about 40 000 t of peat was pr oduced inCana da for fuel purposes between 1900 and 1955.

1855 1875 1895 1915 1935 1955 1975 1995

0

2 000

4 000

6 000

8 000

10 000

Figure 3.15Canadian Potash Production, 1958-2000


Note: The graph does not show the minor producti on from one mine

in 1958 and 1959.

(000 tonnes K2O)

1855 1875 1895 1915 1935 1955 1975 1995

0

3 000

6 000

9 000

12 000

15 000

Figure 3.16Canadian Salt Production, 1886-2000


(000 tonnes)

1855 1875 1895 1915 1935 1955 1975 1995

0

10

20

30

40

50

60

70

80

Figure 3.17Canadian Coal Production, 1867-2000


Note: Canada produced a cumulative total of 2.6 Mt of coal from

1785 to 1866.

(million tonnes)

1855 1875 1895 1915 1935 1955 1975 1995

0

200

400

600

800

1 000

1 200

1 400

Figure 3.18Canadian Peat Moss Production, 1941-2000


Note: This graph does not include a cumulative total of about

40 000 t of peat fuel produced between 1900 and 1955.

(000 tonnes)


19/51

4. Exploration Expenditures inCanada for Non-Petroleum Minerals

4.1 INTRODUCTION

There a re no sta tistics on exploration expenditur esin Cana da for th e years prior to 1946. From 1946 to1966, Stat istics Cana da gat hered da ta on Prospect-ing Expenditur es by Metal Mining Compan ies,which included prospecting expendit ur es by all com-pan ies carrying out explorat ion in Canada . There

was no definition of th e types of explora tion a ctivitiesincluded in prospecting, but prospecting app ear s toha ve been interpret ed by most companies to includeessentially the sa me a ctivities included in minera lexplora tion today. Pr oducers of nonm eta llic miner alcomm odities and coal were not included becau se suchcompa nies were not met al mining compan ies. F ew,if an y, such compan ies would ha ve been prospectingfor metals.

Beginning with the survey year 1967, a qu estion con-cerning explorat ion expenditures was included in theAnnual Survey on Exploration, Development,

Capital an d Repair Expenditu res, which gat heredexploration expenditures for:

1) Physical Work a nd Su rveys - later chan ged toField Work,

2) land costs (costs of stak ing mineral claims,recording th em with governm ent a gencies andrenewing them ),

3) administrative expenses in th e field, and4) exploration-related h ead office expenses.

In F igure 4.1, expend itur es for 1946-66 are Prospect-ing Expend itu res. Those for 1967-2000 are explo-rat ion expenditur es (total of item nu mbers 1 t o 4above). Pr ior to 1980, Sta tistics Cana da did notinclude expend itur e categories 2, 3 or 4 (above) inpublished Cana dian explorat ion stat istics. Theau thor has added such data , tak en from the origina lquestionnaires retu rned by the compa nies to Stat is-tics Cana da (Natu ral Resources Canada had a ccessto them because th at depa rtm ents nam e was alsoon th e questionn aire), for cat egories 2, 3 an d 4 to

1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000

0

500

1 000

1 500

2 000

Cost of prospecting by senior companies, 1946-66

Cost of prospecting by junior companies, 1946-66

Exploration expenditures by senior companies, 1969-2000

Exploration expenditures by junior companies, 1969-2000

Exploration expenditures by senior and junior companies, 1967-68


Note: Expl oration expenditures from 1975 to 1981 are overstated by an av erage of about 17% relativ e to earlier and later years becaus e of

changes to the methodology used by Statistics Canada over the years.

Figure 4.1Prospecting and Exploration Expenditures in Canada, 1946-2000

(2000 $ millions)


20/51


Ph ysical Work an d Sur veys totals for t he per iod1967-79 inclusive so th at t he year s 1967-79 ar e com-pa ra ble to 1980-2000.

Prospecting expenditures for the 1946-66 period aresomewhat u ndersta ted relative to explorat ion expen-ditu re tota ls for the 1967-2000 period because

prospecting expenditur es excluded such expenditur esby companies tha t were producing indu strialminera ls, construction m ater ials and coal, andbecau se ma ny compan ies probably did not includeprospecting-relat ed hea d office expens es in th eirtota ls. To be compa ra ble to explora tion expend itur esfor years after 1966, prospecting expenditures wouldha ve to be increa sed by roughly 25% or m ore, as canbe seen from the distinct rise in exploration expendi-tur es beginning in 1968. Expenditur es for 1967, theinitial yea r of a n ew sur vey, ar e also likely to beincomplete.

4.2 INFLUENCE OF CHANGINGMETAL PRICES ON EXPLORATION

Although t here a re no stat istical data concerningexploration expenditur es in Cana da dur ing the1930s, the in crease in t he gold price to US$35/troy ozin 1934 led to h igh levels of gold explorat ion inCana da. During the Great Depression of the 1930s,base-metal prices were so low th at ther e was littleincentive to explore for them . The produ ction ofnickel, copper, zinc an d lead, th e base met als mostimportant to Can ada , increased with t he outbreak ofwar in 1939, then declined after 1943 or 1944becau se metal stocks on h an d, together with t hen

current levels of production, were more t han ade-qua te for immedia tely foreseea ble needs. Additiona lsoldiers were needed in Europe, so manpower priori-ties shifted from mining to th e military.

