The Mining Association of Canada | The Canadian Mining Story: Economic Impacts and Drivers for the Global Energy Transition 2023 27 Exploration and Deposit Appraisal in Canada Spending on exploration is a leading indicator for the future success of mineral production in Canada. Natural Resources Canada defines spending on finding and assessing mineral resources as follows: • Exploration expenditures: Spending on activities up to and including the first delineation of a previously unknown mineral deposit. • Deposit appraisal expenditures: Spending on activities that bring a delineated deposit to the stage of detailed knowledge required for a production feasibility study. The two expenditures combined are “exploration spending.” Spending on exploration and deposit appraisal fell in 2020 as a result of low commodity prices and the pandemic. In 2021, after increases in mineral and metal prices and a lessening of pandemic impacts, exploration spending rose 66% to $3.6 billion. Expenditures are expected to continue to rise in 2022 as a result of commodity price increases and shortages due to the ongoing war in Ukraine. Precious metals attracted most of Canadian exploration spending in 2021, accounting for 66% overall (see Figure 2). High gold prices have driven interest in precious metals exploration investment. If inflation continues above historical levels, the “safe-haven” status of gold to hedge inflation risks may mean a continued focus on precious metals. From 2017 through 2021, base metal exploration’s share of total investment increased from 14.7% to 20.5%, and the absolute value of dollars invested doubled to $775 million. Most other targets also saw an increase in the value invested in exploration, although uranium and diamonds saw declines in both expenditure and proportion of total expenditure. Year 2017 2018 2019 2020 2021 $million (percentage of total in parentheses) Base Metals 322.2 (14.7%) 376.6 (15.2%) 425.4 (18.6%) 385.4 (17.6%) 774.5 (20.5%) Precious Metals 1,430.5 (65.5%) 1,522.8 (61.3%) 1,297.9 (56.8%) 1,480.2 (67.5%) 2,497.6 (66.1%) Iron 9.1 (0.4%) 18.4 (0.7%) 17.1 (0.7%) 30.6 (1.4%) 97.9 (2.6%) Uranium 137.4 (6.3%) 169.7 (6.8%) 162.3 (7.1%) 66.8 (3.0%) 122.2 (3.2%) Other Metals 89.0 (4.1%) 140.7 (5.7%) 105.9 (4.6%) 33.1 (1.5%) 115.6 (3.1%) Nonmetals (excluding diamonds) 58.4 (2.7%) 78.6 (3.2%) 58.7 (2.6%) 35.1 (1.6%) 65.3 (1.7%) Diamond 83.2 (3.8%) 108.8 (4.4%) 127.0 (5.6%) 64.0 (2.9%) 51.8 (1.4%) Coal 55.7 (2.5%) 69.5 (2.8%) 92.2 (4.0%) 96.2 (4.4%) 56.1 (1.5%) Total 2,185.5 (100.0%) 2,485.2 (100.0%) 2,286.5 (100.0%) 2,191.4 (100.0%) 3,781.0 (100.0%) Figure 2: Mineral Exploration And Deposit Appraisal Expenditures in Millions of Dollars, By Target, 2017-202117 17 Natural Resources Canada, Exploration Plus Deposit Appraisal Expenditures, by Mineral Commodity Sought, 2017 - 2021 Annual and 2022 Revised Spending Intentions.
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