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NORTHWEST TERRITORIES
Revised Natural Resources Canada estimates for 2011 exploration spending show even lower expenditures in the Northwest Territories than projected last spring.

An aerial view of Sabina Gold and Silver Corp.'s Goose Lake Campm which serves its Back River gold project, located about 375 km southeast of Cambridge Bay. Exploration spending in Nunavut is booming this year, especially in the Kitikmeot region. - photo courtesy of Sabina Gold and Silver Corp.

Spending intentions for the territory are now estimated at $81 million, compared to $83 million projected in March, and down from about $85 million in 2010.

Spending estimates in Nunavut, however, have been significantly increased from the March projections, with the department pegging spending at $396 million, up more than $70 million from the initially projected $323 million this year.

"When you compare the Northwest Territories to its two neighbours, it quickly becomes clear that something has gone wrong here in the Northwest Territories," NWT and Nunavut Chamber of Mines executive director Tom Hoefer said, likening the numbers to a sort of wake-up call for the territory. "I think the fact that exploration is down could be seen to be a good thing in that it certainly now has gotten peoples' attention that it's a real problem."

Much of the reason for lower exploration activity in NWT can be attributed to regulatory complexity associated with aboriginal land claims and with high levels of proposed protected areas, the chamber concluded in a news release sent out Thursday.

Due to the lack of land claims issues in Nunavut, investors feel there is a "certainty of tenure," Sabina Gold and Silver Corp. investor relations director Nicole Hoeller told News/North.

"The territory is pro responsible mining and exploration," Hoeller said. Sabina has spent upwards of $40 million on its exploration projects in the Kitikmeot region this year, including the Back River gold program, located about 375 km southeast of Cambridge Bay.

"Nunavut has captured investors' interest, and they feel secure in doing business there," chamber president Pamela Strand said. "But in the NWT, the investment environment is not as strong as it should be."

Prior to the recent declines in exploration spending in the territory, stakeholders did not know where the barriers to investment in the NWT lay, Hoefer said.

"Now I think it's pretty clear," he said. There is reasons for optimism, however, Hoefer said, noting that the federal government advanced its amendments to the Mackenzie Valley Resource Management Act, the territorial government made its mining strategy a priority, and individual boards are taking steps to improve their performance.

"I think there are ingredients out there now that can help us change the situation," Hoefer said.

The chamber is continuing to call for a strategic approach to strengthening investment in the NWT's primary industry, especially as the territory's diamond mining industry "is now reaching its plateau," Strand said. "The lack of grassroots exploration investment is worrisome."

Natural Resources Canada's exploration spending estimates include on-mine-site and off-mine-site activities, including field work, overhead costs, engineering, economic and pre- or production feasibility studies, environment, and land access costs.

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