During the war , ore reserves at Cana dian mines wereallowed to decline. At the end of th e war, base-meta lprices were low. Dema nd for most meta ls did notbegin t o improve unt il late 1947 or ea rly 1948 and,when minera l explorat ion resum ed in Canada in1945, it was chiefly for gold from 1945 u nt il the ea rly1950s.

There was rapid inflation in Canada . After adjust-men t for inflation, th e new gold price of US$35 a nd

C$35/troy oz, set in 1934, ha d declined by 1949 (inter ms of 1934 Cana dian dollar s) to only C$19.46/oz(both curren cies ha d equa l values in th e 1930s), cau s-ing gold explora tion in Can ad a to decline ra pidly.

In 1940, th ere were some 140 producing gold minesin Cana da. Gold mining was the ent ire basis of theeconomy in most of the communities these mines sup-ported. The effective decline in th e gold price th atresu lted from t he combined effects of the fixed goldprice an d ra pid inflation soon th reat ened th e contin-

ued existence of many of these commu nities an d th econt inu ed employmen t of th eir resident s. To coun terthese pr oblems, in 1948, the Government introducedthe Em ergency Gold M inin g Assistan ce Act(EGMA).Depend ing on t he per-ounce cost of gold produ ction ofeach mine, th is act provided governm ent assistan ce ofup t o C$10.27/oz, with th e condit ion t ha t t he gold

produced at such m ines had to be sold directly to theGovernment of Cana da. Many of the r emaining goldmines event ua lly closed, but over a long per iod oftime with ore reserves mined out ra ther t ha n ha vinga cat ast rophic series of closur es of ma ny gold min es.The E GMA was finally repealed in 1976 a fter theU.S. governm ent had set th e gold price free when itwould no longer sell an y qua nt ity of gold at th e fixedUS$35/oz price and th e gold price was high en oughtha t assistan ce was not required. By 1979, when th egold pr ice began to rise ra pidly, only 15 gold min esrema ined in production in Cana da, other t ha n base-meta l mines tha t yielded by-product gold. Only threeof those mines ha d not requ ired EGMA assistan ce.

Explorat ion expenditures genera lly declined u ntil1950 when the Korean War began, and th en demandan d prices increased for t he m etals most n eeded forth at war , including n ickel, copper, molybdenu m, nio-bium, tungsten and cobalt.

From 1950 u ntil 1957, prices for m an y meta ls, andexploration expenditures, in Can ada rose rapidly.Ther e was little inter est in exploring for gold becau seth e pr ice wa s n ow only C$15.07/oz (1934 dollars).Dur ing 1957, prem ium prices for n ickel, offered sincethe beginning of the Korean War , disappear ed an dth e nickel price dropped. The copper pr ice droppedsha rply in 1957-58. Zinc had declined between 1952

an d 1954 and its pr ice was still low in 1957-58. Leadan d cobalt prices declined a fter 1956 and t he u ra-nium price was sha rply down because the Un itedSta tes had , by then, arr an ged purchase contr acts forall of the ura nium it r equired for the long-term futureof its nuclear weapons program. Nuclear power gen-erat ion was st ill in its infancy and little uran ium wasrequired for th is purpose. Silver and m olybdenumprices were still attr active, but these t wo metals com-bined t hen accoun ted for only 3% of th e value ofCana das total mineral production. Some Can adianbase-metal mines closed an d others cut ba ck theirproduction. Prospecting expenditures, which h adpeak ed at $330 million (2000 dollars) in 1957(Figure 4.1), declined to only $194 million (2000 dol-lars ) in 1958. Despite th is, in 1958, prospectingexpenditures in Canada were at th eir third-highestlevel ever. Explorat ion increased again in 1959 and anew prospecting expenditure r ecord was at tained in1965. A lar ge number of new base-meta l orebodieswere discovered in Cana da du ring the 1950s an d1960s.

Exploration expenditures for 1967, the first year ofthe new explorat ion su rvey, appea r to ha ve beenun dersta ted, perha ps becau se questionn aires were


21/51


not sent to all companies tha t a ctually conductedminera l exploration in Cana da tha t year. The rea-sons for explorat ion expenditures being a s h igh asthey were from 1968 to 1971 are n ot known to theauthor.

Explorat ion expenditur es were down in 1972 an d

then increased unt il 1974 an d beyond. During the1970s, severa l of the worlds m ajor oil compa niesdecided to become involved in th e meta l miningindustr y and soon began t o spend large sum s onexplora tion for non-petr oleum miner als. Explorat ionexpenditures in Cana da for copper, zinc, ura niuman d coal increased dur ing the 1970s becau se ofimpr oving prices for those miner al comm odities andbecause of the expend itur es by oil compan ies onCana dian meta l exploration.

The pr ices of gold an d silver and, to a lesser exten t,th e copper pr ice, rose ra pidly in 1979. The gold pricepeaked on J anu ary 21, 1980, at US$850/oz (in 2000dollar s, US$1646/oz). The silver price increa sed moretha n ten fold from early 1978, an d more than thirt y-fold from 1971, p eak ing a t US$48/oz (US$93/oz in2000 dollars) on J an uar y 21, 1980, when t he Hu ntbrothers of the Un ited Stat es attem pted to corner thesilver ma rket but did not succeed in doing so.

