NNSL Photo/Graphic

Canadian North

Home page text size buttonsbigger textsmall textText size Email this articleE-mail this page

NNSL photo/graphic

An aerial view of North Arrow Minerals Lac de Gras Redemption project camp on April 13, 2014. Company president and CEO Ken Armstrong said the NWT's new mining incentive program could help level the playing field when it comes to attracting exploration dollars to the territory. - Photo courtesy Nick Thomas, North Arrow Minerals Inc.

Territory boosts exploration
Incentive program may level playing field, but some say problems remain

Walter Strong
Northern News Services
Published Monday, June 16, 2014

Against a backdrop of declining investment in NWT mineral resource exploration over the past five years, the GNWT announced a $400,000 Mining Incentive Program on June 9.

The program has two streams - prospector and corporate - making up to $15,000 available to NWT-licenced prospectors, and up to $100,000 available to NWT-licensed mineral exploration companies involved in larger claims.

Prospectors will be able to receive upfront funding, while larger operations will receive a combination of up-front money and post-project reimbursements.

North Arrow Minerals, a Vancouver-based mineral exploration company, has several projects at different stages of development in the NWT and Nunavut.

"Doing work in the North is expensive," said North Arrow Minerals president and CEO Ken Armstrong. "I think the program will level the playing field a bit with respect to other jurisdictions."

"At a time when the rate of exploration in the territories has been very low, it should assist in bringing back a little more activity," Armstrong added.

""We just finished a four-day job with two guys that took five years to get permitted."

But the NWT may face larger and more basic issues than can be solved by simply making money available to encourage mineral exploration, said Panarc Resource director and professional geologist Lou Covello.

"We've got more fundamental problems," Covello said. "Our main problem is access to land."

Panarc Resources works in both the Yukon and the NWT, and was the first company to file a mineral claim with the territory post-devolution.

"It's difficult to find open ground to stake because so much of the land has been alienated in one form or another either through national parks, proposed national parks, territorial protected areas, (or) land claim withdrawals," Covello said.

"On top of that, we've got a very cumbersome vetting process as far as land use permitting is concerned."

"We just finished a four-day job with two guys that took five years to get permitted."

"No one can live with that."

"People hear stories like that, and they go somewhere else," Covello added.

The mining incentive program hasn't been in place long enough to have received an application yet, much less to gauge its effectiveness, but statistics show the NWT has room for improvement when it comes to attracting mineral exploration dollars.

According to a March report published by Natural Resources Canada, since 2009 the NWT has lagged behind both the Yukon and Nunavut in terms of attracting spending on mineral exploration and deposit appraisals.

This is despite the NWT having been compared favourably to both Nunavut and the Yukon in terms of its mineral potential by the most recent Fraser Institute annual survey of mining companies.

Between 2009 and 2013, spending on mineral exploration in Nunavut totalled approximately $1.67 billion, spending in the Yukon was $903 million and the NWT saw $418.3 million in exploration spending.

Natural Resources Canada expects spending on exploration in the NWT to decline to $71.5 million in 2014, a 21 per cent decrease from, 2013's $90 million spent on exploration, and down more than 35 per cent since 2012.

In comparison, spending in the Yukon is on the increase, expected to grow to $97.7 million in 2014, up from 89.9 million last year.

The funding follows recommendations made in the NWT Minerals Development Strategy developed in anticipation of territorial devolution, and will be implemented through the NWT Geoscience Office.

"It's modelled on a number of programs," said John Ketchum, director of the NWT Geoscience Office. "We considered programs from across the country when we developed it."

The new program not only brings the NWT in-line with incentive programs available in some other jurisdictions, but expands on the Yukon's very similar program.

The Yukon Mineral Exploration Program provides up to $15,000 for prospectors, same as what the GNWT is offering. But the $100,000 the GNWT has made available under the corporate stream of its program doubles what the Yukon offers.

The Yukon program, which was launched in 1986 with $1.1 million in available funding, has over the years been increased to the $1.4 million available for disbursement this year.

Ketchum said future mining incentive budgets would be subject to GNWT budgets and approval based on the programs effectiveness in promoting quality mineral exploration in the NWT.

Applications are now being accepted for this year's funding, with a July 14 deadline. Next year's deadline is expected to be April 1.

Ketchum said the GNWT's long-standing $5,000 grubstake program for prospectors is not expected to be affected by the introduction of the new mining incentive program.

E-mailWe welcome your opinions. Click here to e-mail a letter to the editor.