Photo: MERN CHAPTER 4 Mineral Exploration 4.1 Introduction Targeted commodities In 201512, roughly 200 mining companies reported exploration or deposit appraisal work in Québec as project operator. Exploration expenditures and investments amounted to nearly $221M (Figures 4.1 and 4.2). Junior companies continued to have difficulty financing their projects on the stock markets. Although spending by juniors had dropped by 30% in 2013, they have increased by 8% from 2014 to 2015. As in the past, exploration and deposit appraisal expenditures are largely focused on precious metals ($108M, 49%), ferrous metals ($58M, 26%) and base metals ($13M, 6%) (Table 4.1). The last few years have also seen a growing inte- rest for several commodities that Québec does not yet produce or only in small quantities. This is true for lithium, rare earth elements, diamonds, phosphate and graphite, which collectively reached a high of $150M in work expenditures in 2012, compared to a total of only $10M in the early 2000s. Nevertheless, the global stock market pullback had a negative effect on the level of investment for these new commodities. In Québec, expenditures fell from $150M in 2012 to $33M in 2015, a drop of 78%. The applications for these strategic commodities are diverse and growing, particularly in the high-tech and green technology sectors for products such as hybrid and electric cars, wind turbines and high-performance rechargeable batteries. According to preliminary data, exploration and deposit appraisal expenditures were down for a fourth consecutive year with a total of $221M. The year-to-year reductions observed in 2012 (26%), 2013 (38%), 2014 (17%) and 2015 (30%) are explained by lower stock market prices for certain commodities that led to worldwide financing difficulties in the industry. In fact, over the course of the past year, stock market indexes for the mining sector were falling while those for other sectors were on the rise. Across Canada, expenditures for exploration and deposit appraisal activities were also down. Over the last ten years, Québec’s contribution has accounted for 15% to 19% of the total Canadian expenditures for these activities. 12 - Based on data compiled by the Institut de la statistique du Québec as part of its mining statistics program. Report on Mineral Activities in Québec - 2015 38 Figure 4.1 Total mining investments in Québec, 2001-2015 ($M). Investissements miniers totaux au Québec, 2001 - 2015 (M$) 5,130 4,576 Total Exploration & deposit appraisal 3,923 2,917 2,976 2,011 2,041 2,299 1,624 1,200 1,213 833 743 847 986 834 476 526 512 621 382 317 103 111 134 227 205 295 379 221 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015p Source: Institut de la statistique du Québec p: preliminary data Figure 4.2 Exploration andD édepositpenses appraisalpour des trexpendituresavaux d'explo rinat iQuébec,on et de m2001-2015ise en ($M). valeur au Québec, 2001 - 2015 (M$) 834 621 526 476 512 379 382 295 317 227 205 221 103 111 134 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015p Source: Institut de la statistique du Québec p: preliminary data TABLE 4.1 - Exploration and deposit apppraisal expenditures in $M by commodity. Commodity 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015p Precious metals (Au, Ag, PGE) 116 145 226 263 231 277 448 245 143 104 108.4 Base metals (Ni, Cu, Zn) 53 71 118 122 59 87 125 83 61 60 57.7 Diamonds 23 29 27 13 10 14 14 14 12 4 - Ferrous metals 1 22 29 24 15 32 106 143 44 38 13.2 Lithium - - - 0.2 6.4 20 16.7 7. 3 11 1 - Rare earths - - - 1.3 2.8 16.4 41.7 49.2 38 11 13.6 Graphite < 1 < 1 < 1 < 1 < 1 < 1 1.4 16.7 12 13 12.2 Phosphate - - - - - - 0.9 25.2 4 22 5.3 Other substances 8 6 5 15 7 24 47 13 56 19 7. 2 Total 205 295 476 526 379 512 834 621 381 272 220 Source: Institut de la statistique du Québec Data accurate as of March 2016 p: preliminary data Figure 4.3 ExplorationRépartitio nand de deposits frais dappraisal'explora texpendituresion et de m ibyse commodityen valeur inpa Québec,r substa 2015.nce recherchée, Québec, 2015 Precious metals Base metals Rares earths Ferrous metals Graphite Other substances Phosphate 0% 10% 20% 30% 40% 50% Source: Institut de la statistique du Québec. Data for 2015 are preliminary. 