Explorat ion expenditures peak ed in 1981 and t hendeclined u nt il 1983 after gold an d silver pricesdropped rapidly. Prices for nearly all base metalsalso declined due to a severe world economic slow-down th at began in 1982.

Fr om 1983 to 1988, a t ax incent ive for explora tionwas intr oduced to the Can adian income ta x system.

This incent ive, th e Mining Explorat ion DepletionAllowan ce (or MEDA), provided an a tt ra ctive ta xwrite-off on federa l income t ax for invest men t inflow-th rough sha res of minera l explora tion compa -nies. A compan y that did not ha ve taxable incomecould allocat e a d edu ction of 133 1/3% of eligibleexploration expenses to individua l taxpa yers whopurcha sed flow-thr ough shares. This programpeaked in 1987 and 1988 when previously unima gin-able sums were r aised for mineral explorat ion a ndnew exploration expenditure r ecords were set. Manyin the industr y are of the opinion that a substan tialportion of th ese flow-through funds were n ot usedeffectively an d did not yield favoura ble discoveryresults.

Explorat ion declined after 1988, in par t becaus e flow-thr ough-shar e income t ax regulat ions became lessattractive, but also because of severe recessionaryconditions worldwide that caused met al pr ices todecline. Explorat ion r eached a low of $385 million in1992, but increased after th at year t o $895 million in1996, then declined to $820 million in 1997, $656 mil-lion in 1998, $504 million in 1999, $497 million in2000, and $491 m illion (prelimina ry) in 2001.

4.3 DISCUSSION

Over the 56 years for which Ca na dian m ineral explo-rat ion expenditur es have been gat hered, explorat ionexpendit ur e levels ha ve tended t o ebb an d flow, witha genera lly rising tren d, partly in response tochanges in the business cycle, but m ore strongly

influenced by other factors. Cha nging world eco-nomic conditions influence dema nd a nd p rices formeta ls, but chan ges in supply, demand a nd price donot ta ke place in a similar fashion for every meta l.

When ma rket pr ices are depressed for the meta lsprodu ced by a m ining compa ny, th at compa nys prof-its also tend t o be depr essed. As orebody discoveriesare not immediately essential for their continu edexistence, many companies tend to spend less onminer al explora tion when prices are low. A consider -able contribution to exploration expenditures inCana da is made by jun ior explorat ion companies(Figure 4.1), small companies engaged in mineral

explora tion but wit hout , as of yet, a miner al discov-ery in production. Ju nior companies are dependenton sales of compan y shar es to fina nce their m ineralexplora tion activities. When met al prices ar e low,this is difficult and exploration expenditures by

jun ior compa nies decline. Dur ing the 1970s, by tight -ening its stock ma rket listing requirement s, theToronto Stock Excha nge ma de it impossible for ma ny

jun ior compa nies to ha ve their shar es traded on th atexchan ge, which m ade it d ifficult for t hem to ra isemoney un til the Vancouver St ock E xcha nge (recentlymerged with t he Alberta Stock E xcha nge to form th eCana dian Ventur e Exchange) became a major sourceof junior compan y fina ncing.

Explorat ion in Cana da wa s depressed in 1947-49,in 1958, in 1973, in 1983, in 1992, and aga in at theend of th e cent ur y. With th e possible exception of1947-49, each of thes e low-expendit ur e periodscorr esponded t o a depressed world business cycle.

Except for the fina ncial rea sons given above, lowprices ar e not a logical rea son to cease exploring for ameta l becau se man y years a re likely to pass betweenexploration and eventua l production from a ny ore-bodies discovered. Cur ren t-day meta l prices willprobably ha ve little effect on th e profita bility offuture mines when production event ua lly begins.

Few compan ies or investors ha ve expertise when itcomes to th e forecasting of future m ark et dema ndan d prices. Man y compan ies tend to explore for acomm odity only when its price is high an d to ceaseexploring when th e price declines. Ura nium is anexample. A shar p rise in the ura nium price in thelate 1970s yielded a ra pid rise in ura nium explo-rat ion. When the price declined, inter est in uran iumexploration waned almost immediately (Figure 4.2).Explorat ion bur sts of th is sort a re inefficient . Muchof Canadas uranium exploration expertise, developed


22/51


in th e late 1940s and th e 1950s, was lost as m ostpeople had to depart the u ranium industry whenura nium was in oversupply. In th e late 1970s, mostCan adia n geologists involved in th e sear ch forura nium were new to uranium exploration becau sether e ha d not been mu ch for 20 years, but before th eyha d developed th e expert k nowledge needed, man y of

them ceased exploring for ura nium. Many uran iumexploration projects were shu t down prema tur ely andthe da ta t ha t might ha ve resulted in new discoverieswere not pr operly followed up. As a result , a consid-erable portion of the lar ge sums spent on u ran iumexploration between 1975 and 1985 was probably notas effective as it m ight ha ve been.

While it is not a simp le task , the forecast ing of min-eral commodity supply and deman d an d prices can besuccessfully done a t least part of the time, as dem on-strated by the results achieved by successful forecast-ers with some of the lar ge multina tiona l mining com-pa nies. The availability of high-qua lity dema nd/priceforecasts might support better decisions concerningwhich miner als to explore for. However, year s nor-ma lly elapse between t he commencement of an explo-rat ion program and mak ing a discovery and, once anorebody is discovered in Cana da, th e at tainm ent ofproduction t akes, on avera ge, another six or sevenyears. It would be an expert forecaster indeed whocould pr edict realistic supply-deman d an d price con-ditions as far a head a s 10 or 15 years.

