The Crisis in Manitoba Mining Versus the Prosperity in Saskatchewan – by Stephen L. Masson

Stephen L. Masson, M.Sc. P.Geo. is the President, of the Manitoba-Saskatchewan Prospectors and Developers Association

“Saskatchewan has now become a “have” province based on the enormous revenues of its mining industry plus oil and gas, whereas Manitoba struggles despite the huge mineral potential of the province.” Stephen L. Masson (December, 2010)

Another year of good metal prices but lower exploration costs has made for continued strength in the mineral exploration of Manitoba and Saskatchewan, but far more in Saskatchewan than Manitoba.

Soaring gold has made it possible for even small juniors to fund their projects at whatever stage. Uranium in Saskatchewan and Rare Earth metal exploration in both provinces remains strong. Nickel exploration in the Thompson Nickel Belt continues at a good pace, although the shut-down of the Bucko Lake Mine offered a small wrinkle in this otherwise promising historic exploration real estate.

The Snow Lake, Flin Flon, and Sherridon Camps saw continued strong exploration, riding in part on the coattails of the huge Lalor Lake Zn-Cu-Au discovery in the Chisel basin of Snow Lake. Hudbay Minerals is now proceeding towards development of this large and very rich deposit. Continued success by Hudson Bay and VMS on the Reed Lake deposit promises a near surface deposit rich in copper, with a recent hole reporting 6.69 per cent copper over 71.69 m.

Flin Flon continues to dominate the Copper-Zinc news as one of the great mining camps in this country, which remarkably continues to turn out discoveries and world class deposits. Halo continues to increase its inventory of Copper Zinc in the Sherridon Camp and Rockcliff, along with VMS, Callinan, and Copper Reef, which are aggressively exploring in the Snow Lake and main Flin Flon Camps.

In Saskatchewan, Hudson Bay Minerals continues advancing promising targets of the sub Paleozoic Flin Flon Belt. Copper Reef Mining Corporation is exploring a new copper zone at Hanson Lake. In a recent agreement between Copper Reef and Foran Mining, Foran has consolidated its ownership of the McIlvenna Bay Deposit, where the company states that its goal is to establish itself as a significant polymetallic exploration and development company, advancing one of the largest undeveloped zinc deposits in the world.

Despite all this continued exploration, discovery and project advancement, most junior companies continue to struggle to advance their share price, even upon success. This seems to be a country-wide and possibly worldwide condition, with only those with great discoveries forming the exception. It may be that there are simply too many companies all vying for the same market attention and investment dollar.

We may see more mergers as juniors follow intermediate companies to consolidate the ever-increasing burden to fund the larger overhead costs related to the administrative burden of running a junior company in today’s environment of increasing red tape and regulations. CNSX has tried valiantly to help this situation especially for start- up companies but the inability to date for the average investor to easily buy and sell stocks has dampened what should have been a shot in the arm for the junior exploration industry.

An even more disturbing trend is that although high metal prices are generating great wealth from mining revenues in both Saskatchewan and Manitoba, both Manitoba and Saskatchewan governments not only continue to underfund their respective mines branches and geological surveys, but in fact continue to decrease their budgets annually. This is so much so in Manitoba where the geological survey branch is all but defunct without money to launch effective field programs. Manitoba, once the second best place to explore in Canada based on mineral potential, land access, permitting, government assistance programs, and geological programs, has now slipped to second last place only above PEI, which has no mines.

Saskatchewan has now become a “have” province based on the enormous revenues of its mining industry plus oil and gas, whereas Manitoba struggles despite the huge mineral potential of the province. Exploration in Manitoba has decreased for three straight years and much of this has to do with government policy over permitting amidst confusion of the duty to consult with First Nation issues, as well as a totally out of control Parks branch that has alienated huge portions of Manitoba from exploration and continues unabated. Plans are in the works to add even more huge areas to parks eliminating land of good exploration potential.

