The impacts on the sector include a significant reduction in the number of active mineral projects (down one-third from the 2011 peak) and a number of projects reporting only minimal expenses related to maintaining mineral claims and leases in good standing and head-office expenditures aimed at keeping the corporate entity alive. This and other statistics from the latest survey underscore the ongoing struggle to conduct work programs that advance projects into later stages of development (Natural Resources Canada, March 2016; latest available data).
Furthermore, many companies are not able to remain on the market. Whereas the number of companies acting as project operators was 713 in 2014 and 598 in 2015, it is expected to further decrease to 480 in 2016. Since the record high of 911 in 2012, it is projected that 431 project operators will have become dormant, merged, or ceased to exist by 2016. Of this total, junior mining companies are anticipated to account for the vast majority (412) of lost project operators, highlighting the impact of current operating challenges on their ability to remain viable (Natural Resources Canada, March 2016; latest available data).
This trend is not limited to Canada alone, of course, but reflects a global economic trend or bear market. In a recent global study, SNL Mining & Minerals determined that, based on data from nearly 3,500 companies, worldwide exploration investment in 2016 fell to US$6.89 billion for non-ferrous metals. This is a 20% decrease from 2015, and a near 66% drop from the all-time record high of US$20.53 billion in 2012 (MAC, Facts &Figures 2017, SNL Financial).
According to Natural Resources Canada, the future for major mining project investments is very grim. Even though the commodity prices are on the rise, Capital investment has and still is declining since 2012. The fact that the federal environmental assessment registry only received two new mining project submissions only confirms this trend.