British Columbia's red-hot mining boom will continue to set new records this year, industry leaders and officials predict.

The sector spent $130 million last year searching for new mines compared to $29 million in 2001, B.C.'s minister of energy and mines told an international mining conference in Vancouver last week.

"2004 was the best year for B.C. mining in a decade," Richard Neufeld told the opening session of the Mineral Exploration Roundup, an event sponsored by the BC & Yukon Chamber of Mines.

The conference, the second largest in the world, attracted a record 5,100 delegates from 28 countries. Last year, 3,900 delegates took part.

Peter Tomsett

"The industry has really taken off. We're definitely looking at a better performance for this year," Neufeld said in an interview with Business Edge.

"One indication of how strong the industry is: There are 13 different mining projects at the environmental assessment stage."

Conference chair Randy Turner echoed his optimism, noting that an abundance of exploration capital is paying dividends. "The industry is the best it's been in 30 years," said Turner, president and CEO of Vancouver-based Diamondex Resources Ltd.

"There is a tremendous amount of capital available for exploration. Commodity prices are high and a lot of the credit goes toward the government. They are excellent and very pro-mining, which is great for the B.C. economy, and all the jobs that it's creating. It can't get much better than this."

In his opening address, outgoing chamber president Michael Gray said B.C. is leading the pack internationally. "B.C. is No. 1 in the world for raising early-stage mineral exploration capital and it is No. 1 in the world for its talent pool of geologists, engineers, lawyers and accountants specializing in the mining exploration field. This natural economic cluster is the envy of the world."

He noted that 25 per cent of the world's mining and exploration companies (about 700 firms) have their head offices in Vancouver. Last year, B.C. mining companies trading on the venture board of the Toronto Stock Exchange raised $1.4 billion in capital for worldwide exploration and development, compared with $800 million in 2003.

The industry generates $1 billion in revenue for the provincial government and accounts for 60 per cent of the province's port volume, said Gray. The sector has the highest average wages, at $94,500 a year, and each of the 30 mines operating in B.C. generate $1 billion in revenue annually, he added.

"We're in a tremendous boom market," noted incoming chamber president David Caulfield, president and CEO of Rimfire Minerals Corp. "Commodities are on a roll right now and that allows exploration companies to tap into the financial markets to raise the necessary funds required to search for new mines. We expect this boom to continue."

Donald McInnes, president of Western Keltic Mines Inc., said his company has spent $22 million trying to develop a copper deposit in northern British Columbia.

"We are currently starting our feasibility and environmental assessment study of the deposit," says McInnes. "This is a wonderful time for the mining industry. We have a very rosy future ahead of us.

"B.C. now accounts for 12 per cent of all the money spent in Canada on exploration. Under the previous NDP government, that dropped to five per cent."

Peter Tomsett, president and CEO of Vancouver-based multinational mining firm Placer Dome Inc., agreed the industry is savouring the good times.

"Here in B.C., renewed government interest in encouraging and supporting exploration is driving record expenditures in the sector overall," he said. "And, the B.C. government's new mining plan ... puts substance to the claim that this province is becoming a mining-friendly jurisdiction once again. I don't have to tell this audience that a thriving mining sector requires stability and consistency over the long term."

One major concern often expressed by industry executives is the lack of adequate funding for geoscience - the gathering of original geological data, including aeromagnetic and geochemical surveys, to determine the location of significant mineral occurrences.

However, later in the conference, B.C. Premier Gordon Campbell announced $25 million for a geoscience research centre.

"We want to support the chamber's proposal for geoscience that will lead directly to greater exploration and the development of new mines across B.C.," Campbell said in a statement. "The mineral exploration and mining industry in B.C. has a proven track record for innovation and expertise, and we want to help them lead the way into a golden decade of opportunity and job creation."

Of the $25 million, $20 million is earmarked for geoscience for mineral exploration, with five million to be used in partnership with the oil and gas industry to create opportunities for both industries in central B.C. An independent, industry-based organization is also expected be created with this funding.

Meanwhile, the Chamber's Gray credited Canada's diamond industry for much of the success in the hot mining sector. "It put us into the limelight internationally," he said. "Canada is now No. 1 for diamond exploration in the world."

Kim Reeder, a young prospector who has been in the business for three years, agreed the diamond sector is on a roll.

"There is a real interest in diamonds right now and the industry is going through some good times and prospectors are being taken seriously," Reeder said.

Conference chair Turner said that $200 million is now being spent on diamond exploration in Canada.

Many executives at the conference agreed that China is one of the biggest market factors for the boom.

"A lot of the action is being driven by Chinese demand," said Gray. "There is a tremendous interest in natural resources today. It looks like we're in a sustained commodity rally driven by Chinese demand and, to some extent, by India. The Chinese are a huge consumer of metals and energy."

Noted Chan Quang, a geologist with Wolfden Resources in Thunder Bay, Ont.: "When I graduated from the University of British Columbia five years ago there were hardly any jobs. It was tough. There was no money in the mining sector at all.

"But things have picked up. All the companies are now flush with cash. There is a real serious shortage of employees everywhere. If you're single and haven't settled down yet, there are a lot of opportunities in the industry," he said.

(George Froehlich can be reached at george@businessedge.ca)