There a ppears to be some correlation between th eprices of the m ajor met als produced in Cana da a ndan nu al exploration expenditur es, but tha t correlationis not especially close (Figure 4.3).

1970 1975 1980 1985

0

25

50

75

100

125

150

0

50

100

150

200

250

300

Figure 4.2Comparison of Exploration Expenditures forUranium in Canada and the NUEXCO UraniumPrice, 1970-90

Sources: Natural Resources Canada; Nuclear Exchange Corporation.

NUEXCO Price

(2000 $/lb U3

O8

)

Uranium prices

Exploration expenditures

Exploration Expenditures

(2000 $ mill ions)

1970 1975 1980 1985 1990 1995 2000

0

400

800

1 200

1 600

0

50

100

150

200

250

300

350

400


Figure 4.3

Total Exploration Expenditures in Canada and the Metal Price Index, 1969-2001

Exploration Expenditures

($ millions)

Metal Price Index

(1971=100)

Metal Price Index

Exploration

Expenditures


23/51

5. Changing Rates and Costs ofOre Discovery in Canada

During t he 1970s, 1980s an d ear ly 1990s, severalan alyses of Canadian minera l explorat ion successwere carried out by t he federal government s Depart -ment of Nat ura l Resources (Cran stone and Mar tin,1973; Cranstone, 1980; Cranstone, 1982; Cranstonean d Whillan s, 1987; Cran stone, 1988; Cranst one,Lemieux an d Valle, 1993). Some of th e result s ofthis r esearch a re discussed below.

Graph s depicting th e tonna ges of the six metals(nickel [Figure 5.1], copper [Figure 5.2], zinc[Figure 5.3], lead [Figure 5.4], molybdenu m[Figure 5.5], silver [Figur e 5.6] and gold [Figur e 5.7])tha t were discovered in Cana da per 10-year periodover the 140 yea rs from 1846 (th e year of Cana dasfirst nonferrous met al orebody discovery) to 1985were prepared for an unpu blished ta lk given by theau thor in 1987. These graph s have not yet beenupda ted t o include the subsequent 10-year discoveryperiod 1986-95, nor h ave th ey been adjusted t o takeinto account t he t onnages of meta l in deposits tha t, inthe 1987 graphs, were included in t he categoryDeposits Uneconomic to Dat e but ha ve subse-

quent ly been brought into production. In upda ted

discovery graph s, these t onnages should now appearin the mined deposit category because they now con-stitut e ore reserves and pa st production a t current lyor former ly producing mines.

The most r ecent an alysis of ra tes a nd costs of ore dis-covery in Can ada , by Dona ld Cran stone, AndrLemieux and Marcel Valle of Natural Resources

Can ada (Cran stone, Lemieux an d Valle, 1993), cov-ered th e 45-year int erval 1946-90 inclusive. The year1946 was chosen as th e initial year of th e discoveryan alysis becau se 1946 is th e first yea r for whichCana dian explorat ion expenditur e stat istics weregath ered. In th is analysis, the interval 1946-90 wassubd ivided into 15 th ree-year periods. Iron ore wasexcluded from th is discovery ana lysis because t hedevelopmen t of new iron min es is not genera llyrelated t o new discoveries but, rat her, to ma rketingopportun ities. In addit ion, the inclusion of th e vasttonna ges of iron in k nown Can adian iron deposits,some 45 000 Mt of iron cont ain ed in crud e ore(Ener gy, Mines an d Resources Cana da, 1977), if val-ued a t nomin al prices for iron ore, would have seri-

ously distorted th e results of this st udy.

1846-1855

1856-1865

1866-1875

1876-1885

1886-1895

1896-1905

1906-1915

1916-1925

1926-1935

1936-1945

1946-1955

1956-1965

1966-1975

1976-1985

0

1

2

3

4

5

6

7

8

9

10

In deposits that have been

mined, are being mined, or are

committed for production

In deposits uneconomic to date

Figure 5.1Nickel Discovered in Canada by 10-YearPeriod, 1846-1985

Source: Natural Resources Canada.

(million tonnes)

1846-1855

1856-1865

1866-1875

1876-1885

1886-1895

1896-1905

1906-1915

1916-1925

1926-1935

1936-1945

1946-1955

1956-1965

1966-1975

1976-1985

0

10

20

30

40

50





Figure 5.2Copper Discovered in Canada by 10-YearPeriod, 1846-1985


(million tonnes)


24/51


1846-1855

1856-1865

1866-1875

1876-1885

1886-1895

1896-1905

1906-1915

1916-1925

1926-1935

1936-1945

1946-1955

1956-1965

1966-1975

1976-1985

0

1 000

2 000

3 000

4 000





Figure 5.7

Gold Discovered in Canada by 10-Year

Period, 1846-1985


(000 tonnes)

Figur es 5.8 to 5.15 depict th e tonn ages of each of th ema jor met als (oth er th an iron ore) discovered inCana da per thr ee-year period over the 45 years 1946-90. Figur e 5.16 depicts the valu e of met als discov-ered in Can ada over the sam e three-year periods. Tocompile th is figure, met al prices were used to addtogether the var ious tonna ges of the var ious met alsdiscovered in each t hr ee-year discovery period of th e

