Exploration spending peaks in Nunavut

The government of Nunavut reported figures in early November suggesting the Canadian territory is heading for its eighth year of record spending on mineral exploration and development.

A sector that injected about C$26 million into the economy in 1999 is now expected to pump in more than C$256 million in 2007. That's nearly one-quarter of Nunavut's entire gross domestic product and a 17 percent jump from last year.

Over 65 exploration companies were active in Nunavut in 2006.

With the Jericho diamond mine, operated by Tahera Diamond Corp., leading the pack, Nunavut also has three advanced exploration projects expected to become operating mines over the next three to five years, and many other projects with prospects of becoming mines over the next 10 years, Nunavut officials say.

The now closed Lupin, Polaris and Nanisivik mines are also in reclamation, which is expected to continue for the next few years.

As in 2006, uranium drove most of the exploration spending in Nunavut this year. Of Nunavut's 135 active exploration projects, 49 involve uranium. Diamonds come next at 41 projects, followed by gold with 25.

High commodity prices have even spurred interest in lower-value resources. Nunavut has nine base metals projects, six companies examining nickel-copper deposits and two focused on iron.

The activity is spread all over the territorial map - from the massive Mary River iron project on the tip of Baffin Island to the advanced gold and uranium projects around Baker Lake and Rankin Inlet in the central region to diamond exploration around Coronation Gulf in the far west.

In 2007, two major mining multinationals - Zinifex Ltd. and Newmont Mining - have bought out junior companies with projects in Nunavut.

Territorial figures show about half the money is spent in the central region. The rest is equally divided between Baffin Island and western Nunavut.

Industry interest is expected to intensify as more prospecting permits become available Dec. 1.