New mindset needed for exploration.

• Author: Morrison, Douglas
• Position: Guest Columnist

Discovering new orebodies and opening new mines in Northern Ontario is urgent and necessary.

In the past, providing a stimulus to prospectors--as the Ministry of Northern Development and Mines has recently done--and making an investment in exploration to provide better returns would do the trick.

The government has now done about as much as it can on this front, but in 2016 the field of mineral exploration needs much more than a short-term financial jolt.

The impact of the current downturn means the industry has to make fundamental changes in the way it conducts this part of the business.

The problems began about 30 years ago, when the major mining operators realized that adding reserves through mergers and acquisitions was far easier and cheaper than adding them using teams of knowledgeable and experienced geologists to find them.

They outsourced their exploration, and the risk of ore discovery, to the junior mining companies--most of whom could only attract adequate funding in boom years and scrape by the rest of the time.

In the merger game, there were a few early successes, but eventually most ended in major write-downs.

Mergers do not find new orebodies; they simply accrue existing resources and reserves to one bottom line.

And since merged companies have to mine larger orebodies, the smaller orebodies in both portfolios become too small to be mined profitably, and their value was lost.

Meanwhile, university geology departments shrank and today we cannot replace more than 25 per cent of the geologists in the industry, far less replace the globally recognized experts in their field, now in their 60s and 70s.

Over this period, the decline in orebody discovery (and mine productivity) was camouflaged by improving the performance of mineral processing, extracting ever more value from ever-declining ore grades.

Mineral processing has now been about as successful as it can be--we have to improve the disciplines that can discover new orebodies and mine them effectively.

In Ontario, there have been major high-profile discoveries in the Far North, but the cost of conventional infrastructure has proven too great a hurdle to overcome in the current market.

More discoveries in the region make it easier to justify infrastructure investment, and the expectation of new discoveries is very high.

But the clay and muskeg overburden limit the conventional geophysical techniques that can find mineral targets worth drilling.

We need to revitalize innovation...