45 years. The black port ion of each bar in dicates val-ues of th e total qua nt ities of met al discovered indeposits that ha ve subsequent ly been mined andclosed, in deposits t ha t a re curren tly being m ined,an d in deposits th at are curr ently committed for pro-duction (positive feasibility study, fina ncing ar ra ngedan d mine construction un der way). The quan tities ofmeta ls contained in an ticipated r ecoverable exten-sions to those deposits a re also included in t he blackbars. The white portion of each bar depicts quan ti-ties of metal conta ined in reported tonn ages at

1846-1855

1856-1865

1866-1875

1876-1885

1886-1895

1896-1905

1906-1915

1916-1925

1926-1935

1936-1945

1946-1955

1956-1965

1966-1975

1976-1985

0

500

1 000

1 500

2 000





Figure 5.5Molybdenum Discovered in Canada by 10-YearPeriod, 1846-1985


(000 tonnes)

1846-185

5

1856-186

5

1866-187

5

1876-188

5

1886-189

5

1896-190

5

1906-191

5

1916-192

5

1926-193

5

1936-194

5

1946-195

5

1956-196

5

1966-197

5

1976-198

5

0

10

20

30

40

50




In deposits uneconomic to

date

Figure 5.6Silver Discovered in Canada by 10-YearPeriod, 1846-1985


(000 tonnes)

1846-1855

1856-1865

1866-1875

1876-1885

1886-1895

1896-1905

1906-1915

1916-1925

1926-1935

1936-1945

1946-1955

1956-1965

1966-1975

1976-1985

0

10

20

30

40

50

60

70

In deposits that have been mined,are being mined, or are committed

for production


Figure 5.3Zinc Discovered in Canada by 10-Year Period,1846-1985


(million tonnes)

1846-1855

1856-1865

1866-1875

1876-1885

1886-1895

1896-1905

1906-1915

1916-1925

1926-1935

1936-1945

1946-1955

1956-1965

1966-1975

1976-1985

0

5

10

15

20

25

In deposits that have beenmined, are being mined, or are



Figure 5.4Lead Discovered in Canada by 10-Year Period,1846-1985


(million tonnes)


25/51


discovered deposits th at ar e not yet being developedfor pr oduction (most of these deposits a re u neconomicun der current conditions, but it is not un usua l forsome deposits to rema in un developed for m an y yearsafter th ey ar e discovered). The cross-hat ched port ionof each bar shows quan tities of meta l conta ined inestimated a dditional tonna ges in those deposits. The

relat ively sma ller proportions of black in more r ecentthr ee-year discovery bars ar e not a mat ter t o be con-

cerned about because it tak es time for m ost depositsto become producing mines. As time goes on, th e pro-portion of a bar tha t is black should increase, an d th ewhite a nd cross-ha tched portions should decrease, asmore of the d iscovered deposits a re d eveloped for pro-duction. In fact, over th e nine years since Figure 5.16was prepa red, a considerable num ber of the m ineral

deposit discoveries ha ve alrea dy been d eveloped forproduction.

1946-1948

1949-1951

1952-1954

1955-1957

1958-1960

1961-1963

1964-1966

1967-1969

1970-1972

1973-1975

1976-1978

1979-1981

1982-1984

1985-1987

1988-1990

0

1

2

3

4

5

6

Tonnages in deposits that are being mined or

that have been mined

Deposits not yet mined (reported tonnage)

Deposits not yet mined (estimated additional

tonnage)

Figure 5 .8Nickel Discovered in Canada by Three-Year Period, 1946-90


(million tonnes of metal)

3 x 1990

Production

1946-1948

1949-1951

1952-1954

1955-1957

1958-1960

1961-1963

1964-1966

1967-1969

1970-1972

1973-1975

1976-1978

1979-1981

1982-1984

1985-1987

1988-1990

0

5

10

15

20

25

30

Tonnages in deposits that are being mined or

that have been mined


Deposits not yet mined (estimated additional

tonnage)

Figure 5 .9Copper Discovered in Canada by Three-Year Period, 1946-90



3 x 1990

Production


26/51


19

46-1948

19

49-1951

19

52-1954

19

55-1957

19

58-1960

19

61-1963

19

64-1966

19

67-1969

19

70-1972

19

73-1975

19

76-1978

19

79-1981

19

82-1984

19

85-1987

19

88-1990

0

5

10

15

Tonnages in deposits that are being mined

or that have been mined


Deposits not yet mined (estimated

additional tonnage)

Figure 5.11

Lead Discovered in Canada by Three-Year Period, 1946-90



3 x 1990

Production

1946-1948

1949-1951

1952-1954

1955-1957

1958-1960

1961-1963

1964-1966

1967-1969

1970-1972

1973-1975

1976-1978

1979-1981

1982-1984

1985-1987

1988-1990

0

10

20

30

40

50





additional tonnage)

Figure 5.10Zinc Discovered in Canada by Three-Year Period, 1946-90



3 x 1990

Production

1946-1948

1949-1951

1952-1954

1955-1957

1958-1960

1961-1963

1964-1966

1967-1969

1970-1972

1973-1975

1976-1978

1979-1981

1982-1984

1985-1987

1988-1990

0

200

400

600

800

1 000

1 200

1 400

1 600





additional tonnage)

