7 Conditions Required For A Mining Jurisdiction

There are seven conditions required for any jurisdiction to be successful in mining. These conditions are somewhat obvious, but bear repeating. They are laid out below, extracted from a 1999 Ore Shoot newsletter (possibly written by Muckpile Mike iirc). Has anything changed since then in the requirements?

1. A sizeable, fixed quantum of land with high geological potential available for mineral exploration. Exploration is drawn to areas where success is likely. PEI has no significant mineral potential and no mineral industry. Several New England states have high potential for mineral exploration but have no land available; hence they too have no mineral industry.

2. The right to enter, prospect, stake and explore public land. Mineral deposits occupy an extremely small area of land and are generally found by detailed, repeated examination of surface investigations. Nearly 1000 years of mining law has established that a competitive free-entry system which encourages individuals or small exploration
syndicates is the only economic method of exploring and finding new mineral deposits.

3. The right to mine a discovered mineral deposit subject to legislated operating conditions which permit profitable operation. lf you buy a piece of commercial land and you want to set up a business, you take your building plans to the building inspector, get a permit, build your plant and operate within fixed rules. The building inspector doesn’t get the right to decide whether or not you have a right to set up your business, he can’t force you to pay a bribe to your neighbours and he can’t set arbitrary operating conditions different from everyone else in the area. ln
addition, he has to review your plans within a fixed period of time lest he violate your civic rights. Why is mining any
different?

4. An acceptable degree of political risk. ln the 1960’s we learned all about unacceptable risk with a wave of
nationalization and revolutions in Latin America. So did the local people who have now installed political systems
which respect property rights and provide a stable operating environment for mining companies. ln the 1990’s in Canada and the U.S. we have experienced a different form of political instability. Governments intent
on manipulating or restricting industry to pay off their supporters have created an unprecedented level of
political risk to mining companies operating in these jurisdictions. The pathetic policies of the NDP in BC
during the 1970’s and 1990’s are text book examples of the effect of political risk on mining investment.

5. A competitive regulatory regime. The exercise of mining rights entails both direct and indirect charges.
Permit fees, royalties and taxes are direct charges while bonding and the costs of permitting delays are indirect
charges. An efficient regulatory regime affords a jurisdiction a comparative advantage in competing for
exploration and development dollars. The only realistic way to do this in regimes with regulatory overlap is
through a “one window” approach where miners deal with one agency.

6. Competitive costs for transportation, power, labour and supplies. Pretty obvious stuff, especially from the Yukon perspective.

7. A good geoscience database. Accurate, current claim maps, reliable geological maps, regional geochemical and
geophysical survey data, compilations of past exploration and accessible assessment work records afford the Yukon
a competitive advantage in this department. Anyone who has ever staked in Alaska can appreciate the value of
reliable claim maps. Geological maps in some countries are either classified or are at a scale to be almost useless.
Regional stream geochemical surveys provide a tool which offsets the lack of exposure in the Cordillera. All of these
contribute to the making a jurisdiction an attractive place to explore.

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Since 1999 in Yukon condition #1 land quantum has been significantly reduced and is dwindling annually. Conditions #2 & 3 have been inhibited or under constant threat from one angle or another. Condition #4 political risk has improved in much of the world for our competition, and in Yukon as well.  However there will be an election in a few weeks (November 2016) that could change that. Condition #5 – the regulatory regime saw some improvements after 1999, but has deteriorated in the last few years. #6 Costs – the power grid in Yukon has improved, as have some roads since 1999, but this is still one of the most expensive mining locations in the world. Condition #7 – the Yukon continues to have an excellent and expanding geoscience database, and we should be thankful for that.

Teddy