Commodity gains spin mining cycle upward.

Apparently there are no Little Red Hens in the mining industry. Nary a hint of resentment toward investors who for so many years found better things to do with their money--frolic fast and foolish with glitzy high-tech stocks, eye-popping IPOs and ethereal 'virtual companies,' for example--while mining had their collective nose to the grindstone. Not one person scoffing 'I told you so' and indignantly telling the money men where to shove their legal tender.

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Instead the mining industry sweeps any hard feelings under a buffed and manicured red carpet, escorts investors to the finest seat in the house and serves up a financial feast. They worked hard to prepare for a day they knew would come.

"Virtually all of the natural resource commodities have strengthened considerably," says Saskatchewan Mining Association Base and Precious Metals Chairman Phil Olson. "Prices have been creeping up virtually across the board. We've seen gains in gold by about 20 per cent and higher prices for most of the base metals. Copper is up dramatically over the past year."

Everyone in mining accepts the fact that market prices attract investment dollars and that the market will run in cycles. All they can do when market prices are in a funk is set the table for the inevitable revival.

Olson credits current Saskatchewan Minister of Industry and Resources Eric Cline and his predecessors for delivering on promises to give the industry a make over that would appeal to the investment community. The mining industry operates on a solid platform because of the framework built by government and industry.

"We have a set of very competitive regulations under which to operate our base and precious metals industry," Olson says. "We would also like to think we have a big theatre in which we can expand the base and precious metals sector."

The La Ronge domain and the extension of the Flin Flon-Greenstone belt are ideal entranceways for base metal exploration. A joint project between the industry and universities has been set in motion to map the Saskatchewan side of the Callinan deposit in search of copper and zinc, activity that began even when copper prices were quite depressed.

Exploration across the entire gold and base metal sector has undergone what Olson calls a "sane and rational increase" with spending rising from a low of about $2 million to more than $4.5 million over the last couple of years. Coincident in the surge has been the movement of metal prices and full realization of the provincial government stimulation program.

"It's a matter of time and effort before they come up with a new (gold) find," Olson predicts. "There are a number of known zones of mineralization and there are efforts underway to bring those smaller deposits of gold on stream."

The province is already home to a producing gold mine that has just passed 625,000 ounces of gold. The Seabee mine is on track to become the singularly largest gold mine in Saskatchewan history.

"The message has been sent to a lot of naysayers that the geology in Saskatchewan can certainly host modest-to-large deposits of gold," Olson says. "The current resource base at Seabee translates into another 13 years of potential production, effectively doubling what has been mined already, plus there are some more exciting deposits in the immediate area of Seabee."

Seabee has endured a gold price as low as $250 US per ounce over its 12 years and with a current price around $400, it's time for the mine to enjoy sustained levels of profitability.

"Most gold producers are optimistic that we're in a sustained bull market, considering the gap between supply and demand is still growing," Olson says. "The expectation is that after a protracted downturn the upturn will be extended and give us a window that should be open for five years if not longer."

Begotten from an intrusive and explosive process, the diamond has an industrial lineage on the periodic table yet it yearns for the highborn status of a precious metal. Regardless of where it's classed the entire mining industry is ready to embrace diamond's potential.

Macro diamonds are present in the Fort a la Corne Kimberlite field, that much is certain. Their quality, clarity and number will determine if a mine is in the cards.

The companies involved are moving ahead to a decision point as "the grades to this point are not far off the economic threshold," Olson says. Prevailing opinion is leaning toward a low-grade, high-tonnage open pit mine.

"It wouldn't be a small mine," Olson predicts. "It's looked at as a big dirtmoving venture where the cost structure would be an order of magnitude less than other Canadian diamond mines."

Expansion benefits the entire provincial mining industry because it helps build and retain a critical mass of skilled people. New opportunities keep geologists and tradespeople in the province while boosting overall employment.

"The read I'm getting is that if you want to address unemployment in Saskatchewan and particularly in Northern Saskatchewan then mining is the way to go," Olson says. "When you look across each sector of the industry you see that mining is further evolved than many other industries in Saskatchewan and you realize we're in a position to greatly benefit the province."--J.A.