MRNF - Québec Mines - Québec a great place to explore!

ISSN en ligne :  1499-383X


Québec: a great place to explore!

Sylvain Lacroix
Direction de la politique et de l’économie minérales

Québec has a unique position in the world of mineral exploration. Many different factors underlie its excellent investment climate.

Québec: an attractive prospect

Québec is widely recognized as one of the best places in the world for mineral exploration. It is the only mining jurisdiction in Canada to have ranked repeatedly in the top five (1st in 2001, 2nd in 2002 and 4th in 2003) in terms of its attractiveness for investors in the field of mineral exploration, based on the three last annual surveys of the industry by the Fraser Institute.

In addition, exploration and development expenditure in Québec has increased by 42% since 2000, reaching $134 million in 2003. Compared to the total world exploration budget of US$2.4 billion, estimated by the Metals Economics Group, Québec attracted 4% of all investment (Figure 1) and ranked as the 7th most explored mining jurisdiction in the world (compared to 10th in 2000).

Source : Natural Resources Canada (Final data 2003) and revised spendings intentions (2004)

Québec is the Canadian mining jurisdiction where the most exploration discoveries, financed by flow-through shares, have been made since 2000, according to a study by the Prospectors and Developers Association of Canada published in 2003 (Format PDF, 82,2 Ko). According to this study, five of the seventeen discoveries made in Québec have production potential (Lapa and El Coco by Agnico-Eagle, Pandora by Queenston Mining and the Mesamax and TK zones by Canadian Royalties), besides the discovery of the Renard diamond-bearing kimberlites by Ashton Mining of Canada and SOQUEM.

What conditions do mining companies need?

Mineral exploration is a high-risk activity. Worldwide budgets are linked to the profitability of the mining industry, itself dependent on the economic context and, more specifically, the prices for metals and other mineral substances. Although worldwide exploration budgets began to rise in 2003, the total investment (US$2.4 billion) is still well below the level in 1997 (US$5.2 billion). Since 1990, many more countries have opened their borders to mining exploration, and there is keen competition to attract the investment that leads to mining development.

In this cyclical and competitive context, mining companies prefer to focus exploration investment in regions that offer both promising mineral potential and a favourable business climate. Mineral potential, clearly, constitutes the key element in a given jurisdiction, However, the business climate is also important, since the economic and regulatory conditions in which companies work may affect not only the effectiveness of their exploration work, but also the legal framework for and profitability of any resulting operations. In short, all companies seek to maximize the probability of making a valuable discovery, their ultimate goal, while minimizing the risks inherent in exploration activities.

Why choose Québec?

An attractive territory and enviable business climate

Québec is recognized as one of the best places in the world for mineral exploration because it has both an attractive territory and an enviable business climate. The balanced investment climate in Québec is illustrated in Figure 2, which shows each of the ten most attractive mining jurisdictions for exploration investment in 2003, ranked according to the relative attractiveness of their mineral potential and government policies.

Ten specific factors

A territory is considered attractive, and a business climate is considered favourable by the mining industry, on the basis of several specific factors. Listed below are the ten specific factors that help make Québec one of the best places in the world for mineral exploration:

  • An attractive territory
    1. A steady rate of major discoveries
    2. A major past production, with world class deposits
    3. A rich and diversified current mining production
    4. A vast, little explored and open territory
    5. Great geoscience infrastructure
  • An enviable business climate
    1. A reliable and modern mining regime
    2. A territory well served by transportation and energy infrastructures
    3. Great access to venture capital
    4. Generous tax incentives
    5. Partnerships for sustainable development

The presentation Why Québec is a hot place for exploration, given on March 10, 2004 at the convention of the Prospectors and Developers Association of Canada, gives more details on each of these themes. All the slides used in the presentation (in Power Point format) and the spoken text (in Word format) are available on the MRNFP website.