The latest Survey of Mining Companies released by the Vancouver-based FRASER INSITUTE reminds me of the old joke about how five blind men would describe an elephant. Touching the truck, one would say it resembled a snake. Touching a leg, the second would say it resembles a tree. Touching the tail, the third would say it resembles a rope. Touching the huge animal's side, the fourth would say it resembles a wall. And touching an ear, the last would say it resembles a fan.
Likewise, depending on the reader's interests, the Fraser Institute's report can be read from several angles. Having surveyed 320 companies in 64 jurisdictions around the world, the institute collected the minutiae and arranged the results in several telling graphs.
The report tallies US$1.83 billion in international exploration expenditures in 2005, which the institute believes is only one-third of the global total. Four out of five exploration companies increased their budgets, and that ratio was also reflected among large and small producers. Half the respondents said gold is assigned the largest portion of their budgets. Copper was the most sought-after commodity among 15%, and "other" was rated most worthwhile among 12%. Interestingly, only 8% of companies are spending the most on the hunt for nickel and 5% or less are primarily seeking silver, diamonds, zinc or platinum.
Explorationists wishing to avoid land use restrictions will be most interested in Chile, Ghana, Mali, Mexico, Mongolia, Western Australia and that country's Northern Territory, Nevada in the United States, and Canada's Ontario and Quebec.
Assuming there were no land use restrictions and the industry continues to employ best practices, the locales with the best policy/mineral potential are Nunavut, Northwest Territories, Nevada, Peru, Indonesia, Russia, Papua New Guinea, Democratic Republic of the Congo, Ghana and Mali.
Tucked in among its figures, the institute's report ranks countries by political stability, regulatory uncertainty, their environmental policies and taxation regimes, infrastructure, labour regulations, geological databases, and more.
For supporters of the British Columbian mining industry, the Fraser Institute rates that province in the top half of desirable locations for the first time since the report was begun in 1997. On the matter of overall policy potential, B.C. now ranks 23rd of 64. Both the province and the survey have come a long way.
The answer to the question, "What does the Fraser Institute's elephant really look like?" lies in its Policy Potential Index, which reflects all rankings taken together. Right at the top is Nevada, which scores 93 out of 100, followed closely by Alberta (92). Not far behind are Manitoba (88), Chile (87), Quebec (86), Mexico (84) and Saskatchewan (81). Rounding out the top ten are Arizona (79), Ontario (78) and Utah (75).
According to the institute, explorationists should avoid the Northwest Territories, Nunavut, Wisconsin, California, Bolivia, Zambia and Russia, all of which scored between 20 and 30 for policy potential index. Stay away from the Philippines, Venezuela, the Democratic Republic of the Congo and Papua New Guinea, which ranked between 10 and 20. And at all costs avoid projects in Zimbabwe; with its measly score of 2 out of 100, it is the absolutely worst place to go exploring for minerals.
The Fraser Institute's Annual Survey of Mining Companies 2005/2006 may be read in its entirety at www.FraserInstitute.ca/admin/books/files/Mining20052006.pdf. Don't miss the comments from those who anonymously completed the survey. Whether you agree or not with the rankings, they will provide the jumping off point for many lively discussions.