Resource World Magazine

EPILOGUE David D uva l Industry needs to address fundamental issue of declining mineral discovery rates E ven today one could easily question the so called "conventional wisdom" that all the easy-to-find mineral deposits have been discovered. For the record, this same thinking was prevalent around the time of the Hemlo gold discovery in the mid-1980s which today ranks among the largest gold finds in Canadian history. Adherents to this theory would have you believe that our contemporary geological know-how, capabilities and technology have the capacity to effectively sterilize large tracts of this vast country for exploration. Don't be so sure about that. The fact is you could have sampled outcrop overlying the main Hemlo deposit in northwestern Ontario just 20 feet off the Trans Canada Highway and it would have graded over 10 grams gold/tonne. (Years ago I discovered this, to my delight.) Yet Hemlo lay undiscovered, right next to that major transportation artery, for almost 40 years after Teck first sniffed around the area in the late 1940s. Just recently, I read something about the difficulty of exploring in highly prospective parts of Australia given the amount of sedimentary cover. We face similar issues in Canada, especially in places like the Timmins camp where there is extensive overburden. Nevertheless, this issue has been around for decades yet the industry has done little to address it with technological innovation. Why we haven't seen any large scale grass roots discoveries of this nature in decades is the subject of considerable debate – and clearly, there is no single answer to the question. In my opinion, some of it relates to the Bre-X scandal of 1997, which just about destroyed the junior exploration market at the time. Then came the overzealous regulators 62 www.resourceworld.com to pick the rest of the meat off the walking wounded. The implications of this high cost regulatory climate are being felt today, with many juniors now struggling to refinance and, for that matter, to even maintain their stock exchange listings. Regarding the regulatory climate that currently exists, I believe that, in the interest of protecting investors, we have allowed them to abrogate their personal responsibilities to complete the proper due diligence and risk assessment before investing in what are inherently high risk situations. To my mind, this Big Brother mentality has become a global phenomenon whereby the general public has given up many of its personal freedoms for what they perceive as protection from the state. Governments all over the world have a history of telling the masses they are threatened and that only their government can protect them. The fact is that some people make stupid investments – whether it be purchasing real estate or investing in financial instruments they simply don't understand. The onus shouldn't be on government to protect investors from themselves. As far as I'm concerned, the government's mandate is to provide a reasonable, cost effective regulatory framework for exploration companies to conduct business which implies a level of enforceable professionalism and integrity on the part of management. A good place to start would be to make it a requirement that directors of publicly traded companies have some of their own money in the game. If management doesn't believe in the company and is not willing to place a tangible bet on their success, why should investors? As I see it, another major issue confronting the exploration industry today is the fact that there has been a mass exodus of seasoned veterans into other sectors of the economy over the past two decades and few of them have returned to the minerals industry. That's a huge loss of experience and expertise that might not be replaceable in an age when technology is deemed to be the solution for all our problems. Several years ago, I called an old friend who had worked as Chief Geologist at a large copper-gold mine in northwestern Québec to get some insights into the nickel potential of the Chibougamau mining camp and he told me he was out of the business and now owned a sandwich shop in downtown Toronto. He's hardly an anomaly. In recent years many mining companies have played it safe by exploring in established camps where infrastructure and skilled personnel are abundant. (In actual fact, they've probably been the smart ones). You will probably see more of this given the high capital cost and financial risk associated with developing projects in more remote areas. Perhaps a little geological thinking outside the box might generate some big discoveries in the years ahead. I'm aware of one company that is searching for Witwatersrand style paleo-placer deposits in the Sudbury mining camp, which is a good start. One of its advisors is a former South African Professor and an expert on the subject. Robert McEwen, of Goldcorp fame, is apparently a significant shareholder in the company. Say, wasn't it McEwen who actively promoted the concept of a deep seated gold discovery at the Goldcorp Mine in the Red Lake Camp? McEwen is known for thinking outside the box, recognizing that big discoveries can sometimes be sitting right under your nose! n APRIL 2013

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