Mining Association of Canada | 2023 Report

The Mining Association of Canada | The Canadian Mining Story: Economic Impacts and Drivers for the Global Energy Transition 2023 31 Senior mining companies are more experienced, larger, and generate cashflow from their operations instead of raising it on the market. When a junior company finds a mineral resource that could become a mine, they typically partner with a senior company to bring the mine into production. Junior mining companies face persistent challenges raising the capital that they need to operate. In Figure 6, the wide variation in expenditures by junior companies is visible: the junior miners were able to spend only $634 million in 2016, but almost $2 billion in 2021. Because juniors don’t generate cashflow from their activities, they require access to capital for all aspects of their operation: for salaries, for drilling equipment, for modelling geology and for conducting feasibility studies. Without sufficient access to capital, the years of work required to move a project forward may be substantially delayed. At their high point in 2011, expenditures were roughly equal between senior ($2.178 billion) and junior ($2.049 billion) companies. At their recent low point in 2016, senior companies were responsible for less than 40% of the $1.6 billion total. Figures based on company intentions from 2022 indicate that junior companies planned to spend about 58% of the $3.741 billion total. While proportions vary year to year, each party is projected to account for roughly 50% of expenditure over the long term. Figure 6: Mineral Exploration And Deposit Appraisal Expenditures, By Company Type, 2007 - 202222 0 1000 2000 3000 4000 5000 $ Million 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (prelim) 2022 (intended) Senior Junior 1,904.4 2,117.8 1,110.7 1,547.0 2,049.1 1,847.0 963.6 814.3 577.7 633.9 1,076.3 1,121.3 957.0 1,069.8 1,987.9 2,153.0 1,121.6 1,329.4 1,363.9 1,109.3 994.9 1,264.7 1,203.2 1,388.4 2,028.1 2,178.3 1,224.9 833.7 1,161.7 926.5 1,652.1 1,588.3 MINING INDUSTRY CAPITAL INVESTMENT In 2021, capital and repair spending by the mining industry made up 4% of Canada’s total capital and repair expenditures on non-residential tangible assets. The total value of capital and repair spending by all stages of the mining process was $11.2 billion in 2021. This is down substantially from a high of almost $22 billion in 2012 as shown in Figure 7. 22 Natural Resources Canada, Exploration Plus Deposit Appraisal Expenditures, by Junior and Senior Companies, by Province and Territory, 2018 - 2021 Annual and 2022 Revised Spending Intentions. Table based on the Federal-Provincial-Territorial Survey of Mineral Exploration, Deposit Appraisal and Mine Complex Development Expenditures. Includes on-mine-site and off-mine-site activities. Includes field work, overhead costs, engineering, economic and pre- or production feasibility studies, environment, and land access costs