MRNFP - Summary and highlights for 2003

Summary and highlightsof the Québec Mining for 2003

Gold

Ferrous metals Base metals

Principal exploration and development activities

Financing Mining taxation

Dépôt légal - Bibliothèquenationale du Québec, 2004

ISSN en ligne : 1499-8475

For the first time, Summary and Highlights of the Québec Mining Industry will be published solely in electronic format. As it has in previous years, this document presents mining industry data, compiled from statistical surveys conducted in fall 2003. The data are mostly preliminary and were updated on January 20, 2004.

We are therefore pleased to invite you to browse through these pages. The menu on the left shows chapter headings. You can also print the complete version of the document by clicking on the printer icon in the upper right hand corner of the page.

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Summary and highlights of the Québec Mining for 2003

● Economic overview● Outlook 2004 ● Québec's mineral shipments● Metallic minerals

❍ Gold❍ Ferrous metals❍ Base metals

● Industrial minerals ● Mining investment, financing and taxation

❍ Principal exploration and development activities❍ Financing❍ Mining taxation

● Mining environment● Research and development● Strategic activities● Production









Gold






Research and development in 2003

● COREM, the mineral research consortium, has finished renewing its membership. In 2003, it became an associate member of the Mining Association of Canada, which will help to improve its visibility and facilitate recruiting. From September 22nd to 24th, COREM held an international iron ore pelletizing symposium in Québec. This event, which attracted roughly one hundred people from all over the world, made it possible for the organization to position itself worldwide as a key player in R&D relating to pelletizing technology and iron ore characterization. COREM is working on over 30 pre-competitive research projects. Nine more research projects have been concluded to date and the industry is very interested in their potential benefits.

● The Ministère des Ressources naturelles, de la Faune et des Parcs (MRNFP) (department of natural resources, wildlife and parks) has earmarked $200,000 in its 2003-2004 budget for the NSERC-Polytechnique-UQAT Environment and Mine Wastes Management Chair. This amount will fulfill the MRNFP's $400,000 commitment. The Department also has a seat on the Chair's Orientation Committee and has placed the Lorraine Mine site at its disposal for various restoration experiments.

● The MRNFP has continued to cooperate with the MEND research program and with its technology transfer activities. In 2003, INAP (the International Network on Acid Prevention), an initiative of the world’s leading mining and minerals companies to deal with acid mine drainage, signed an agreement with MEND to optimize its research. In 2003, MEND received funding of $125,000 for its research projects and also worked closely with organizers of the Sixth International Conference on Acid Rock Drainage held in July, in Cairns, Australia.

● SOREDEM supported CANMET's review of research priorities for the coming years. This $226,724 project is funded primarily by Economic Development Canada ($90,000), CANMET (by reducing its costs by 50%), and SOREDEM ($52,287), which received $20,000 from the Department. The final report is expected in June 2004.

● Other research projects supported by SOREDEM:

❍ using water instead of compressed air as an energy source (hydraulification);❍ non-destructive testing of hoist rope integrity (Permascan);❍ thermal fragmentation of rock;❍ underground communications laboratory;❍ photonic probe for detecting ore in drill holes;❍ low-vibration drill handle.

● The Mineral Exploration Research Consortium (CONSOREM) is an applied research organization focusing on mineral exploration technology in Québec. It serves as a link between various mineral industry stakeholders in industrial, governmental, and academic circles. CONSOREM's research projects focus on five major areas:





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http://www.nrcan.gc.ca/mms/canmet-mtb/mmsl-lmsm/mend/default_e.htm

http://www.amq-inc.com/lamq/soredem.htm

http://depcom.uqac.uquebec.ca/consorem/

❍ atlas of deposits;❍ hydrothermal alteration signatures;❍ data integration for mineral exploration;❍ opportunity studies for atypical mineralization;❍ potential of anorthositic complexes.

In 2003, the MRNFP continued to cooperate with CONSOREM by providing financial support ($90 k) and by actively participating in research orientation committees and on the Board of Directors.

● Laval University's Peatland Ecology Research Group (PERG) was awarded an Industrial Research Chair in Peatland Management with an annual budget of $616,000. A dozen industry partners mobilized to join the Chair, which is working on making harvesting of peatlands a sustainable economic activity. Reaching this objective involves developing restoration techniques that ensure that no wetlands are lost as a result of industry activities. In Québec, roughly 25 peat-harvesting businesses have annual sales of more than 50 million dollars and provide the equivalent of 700 full-time jobs in the regions.

● In 2003, the Canada Research Chairs (without industrial partners) program awarded two chairs to the Université du Québec en Abitibi-Témiscamingue for work on mine environments:

❍ a research chair on optimizing use of cement fill in mines and evaluating its environmental response at the surface and underground;

❍ a research chair on studying the formation of acid mine drainage in abandoned mine sites.