 Further adding to the problem is a Mines Branch lacking leadership to inform the government of the
consequences for their misdirection. We need a shake up and need it badly. The Manitoba government, on the other side, continues to increase the forestry, agricultural and parks branch funding, which have
significantly lower or no revenue. Part of the funding for Parks comes from foundations such as the Pew Charitable Trusts who are directing the Manitoba Government through large amounts of financial support
to other environmental organizations to lobby for Heritage Rivers and Parks and create areas that will permit no industry, but only low paying tourism jobs. This American money is buying off Canadian
land at 14 cents/hectare and will have the future consequences of not only alienating Canadian jobs for all Canadians, including our First Nations People who represent the majority of residents in some of these areas.

This alienation of mining, forestry, and hydro that have the potential to contribute significant revenue and jobs to our northern and more isolated communities will be lost forever. Once again we are expressing
concern that “bush ghettos” are being created in the north where people live on meagre seasonal tourism jobs. This is true for not only former mining towns such as Lynn Lake and Leaf Rapids, but also true for northern reserves where there is no local industry for employment. We all can’t live within the perimeter highway.

How did this all happen? I will use the Far North Boreal to sub-Arctic Region as an example.

1) In the beginning (see the first map)

It started with the Manitoba Government wanting to create new protected areas throughout the province. Their aim was 12 per cent of the province, including existing parks, in an effort to represent the main biogeographical regions of the province, including the sub-Arctic and Northern Boreal, the Boreal, and the Interlake, as well as other southern regions of the province.

At first the mining industry was hesitant but bought into the concept because we could help choose these new parks and hopefully avoid areas with moderate to high potential. We chose to tackle the north first because only mining and hydro were a factor; agriculture, private land, and forestry are non-issues to contend with or complicate matters. We chose three large parks, one larger than PEI, in areas that we
thought was mainly underlain by granite or large areas of gneissic and granitoid terrain. We thought we were done, although our decisions were based on poor information and a lack of good geological data. There were no recent surveys for verification to make these important decisions.

2) Then came the protected landform Model

Parks then wanted to add more to this 12 per cent, saying that the areas we chose did not represent all the biodiversity and different regions of soils, rocks, biology, and zoology that existed. Back to the drawing board; we tried to accommodate this by picking out smaller areas that had lower potential for mineral exploration. The Manitoba Protected Area Initiative was at one point wishing to create a park consisting of 97 per cent of Manitoba’s ocean coast. In this model, the process actually worked fairly well.

Biologists and geologists worked with the WWF, the Industry, and various government branches. There
were debates, hard at times, but compromises were worked out. This now involved way more than 12 per cent, and Parks was unwilling to renounce portions of parks we previously created after much more detailed data became available suggesting they contained favourable mineral potential.

The Mining Industry found we had made horrible mistakes in our previous surrender of land. Perhaps the most glaring was the surrender of Manitoba’s oldest portion of the earth’s crust, one of the oldest in
Canada, and Manitoba’s most favourable terrain to host the diamond bearing kimberlites that have enriched Nunavut and the Northwest Territories. We alienated almost 100 per cent of this area. What makes this even worse is that in Manitoba this area also contains the extension of the huge crustal structure that host the DeBeers Diamond Mine in the James Bay Lowlands. We created a park on our highest diamond pipe potential, and in so doing, permanently parked the huge revenue a discovery in the area could have represented to the province. In any event, the area of parks, proposed parks, and withdrawn areas for mineral exploration have increased to the point that 30 per cent of the north is now
alienated from exploration.

3) Then came recently, no compromise, no debate, just government arrogance wanting only a rubber stamp from industry.

Again using only the far north as an example. See the second map, can you see the difference? All the areas in gray and blue have mineral rights permanently or currently withdrawn. Over this past year the Manitoba Government again put forth a proposal from Parks that they include the large area of Nueltin Lake, including a huge area to the south and east. This area, from our geological data, abuts part of the Wollaston fold belt, an area of moderate to high potential in Saskatchewan where it extends into Manitoba.

