A resurgent diamond industry and an increase in staking, offset by 437 cancelled claims, marks this past year as one of tempered optimism for the NWT mineral industry.
Last week, the GNWT released its Northwest Territories Mineral Exploration Overview, prepared by the Northwest Territories Geological Survey, which looks at the end of 2016 and most of 2017.
Geologist Hendrik Falck, one of the overview鈥檚 authors, says the industry is buoyed by a lot of large companies finding investment to work on large, established projects such as TerraX鈥檚 Yellowknife Gold Project and Nighthawk鈥檚 Indin Lake property.
鈥淲hat we don鈥檛 have a lot of is grassroots, really out-there projects where people are trying new areas and new things,鈥� said Falck.
鈥淚n some ways there鈥檚 certainly a lightening of mood in the [global mineral] industry as a whole, but that hasn鈥檛 translated yet up here,鈥� he said. 鈥淚鈥檓 hopeful that by next summer we鈥檒l start seeing an increase in the number of smaller projects. That鈥檚 really what鈥檚 missing right now.鈥�
He says the lack of exploration has impacted local economies. Small projects often source goods and services from NWT communities close to their activities.
Falck says that from what he has heard, there are two identifiable causes contributing to this lack of activity.
For one thing, the investment climate鈥攕kittish since the recession of 2008鈥攊s still not taking too many chances, hence the investment in established projects with high value, such as gold and diamonds.
鈥淭he juniors who have a good idea and are sort of one step above a prospector I don鈥檛 think are finding it quite as easy to raise money with just a good tale right now,鈥� said Falck.
As well, while gold prices are now somewhat stable鈥攁nd historically high, said Falck鈥攎uch of the NWT鈥檚 known gold-rich land, in the Slave geological province, is currently subject to land withdrawals while land claims are being negotiated between indigenous groups, the federal government and the GNWT.
There is cause for optimism, though. After the Geological Survey tried some new surveying techniques looking at older pieces of ground that were open for exploration, established diamond operations identified anomalies worth looking into and staked them鈥攖his translated to 34 new claims over two weeks.
As well, despite base metal commodities鈥攕teel, lead-zinc and the like鈥攈aving been low in general for the last few years, copper has shown some signs of resurgence. Low industrial activity worldwide impacts these commodities the most. An example Falck gave is tungsten鈥攗sed now mainly in steel-cutting tools, the fact that new steel production has been slow has caused tungsten prices to collapse, and the NWT saw Cantung close in 2015 as a result.
Sometimes, even more obscure world events can impact mining in Canada鈥檚 North. This year, in an effort to combat corruption, the government of India devalued some of its high-value banknotes鈥攖he 500 and 1,000 rupee currencies which it identified to be used more than others to buy votes and bribe public figures.
These were also the most common banknotes used in India to purchase small diamonds for jewellery-making, transacation typically done with cash.
鈥淪o suddenly they had all of this currency that was now worthless so they couldn鈥檛 buy the diamonds that they needed for making jewelry,鈥� said Falck. 鈥淭he value of diamonds suddenly disappeared so diamond companies saw a slump in their prices and their sales as well.鈥�
Prices have recovered since then and full activity has returned to the market.
Despite these conditions, Gahcho Kue successfully completed its first year of operation and both Diavik and Ekati are proceeding with major mine expansions.