Figure 5.12Molybdenum Discovered in Canada by Three-Year Period, 1946-90


(000 tonnes of metal)

3 x 1990

Production


27/51


1946-1948

1949-1951

1952-1954

1955-1957

1958-1960

1961-1963

1964-1966

1967-1969

1970-1972

1973-1975

1976-1978

1979-1981

1982-1984

1985-1987

1988-1990

0

10

20

30

40

50





additional tonnage)

Figure 5.13Silver Discovered in Canada by Three-Year Period, 1946-90


(000 tonnes of metal)

3 x 1990

Production

1946

-1948

1949

-1951

1952

-1954

1955

-1957

1958

-1960

1961

-1963

1964

-1966

1967

-1969

1970

-1972

1973

-1975

1976

-1978

1979

-1981

1982

-1984

1985

-1987

1988

-1990

0

500

1 000

1 500

2 000

2 500





additional tonnage)

Figure 5.14Gold Discovered in Canada by Three-Year Period, 1946-90


(tonnes of metal)

3 x 1990

Production

1946-1948

1949-1951

1952-1954

1955-1957

1958-1960

1961-1963

1964-1966

1967-1969

1970-1972

1973-1975

1976-1978

1979-1981

1982-1984

1985-1987

1988-1990

0

100

200

300

400

500

600





additional tonnage)

Figure 5.15Uranium Discovered in Canada by Three-Year Period, 1946-90


(000 tonnes)

3 x 1990

Production


28/51


1946-1948

1949-1951

1952-1954

1955-1957

1958-1960

1961-1963

1964-1966

1967-1969

1970-1972

1973-1975

1976-1978

1979-1981

1982-1984

1985-1987

1988-1990

0

50

100

150

200




Deposits not yet mined (estimatedadditional tonnage)

Figure 5.16Value of Metals Discovered in Canada at 1987-91 Average Prices, by Three-Year Period, 1946-90


(1992 $ billions)

1946-48 1949-51 1952-54 1955-57 1958-60 1961-63 1964-66 1967-69 1970-72 1973-75 1976-78 1979-81 1982-84 1985-87 1988-90

0

500

1 000

1 500

2 000

2 500

3 000

3 500

Figure 5.17Exploration Expenditures in Canada by Three-Year Period, 1946-90


(1992 $ millions)

1946-48 1949-51 1952-54 1955-57 1958-60 1961-63 1964-66 1967-69 1970-72 1973-75 1976-78 1979-81 1982-84 1985-87 1988-90

0

100

200

300

400

Figure 5.18Value of Metals Discovered in Canada Per Dollar Spent on Mineral Exploration, by Three-YearPeriod, 1946-90


(ratio)


29/51


The qua ntities of meta l discovered in Can ada in eachof th e t hr ee-year periods 1946-48, 1949-51, 1958-60,1982-84 an d 1985-87 were all relat ively sma ll. Thevalue of meta l discovered in t he m ost r ecent thr ee-year discovery per iod sh own, 1988-90, exceeds t hecombined a verage values of the 14 other t hree-yeardiscovery periods, and therefore represents a consid-

erable improvement over the immediately precedingperiods 1982-84 and 1985-87.

However, over the year s, there h as been a majorincrease in the amounts spent annu ally on m ineralexplora tion in Can ada (Figur e 5.17). These explo-rat ion expenditures mu st be taken into account inan alyzing Cana dian discovery success. This has beendone by dividing th e gross values of met al in a lldeposits discovered in Ca na da d uring ea ch th ree-yeardiscovery per iod by t otal inflation-adjust ed explo-

ra tion expendit ur es for all meta ls (excluding explo-rat ion expenditu res for iron ore) for the same thr ee-year discovery periods (Figure 5.18). Using th is mea -sur e, discovery costs (meta l value discovered p erdollar of explora tion expend itur es) were exceptiona llyhigh in 1982-84 an d in 1985-87. In 1988-90, th e fina ldiscovery period analyzed, there was a notable

improvement but, despite th is improvement, it wasconcluded th at considerable a dditiona l improvementwould be needed if explorat ion r esults wer e to con-tinue to sustain the Can adian meta l mining industryover th e long term .

Tonna ges of copper, zinc, gold an d ur an ium d iscov-ered in Ca na da in each th ree-year discovery period ofth e inter val 1946-90 are port ra yed by geologicaldeposit type in Figur es 5.19 to 5.22, respectively.

Figure 5.19

Copper Discovered in Canada by Geological Deposit Type, by Three-Year Period, 1946-90


1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

2

4

6

8

10

12

REDBEDS

(million tonnes)

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

2

4

6

8

10

12

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

2

4

6

8

10

12

NICKEL-COPPER

SKARN

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

2

4

6

8

10

12

14

PORPHYRY

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

2

4

6

8

10

12

14

VOLCANOGENIC MASSIVE SULPHIDE


30/51


The discovery an alysis covering th e years 1946-90has not, as yet, been updated. Indications are thatthe n umber of deposits an d conta ined meta l tonnagesdiscovered in th e next su ccessive thr ee-year p eriod,

1991-93, were rela tively low, but t his can beexplained in pa rt by th e fact tha t explorat ion expen-ditures in Cana da in th ose thr ee years were th e low-est (in inflat ion-adjusted ter ms) in a ny t hree-yearperiod over th e 21 years th at ended in December1993.

