Ontario ranked tops for exploration.

Ontario is ranked as the best place in Canada for mining companies to put down exploration stakes, according to a survey released by the Fraser Institute.

Now the president of the Porcupine Prospectors and Developers Association only hopes that ring of endorsement eventually translates into investment dollars for mining exploration.

Andrew Tims says despite Ontario's acknowledged wealth of mineral potential, a stable political environment, tax cuts and government packages of mining-incentive goodies, he finds exploration at the grassroots level "quite discouraging."

Outside of the platinum group metals exploration rush in Sudbury, Tims finds many junior mining companies simply don't have the money for exploration anymore and find it difficult to raise speculative capital. "There used to be seven dedicated offices just in Timmins, four years ago," Tims says. "There's none now. The last office closed up in December."

A reintroduction of the Ontario Prospectors Assistance Program, eliminated last year, would be a "big step" towards encouraging more grassroots exploration, he says.

In addition, cutbacks to the resident geologist program and to mining recorder offices, along with some closings of core-sample libraries have undermined the local industry, he adds.

With gold prices sagging and only a limited number of viable targets for base metals such as copper, lead and zinc, exploration in the Timmins region is limited and Tims fears some gold-producing centres like Red Lake could become ghost towns.

The Fraser rankings were based on a region's geological potential combined with the effects government policies - such as regulation and land use - have on encouraging new exploration.

The Vancouver-based government policy think-tank polled 157 international senior and junior mining companies for their annual survey rating mining jurisdictions in North America and around the world. Ontario was the top-ranked Canadian jurisdiction and finished third overall in the world rankings, finishing just behind Nevada and Chile.

Laura Jones, a Fraser Institute researcher, says Ontario's taxation policies, infrastructure, environmental and labour regulations, all scored well with survey respondents. But what's keeping Ontario from achieving an even higher ranking is the uncertainty over what lands are considered protected areas. About 25 per cent of respondents cited Ontario's controversial Lands for Life - Living Legacy Trust planning process as the primary deterrent to new exploration investment, along with native land claims to a lesser extent.

Jones says some of the incentive goodies offered by the provincial government, such as flow-through shares and other tax-credit programs, do help to some extent, but uncertainty over land use policy remains an overriding factor.

"There's nothing worse than having invested money, finding something, and then being told this is going to be a park," she says in summing up comments from mining company executives.

But Ontario is still in a better position when compared to British Columbia where the government's protected lands policy was considered a major drawback to 93 per cent of the companies surveyed.

"That's nine out of 10 respondents saying that's a strong reason not to come and invest in your province," Jones says. "B.C. could stand for basket case."

Jones says the survey is a "report card" of which jurisdictions are serious about attracting investment. The province has consistently ranked in the top 10 in overall investment attractiveness since the Vancouver-based think-tank initiated the anonymous survey in 1997.

She says Ontario scores consistently high because they consider exploration to be an economic priority as compared to Wisconsin. And judging from the feedback they receive from government ministries, mining companies and private individuals requesting copies, their survey does carry some weight within industry circles.

The 2000 survey encompassed all Canadian provinces and territories, except P.E.I, 14 American states, Australia, Argentina, Brazil, Chile, Mexico, Peru, Indonesia, Papua New Guinea and South Africa. The response rate was about 16 per cent from companies accounting for $726 million (US) in exploration in 1999 of which half was spent in Canada.

Though the Prospectors and Developers Association of Canada has covered the cost to put together the survey the last two years, Jones insists their methodology and reporting is completely independent of any industry editorial control.