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Ode to the Prospector

Imagine, if you will, a winter's worth of poring over geological maps, historical assessment reports, geochemical data and ministry annual reports to pick the perfect spot to explore. You pack up your gear and hop in your 4x4 to spend hours traveling paved and dirt roads, on your spare time from your day job, to your final destination: a long, forgotten spectacular showing or perhaps a new discovery. Robert W. Service, however, does a much better job at describing a prospector's life and passion in his poem The Prospector. Such is the life of many prospectors in British Columbia (BC), but how much do they contribute to mineral exploration?

Gold panning on unnamed creek in 2004

The 2019 British Columbia Mineral and Coal Exploration Survey report was recently released by the BC Ministry of Energy, Mines and Petroleum Resources, the Association for Mineral Exploration and EY. They collected information from 29 prospectors and 171 mineral/coal exploration companies representing a total of 326 exploration projects within BC. What was most surprising was that, in 2019, the 29 prospectors surveyed spent over $750,000 resulting in an average of $26,000 per prospector. While in 2018, the prospectors surveyed spent $1.2 million with an average of $36,000 per prospector. The report also mentioned that tracking prospectors is difficult since "many prefer not to disclose work."

There are a few reasons why these numbers are interesting:

  • Prospectors typically are the ones to find deposits and how much work they do could affect the quality and quantity of projects available for further development. For example, the Mt. Milligan Gold Mine in central BC was discovered by prospector Richard Haslinger, of Fort St. James, in 2003 by slogging through the low country while geologists were looking in the steeper traverses of the high country.

  • Prospector's do a lot of the groundwork so that major and junior exploration companies can have the drill-ready projects to satisfy their investors.

  • Prospectors do not typically have investors to pay for the work on their claims such as their wages and equipment. Unlike other provinces and territories, there is no active prospector assistance program offered in BC. There was a prospector program that ran in the 1990's but the next government that won the election discontinued the program in ~2001. In addition to the Federal Programs, there are a Mining Exploration Tax Credit (METC) and the Mining Flow-Through Share Tax Credit for work conducted in BC. While the flow-through share tax credit is for publicly traded companies, prospectors receive some benefit from the METC in the form of a partial tax credit for paid expenses such as fuel and assays. Like most tax credits, however, you have to make money in order to get a see some relief from those expenses.

In BC, if you want to keep your mineral and placer tenures then you need to report the work. In addition, if you are reporting work on your tenures then all the work needs to be reported. This requirement is to discourage cherry-picking results. The work done is published as a report in the Assessment Report Indexing System (ARIS) with a one year confidentiality time period. A spreadsheet is also updated with the basic features of exploration and development work such as claim owners, operators and total expenditures.

Using the current ARIS spreadsheet, updated July 31 2019, the expenses based on claim owners and operators were extracted. Since there is a one year confidentiality date, only data prior and up to 2017 was used.

There are a number of gaps in the spreadsheet, all of which were manually filled using the online ARIS search by the report number and checking the PDF reports for the missing information. The data in spreadsheet format is a great resource and, hopefully, sees some review of the older records in the future, but, because of the numerous gaps, only some years were looked at in detail.

Future work could also take a deeper dive into regions, type of work done, commodity, deposit type and comparing the data with other provinces and territories. In addition, all expenditures were converted to 2002 Canadian Dollars (a feature of the spreadsheet). Follow this link to the coding and data used:

First we look at expenditures, millions of dollars based on 2002 CAD, since inception in 1946. Here we can see the valleys and peaks in reported expenditures by the report year (note that there are too many missing dates based on work year). There is a noticeable dip in expenditures in 1999 and peaks in 2008 and 2012 which would be interesting to compare with commodity prices.

BC ARIS Expenditures from 1946 to 2018

In 2017, the latest complete year of work reported, there were 692 work reports with a total work expenditure of $89.91 million. Company-owned projects reported $83.42 million in expenditures on 439 projects (~$190,000 per project) while prospector-owned projects reported $6.49 million on 253 projects (~ $25,000 per project).

2017 BC ARIS Expenditures on Claims

To break down the work done on prospector-owned claims even further, 190 work projects were run solely by the prospector totaling $2.68 million (~$14,000 per project) while prospector-owned claims operated by a company accounts for 63 projects totaling $3.08 million (~$60,000 per project).

2017 BC ARIS Expenditures on Prospector Claims

Further break-downs for each year, from 1998 to 2000 and 2010 to 2017, can be found in the GitHub repository. From 1998 to 2017, the total ARIS expenditures fluctuated wildly. It will be interesting to see if an upward trend continues in 2018 and 2019. It is noteworthy that expenditures on prospector claims dipped in 2000-2003 shortly after the discontinuation of the BC Prospector's Assistance Program.

Total BC ARIS Expenditures from 1998 to 2017 on Company- and Prospector-Owned Projects

An increase in expenditures on prospector claims from 2004 to 2012 is reflected below as an increase in expenditures by companies on the prospector-owned claims. As of 2013, however, company expenditures on prospector claims are declining while prospector expenditures are increasing.

Total BC ARIS Expenditures from 1998 to 2017 on Prospector-Owned Projects by Companies and Prospectors

In summary, I was surprised to learn that prospector expenditures was in the millions of dollars in BC each year and that the number of projects worked by prospectors, ~100 to 200 projects annually, contributes to one third to one half of the number of projects worked every year. Will prospectors' expenditures continue to rise, as companies shift business models to taking on drill-ready projects, or if we are seeing an increase in placer mining by prospectors in BC? In addition, will this trend continue and potentially affect the quality and quantity of projects available in the future for junior and major exploration and mining companies?

For more information on Canadian Mining Taxation: NRCan Mining-Specific Tax Provisions

Easier Reads on Canadian Taxation, but a bit out of date:

About the Author:

Dr. Diana Benz has over 20 years of experience working in the mineral exploration industry searching for diamonds and metals in a range of roles: from heavy minerals lab technician to till sampler, rig geologist, project manager and business owner. She has a Bachelor of Science in General Biology, a Master of Science in Earth Sciences researching diamond indicator mineral geochemistry and a Ph.D. in Natural Resources and Environmental Studies researching geochemical multivariate statistical analysis techniques for use in interpreting biogeochemical data for mineral exploration. Diana has conducted field work in Canada (BC, NWT, YT and ON) as well as in Greenland. She has also been involved, remotely through a BC-based office, on mineral exploration projects located in South America, Africa, Eurasia, Australia and the Middle East. Currently, Diana is the owner of Takom Exploration Ltd., a small geological and environmental consulting firm focused on metal exploration in BC and the Yukon.

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