There a ppears to have been considerable improve-ment in miner al deposit discoveries during th e 1994-96 period. This period included t he discovery of th elarge Voiseys Bay nickel-copper-cobalt deposit, dis-covered in 1994 nea r th e Atlan tic coast of Labr ador,and 15 or more at tra ctive diamond deposits at var i-ous locations in the North west Territories. Eight ofthese diam ond deposits are on t he pr operty of theEka ti diamond mining operation where pr oductionfrom t he first deposit to be mined began in October1998. The Diavik propert y cont ains at least fourhigh-grade diamond deposits with initial productionexpected in 2003.

Subsequent diamond discoveries include th e Sna pLak e kimberlite dyke, now owned by De BeersCana da Corporation, reported to conta in some86 million car at s (ct) of recovera ble diamonds valued

at a bout US$100/ct. The deposit is expected to be inprodu ction in about 2006. Ea rly in 2000, De Beerstook a 7000-t bulk sa mple from the Victor kimber litein Onta rio, 100 km west of J ames Bay. De Beers ha s

stat ed tha t th e Victor deposit contains 37 Mt with adiamond conten t valued at C$100/t. There is alsopotent ial for production from two addit iona l diamonddeposits discovered in 1994-96 at oth er locat ions, onein the North west Territories and t he other inNun avut, but it is too early to be certa in of thisbecause additional diamond discoveries may beneeded in t heir vicinity to increase t he t onnages ofmineable ore. Diamonds are not meta ls; ther efore,diam ond deposit discoveries should n ot be consider edas belonging in a met al deposit discovery an alysis.However, they do constitute important discoveriesan d because diam ond values per tonne of ore areavailable for such deposits, th ey can be added to thediscovery analysis provided that exploration expendi-tur es for diam onds are also taken into account.

In sum ma ry, there would appear to have been someimprovement in m ineral explorat ion an d discoverysuccess in Cana da in the mid-1990s. When thispaper wa s written, it was too early to adequat elyevaluate the success of exploration in Can ada in1997, 1998, 1999 a nd 2000, but a significant nu mberof discoveries of base m eta ls, gold an d other miner alcommodities have been mad e.

Figure 5.20Zinc Discovered in Canada by Geological Deposit Type, by Three-Year Period, 1946-90


1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

5

10

1520

25

30

35

MISSISSIPPI VALLEY

(million tonnes)

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

5

10

15

20

25

30

35

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

5

10

15

2025

30

35

SEDIMENTARY EXHALATIVE



31/51


Figure 5.21Gold Discovered in Canada by Geological Deposit Type, by Three-Year Period, 1946-90


1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

200

400

600

800

1 000

DISSEMINATED

(tonnes)

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

200

400

600

800

1 000

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

200

400

600

8001 000

STRATIFORM

POLYMETALLIC VEIN

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

200

400

600

800

1 000

VEIN

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

200

400

600

800

1 000

PORPHYRY

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

200400

600

800

1 000



32/51


Figure 5.22

Uranium Discovered in Canada by Geological Deposit Type, by Three-Year Period, 1946-90


1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

100

200

300

400

METAMORPHIC, GRANITIC, PEGMATITIC

(000 tonnes)

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

100

200

300

400

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

100

200

300

400

VEIN

PALEOPLACER

1946-48 1952-54 1958-60 1964-66 1970-72 1976-78 1982-84 1988-90

0

100

200

300

400

UNCONFORMITY


33/51

6. Ore Reserves and theLong-Term Future of

Canadian Mineral Production

6.1 INTRODUCTION

M ining yields many different mineral commodi-ties. Over the years, the balan ce of the var ious min-erals produced in Cana da ha s cha nged and willun doubtedly continu e to cha nge in the futu re.Figur e 6.1 shows 2000 produ ction va lues for a ll min-eral commodities being produced in Can ada . The

base meta ls are actua lly all meta ls that a re not con-sidered t o be precious m eta ls, but comm on usa ge inCan ada seems t o include n ickel, copper , zinc, leadan d perha ps molybdenum in th e base-meta l category.By this usage, base metals, together with the var iousby-products recovered in their production, currentlyconstitu te 40% of the value of total Ca na dian mineoutpu t of all miner al comm odities (excludin g thepetr oleum r ecovered by mining a nd pr ocessing of th eAlbert a oil sands).

On a na tiona l basis, Canada s reserves of any pa rtic-ula r met al (or of an y oth er min era l commodity) in oreare n ot n ormally what matt ers, provided that anydecline in th e production of some meta ls or min era lsis compensa ted for by increa sed pr oduction of othermeta ls or minera ls. However, there may be regionalproblems in ter ms of employment , concentr at e feedfor sm elters, and the like.

