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SOMBA K'E/YELLOWKNIFE - Yellowknife prospectors may have to do some extra digging for funding this year now that the territorial government has axed its $50,000 Prospectors Grubstake Program.

“It was reduced to $50,000 last year. It's reduced to nothing this year,” said Tim Coleman, director of the minerals, oil and gas division with Industry, Tourism and Investment.

Prospector Lane Dewar, seen here in 1990 at Rex Lake, has been working in the North for decades. He was disappointed in the GNWT's decision to cut its grubstake program, saying the program is so small money-wise it's unlikely to make much of a dent in the government's crusade to cut spending – but it would have greatly helped prospectors in tough economic times. - photo courtesy of Lane Dewar

Prospecting programs compared: Nunavut, NWT and the Yukon The Northwest Territories is the only Northern jurisdiction to cut its prospecting program. “The contrast between the Yukon, Nunavut and the NWT is telling,” said prospector Walt Humphries. “The NWT seems to be going in the opposite direction.” In February, the Yukon government announced a substantial $1.1 million one-year increase to its Yukon Mining Incentive Program (YMIP), bringing the total funding for the program to $1.8 million. The government also increased grant amounts for each of the program's three funding categories, boosting the available amount for grassroots – individual -- prospectors to 100 per cent of total costs, up to $15,000. In Nunavut, prospectors can apply for up to $8,000 each year. The government upped available funding from $5,000 per prospector to $8,000 in 2005.

Indeed, the move is the final blow to the longstanding program, which was founded in 1962 as a federal project. The GNWT assumed responsibility for the program in 1995. It made the decision to scrap the program two years ago, slashing its budget from $150,000 to $50,000 last year.

The GNWT gave two key reasons for the discontinuation: general cutbacks and waning popularity of the program.

“Since 2006/07 (prospectors) have never used all of the available resources,” said Coleman.

Out of last year's $50,000 in available funding, only $38,000 went out the door at the end of the day, he added.

Prospectors and proponents of the exploration industry are calling the move short-sighted, saying low subscription to the program in recent years has more to do with the cyclical nature of the industry than a lack of need.

“I think it's a shame,” said local prospector Walt Humphries.

“We're one of the few jurisdictions in Canada now that doesn't have a grubstake program – and yet we're one of the jurisdictions that probably needs one the most,” he added.

When times are tough – like they are now -- more people are likely to try their hand at the risky business of prospecting, said Humphries. That could be because they're out of their regular job or because they need extra cash. Prospector Lane Dewar said he hasn't had to use the grubstake program for a few years – but with this year's economic crunch he would have.

Grubstake funding doesn't cover all exploration costs for prospectors, but it does pad their pockets enough to cover expenses like transportation and when cash is tight, it can be a make-or-break factor.

The GNWT "should have shown a little bit more support for exploration" in the downturn, said Dewar, who runs Cassidy Point Exploration Services and is responsible for finding several high-interest properties in the NWT.

“We have three diamond mines ... not one of those mines were found by a big (mining company). If we don't have any prospectors now, we won't have any mines,” said Dewar.

Mike Vaydik, general manager of the NWT and Nunavut Chamber of Mines, agreed prospectors are key in making the mining industry in Yellowknife successful.

The chamber voiced its concern over cutting the program early on.

“We think this program is a key element of government stimulus for the mining industry. It allows prospectors a little funding,” said Vaydik.

It also has the potential to pump cash – and bring interest – into Yellowknife and the surrounding area even if exploration teams don't find a mine, he added.

The GNWT is directing prospectors in search of funding to the Support to Entrepreneurs and Economic Development (SEED) program.

SEED is designed to help small businesses across the territory and is community-focused. The program runs the gamut from business intelligence networking funding to sector development funding to micro-business funding – the category most individual prospectors fall under.

Under the micro-business funding category, applicants can receive up to $5,000 for self-employment activities geared toward things like traditional economy, arts and film.

Humphries, for one, is skeptical about SEED's application to individual prospectors.

“I've looked at it and I can't see much use for individual prospectors,” he said.