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DAILY NEWS May 29, 2014 5:57 PM - 0 comments

BC Mines Minister, MABC talk state of the province's industry

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VANCOUVER — With the annual B.C. Mining Week wrapping up in May there was significant discussion on the state of the industry in the province, including the announcement of more funding for Geoscience B.C. from the Liberal government and debates over mine permitting and developing a social licence with First Nations communities.

The Northern Miner had a chance to sit down with B.C. Energy and Mines Minister Bill Bennett and Mining Association of British Columbia president and CEO Karina Briño to talk about recent events in the province’s resource sector, and how government and industry representatives are helping mine developers and explorers realize B.C.’s mineral potential.

Social licences are a major issue in B.C. when it comes to mine permitting and agreements with local First Nations bands. After the federal government’s rejection of Taseko Mines’ (TSX: TKO; NYSE-MKT: TGB) New Prosperity copper mine and the legal case surrounding Pacific Booker Minerals’ (TSXV: BKM; NYSE-MKT: PBM) Morrison copper mine, the permitting landscape in the province is becoming murkier.

Bennett has been an outspoken critic of the New Prosperity decision, and says that during recent international investment forays he has noticed some hesitation about Canada’s mine permitting processes. He says it shows how "well-connected the mining industry is worldwide," and that the provincial and federal governments should note that "news like [New Prosperity] does really discourage investment in jurisdictions."

Briño says the industry has "definitely expressed some concern to us in terms of understanding just how the approval process is structured following the New Prosperity and Morrison Lake rejections.

"When you enter the environmental-review process you have your mine design and relevant information, and things are supposed to proceed according to a schedule that leads to a decision," she says. "There needs to be more accountability and transparency in the time period between the application and that decision."

Bennett counters that his ministry is "working really hard internally" to figure out the problems the industry says exist with mine permitting.

The provincial government is circulating its second white paper on charging mining companies fees under the Mines Act, though it was recently announced those fees will not apply to exploration-stage projects.

Bennett says the feedback from the industry has been "conditional" and that companies are willing to pay associated fees to the ministry, as long as the quality of service improves to justify payment.

As for First Nations relations, Bennett and Briño both stress a number of B.C. success stories, including Imperial Metals’ (TSX: III; US-OTC: IPMLF) Red Chris mine agreement with the Tahltan Nation and Thompson Creek Metals’ (TSX: TCM; NYSE: TC) beneficial relationship with the McLeod Lake Band at the Mount Milligan project.

One outstanding issue is the mediation with the Tahltan over Fortune Minerals’ (TSX: FT; US-OTC: FTMDF) Arctos Anthracite metallurgical coal joint venture, 330 km northeast of Prince Rupert. The project sits in a traditional location the Tahltan refer to as the "Sacred Headwaters," which has been a point of contention since the B.C. government paid Shell Canada $20 million in royalty credits to abandon drilling in the area back in 2012.

"The Tahltan are involved in economic development, but the Sacred Headwaters are very specific, and I think the scope of the issue is quite narrow," Briño says. "We have to ask: ‘Is there an opportunity to find common ground?’ Those conversations are definitely happening more often than not, but unfortunately we tend to hear more about the problems than the solutions."

She adds that "we’re committed to ensuring companies get in as early as possible to establish a relationship with local First Nations. I meet with all the companies advancing through the process, and encourage them to build that relationship as soon as possible. From the government perspective we want to ensure the First Nations actually benefit from these projects, because I think that’s really what the social licence represents."

Bennett unveiled news for the exploration sector on May 22 at the Minerals North Conference in Vanderhoof: the government has earmarked $3 million in new funding from the B.C. Ministry of Energy and Mines for non-profit geological research by Geoscience B.C.

The ministry has been trying to nail down more sustainable financing for the program — which has been credited with helping discover New Gold’s (TSX: NGD; NYSE-MKT: NGD) Blackwater gold deposit 160 km southwest of Prince George, as well as satellite deposits found near Imperial Metals’ Huckleberry mine 123 km southwest of Houston — but Geoscience B.C. remains in an uncertain state, as it’s currently funded year to year.

"It was challenging to get the funds this year," Bennett noted. "Government will not lose sight of the importance of public geoscience. We’ve heard from the industry how important funding is for [the agency], and how important the work and results are for discoveries. We’re obviously going to try to find sustainable funding in the meantime, but if we can’t do that I guess we’re faced with trying to get a piece of the contingency again next year."

A big piece of that funding will go towards Geoscience B.C.’s Targeting Resources for Exploration and Knowledge (TREK) project, initiated in 2013, which focuses on B.C.’s northern interior plateau region. The region is highly prospective for mineral resources and holds geothermal potential. It reportedly remains underexplored due to complicated and poorly understood bedrock geology and overburden.

TREK includes new airborne geophysics; new stream, lake, soil and till geochemical sampling; and new geological mapping and mineral deposit studies. The project will cover an area over 20,000 sq. km, extending south from Vanderhoof and Fraser Lake, and west from Quesnel.

"I’m glad we can continue to recognize the importance of the program. I was minister when it was created, and I have to say there are a lot of allies within our government for the organization, and I think they do understand the importance," Bennett continues. "We’re really quite thankful we got anything this year, to be honest. I’m grateful to the finance minister because he was being pulled in a lot of directions, and had to say ‘no’ a lot more than he said ‘yes.’"

Despite the added funding for Geoscience B.C. and the lack of upcoming fees for exploration-stage companies, it remains a tough haul for juniors.

According to a recent PwC report, B.C.-based mining companies raised $2.6 billion in financing last year, down from $5.3 billion in 2012. PwC surveyed 21 operating mines, 14 operations in development and two exploration properties, and found that B.C. mining companies cut capital expenditures by 35% last year to $1.8 billion, while exploration costs fell by 30% to $476 million.

"It’s still quite tough for the smaller companies. I’ve heard a few success stories over the past couple of months though, where these juniors have raised money," Bennett says. "There are signs of that market recovering, but I wouldn’t want to paint too rosy a picture. On the larger, more senior end of the exploration business the situation is better, and we’ve seen companies moving towards mine development raise the necessary funding."

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