● The thermal fragmentation process developed by Rocmec International, from Saguenay, is beginning to be implemented. The process, designed initially for open-pit use, consists of drilling a standard pilot hole then reaming it on the way back with a burner, causing the rock to shatter. The rate at which the burner is removed adequately controls the diameter of the hole. In 2003, Campbell Resources reached an agreement with Rocmec to use the technology in the Joe Mann Mine. Ore extraction using this method began in October 2003.

● BioteQ Environmental Technologies Inc. has developed a technology that makes it possible to recover metals from water contaminated by acid mine drainage through a biotechnological process. The company came to an agreement with the Raglan Mine to treat acid contaminated water by selective recovery of nickel from acid mine drainage. Recovering the nickel and minor amounts of other metals will produce clean sludge-free water. The BioteQ treatment plant will replace the existing lime treatment plant and will operate for six months a year.


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Gold






Economic overview of 2003

The market for metals and minerals

In spite of rather moderate economic growth in industrialized countries in 2003, the global mining industry reaped tremendous benefits from the vitality of the Chinese economy. In fact, Chinese consumption, combined with considerable depreciation of the American dollar, contributed to significant increases in the prices of several metals, some of which also benefited from various supply constraints.

After a rather uneventful first quarter, the prices of base metals (copper, nickel, and zinc) ended the year on a high note. As it happens, in spite of improved fundamentals, the surge was largely fuelled, especially in the last quarter, by speculative purchases of investment funds, stimulated by depreciation of the American dollar and signs of a global industrial recovery. Once again in 2003, gold had a very interesting year. The precious metal particularly benefited from depreciation of the American dollar and from geopolitical tensions. In addition, the price of iron ore, under the impetus of Chinese imports, also rose significantly.

According to preliminary data, the value of Québec's mineral shipments1 was nearly 3.7 billion dollars in 2003, a slight drop from 2002. The decrease can be attributed to the shutdown at Magnola Metallurgy, to difficulties in the chrysotile sector, as well as to the decline in quantities of gold shipped. Neither the increase in iron ore sales nor the increase in the prices of several metals could entirely compensate for these factors. For that matter, it should be noted that the significant appreciation of the Canadian dollar greatly reduced price increases, which, when expressed in Canadian dollars sometimes even cancelled out.

1 : The term "shipments" refers to:

● quantities sold, shipped, or used, not necessarily quantities processed during the year.● to substances from the primary sector and a few products of primary processing.






Gold






Outlook for 2004

For metals and minerals

Market conditions for metals and minerals should continue to improve in 2004, not only because of the vitality of the Chinese economy, but also due to anticipated growth in industrial production in industrialized countries. The resulting rise in consumption will be reflected in the prices of several metals and minerals, which will also benefit from the American dollar's persistent weakness and, in some cases, from constraints related to supply.

Mineral shipments from Québec in 2004 should therefore benefit from the synchronized global economic recovery and the expected increase in average annual prices of several mineral products.






Gold






Mineral shipments

Mineral shipments in Québec for 2002 and 2003p

Commodity

2003p 2002

Quantity2 Value($000)

Quantity2 Value($000)

Metallic minerals

Cadmium

Cobalt

Copper

Iron (pig iron and steel3)

Iron (ore)

Magnesium

Nickel

Niobium (FeNb)

Gold

Palladium

Platinum

Selenium

Silver

Tellurium

Zinc

272,000 kg

253,000 kg

80,314,000 kg

c

13,600,000 t

c

24,845,000 kg

3,270,000 kg

28,053,000 g

c

c

202,000 kg

228,968,000 g

34,000 kg

253,124,000 kg

517

c

195,403

c

c

c

c

c

456,282

c

c

2,882

50,212

548

290,839

319,310 kg

329,532 kg

87,417,815 kg

c

11,949,996 t

c

24,692,547 kg

3,333,216 kg

32,741,543 g

c

c

124,240 kg

252,705,194 g

31,195 kg

236,994,683 kg

59,012

322

c

215,485

c

c

c

c

c

512,405

c

c

1,692

501

289,608





Sub-total 2,323 911 2,319 425

Industrial minerals

Asbestos

Graphite

Ilmenite

Mica

Salt

Silica

Sulphur4

Talc and steatite

Titanium (slag)

Peat

Sub-total

161,000 t

c

c

c

c

490,000 t

185,000 t

c

c

8,779 000 s5

c

c

c

c

c

15,085

8,153

c

c

52,592

576,546

240,618 t

c

c

c

c

534,817 t

195,117 t

c

c

9,566 472 s5

c

c

c

c

c

16,519

8,585

c

c

52,987

642,866

Construction materials

Lime

Cement

Stone

Clay-brick products

Sand and gravel

Sub-total

c

3,017,000 t

33,531,000 t

c

27,853,000 t

c

329,567

256,445

c

88,298

750,622

c

2,961,854 t

38,121,872 t

c

32,599,523 t

c

301,934

292,743

c

103,503

776,460

Total 3 651 079 3 738 752

p : Preliminary datac : Confidential data

1. The term "shipments" refers to quantities sold, shipped, or used, not necessarily quantities extracted or processed during the year. It is also worth noting that, from one year to the next, comparisons are indicative only.

