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NWT mining revenues and exploration spending down

Mineral production and exploration spending will decrease in the Northwest Territories this year, according to statistics released by Natural Resources Canada recently. 

Figures are down across the rest of the country as well.

Preliminary estimates show that the total value of mining production in the NWT was $1.28 billion in 2016, down 30 per cent from $1.82 billion in 2015.

Across Canada, the total value of mining production was $40.76 billion in 2016, a drop of $2.01 billion (5 per cent) from $42.77 billion in 2015.

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“Mineral production in the Northwest Territories took a significant hit in 2016 as the result of two mines ceasing operations, Snap Lake and Cantung,” said Gary Vivian, president of the NWT and Nunavut Chamber of Mines.

Vivian says the opening of the Gahcho Kué diamond mine is encouraging, but that the significant drop in diamond revenues after the closure of Snap Lake provided ‘only a small taste’ of what’s to come when other mines close.

He added: “That’s why we continue to urge our leaders – federal, territorial and Aboriginal – to make the improvements we need to the territories’ investment climates.

“We all need to work at attracting and maintaining healthy exploration investment to increase the odds of making new mine discoveries, and preventing downturns to our northern economies.”

‘No substantive results’ in terms of delivering roads, power to resources

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In addition to mining production being down, mineral exploration and deposit appraisal spending is also expected to dip in the territory this year.

RELATED: 68-carat diamond recovered at Gahcho Kué mine largest yet

“Despite the tremendously strong mineral potential, the tide of investment leaving Nunavut and NWT has yet to turn,” Vivian said. “Governments must do all they can to regain investor confidence.”

In the NWT, mineral exploration spending went down $2.1 million from 2015 to 2016, going from $65.5 million to $64.4 million.

The NWT and Nunavut Chamber of Mines cites conflicting regulatory systems and permitting delays as problems.

It also pointed to the territorial government’s ‘inability’ to agree on major infrastructure projects as an issue.

David Connelly is a strategic business consultant and adviser based in Yellowknife. He says projects like the Whati all-weather road are a good start, but industry wants to see more.

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“What industry wants is actual results,” he said. “It’s encouraging that people are talking about infrastructure and addressing the power shortfall and the transportation shortfall.

“But there’s been no substantive results in terms of delivering roads to resources or more importantly now, power to resources. Nothing has really changed so there’s no reason to expect that downward trend to change.

“It’s one of the most expensive places to do business because of the lack of infrastructure and therefore only the very best deposits will merit attention.”

Connelly says there’s also a perception that the territory’s regulatory system hasn’t improved over the years, but added that it’s unfair to blame decreased production and spending entirely on the NWT’s regulatory regime.

“The hurdle of the regulatory regime, in my mind, has decreased,” he said. “That’s a positive change from where we were a number of years ago.

“As long as you’re willing to take the time and the effort and the patience and go through multiple consultations with all the stakeholders, you can generally predict a favourable outcome from the regulatory regime.”

You can find the latest figures from Natural Resources Canada here.

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