Prospectors see glimmer of hope for metals and minerals

Long-term natural resource demand expected to buoy plummeting commodities prices

Geoscientist Carl Schulze: “an important thing to think about with these kinds of commodities is that the world needs them” | Chung Chow

Prospectors are an optimistic bunch. But that optimism is being severely tested in a global economy that’s dragging down commodities and Canadian mineral prices, Carl Schulze of All-Terrane Mineral Exploration Services said January 25 at the Mineral Exploration Roundup at Canada Place.

Schulze, a geoscientist based in Whitehorse, Yukon, helps mining firms find gold and other metals and minerals across northern B.C., Alberta and Ontario.

“It’s pretty depressed right now overall,” Schulze said in the event’s exhibit hall.

But he added that mineral prices haven’t reached historic lows amid the latest global economic uncertainty.

At the end of December, mineral and metal prices were experiencing year-over-year double-digit percentage drops: coal was down 32% from its price at the end of 2014; iron ore dropped by 24%; palladium, copper, zinc and aluminum all fell by similar percentages.

“An important thing to think about with these kinds of commodities is that the world needs them,” Schulze said. “We’re going to run out of inventory, and we’re also going to run out of advanced projects, so people are going to require more grassroots [mining] projects, more mid-tier projects.”

However, he said, there are no signposts yet in the market that suggest mineral prices will rebound soon.

B.C.’s government appears to agree.

Earlier on at the roundup event, B.C. Premier Christy Clark announced that her government was working on a plan to let B.C.’s mines defer their electricity bills to help them stay afloat during the commodity market downturn.

Without offering details on how the deferments would work, Clark called the plan a last resort. “We have your back,” Clark told a crowd of mining delegates, adding that the deferment will not be a taxpayer-backed subsidy.

The Mineral Exploration Roundup began roughly 30 years ago to provide a space for prospectors from Vancouver to share news from their explorations around B.C. and the north, said Glen Wonders, vice-president of technical and government affairs for the Association for Mineral Exploration British Columbia.

The event, he said, has grown into a global conference with nearly 7,000 delegates from 36 countries.

But the backdrop of this year’s conference has been dark.

“It’s tough out there,” Wonders said. “It’s tough raising money. It’s tough getting investors interested in projects. But there are still very good projects in B.C. that are advancing as a result of good work and careful stewardship of both the financial side of the company as well as the social side.”

Wonders said 2016 is set to be another challenging year for mineral prices.

But he added that prospectors and miners remain optimistic.

“Explorers always are. We’ll find a better market into late 2016 and 2017.”

Schulze shares Wonders’ optimism, noting that the markets for precious metals like gold remain a safe haven for investors and prospectors. At press time, gold was trading at US$1,115 per ounce.

He added that there is also a sizable group of junior mining companies in B.C. with “nice, viable deposits” and professional management.” But they need investor capital.

“I think eventually … people will start recognizing the investment opportunities in companies like that.”