Resource World Magazine

38 www.resourceworld.com o c t o b e r / n o v e m b e r 2 0 1 6 Ontario explorers still have gold fever by Peter Kennedy A recent uptick in the price of gold has brightened the mood in Ontario, which remains a major global centre for mineral exploration despite the drop in overall spending. No-one knows that better than Randy Salo, a Timmins-area prospector and participant in a syndicate that recently sold its interest in a northern Ontario property that contains the former Ashley Gold Project to Prosper Gold Corp. PGX-TSXV] for about $1 million in cash, shares and royalties. "The feeling right now around Timmins is that the gold price is holding up and people are out there exploring,'' said Salo, during a telephone interview with Resource World. In spite of investor interest in energy related minerals, industry officials say gold remains the target of choice for exploration com- panies in Ontario, which has seen the amount spent on mineral exploration drop to $393 million in 2015 from just over $1 billion in 2011. Major Ontario gold mining centres such as the Red Lake and Porcupine camps continue to lead the way as companies like Goldcorp Inc. [G-TSX; GG-NYSE], New Gold Inc. [NGD-TSX] and Detour Gold Corp. [DGC-TSX] work to develop new proj- ects in a bid to replace some of the province's aging operations. Goldcorp CEO, David Garofalo, has warned that the high-grade ore that has sustained its key Red Lake Mine in northwestern Ontario will likely run out in about four years from now. The company is now working to bring the high-grade HG Young and former Cochenour Mine on line to augment ore from Red Lake and the adjoining (but soon to be exhausted) Campbell Mine. While Prosper Gold has commenced drilling at the Ashley Gold Project, which yielded 50,099 ounces of gold in the 1930s, indus- try officials are watching developments at Kapuskasing Gold Corp. [KAP-TSXV], which is drilling on the West Keefer Property, just west of Timmins. Other companies on watch list are Probe Metals Ltd. [PRB-TSXV], which was spun off by Probe Mines Ltd., a company that was acquired by Goldcorp in early 2015 in a $526 million deal that enabled Goldcorp to scoop up the Borden Project. After recently raising over $5 million from a non-bro- kered private placement financing, BonTerra Resources [BTR-TSXV] is collecting historical drill data to design a fall drill program at the Larder Lake property which is located between Kirkland Lake and Virginiatown. Dale Ginn, the company's Vice-President, Exploration, said BonTerra hopes to be in a position to announce a new NI 43-101 mineral resource estimate at Larder by 2017. Mining industry advocates, such as the Toronto-based Prospectors and Developers Association of Canada (PDAC) say they are doing what they can to keep the exploration sector on track. "A significant number of junior companies took advantage of the junior exploration assistance program,'' said PDAC Executive Director Andrew Cheatle, adding that the program has advanced about $2.7 million for roughly 30 projects. "That has enabled companies with good projects to keep those projects in good standing," he said. Cheatle said the drop in commodity prices and the slowing of investor interest in the mining space has had the inevitable impact on exploration spending in Ontario. But he is quick to point out that mining is a cyclical business and industry officials do not expect to see another big drop in spending this year. In 2015, $393 million was invested in mineral exploration and deposit appraisal, a 16% decrease from $468 million in 2014, according to the Ontario Mining Association. Spending estimates for 2016 show a possible 11% decline to $351 million. Junior companies accounted for about 13% of exploration spending in 2015, down from 22% in 2014. Of the total spent, $268 million was directed towards gold. Exploration for gold has recently declined but continues to be the most sought after mineral in Ontario. Last year, $108 million was spent on base metals. Most base metal exploration targeted nickel in the Sudbury area. The balance included $11 million on platinum group metals, $5 million on diamonds, and $6 million for other minerals, including rare elements used in advanced technologies. More than 40 mine sites operate in Ontario, a province which ranks as the largest producer in Canada of gold, nickel, copper, platinum group metals, copper, salt and structural metals. The value of mineral production in Ontario was $10.8 billion in 2015. n ONTariO Construction of New gold's 21,000 tonne-per-day rainy river gold mine 65 km northwest of Fort Frances, northwest Ontario is well under way. photo courtesy New gold Inc.

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