Mining:

Mining continues to drive economic growth in Northern Ontario. Already a global leader in precious and base metal production, the region continues to boast untapped geological potential that is unequalled in the world. These rich geological resources combined with recent provincial efforts to create a positive business climate for mineral exploration has led to Ontario being identified as one of the best places in the world for mineral investment.

Profile:

Ontario has been one of the world's leading mineral producers for more than a century. Northern Ontario produced over $7 billion worth of minerals in 2005, with the majority of the value derived from metals. The North is home to 26 of Ontario's 27 metal mines, 14 gem stone mines, and 5 of the province's major industrial mining operations.

Almost all of Ontario's metal mining employment is located in the North (approximately 13,500 jobs), generating an estimated $1.4 billion in labour income.

In 2005, Ontario yielded 36% of Canada's metallic mineral production, and 23% or Canada's non-metallic mineral production. Ontario is one of the top ranked producers of metal in the world. Major mineral deposits in Northern Ontario account for a large majority of the production. Nickel, cobalt and platinum group metal production occurs abundantly in the Sudbury area, while zinc is produced in Kidd Creek. The following chart indicates Ontario's current world standing in metal production.

Gold continues to be the most sought-after commodity in Ontario with increased activity at existing gold mines. In addition, spending on the search for diamonds and base metals has almost doubled during the last two years as the development of key projects move forward.

Since 2003, there has been an increase in demand for metals. As a result, the prices of metals have increased as well. Prices of precious metals including gold and silver have increased 100% and 300% respectively, while copper and zinc have each increased over 400%.

At the end of 2005, there were 212,738 mining claims in good standing in Ontario, a 7.8% increase from 197,395 in 2004.

Mineral reserves are defined as proven and probable minerals at producing mines or deposits firmly committed to production. There are significant mineral reserves in Northern Ontario of nickel, copper, gold, zinc and platinum-palladium. Although gold reserves have recently levelled off, the current supply should be able to support mine production in Northern Ontario for the next seven years. As base metal reserves are declining in Northern Ontario, new discoveries from exploration could reverse this trend.

Opportunities:

Northern Ontario's mining industry is a world leader in mine automation and rehabilitation, with cutting edge companies supplying the latest methods, technologies, and equipment to global markets.

Traditional mining equipment and services used to be dominated by heavy equipment manufacturers. However, in recent years, there has been an emergence of higher technology services, which are supplied and developed by numerous companies located in Northern Ontario. These services include:

• robotic control systems;
• underground communication systems;
• 3D surveying; and
• fragmentation analysis.

As a world leader in automated mining equipment, satellite imaging, mining research and rehabilitation, we have an estimated 400 mining service and supply companies located in Northern Ontario that supply mining services and advanced equipment to hundreds of exploration and development projects in dozens of countries.

More than 300 of these companies are located in the Northern Ontario Mining Triangle, which is bordered by North Bay, Sudbury, and Timmins, a growing global cluster for the mining equipment and services industry.

INCO Limited uses a robot, adapted from Canadarm technology, to prepare mine workings in areas of unstable rock.

Noranda Limited has developed a virtual reality mining helmet worn by operators on the surface to direct heavy equipment deep in their mines.

Ontario has maintained a leading position as an attractive investment location, while continuing to promote an environment welcome to further exploration. In addition to the variety of mineral resources historically found in Northern Ontario, there is considerable exploration interest in searching for diamonds, platinum-palladium deposits and an exciting new interest in tantalum discoveries.

2006 represented the third year in a row where mining exploration exceeded $300 million in Ontario. The primary focus of the explorations included gold, diamonds, copper-zinc-silver volcanogenic massive sulphide mineralization and copper-nickel-platinum palladium.

Recent geological evaluations suggest that there is also a good chance for a diamond discovery in Ontario, particularly in the Temagami-Kirkland Lake, Kapuskasing-Wawa, James Bay Lowland and River Valley areas. Information on publications describing the Operation Treasure Hunt and other recent Ontario Geological Survey projects is available through the Ministry of Northern Development and Mines Website at http://www.mndm.gov.on.ca/MNDM/MINES/default_e.asp.

The rising demand for sand, gravel and crushed stone in the Greater Toronto Area and the south-western portion of the province combined with the expense of developing aggregate reserves in southern Ontario provide significant opportunities for aggregate producers in Northeastern Ontario to provide sand, gravel and crushed stone. In the coming decades, additional opportunities exist for the shipment of aggregates to markets in the central United States.

There is significant opportunity to develop value-added processing and manufacturing of raw materials in Northern Ontario to enhance the value of product and to create additional employment. Such innovative opportunities include the development of special nickel alloys and further processing of traditionally produced metals, the development of processing plants for specialized industrial minerals and the establishment of diamond cutting and related businesses when diamond production begins.