2. Quantities are expressed using the International System of Units (SI).3. This is solely production from QIT-Fer et Titane.4. In the form of sulphuric acid.5. s = 170 dm3 bags

Data for 2003 on shipments and investments in the Québec mining industry are preliminary. They are compiled from statistical surveys conducted in fall 2003. This table was updated on January 20, 2004.

Source : Service de l’imposition et des données minières.





Gold






Metallic minerals

In 2003, the global market for metallic minerals was rather positive, compared to results recorded for 2002.

● Gold in 2003

● Ferrous metals in 2003

❍ Iron❍ Niobium❍ Vanadium

● Base metals in 2003

❍ Copper❍ Nickel❍ Zinc❍ Magnesium





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Gold






Metallic mineralsGold

Global context

● The price of gold continued its upward trend, begun in 2001, in spite of wide fluctuations. The average price of an ounce of gold rose to US$363 (London PM Fix) in 2003, compared to US$310 in 2002, a 17% increase. The price of gold went from a floor price of US$319.90, in April, to a ceiling price of US$416.25, in December. This performance is largely the result of a significant drop in the value of the US dollar, the currency of quotation for gold, compared to other currencies. Therefore, in Canadian dollars, the average price of an ounce of gold rose to C$508 in 2003, compared to C$487 in 2002, a 4% increase.

● The drop in the dollar curbed rising profits of mines outside the United States. The S&P/TSX Canadian Gold Index, composed of companies with mines in Canada and elsewhere, was still at 13.6% after an exceptional performance of 42.5% in 2002. This reflects ongoing investor optimism regarding the price of gold and the profits of gold producers. The S&P/TSX composite index, on the other hand, gained 24.3%, while it had dropped by 14% in 2002.

● In a context where mining production and official sector sales have remained relatively stable with respect to 2002, the significant rise in investment demand was the main reason for the increase in the price of gold in 2003. It compensated for the drop in jewellery fabrication demand and in demand due to producer de-hedging, as well as for the large increase in scrap gold supply.

● Stagnation in global mining production contributed to keeping the price of gold up again in 2003. This situation should continue until 2005. Supply from official sector sales, largely covered by the Washington Agreement, increased slightly, as expected. Supply from scrap gold rose considerably, in response to the high price of gold.

● The increase in investment demand for gold is a result of the weakness of the US dollar, instability in the Middle East, and low interest rates. Even though demand for gold due to producer de-hedging programs declined, it still remained significant. The weakness of jewellery fabrication demand, which accounted for about 60% of demand, is attributable to the high price of gold.





Situation in Québec

● In 2003, according to preliminary data compiled by the Department, the volume of gold shipments from deposits in Québec declined by 14% with respect to 2002, to reach $456 million. This drop can be attributed mainly to the closure, in 2002, of Bousquet-2 and declining production from the LaRonde and Troïlus mines.

● A sustained rise in the price of gold made it possible for Cambior Inc. to undertake major development and exploration projects at its Doyon (driving an exploration drift) and Mouska (deepening the shaft) mines. In addition, Cambior and Aurizon Mines Ltd. began work on deepening the shaft at the Sleeping Giant Mine, of which they are co-owners. In total, these investments amount to more than $ 20 million.

● Campbell Resources Inc. undertook development work in the West Zone at the Joe Mann Mine, where exploration identified high-grade gold zones in 2002. It is also currently participating in development of thermal fragmentation technology for ore extraction.

● Aurizon Mines Ltd. continued its $22 million exploration and development program on the Casa Berardi Property. The results of the program are expected in 2004 and could lead to an investment of $120 million.

● In 2003, gold production from Agnico-Eagle Mines Ltd. was considerably affected by a rock fall in two stopes at the LaRonde Mine. The rock fall forced Agnico-Eagle to mine lower grade areas and to defer mining of certain high-grade blocs. In 2004, Agnico-Eagle is planning to move ahead with an in-depth exploration program at the mine. It also intends to continue development and exploration on the Lapa, Goldex, and Bousquet properties, the latter having been acquired from Barrick during the year. It anticipates production of 300,000 ounces of gold from the LaRonde Mine in 2004.

