Commentary: How to revive exploration in Manitoba – by Stephen Masson (Northern Miner – December 23, 2015)

Creation of vast parks would create “wilderness ghettos”

The opportunities related to mining and exploration are enormous in Manitoba and Saskatchewan, but mineral exploration in these two provinces is decreasing, and our industry will need to see changes if we are to expect improvement.

Across the country, although there are some exceptions such as Fission Uranium’s uranium discovery in Saskatchewan and Balmoral Resources’ nickel find in Quebec, the lack of exploration activity by junior companies has resulted in a fall-off in discovery rates.

Without discoveries, mines rapidly approaching the end of their life will not be replaced, and our once-vibrant mining camps and towns will go into decline, and new mining camps will not be founded.

The plunge in the discovery rate across the country has been unprecedented, and has been caused by five factors:

1) A lack of funds in the market for exploration, resulting from risk-averse, bank-owned brokerage firms that engineered a sell-off of junior stocks to mere cents, causing a profound shift in risk tolerance by investors, and a degradation in investor confidence in the junior industry;

2) This contraction in financing caused desperate junior companies to divert their few remaining dollars into exploring less risky, known mineralization, and away from new greenfield targets, as investors leaned towards high-quality projects closer to production;

3) The rise in costs related to complying with excessive and increasing regulations, consultations, safety and environmental measures have reached a point where only a quarter of junior companies had money for exploration, with the remaining companies becoming the walking dead, or on the brink of getting delisted;

4) The rising cost of pre-production work, as required by best practices, has resulted in resurveying, redrilling, reassaying, researching, repricing and refining mill processes to produce yet another National Instrument 43-101 compliant resource estimate report to reduce real risk, and protect analysts, resource slayers and geo-morticians. It has been exploration overkill at shareholders’ expense, as companies issue an unprecedented number of shares to finance it all;

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