6.2 CANADAS RESERVES OFMETALS IN ORE

Nat ura l Resources Can ada first compiled reserves forthe ma jor meta ls as at J anua ry 1, 1974, and ha s con-tinu ed to do so for each year since then . The mostrecent ore reserves compilation is as a t J an uar y 1,2000 (Reed, 2001). Reserves ar e compiled for t hetota l of proven an d probable minea ble ore only.Inferred minera l resources are n ot included becau sethe existence an d m etal gra des of such resourcesare based on little informa tion and are ther efore tooun certa in to be relied upon. The reserves include all

ore in producing mines an d in a ll deposits tha t were,at t ha t dat e, committed to production. Committ ed toproduction means t ha t t here wa s a positive feasibil-ity study, all needed permits ha d been received,equipment h ad been ordered, and constr uction was inprogress. For each ma jor met al, one figure illustr atesan nu al ore reserves of tha t meta l from Ja nua ry 1,1974 to J an uar y 1, 2000. For the years 1973 to 1999,the other figure illustr ates for each meta l the r atio ofreserves at the en d of each year t o overall mine pro-duction during tha t year.

Nickel

Fr om 1981 to 1994, Cana da s reser ves of nickel in ore

(Figure 6.2) declined by more tha n one-third. Forman y years Can adian n ickel production ha d beenincreasing; therefore, nickel reserves had also beenincreasing. Production subsequen tly declined asCana da lost nickel mar ket shar e. About the year1980, the Canadian reserves-to-production ratio fornickel (Figure 6.3) was in excess of 45 to 1, a r at iotha t was considerably higher th an were th e reserves-to-production rat ios for the other m etals an d tha t wastoo expensive for the n ickel indu str y to continu e to

Zinc

1 567

Coal

1 427

Uranium

473

Other metals

755

Figure 6.1Value of Mine Production in Canada byCommodity, 2000


Potash

1 644

Total: $19 842

Gold

2 054

Copper

1 684

Nickel

2 324

Cobalt

and PGM

578.8Lead

97Molybdenum

63

Iron ore

1 424

Asbestos

142

Salt

351

Diamonds

625

Other non-metals

1 140

($ millions)

Cement

1 259

Lime

238

Sand and gravel

971

Stone

881

Clay products

175


34/51


ma intain. Nickel reserves appear t o have been delib-era tely allowed to decline to a more rea listic reser ves-to-production ra tio of about 28 to 1. Nickel reservesincreased by some 500 000 t on J an uar y 1, 1996,mostly becau se of th e addit ion of th e nickel at th eRaglan nickel-copper m ining operation in t he Ca peSmith-Wakeham Bay Nickel Belt, in th e Ungava

Region of nort her n Quebec. The var ious nickel show-ings and deposits current ly known in t his region wereorigina lly discovered in t he 1950s a nd 1960s, bu t itwas not un til 1995 tha t a decision was made t o bringa nickel deposit int o production. When th ere is even-tu ally a production go-ah ead for t he Voiseys Baynickel deposit in Labr ador, discovered in 1994,Can ada s nickel reserves could increa se by as mu chas 50%, depen ding on how much of th e known n ickelth ere In co Limited (th e owner of the deposit) choosesto add t o its pr oven an d probable reser ves of nickel inore. Recently, Inco Limited an d Falconbr idge

Limited, Can ada s two major nickel producers, haveeach discovered sever al n ew, deep n ickel-copperdeposits at Sudbu ry, Onta rio, and have other att rac-tive, known, but a s yet un developed, nickel depositsat Su dbur y. Ther efore, Cana das reserves of nickel inore are likely to continue t o be mainta ined for a t leasta decade or two.

If ann ua l nickel production from the Voiseys Baydeposit is a s high as some predict wh en pr oductionbegins, the r eserves-to-production ra tio is most likelyto fall below th e levels of th e late 1980s a nd ea rly1990s, but only the futu re will tell.

It sh ould be noted tha t in the reserves-to-productionrat io graph for nickel, and for a ll the other met als,sudden cha nges in the r atio, either u p or down, nor-ma lly reflect t emporary lows or highs in an nua l pro-duction r ather than annu al changes in ore reserves.

1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 20000

1

2

3

4

5

6

7

8

9


Figure 6.2Canadian Proven and Probable Reserves of Nickel Metal in Ore, 1974-2000

(millions tonnes)

At January 1

2000

Production

1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999

0

10

20

30

40

50

60

70

80

90


Figure 6.3

Canadian Nickel Reserves-to-Production Ratio, 1973-99

(ratio)

Reserves at Year-End to Production During Year


35/51


Copper

Copper r eserves in Cana da were fairly steady from1974 to 1982, but su bsequen tly declined by about45% (Figure 6.4). The reser ves-to-production ra tiofor copper ha s also declined (Figure 6.5). Pr oductiondecisions for t he H uckleberry, Kemess South and

Mount Polley porph yry-copper deposits in Brit ishColumbia a dded some 1.1 Mt to Cana dian r eserves ofcopper a s at J an ua ry 1, 1997. The Voiseys Bay

nickel-copper -cobalt deposits could add a s mu ch as2 Mt more when a pr oduction decision is eventu allymad e. Significan t furth er replacement of the copperproduced from reserves a t Sudbur y, Ontar io, is likelywhen production decisions are eventually made forsome 10 as yet u ndeveloped but at tra ctive nickel-copper deposits that are kn own th ere. There is also

potent ial for developmen t of a few already kn own,but as yet u ndeveloped, porph yry copper dep osits inBritish Columbia.

1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000

0

2

4

6

8

1012

14

16

18


Figure 6.4Canadian Proven and Probable Reserves of Copper Metal in Ore, 1974-2000

(million tonnes)

A t J anuar 1

2000

Production

1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999

0

5

10

15

20

25

30

Source: Natural Res

history of candian mining

Documents