SOMBA K'E/YELLOWKNIFE - Projected decreases in mineral exploration activity throughout the NWT this year have become reality - resulting in fewer spin-off effects, according to several Yellowknife-based businesses that cater to the troubled industry.

Earlier this year, Natural Resources Canada estimated only $28.4 million would be spent on mineral exploration and deposit appraisal expenditures in the territory, down from $133.1 million in 2008.

Charters and scheduled cargo and passenger flights for Canadian North are down by 25 to 30 per cent, said Kelly Kaylo, vice-president of passenger, product and sales for the airline.

"I would say that a good percentage of that downturn is related to the resource sector," said Kaylo.

While the company has managed to mitigate the impact of decreased business from the exploration sector - particularly by securing a three-year contract to transport groceries for Arctic Co-operatives Ltd. throughout the NWT and Nunavut - it has had to make some operational changes.

Flights to Norman Wells and Inuvik - the latter of which has been particularly affected by the near-absence of oil and gas exploration work in the surrounding area - have been reduced this year to eight from 10.

But it's not only Canadian North that's had get with the times; smaller businesses which provide support to exploration companies are also being affected, added Kaylo.

"Because we live in an area that has very little road infrastructure, you have to think that a downturn in any one project has such a large ripple effect because the only way to move people or goods is by air," she said.

Discovery Air, owner of Discovery Mining Services, Great Slave Helicopters and Air Tindi, has reduced the number of planes it uses to service exploration companies from approximately 75 to 50 this summer, according to president and CEO David Jennings.

"We've definitely reduced the amount of seasonal staff required because of the fact that we've scaled our business," he said.

"Certainly, if you go back to 2006, 2007 - there was clearly a lot of mining exploration going on. By the summer of 2008, we did notice a drop, particularly in the junior exploration side of things. We always expected it to continue to stay down in 2009 and that's pretty much fleshed out."

Arctic Sunwest Charters, owned by Yellowknife-based RTL Robinson Enterprises Ltd., has similarly experienced "about 30 per cent less demand in mining and exploration air support versus historical requirements," said Ashley Edwards Scott, communications and marketing co-ordinator for Westcan Bulk Transport Ltd., RTL's sister company.

Bud Weaver, co-owner of Weaver and Devore - which provides supplies like groceries for exploration camps - said the store's business with the sector is down 50 per cent so far this year, but he added it's still too early in the season to properly take stock.

"We're in early July, so even though we are in the season now, we really aren't going to know until we're further on into it," he said. The store has reduced the number of seasonal staff it hires to fill and deliver orders from five to three, he added.

"There's less money being spent, but it's not like it's dead and there's no money being spent," he said.

Kaylo, Jennings and Weaver all said they're hopeful the economic outlook will improve throughout the year.

"Liquidity has picked up in the last couple months - probably not nearly to the levels it was at in 2007, but it's gotten much better than when it was in a real serious crunch in October of last year," said Jennings.