Miners shy away from investing in Ontario: land claim uncertainty to blame, report says

When it comes to investment in mineral exploration, Ontario has dropped into a slump, the latest report from the Fraser Institute says.

The think-tank recently rated 104 regions around the worldon their geologicaland regulatoryattractiveness to those looking to invest in mineral exploration.

The report namedSaskatchewan as the top jurisdiction forinvestment. The prairie province moved up to first from second place in 2015.

Manitoba moved up to second place this year after ranking 19th the previous year.

Western Australia dropped to third, after Saskatchewan displaced it as the most attractive jurisdiction in the world. Rounding out the top-10 are Nevada, Finland, Quebec, Arizona, Sweden, the Republic of Ireland, and Queensland.

Ontario dropped three spots this yearto18thplace. The reason? Mining companies areput off by the uncertainty around land claims in Ontario, the report says.

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Most new exploration projects are conducted by junior mining companies and those smaller firms can't afford to wait for land claim issues to be resolved, says Bruce Jago, executive director of the Goodman School of Mines at Laurentian University in Sudbury.

"[For] companies that are working in remote areas it's a real devil of a time," he said.

"It takes a long time to get permits. And during that time, if you're a small company, you could be losing your investment."

He says companies are looking for an assured period of time to get their permit. Some companies have waited months and even years to begin their development work.

Go where the geology is

Garry Clark, executive director ofthe Ontario Prospectors Association agrees there are obstacles in Ontario that could scare developers off.

"Some of it's permitting," Clark said. "Some of it's environmental legislationthat's in place. Some of it's First Nations issues."

Mining companies tend to go where there is good geology, like Sudbury and northern Ontario, Clark noted. And that means the province will always be attractive to the exploration industry.

"We have really good rocks in Ontario and we have good operating geologists and prospectors," he continued.

"You go where you think you're going to get the best bang for your buck. Ontario is still one of the best."

Report not based on facts

The Minister of Northern Development and Mines said the provincial government "agrees with theFraserInstitute when they acknowledge Ontario as a globally competitive mining jurisdiction."

But BillMauro says the ministry takes issue with their rankings and methodology.

"TheFraserInstitute's Miningrankings are based on an opinion survey that relies on respondents' opinions about Ontario's exploration investment climate," he wrote in an email.

"Their results are not based on facts. The fact is Ontario is the national leader in mineral development and a global force among mining jurisdictions."

Mauro noted that Ontario "is more than just an attractive place for mineral investment.Toronto's TSX is where the global mining industry turns to for financing with more than $9.4 billion raised in new equity capital last year."

The Fraser report noted that nationally, Canada's overall investment attractiveness based on the combined rankings of all Canadian jurisdictions improved in 2016.

Mining companies will show their latest exploration plays this weekendat the four-day Prospectors and Developers Association of Canada Convention in Toronto.

Read the Fraser Institute's report