39 Report on Mineral Activities in Québec - 2015 Exploration and deposit appraisal expenditures by region In 2015, most of the province’s $221M in exploration and deposit appraisal expenditures was divided between three administrative regions where most mining activities have historically taken place: Nord-du-Québec ($117M, 53% of the provincial total), Abitibi-Témiscamingue ($70M, 32%) and Côte-Nord ($19M, 9%) (Table 4.2). TABLE 4.2 - Distribution of exploration and mining development expenditures by administrative region (in $M). % of total Administrative region 2011 2012 2013 2014 2015p expenditures 01 Bas-Saint-Laurent - 0.2 0.2 0.23 0.51 0.23% 02 Saguenay – Lac-Saint-Jean 19.8 38.3 13.7 17.81 2.59 1.17% 03 Capitale-Nationale - - - - 3.02 1.36% 04 Mauricie 1.5 - 0.725 - 0.16 0.07% 05 Estrie 2.4 1.8 0.659 0.24 0.05 0,02% 06 Montréal - - - - - 0.0% 07 Outaouais 0.9 2.9 1.9 2.10 1.95 0.88% 08 Abitibi-Témiscamingue 286 167.2 80 53.50 70.01 31.62% 09 Côte-Nord 68.3 77.1 32.4 47.65 19.29 8.71% 10 Nord-du-Québec 436.5 309.9 202.78 146.04 117.32 52.99% 11 Gaspésie – Îles-de-la-Madeleine 10.6 15.7 2.994 2.33 0.77 0.35 % 12 Chaudière-Appalaches 5.5 3.3 0.774 0.18 0.70 0.32% 13 Laval - - - - - 0.0% 14 Lanaudière 0.2 0.2 0.539 - 2.50 1.13% 15 Laurentides 1 2 0.972 0.74 2.53 1.14% 16 Montérégie - - - - - - 17 Centre-du-Québec - - - - - - Total 833.9 620.7 381.7 272.28 221.40 100.00 % Source: Institut de la statistique du Québec 4.2 Mineral exploration This section summarizes the main exploration projects in Québec, by commodity, that have experienced notable progress in terms of: a new resource calculation; the discovery of a new mineralized zone; or a mineralized drill interval along the extension of a known zone. Details of these exploration projects are presented in Tables 4.3, 4.4 and 4.5. Copper and zinc The work by Amex Exploration and its partner Agnico Eagle Mines confirmed the presence of a polymetallic mineralized envelope from surface to a vertical depth of 750 metres that may correspond to the extension of the former Normétal mine, which is located about 5 km to the east. West of Chibougamau, Yorbeau Resources discovered a new mineralized lens named Gap. Work by Osisko Exploration James Bay on the Coulon property, 15 km north of the Fontanges airport in the James Bay region, confirmed the northeast and southwest extensions of lens 257. Diamonds Stornoway Diamond Corporation continued its construction and development of the Renard mine. Iron In the Côte-Nord administrative region, partners Cartier Iron Corporation and Champion Iron conducted a four- hole drilling program on the Round Lake Project, specifically in the Black Dan, Hearts Lake, Thémines No. 2 and Lac Penguin West areas. Report on Mineral Activities in Québec - 2015 40 Partners Century Global Commodities Corporation and WISCO International Development & Investment published a new resource estimate for the Black Bird deposit and a preliminary economic assessment for their Full Moon Project (Sunny Lake), both situated northwest of Schefferville. They also published the results of the feasibility study for their Lac Joyce project (Attikamagen), situated east of Schefferville. Adriana Resources and WISCO International Resources Development & Investment published the results of the feasibility study for the Lac Otelnuk project, situated northwest of Schefferville (Labrador Trough). Iron-titanium-vanadium Société d’exploration minière Vior conducted exploration work on the Foothills property, situated in Saint-Urbain, where a dispersal train of rutile-bearing boulders, assaying up to 57.6% TiO2, had been discovered in 2014. A ground gravimetry survey detected a gravimetric anomaly directly on the Blueberry Lake showing, as well as two other similar anomalies that remain unexplained. BlackRock Metals completed a prefeasibility study for an iron, titanium and vanadium open pit mine and metallurgical complex approximately 30 km southeast of the town of Chibougamau. In addition, exploration work confirmed the extension of the Fe-Ti-V mineralization 5 km southwest of the Armitage Zone. VanadiumCorp Resources published the first mineral resource estimate for its Lac Doré project, adjacent to the BlackRock Metals property, and also began a preliminary economic assessment. Graphite Graphite continued to be an exploration focus in Québec in 2015. Projects are largely concentrated in the Outaouais, Lanaudière, Laurentides and Côte-Nord regions. In the Outaouais region, Great Lakes Graphite announced the results of metallurgical testing and a resource estimate for the Lochaber project, situated approximately 10 km northeast of the Buckingham area (city of Gatineau). Cavan Ventures published the results of metallurgical tests on samples from its Buckingham project. In October, Ashburton Ventures signed an option agreement to earn a 60% interest in the project from Cavan Ventures. In November, the partners conducted a diamond drilling program during which the third hole (BH15-03) intersected graphite mineralization over 148 m.