For years, gold has been the focus of Canadian mining exploration spending: the financing that backs efforts to find, assess, and potentially develop mineral deposits into mines. These efforts have established Canada as a top gold producer worldwide.
And over the course of 2024, the price of gold shot up by 38 per cent, reaching historic heights.
But a B.C. report says skyrocketing value didn’t necessarily lead to more investment last year – it found overall exploration spending in the province was down 14 per cent from 2023, and exploration spending targeting gold dropped by 24 per cent.
“There are a number of factors that play into the level of exploration spend beyond commodity price,” said Iain Thompson, a partner with EY Canada, the consulting firm behind the report.
He pointed to a number of projects in B.C. that are further along the development life cycle and global decline in exploration spending.
Updated data from Natural Resources Canada released Friday shows a varied picture on the impact of gold’s meteoric rise. Preliminary data shows gold prices appear to have had mixed, if any, impacts on territorial industry.
While several provinces reported exploration spending increases — including Saskatchewan and Newfoundland and Labrador, which have consistently posted increases — the Yukon, Northwest Territories and Nunavut, along with B.C., all experienced spending declines between 2023 and 2024.
Calls to ‘streamline’ regulation
Despite its gold deposits and its status as one of Canada’s top producers, exploration spending in the Yukon dropped by an estimated 9 per cent last year, which the Yukon Geological Survey attributed to ripple effects from the Eagle Gold mine failure.
“It all comes down to certainty, and there’s a lack of certainty in the Yukon,” said Jonas Smith with the Yukon Chamber of Mines. “We’ve seen several legal challenges of projects that have followed the process, but still ended up in court for a variety of reasons.”
“Investors are looking for a streamlined regulatory process,” said Karen Costello with the N.W.T. and Nunavut Chamber of Mines. “Simplicity, predictability. A lot of them are not seeing that in N.W.T.”
“The same thing is happening in the Yukon and British Columbia. Their policy intentions have fallen flat and really are not attracting investment despite having great geology.”
While the report acknowledged fluctuations in spending can come down to complex economic factors and “different styles of mineralization,” it did attribute some of the decline to regulations.
It cited “difficult” policy conditions in B.C. surrounding land access, environmental regulations, and permitting delays. Smith and Costello said the same conditions have created challenges in their regions.
Thompson said ease of doing business is a common sense consideration.
“I think holistically, what governments know as well as investors and mining companies know, is that in order to develop resources, it needs to be economically attractive and economically viable,” said Thompson. “And that requires the right environment.”
The Yukon, B.C. and the N.W.T. are all in the process of updating their mining legislation. The Yukon’s mining laws haven’t been changed since the Gold Rush, and have been criticized for failing to consider First Nations sovereignty.
In B.C., new rules rolling out March 26 will require prospectors to consult with First Nations in order to stake a mineral claim. The Association for Mineral Exploration, one of the report’s co-authors, has voiced strong opposition to the proposed changes.
“If they don’t listen to industry, if they don’t get regulations right, we’re not going to see investment,” said Costello.
