B.C. and Yukon had a good year

The level of exploration activity in British Columbia was up sharply last year, according to the B.C. & Yukon Chamber of Mines. Charles A. Aird, president, told the chamber’s annual meeting that 1987 exploration expenditures were approximately $130 million, representing 13% of the national total.

“This is an all-time record for metals exploration in the province, up 38% from 1986. Claim staking, both hard rock and placer, likewise climbed by 36% making 1987 a very active year indeed,” he said.

The Yukon Territory attracted its share of capital, an estimated $45 million which “was not a record, but close to one,” he said. New claim staking was ahead 70% and placer leases doubled in number. Exploration activity was largely directed towards gold because of its relatively high value and portability.

Aird expressed concern about the proposed elimination of the 33.3% Mining Depletion Allowance on Canadian Exploration Expense. He said that flow-through shares account for approximately 80% of exploration funding today and he noted that a Quebec study “showed that far from losing tax revenues the federal government gained revenue from increased money circulation.”

He predicted that flow-through shares would lose much of their appeal to investors without the mda and said that representations were made last year to the government to retain that incentive or substitute alternative measures.

“One of the better things about flow-through shares is their `only in Canada’ application. Already, the amazingly good drilling results from Nevada’s Carlin belt are attracting exploration dollars south of the border and the trend is likely to grow as flow-through shares lose their charm,” he argued.

Noting there are 18 gold and base metal properties currently registered in the B.C. Mine Development Review Process, some of which will attain production in 1988, Aird predicted the exploration side of the industry might suffer. “Indications are that money raised by the big flow-through venture capital funds for 1988 is approximately $275 million so far. This, of course, is far short of the $1 billion raised in 1987.”

Aird said the fact that $1.3 billion was raised on the Vancouver Stock Exchange in 1987 was a possible bright spot. “Experience tells us that much of that money is usually spent in the following year. However, there is less incentive now for exploration in Canada,” he noted.