British Columbia’s grassroots exploration sector faces a structural shift as flagship projects mature and early-stage exploration funding dries up, a new survey found.
Exploration spending dropped 14% to $552 million last year from $643 million in 2023, the consulting firm EY said in a report released Thursday. Per-project spending by junior companies fell 35% to $1.4 million as their overall funding plunged 65% to just $25 million.
Funding challenges are one of the reasons about $38 billion in economic opportunities for the mining sector are currently at risk, according to a 2024 study by the Mining Association of British Columbia. Proponents are awaiting investment decisions or being sidelined due to the challenges explorers contend with working in the province.
“The gradual decrease in expenditure in B.C. from the record highs set in 2022 are indicative of the cyclical nature of the exploration industry,” EY Canada Mining and Metals Consulting & West Leader and co-author of the report, Iain Thompson, told The Northern Miner in an interview. That’s because flagship assets that received significant funding in past years are maturing out of the exploration phase. They're moving along the exploration lifecycle and approaching operational readiness.
plays an important role in Canadian and global exploration, but it faces challenges. B.C. remains a significant contributor with several flagship projects being developed in the so-called Golden Triangle in the province’s northwest. Although B.C. captures roughly 12% of national exploration spend, it’s been struggling to attract new early-stage investment.
The report challenges industry leaders and policymakers to act decisively. If B.C. is to remain competitive, it must expand its funding framework beyond the current provincial tax credit, streamline permitting processes and reform land access and tenure policies. Failure to do so risks not only stifling new exploration but also squandering billions in potential economic development.
“B.C. is rich in natural resources, but you need to build the right conditions for development,” Thompson said. “Simply having good geology won't automatically bring in investment; you must create an environment that encourages risk-taking and upfront investment to compete globally.”
Inflation also squeezes exploration budgets, with respondents citing a higher cost per drilled metre. Thompson said that while one might expect overall spending to increase with inflation, in reality, fewer metres are being drilled because each metre costs more. "You're getting less bang for your buck," he said.
In its ninth iteration, the B.C. Mineral and Coal Exploration Survey draws on data from 130 companies covering 283 projects across the province.
British Columbia’s policy framework increasingly hampers junior explorers. “Differences in provincial policy may be driving a widening gap between British Columbia and other Canadian mineral exploration powerhouses,” the report says.
Rich mineral resources and high commodity prices – two factors that boost later-stage investments – have made B.C. appealing, though restrictive policies and long permitting processes have hurt grassroots exploration, EY says. That’s why a strong policy reform to simplify land access, environmental rules and mineral rights would be appropriate, EY argues.
For now, B.C. is working on changes to the Mineral Tenure Act. After a court ruled in 2023 that authorities need to consult more with First Nations, the government must have a new working system in place by March 26.
Provinces like Saskatchewan, Ontario and Quebec are simplifying rules and using targeted funding incentives. This risks leaving B.C. at a competitive disadvantage, according to Thompson.
“An opportunity may exist for B.C. to go beyond its mineral exploration tax credit and explore other mineral exploration funding and incentive programs to support juniors with financing of new and existing projects,” Thompson said. “Difficult policy conditions surrounding land access, environmental regulation and permitting delays associated with exploration, along with expected changes to the mineral tenure regime, have added to the challenges facing B.C.’s exploration industry.”
Long timelines and unclear regulations might lead companies to drop projects or lose funding, Thompson warns.
Many people’s livelihoods depend on the sector’s success. The exploration sector employed 4,143 workers last year, a 10% year-over-year increase from 2023.
While investment in traditional minerals like copper and gold has waned, B.C.’s exploration focus on critical minerals continues to intensify. The report reveals that spending in this sector more than doubled to $49 million in 2024 from $24 million the previous year.
This growth is driven by the federal critical mineral exploration tax credit and a pressing need to secure the raw materials essential for the green transition. As global demand for strategic minerals grows, the province is refocusing. This positions it as a major player in supplying key components for future energy technologies.
It also gives B.C. ammunition amid the heightened geopolitical uncertainty created by the second term of U.S. President Donald Trump. During a January industry event in Vancouver, Premier David Eby said the province would support “everything’s-on-the-table” federal tariffs.
Eby, who promised to boost B.C.’s economy by adding mining support, wants to diversify trade beyond the U.S. The province's mineral wealth is seen as its key bargaining chip and economic power.
Despite record-high prices, B.C.’s copper and gold exploration spending has taken a hit. Gold spending dropped 24% to $249 million last year, while copper expenditure fell 28% to $177 million.
Nickel exploration expenditure in the province, meanwhile, jumped 50% to $14 million in 2024, reflecting B.C.’s role in electric vehicle batteries and energy storage systems.
Likewise, industrial minerals such as gypsum and limestone saw spending rise 58% to $10 million. These changes are lessening the impact of downturns in traditional sectors. They show a shift in the mix of commodities as companies adapt to new market trends, according to the EY report.
B.C.’s metallurgical coal exploration is rebounding dramatically, having tripled in two years, the report also shows. After touching a decade low of $12 million in 2022, coal exploration spending surged 109% in 2023 before climbing another 47% last year to $38 million.
Coal’s comeback is partly due to market changes. A big sell-off in the steelmaking coal business moved funds into exploration.
Southeast B.C. is still the province’s coal hub, accounting for 80% of provincial coal exploration spending. Spending in the area jumped 53% to $30 million last year.
February 27, 2025
February 27, 2025
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