Another stellar year for Ontario’s minerals sector
Ontario’s mineral sector continued its string of stellar performances in 2012. Exploration and deposit appraisal expenditures continued at near-record levels, new mines continued to reach commercial production and financial markets continued supporting mineral development and exploration.
Nothing less is expected from the province that is Canada’s leading jurisdiction for both mineral exploration and mineral production— the province that is consistently among the top 10 jurisdictions for exploration spending globally. The province has been a major supplier of metals and industrial minerals to the world for more than a century and is well-positioned to continue doing so into the future. Ontario takes pride in being a mining-friendly jurisdiction with a superior investment climate and tremendous growth potential.
Ontario’s mineral sector success
Ontario is one of the most attractive destinations for mineral sector investment in the world. It features favourable geology, large capital markets, competitive business tax regimes, a stable regulatory environment and a government supportive of the industry.
Ontario is blessed with diverse geological endowment with vast regions of high mineral potential. Ontario produces more nickel, gold, silver and platinum group metals than any other province or territory in Canada. It continues to be a top 10 global producer of nickel and platinum group metals and a top 20 global producer of gold, copper, silver and zinc. It is also part of a select group of jurisdictions that produce, process and market diamonds.
Ontario’s capital city of Toronto is the mine-finance capital of the world. The province is home to an unparalleled concentration of mining technical, financial and legal expertise which support domestic and international mine development. In fact, close to 60 per cent of all publicly traded mining companies are listed on Toronto’s TSX and Venture Exchanges and account for 40 per cent of the world’s mining equity capital.
The Ontario government is committed to ensuring clear rules for advancing sustainable mineral development. By working together with stakeholders and Aboriginal communities, the modernized Mining Act reflects today’s realities. These new rules and tools establish a framework for consultation with potentially affected Aboriginal communities, while helping to build positive relationships with surface rights owners and providing greater clarity and certainty to industry.
Ontario has one of the most innovative and reputable mining supply and services sectors in the world, with expertise in all related disciplines from mineral exploration right through to mine closure. In recent years the annual output of the Northern Ontario mining supply and services sector, alone, has been valued at $5.5 billion. The growth in this sector has been immense and its global reach is growing—the international reputation of Ontario’s mining-related goods and services is impressive.
Ontario’s competitive, stable and transparent tax regimes appeal to mineral developers. A focused flow-through tax credit of five per cent, for example, encourages mineral exploration. Additionally, there are significant tax benefits for new or expanding mines and particularly for new mines in remote areas.
Power drives the mineral development industry. With this in mind, Ontario proposes to extend its Northern Industrial Electricity Rate Program. The program supports Northern Ontario’s largest industrial consumers in reducing energy costs, which helps sustain employment and maintain the sector’s global competitiveness.
Furthermore, Ontario continues investing in services such as geological mapping and the digitization of geoscience information to help Ontario’s mineral exploration sector identify areas of economic opportunity.
Eyes firmly on the future, government, industry and academia have established a burgeoning nucleus of research and development focused on making mining safer, more efficient and more profitable. Organizations such as the Northern Centre for Advanced Technology at Cambrian College, the Mining Innovation Rehabilitation and Applied Research Corporation, and the Centre for Excellence in Mining Innovation at Laurentian University are pushing the boundaries of mining innovation.
Mining and Mineral Exploration in Ontario
Early estimates indicate that mineral exploration and deposit appraisal expenditures in Ontario for 2012 reached $982 million, representing approximately 25 per cent of mineral exploration expenditures for all of Canada.
There are more than 600 active exploration projects throughout Ontario, ranging from early development right through to feasibility-stage projects. They can be found in both traditional and emerging mining camps. It is important to note that junior mining companies continue to play a very important role in the discovery of mineral deposits, accounting for over half of Ontario’s exploration expenditures.
The Ontario mining industry spends more than $2 billion dollars annually on goods and services, 75 per cent of which is within the province. The mining sector also supports about 27,000 direct and 50,000 indirect jobs.
The value of mineral production in 2011 was $10.7 billion, an increase of $2.6 billion from 2010. There are 41 mines currently operating in Ontario including 14 base metal mines, 15 gold mines, one primary palladium operation, one diamond mine and ten industrial mineral operations.
Capital investment in new projects in Ontario has climbed from $600 million in 2002 to over $3 billion in 2011. As a result, new mines such as Wesdome Gold Mines Ltd.’s Mishi Gold Mine, AuRico Gold Inc.’s Young Davidson Mine and Lake Shore Gold Corp.’s Bell Creek Mine all reached commercial production in 2012.
Also in 2012, Armistice Resources Corporation reported its first shipment and sales of gold concentrate from its McGarry Mine development project. First Nickel Inc. re-opened the Lockerby Mine with a goal of reaching full production in the first quarter of 2013.
After several years of development activities, a number of projects are expected to reach production in 2013. Detour Gold Corporation is rapidly advancing its massive Detour Lake Project north of Cochrane. The first gold pour is anticipated in early 2013.
In Timmins, the legendary Hollinger Mine will be rejuvenated when Goldcorp begins open-pit production. Meanwhile in Sudbury, Xstrata and Vale are quickly advancing their respective Fraser Morgan and Totten nickel-copper-platinum group metals projects. All three operations are expected to reach commercial production in 2013.
In the Thunder Bay area, North American Palladium Ltd. continues progress on its major expansion of the Lac des Iles Mine. In the prolific Red Lake gold camp, Goldcorp Inc. is advancing its projects and has recently reported that the high-speed haulage drift from its Red Lake Mine over to the Cochenour/ Bruce Channel Project is 60 per cent complete. The Cochenour Mine is expected to produce its first gold in 2014.
Northern Graphite Corp. continued to explore and develop its Bissett Creek graphite property in 2012. It has reported that metallurgical testing has succeeded in purifying spherical graphite up to 99.99 per cent graphitic carbon.
Gold continues to be the mineral exploration industry’s commodity of choice. About 75 per cent of the more than $1 billion mineral exploration expenditures in Ontario in 2011 was directed towards gold, almost all in Northern Ontario. The decade-long bull market for gold has resulted in the delineation of over 20 advanced-stage gold projects, many of which are rapidly advancing toward production.
With the exciting mineral discoveries like those in the Ring of Fire in Ontario’s Far North, the future of the industry looks very bright. Although in the very early stages of development, vast deposits of chromite being developed by Cliffs Natural Resources Inc. and the nickel-copper-platinum group metals project being developed by Noront Resources Ltd. will add to Ontario’s stature as a global mining force.
Outlook for 2013
The outlook for 2013 remains positive for Ontario’s mineral sector, particularly if global commodity prices hold. Since adopting its Mineral Development Strategy in 2006, the province has been committed to ensuring the long-term sustainability, global competitiveness and community development through a range of actions. Our successes today are the stepping stones on the road to future mineral development and prosperity. We look forward to you joining us on our journey.