| Reflecting back to the end of January, Roundup 2009 was, by almost every measure, a great success. The event attracted over 5,800 registered delegates from 40 countries. This figure was down from the 6,800 delegates in 2008, but comparable to attendance in 2007. Planning for Roundup 2010 is already underway, and AME BC is optimistic that the industry will again find significant value in attending the premier mineral exploration conference in the world. The volatility of the world-wide economic recession, however, did continue in the first quarter of 2009, with overall investor confidence remaining low and access to capital problematic for many companies. Q1 also saw many companies continue to reduce spending, incur layoffs and in some cases, merge with other companies to weather the economic storm. Improving prices for some key commodities, though, may represent an early positive sign of better prospects for mineral explorers and miners ahead. Naturally, economic analysts have mixed opinions on predicting when a sustained recovery will occur, but certainly the recent trend to US$2/lb copper, US$950/oz gold and US$160/T for coking coal is encouraging. According to Goldman Sachs Group Inc., the global economy will bottom sometime in the second half of 2009, which would imply strong commodity returns to be realized in 2010 and 2011. And if inflationary pressures develop, physical assets such as metals and minerals can be expected to appreciate in price. Perhaps it is time for some guarded optimism. As reported by the Gallup opinion poll in March, for the first time in the last 25 years, a majority of our American neighbours say that economic growth is the most important issue to them. Looking back, Statistics Canada reported B.C.’s GDP dropped 0.3% in 2008, the first annual drop since 1982, down from +3.1% in 2007. Canada as a whole saw modest growth of 0.5% in 2008. The International Monetary Fund projects this modest growth will worsen into a decline of -2.5% in output in 2009 followed by +1.2% growth in 2010. The US saw 1.1% growth through 2008, but the decline is expected to be sharper than previously anticipated, at -2.8% in 2009, followed by zero growth in 2010. China remains the bright spot globally, but even its growth has been reduced from 13.0% in 2007 and 9.0% in 2008 to a projected 6.5% in 2009 and 7.5% in 2010. World trade volume is expected to drop 11% in 2009 (versus growth of 7.2% in 2007 and 3.3% in 2008) as both imports and exports decline. Nevertheless, for the world-class B.C. mineral exploration and mining cluster, the competitive advantages related to our established network of highly skilled professionals have remained relatively intact. Furthermore, this province remains Canada’s largest producer of copper, coal and the only producer of molybdenum. As reported this past quarter, mineral explorers spent $367 million in B.C. in 2008 (about 15% of the total Canadian expenditures), down from the record $416 million of 2007, but still relatively healthy. Leading up to the federal and provincial budgets in late January and February respectively, AME BC representatives participated in economic task forces and provided many recommendations to governments to increase competiveness, bridge the current financial challenges, build infrastructure and stimulate the sector using fiscal measures, such as tax incentives. Some of the recommendations were acted upon, while others are under active consideration. To help set the stage, AME BC has determined the top seven priority issues for the B.C. mineral exploration community to be: (1) permitting, (2) land access & use, (3) aboriginal engagement, (4) economic incentives, (5) geoscience, (6) infrastructure and (7) human resources. Strategic recommendations have been developed to address these seven areas and to help deliver on the objectives of AME BC’s 5-year strategic plan. The future of mining is dependent on successful exploration and almost half of all proposed Canadian mining projects are in this province. As such, one of the major objectives of the plan is to facilitate successful exploration by advocating for efficient and effective permitting and environmental assessment processes in the B.C. mineral exploration and mining sector. The economic opportunity for B.C. can be measured in the billions of dollars. Knowing this, AME BC will relentlessly encourage the respective governments to conduct permit and project reviews in a timely and effective manner. Specifically, AME BC is contributing to a united Team Mining BC, which includes industry partners and the BC government, for the critical advocacy work required with the federal government. This effort also extends to improving communications with the federal Major Project Management Office (especially for existing projects) and providing recommendations to provincial ministries about proposed multi-year permitting. With respect to the important area of engagement with First Nations, AME BC’s approach is to build mutual understanding in order to facilitate mutual respect, and ultimately mutual benefits. In late February, as a member of the Minister’s Council on Mineral Exploration and Mining, I learned of the proposed Recognition and Reconciliation Act. Beginning with government meetings in Vancouver and continuing through the PDAC event in Toronto, the first two weeks of March were an intense period of dialogue for AME BC and its partners. Firstly, we needed to understand the proposal, and secondly, to communicate to government and First Nations the implications of the proposed Act with respect to the interests of the mineral exploration and mining sector. While the discussions are ongoing and will form a large part of 2009, a key positive outcome is that the Association has developed a much stronger relationship, based on respect and understanding, with the First Nation Leadership Council. Access to the land is fundamental to a vibrant, sustainable exploration and mining industry. Currently, explorers have acquired mineral tenures and sub-surface rights to approximately 11 million hectares, or only 12%, of British Columbia’s 96 million hectare land base. In comparison, protected areas represent about 14% of the province. We know that, on average, approximately $100 million is spent to find one major economic deposit. To remain globally competitive, the industry requires sustained high levels of expenditure. Clearly, a mineral deposit is very rare and valuable and the reality is that the likelihood of an exploration project becoming an operating mine is very low, but the potential benefits to a region can be very high indeed. There are only a limited number of major mineral deposits to be found and built, so despite the current financial situation, B.C. is well positioned to take advantage of the next upswing, assuming some key policies and legislation are developed, or appropriately modified, with the mineral exploration sector’s interests in mind. Over the last few months, I have had the good fortune to meet with many AME BC members, as well as with regional exploration groups working in or near Vancouver Island, Cranbrook, Smithers, Prince George and Fort St. James. Other AME BC staff have met with key stakeholders throughout the province as well. A primary purpose of these meetings is to better understand how AME BC should interact with members at the grassroots level and to appreciate the tangible issues that directly affect exploration projects and proposed mines in British Columbia. Initiated after the New Year, the drafting of guiding principles for AME BC will continue in areas of policy related to permitting, health and safety, environment, land use and access, aboriginal relations, uranium exploration and human resources. The grassroots knowledge provided by B.C.’s prospectors, explorers and miners will directly inform and shape AME BC’s principles and improve our ability to create change. As Partners in Mining, I look forward to seeing many of you during B.C. Mining Week 2009, with events taking place from May 3 – 9 in Vancouver and in many other parts of the province. We share a common interest and passion to see responsible mineral exploration and mining thrive in British Columbia. This year, B.C. has the potential to see some new large metal mines permitted and major infrastructure investments announced. For the upcoming B.C election on May 12, remember to keep our sector’s interests in mind and Vote Mining! Please visit our website or go to www.votemining.ca for further information. On behalf of AME BC, I would also like to extend a thank you to all the many volunteers and new members of the Association. Even with all the world’s economic realities, you have helped make the first quarter of 2009 a success. Undeniably, we have many challenges ahead in the next quarter, but I’m confident that together we will find the means to continually strengthen the foundation of AME BC. Finally and most importantly, “have a safe day, everyday”! Best regards, Gavin C. Dirom, M.Sc., P. Ag.
President & CEO, AME BC
www.amebc.ca | |  Gavin C. Dirom
M.Sc., P. Ag.
President & CEO,
AME BC
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