FAQ about Mineral Exploration in the North

What is mineral exploration?

Mineral exploration is a sequential process of information gathering that assesses the mineral potential of a given area. It starts with an idea or geologic model that identifies lands worthy of further exploration. Suitable target areas may then be staked as mineral claims to secure the mineral rights. Consult the FAQ about Mineral Tenure in Nunavut and the Northwest Territories for more information on how mineral tenures secure the rights to mineral discoveries. The next step is to carry out early exploration work to identify mineralization or geologic anomalies that may lead to a mineral discovery.

As more geological knowledge of the mineral claim block is gathered, the various claims are either accepted or rejected for further work. Later, intensive drilling programs are undertaken on the most promising claims in order to provide statistically robust estimates of the extent and quality of the deposit. The intermediate product of exploration is the improved geological knowledge of a defined area. The final product of successful exploration is mineral deposits that are economically feasible to extract.

How is mineral exploration conducted?

The general stages that a mineral exploration project will follow are:

  1. Planning – Exploration starts with the gathering and analysis of publicly available information on potential exploration areas. The purpose is to identify areas of potential exploration interest and to plan the following exploration stages. Public information includes government geological survey reports, maps, and company filed assessment reports on exploration projects from AANDC's mining recorder's offices. Information made public by other mineral exploration firms and from past and current mines in the areas of interest can also be used.
  2. Recording of Mineral Claims – Once geologically favorable areas worthy of further exploration are identified, the explorer would secure the mineral rights. On Crown land this is achieved through the staking and recording of mineral claims with AANDC's Mining Recorder's Office.
  3. Reconnaissance – The purpose of reconnaissance is to rapidly identify geological anomalies that indicate the presence of mineralization in the areas highlighted during the planning stage. These anomalies become the targets for further exploration. Reconnaissance activities can include:

    • Prospecting and geological mapping: the on-the-ground visual identification of favorable rock types, alteration and surface mineralization.
    • Rock sampling: when a rock sample from a showing is sent for a chemical analysis called an assay.
    • Geophysical surveys: a measure of the physical properties of a rock. This includes electromagnetic, gravitational, radiometric, and electrical conductivity surveys. Regional geophysical surveys can be conducted by aircraft, while detailed surveys are conducted by ground crews.
    • Geochemical surveys: soil, water and sediment samples from land, lakes and streams in the area of interest are examined. They can identify if indicator chemical elements or minerals are in concentrations significantly higher than normal.
  4. Advanced Exploration – Once significant anomalies have been identified, exploration can move to a more intensive phase to determine if deposits of economic minerals are present. Advanced exploration activities can include:

    • Stripping and Trenching: an activity that can include using heavy equipment to remove the shallow overburden and then explosives to blast a trench in the rock to provide larger volumes of material for further sampling and assays.
    • Drilling: drilling produces rock cores that can be examined to determine the mineral concentration and depths at which mineralization occurs. A widely spaced pattern of drill holes provides the geologist with the information needed to estimate the size, geometry and grades of ore present in the deposit. Drilling is typically the most expensive stage of exploration and on average accounts for 50% of total exploration spending.
  5. Sampling and Assaying – Sampling is the collection of a representative part of the mineral deposit. Assays are chemical tests that determine the metallic content of a sample of rock. Sampling and assaying can occur at different stages of exploration but will be concentrated at the advanced exploration stage.
  6. Economic Evaluation – Once the size and quality of an ore deposit has been determined to a high degree of probability, an economic evaluation of developing a mine can be conducted. This evaluation, also known as a feasibility study, will estimate the capital and operating costs of a mine, the expected revenue from the ore concentrate and/or metals produced, the mine life and post closure rehabilitation costs. If the project is estimated to achieve the "hurdle rate of return" it will be economic to proceed. The hurdle rate is the rate of return required to justify the investment in a capital-intensive, high-risk investment.

Where and by whom is exploration being conducted in the North?

Visit the page Major Mineral Projects North of 60th Parallel in Canada for a list and a map showing the major mining projects and deposits north of the 60th parallel.

What is the level of mineral exploration in the North?

The graph below shows the trend in mineral exploration and deposit appraisal expenditures in the North. The North experienced a sustained period of significant growth in the exploration expenditures starting in 2003. This growth coincided with a boom in mineral commodity prices that caused a world-wide boom in exploration activity. The sharp drop in exploration expenditures in 2009 was due to the global economic crisis that caused commodity prices to collapse. However, Northern exploration activity bounced back in 2010 with the return of higher metal prices.

Exploration and Deposit Appraisal Expenditures in the North, 2001-2010.

Source: NRCan Mineral and Metals Sector website. Text description of this chart.

Mineral commodity prices are a key determinant of the level of exploration activity in the North. Not only do higher prices increase the potential value of mineral deposits discoveries, they also make more deposits economic to extract.

Two other factors are important determinants of exploration in the North. First, the North makes up almost 40% of Canada's land area. The mineral potential of this massive land area is largely unexplored, which creates significant opportunities for those willing to explore. Second, the discovery of large deposits attracts a higher sustained level of exploration, both by the original discoverer and by new exploration firms attracted by the higher potential prospectivity of the land surrounding the original discovery. For example, the discovery of diamonds in the NWT in 1988 sparked a surge in diamond exploration that continues to this day.

What minerals are sought in the North?

The graph below shows mineral expenditures in the three northern territories by the mineral commodities currently sought. Exploration for precious metals (gold and silver) has attracted the most money, followed by base metals (copper, nickel, zinc and lead). Diamond exploration continues to be strong in both the Northwest Territories and Nunavut. Nunavut has two large iron ore deposits that attract significant exploration investment. Nunavut also has significant expenditures for uranium. Other minerals sought in the North include tungsten, the rare earth elements, cobalt, coal, and the platinum group of elements.

Mineral Exploration and Deposit Appraisal Expenditures by Commodity, 2010

Source: NRCan Mineral and Metals Sector website. Revised spending intentions at September 2010. Text description of this chart.

Why should mineral exploration be encouraged?

Exploration provides considerable employment in the North, both from the personnel directly undertaking the exploration and by the employment created in support services.

Much of the information collected by mineral exploration firms becomes public information, either through the exploration work assessment reports filed with the Mining Recorder's Office or through their own public announcements. Thus, private exploration provides a public good – improved geological knowledge of the North which feeds the mineral resource development cycle.

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