There is little data available other than some soil anomalies and regional magnetics. However, the area also appears to be underlain by highly magnetic terrains that may represent Ring of Firelike rocks found in the James Bay Lowlands of Ontario where recent discoveries have been enormous. The mining industry has always sought to keep this Nueltin Lake area open to exploration. Even if infrastructure does not now exist it may well exist in the future. Nueltin was always on the Park’s Branch list of areas to protect, and in order to secure this area for exploration, we gave away other areas; one which we now know may have huge diamond potential.

This new tack the Manitoba Government involves no strong biological reasons, no land form models, just
Parks and Government advocates finally getting their wish list. The mining industry presented more data in an attempt to exclude this area as a park. It mattered not. The government claimed that it was part of
a First Nations request, which is likely true, but piggybacked on by the Manitoba Government to extend it over a large area, alienating even more land from exploration.

The mining industry, sensitive to the First Nation’s request, offered a compromise consisting of the main portion of the lake and adjacent shore. It was rejected by the Manitoba Government, which totally
abandoned the debate and compromise approach that made us, in the past, the envy of many provinces. Their approach now is, “You get to state your objections but we decide”, totally abandoning a round table approach. This Manitoba government has hijacked a process that at least offered compromise to one that now is totally dictatorial and wants only a rubber stamp to say, “Well, they had their input.” The Manitoba-Saskatchewan Prospectors and Developers Association will not give this approach any credence and refuses to attend a process where our industry is ignored. There is no indication that this process of continued park building and creeping alienation of exploration lands and withdrawal of the right to exploration is going to stop.

In the Provincial Land Use Policy, under the Planning Act and in “access” under the Mining Act it is incumbent upon the government to protect areas of good mineral potential for exploration and development. They have violated their own act by failing to act upon the recommendations from industry players in the province. Further, the Manitoba government has refused to fund surveys that would verify that these areas are devoid of medium to high potential for mineral deposits, but have no problem funding the Parks Branch to create them. None of this vast land is threatened at all by industry and there is no evidence that it will ever be under our current environmental processes; yet thousands of square-miles are lost yearly to park creation that creates no jobs and stymies development of our north for our communities and people.

In conclusion, I am very pessimistic, not of Manitoba’s great mineral potential, that potential is immense, but of the Manitoba Government and a park and protected area bureaucracy that is out of control creating
huge areas that will curtail the growth of industry and jobs for its northern people. Couple this with people in our own mines branch, including deputy ministers who have failed to stand up for our own industry
against parks and who appear to be struggling to solve problems with permitting and land access. This creates hardship for juniors and prospectors to attract exploration funds to this province when the
competition to spend it elsewhere is fierce.

Further, the Mineral Incentive Program, which was one advantage that Manitoba had other than its great mineral potential, is now being done away with. This government is sending a clear message: we value parks over jobs, and mining be damned. We feel that the government fails to recognize the long-term damage this will do, and is misguided into thinking that we will be able to support strong mining ventures on a much reduced land area, possibly alienating potential new mines.

All we need do is look next door at Saskatchewan and how they have dealt with the issues and see the
revenue generated by their mines, their current level of exploration, and the little land they have alienated from exploration. It can mean the difference between a have province and a have not province. We need
a shakeup at the highest levels in Manitoba if we want to see exploration levels, and with it, discoveries happen so the province doesn’t continue to be just a place for rich tourists to visit parks while our mining
communities dwindle.

This area of Northern Manitoba is Manitoba’s true frontier and likely a great part of our future. It is unlikely that agriculture and forestry will ever be an important economic factor to develop job opportunities for people living in the north. Mining is the most likely industry that can provide an industrial commercial base for northern communities. Over-protection, which is now the case and any further protection, could erase this potential forever.

Sustainable development for the mining industry means the greatest access to its mineral potential, not the least.