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| Photo: David Smith/For the Telegraph-journal |
| David Lentz, economic geology chair at UNB's Department of Geology, takes a reading from a radioactive pegmatite sample from Bancroft, Ont. |
In the last two months alone, the new junior resource firm has raised $1.3 million to keep drilling in 2011, an example of increased spending across the industry in New Brunswick as markets have rebounded.
For the popular rare earth minerals - used to produce parts for cars, mobile phones and airplanes, among other high-tech items - prices are between two and five times what they were last year.
"The Chinese have put some pretty high export tariffs on rare earths and they control over 95 per cent of the supply now," Cache Exploration president George Brown said in an interview Monday.
"It's important for the future that we find sources outside China."
Mineral companies predict that by the end of 2010, which is fast approaching, they'll have spent more than three times what they did last year on exploration in New Brunswick - some $27.6 million versus $8.1 million in 2009 - according to a published survey by Natural Resources Canada.
Nearly half that spending is on exploration for base metals (including lead, zinc and copper, for example) and much of the rest is on precious metal exploration, largely for gold.
Sizzling prices for gold and other base metals in particular are driving the trend, according to observers.
The price of gold is up more than $200 per ounce over this time last year, at US$1,385.50 on the New York Mercantile Exchange (NYMEX) on Monday, a reflection of its popularity as a safe haven for investors.
"The prices are laying a strong foundation for investment in this sector," said David Lentz, a geology professor at the University of New Brunswick who is also a director of Cache Exploration.
"What happened with respect to the recession is it undermined investor confidence in a lot of ways," Lentz said, adding that he believes a long-term strengthening of the mining industry in the province has begun.
Malcolm McLeod, the Department of Natural Resources manager of geological surveys for the province's south, said existing properties have seen a great deal of money, too, from companies trying to open mines.
"What we've seen this year is some major investments in some properties that are established," McLeod said, pointing to Geodex Minerals Ltd.'s (TSX.V:GXM) Sisson Brook tungsten-molybdenum property north of Fredericton, which has caught the eye of Northcliff Exploration, a private company controlled by Hunter Dickinson.
In late October, the firm announced Northcliff can earn a 70 per cent interest in the project by investing $17 million in exploration, feasibility and project costs and one month later, Northcliff had already outlined $13.5 million in spending on studies.
"They are in the business of bringing mines into production," McLeod said of Northcliff and Hunter Dickinson.
Two other deposits that are seeing a lot of cash are Adex Mining Inc.'s (TSX:ADE) tungsten-molybdenum Mount Pleasant Mine property and Kria Resources Ltd.'s (TSX.V:KIA) Halfmile Lake base metal properties.
In October, Adex Mining closed a $4.8-million placement by Hong Kong-based Great Harvest Canadian Investment Company Ltd. to advance the property in the first phase of transactions that are expected to amount to more than $65 million in investment in Adex by Great Harvest.
Kria Resources expects to open the Halfmile Mine in late 2011 and build a new mill to serve the company's Halfmile and Stratmat properties in 2012 or 2013.
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