Courtesy of Houston-today.com
Despite increasingly gloomy forecasts, the mining economy in Northwest B.C. is still active.
Commodity prices are falling, but the mineral riches in the region are going to be insurance for years to come. Prices are unpredictable and might soon be on the rebound, people in the industry say.
“Moly prices will come back,” said Eugene Beukman, president of Bard Ventures, who are currently exploring the Lone Pine property west of Houston. “It’s going to be a little tough for the next few months but it will turn for sure.”
Although the demand for molybdenum may be low, the supply is starting to increase. Bard Ventures recently reported finding a generous amount of the mineral — 200 million pounds worth — at the Lone Pine property.
Economic slumps like this call for a tightening of the belt, Beukman adds, but aren’t a reason for panic. “We have to be fiscally very responsible. We’re really looking for how to get the best bang for the buck.”
Bard Ventures saves money because they don’t have their own drilling program, Beukman notes. “Drilling a hole could cost $50,000.”
“We’ll make use of independent contractors.
On the other hand, Thompson Creek Metals is cutting back on all fronts.
In a Jan. 27 press release, the company announced they would reduce their production of molybdenum to 20 to 24 million pounds, down from a previous target of 31.5 to 34 million pounds.
They also said they were planning a temporary shutdown in the summer for “about a month” at the Endako mine.
“There are others things that we’re working on,” said Wayne Chevaldayoff, Director of Investor Relations at Thompson Creek, but stressed the company would only announce them “when we have a decision.”
The company has already announced a halt at the Smithers Davidson Project on Hudson Bay Mountain.
Duncastle Gold Corp, meanwhile, announced substantial findings of silver, copper and zinc at their Porphyry Creek project. The price of silver has fallen over the past year or so, but is now holding steady. And gold, the company’s mainstay is doing quite well in the markets holding near the $900 US mark. Not surprisingly, in the past three months, the company’s stock has been climbing.
Rob Boyce, Vice President of the Smithers Exploration Group, said that the current market fluctuation is bad for business, but recalls that the mining and exploration industries have weathered crises of the same sort in previous decades.
“The early 1980s and 1990s were similar but not as sharp of a drop. So I think it’s worse.”
However, Boyce said it’s too early to pass judgment. In his estimation, the market will become more favourable in the coming months “I think 2009 is going to be a difficult year and it will gradually improve late in the year. “
“Basically, commodity prices will rise.”
Prediction is a difficult game, he adds. Market fluctuations or new innovations can change things dramatically.
Generally speaking, the industry gets a boost with “higher demand for [their] product or a new technology that allows them to process it less expensively.”
B.C. has a very rich resource base, he added, and old mines can even be brought out of hibernation.
“There’s a number of mines that have been operated in the early part of the century that have sat dormant and then have been reopened.”
Bulkley Valley-Stikine MLA Dennis Mckay said he’s “somewhat optimistic that [the economic slowdown] is not going to impact the mining industry as dramatically as some people are forecasting.”
“The fact that we’re in a bit of an economic tailspin globally does not lessen the demand for the products that come from the mining industry.”
