The recent Mines and Money (M&M) conference in London included a day focused on Canada. Amongst the speakers was Joe Mazumdar, the co-editor of the weekly Exploration Insights newsletter, who gave an impressive presentation on the Canadian mining industry. Mr Mazumdar talked of the huge mineral endowment of Canada's mining companies, the country's favourable ranking as a place to do business and the impressive exploration statistics.
It was an auspicious time for Mr Mazumdar to be speaking, with the previous week seeing publication of Exploration Insights' 500th edition. The newsletter is described on its website as a "synergistic collaboration between veteran economic geologists and equity analysts Joe Mazumdar and Brent Cook". The newsletter offers "the sophisticated speculator a strictly independent, unbiased, and technical analysis of the junior mining and exploration sector".
Mr Mazumdar told M&M delegates that Canadian companies own assets worth C$254 billion globally, with one-third of this being located in Canada and one-half in North America. The country produces 60 metals and minerals, worth C$44 billion in 2017, according to the metals and mining database of Natural Resources Canada. The top four mined commodities in Canada are gold, coal, copper and potash. Despite the emphasis on gold, only two of the country's largest ten mines, by extracted value, are primary gold mines (Canadian Malartic and Detour Lake).
The top four Canadian provinces, in terms of mined production, are Ontario, Quebec, British Columbia and Saskatchewan, representing a combined 75% of the country's total mined value.
Although the US and Australia rank higher than Canada in the World Bank's annual 'Ease of doing business' ranking, Canada ranks highest in terms of transparency and the low level of corruption. Overall it is considered the most attractive venue for mining (followed by Australia), according to the 2017 Fraser Institute Survey of Mining, with Quebec and Ontario currently receiving most of the exploration funds.
In its recent survey of global exploration budgets, S&P Global Market Intelligence identified a global total of US$9.6 billion (to which it added a further US$0.5 billion of estimated exploration expenditure for companies not surveyed). Canada is expected to account for US$1.4 billion (15%) of this total, with US$0.9 billion attributable to the search for gold. Mr Mazumdar said there are 250 gold companies active in Canada.
Canada's Natural Resource Council estimates the total exploration spend this year at C$2.2 billion with the majority directed to gold exploration. The expenditures are reflected in the drilling numbers over the past two years where gold has accounted for 77% of the Canadian exploration effort, with the next highest targets being zinc on 5% and copper on 4%. Over half of the country's exploration programmes are directed to Quebec and Ontario, with budgeted expenditures of C$656 million and C$593 million in 2018, respectively.
Mr Mazumdar noted that junior companies had spent 60% of the Canadian total on exploration and appraisals ten years ago, but that this has fallen below 30% in 2015. This proportion of the search for metals is now back above 40% as the little amount available for exploration is aimed at favourable jurisdictions like Canada.