Ground work still crucial -- Schulze
Doug Ashbury
Northern News Services
Yellowknife (Nov 27/00) - The mining and exploration business can be expensive, but there is a way to get involved without going broke -- prospecting.
"Prospectors are crucial to the mineral industry," said Carl Schulze, and Arviat-based Kivalliq regional geologist.
They can recognize mineral showings on the ground, he said, adding that prospecting is still the main way minerals are found.
To assist rock entrepreneurs the Nunavut Government offers a free prospecting course and a $5,000 grant. Finding and staking a claim can be done for a few thousand dollars. The grant will cover that cost, plus expenses like fuel and food, and assaying.
Schulze spoke at the recent Nunavut Mining Symposium in Rankin Inlet. During his presentation, he took a group of delegates through the basics of how to get into prospecting and how to stake a claim.
"It's no good just to find it. It doesn't belong to the person who found it, it belongs to the person who stakes it."
When the property is staked, the prospector does grassroots exploration -- rock and soil sampling -- and may get some geological mapping or geophysical surveying done on the property.
Dollars for drilling
Determining the drill targets is the next step and that's where the big bucks are needed. Exploration drilling costs thousands of dollars, and extensive definition drilling is a multi-million dollar affair. The latter determines tonnage and grade, and if it's worthwhile to put a property into production.
"Drilling is very, very expensive. Very few properties reach this stage," says Schulze. He says each phase of mineral development is designed to indicate if it's worthwhile to continue.
"Often, it's a hard decision to walk away from a property. People tend to fall in love with it and spend too much money."
For drilling costs, prospectors need mining companies to spend their money -- often money raised through stock exchanges -- on exploration work. Prospectors may also opt to simply sell the property for a set price.
The prospector could option the property to an interested company and collect, for example, $10,000, $25,000 and $60,000 per year respectively in a three-year optioning.
If a prospector is going to option a property they must provide assay results to a company. In that case, the prospector retains a stake in the property's mineral wealth if it goes to production.
Chances of making it big
At Ekati mine, for example, geologists Chuck Fipke and Stewart Blusson each retain a 10 per cent ownership of the Ekati diamond mine.
Fipke and Blusson -- two very wealthy individuals -- represent prospecting's pinnacle. But this kind of success is the exception.
Finding a resource is one thing, but the chances of a resource becoming an operating mine is one in a 1000 in the North, says Schulze.
Another route for the prospector is a net smelter return -- say, two per cent of whatever mineral the mine sells. The two per cent smelter return could easily translate into $10 million over the life of a mine.
"In Nunavut, we're trying to get enough individuals interested so that new mines come into production as others are shutting down."