● In October 2003, McWatters Mining announced that it was suspending operations at the Sigma-Lamaque Mine. It then mandated RSG Global, an engineering firm from Australia, to review its extraction methods and confirm reserves.

● Western Québec Mines Inc. submitted an offer to purchase the Kiena Mine, which should make it possible for it to undertake an exploration program on the Westdome and Shawkey properties.

● At the beginning of December 2003, Richmont Mines Inc. acquired the East Amphi and Fourax properties from McWatters Mining Inc.

● Major exploration work made it possible for Inmet Corporation to increase reserves at the Troilus Mine from 22.6 Mt to 42.5 Mt, therefore extending mine life by four years. Inmet is currently undertaking development work on the J-4 Zone, which it expects to mine, alternating with the Main Zone, in 2004. In August 2003, Troilus Mine celebrated production of its one millionth ounce of gold.

Outlook for 2004

● In 2004, the weakness of the US dollar should continue to contribute to supporting the price of gold. According to the majority of analysts, the price of an ounce of gold should stay above the US$400 mark, as long as the US dollar remains at or below the level it reached at the end of December 2003. However, the price of an ounce of gold could rapidly sink below the US$400 mark if the American dollar regains its vitality, investment demand being largely supported by investment funds. It is probable, though, that the average price of gold will remain higher in 2004 than in 2003, possibly reaching US$380 to $420.

● A 12% drop in gold shipments from Québec is expected in 2004, mainly following closure of the Sigma-Lamaque Mine and the temporary shutdown of the Mouska Mine.

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Gold






Metallic mineralsFerrous metals

Iron NiobiumVanadium

Iron ore

Global context

● The substantial growth in Chinese imports contributed greatly to the significant rise in reference prices for iron ore in 2003. The Québec Cartier Mining Company (QCMC) and the Iron Ore Company of Canada (IOC) obtained increases of 9.66% for concentrates and of 10.19% for pellets on the European market. However, the increases were insufficient to counter the impact of the significant depreciation of the American dollar, when prices, established in American dollars, were converted to local currency of many of the world's top iron ore producers.

● Fuelled by Chinese consumption, world production of crude steel hit another record high in 2003. According to preliminary data from the International Iron and Steel Institute (IISI), global production ended the year with an increase of about 6.5%, mostly due to China, where production grew by nearly 20%, while production in the rest of the world increased by about 3%. Canadian production, on the other hand, dropped approximately 4%, while production in the United States (-1.0%) and the European Union (0.8%) remained relatively stable.

● According to AME Mineral Economics, the global steel industry's excellent performance led to a rise of more than 9% in iron ore consumption in 2003. In fact, the 15% increase in China led to growth of more than 30% of imports. There has been very little change in the total consumption of the European Union, the United States, and Canada, the major markets of Québec-Labrador iron ore producers.

● The top world suppliers of iron ore recorded a considerable increase in sales in 2003. In fact, major producers operated at full capacity without being able to meet the strong surge in





Chinese demand, which even led them to accelerate certain expansion projects.


● After eleven months, growth in the shipments of the three Québec-Labrador iron ore producers was strictly related to exports, since the Canadian market was in decline.

● The agreement concerning the $196 million financial arrangement between QCMC and Investissement Québec, combined with financial commitments by the owners, the employees, and the towns of Fermont and Port-Cartier, made it possible for QCMC to implement its mining plan, which consists of extracting the iron ore from Mont-Wright over the next 15 years. This agreement led to financial restructuring of QCMC, effective on December 31, 2003.

● In 2003, QCMC increased its shipments of concentrate and pellets, rising from 11.5 to 13.6 Mt. Iron ore pellets represented nearly 65% of the tonnage shipped.

● In 2003, Wabush Mines shipped more than 5.23 Mt of pellets, which is nearly 16% more than in 2002. Wabush Mines has completed the initial phase of an experiment to combine IOC concentrate with its own.

● The past year has been particularly difficult for IOC, which, in spite of a well-filled order book, is not anticipating any profit. The company announced that it will need to reduce its unit costs by 18% and increase production by 10% to remain competitive at the global level. IOC was unable to meet its 15.8 Mt shipping forecasts due to technical difficulties. Shipments totalled 14.9 Mt, 82% of which were in pellet form.

Outlook 2004

● Crude steel production is expected to continue to grow in 2004. It could reach the billion tonne mark for the first time. This increase will again be largely attributable to steel consumption in China. However, the economic recovery should also make it possible for industrialized countries to at least increase their overall steel production. Global demand for iron ore will therefore rise again, once more mainly due to China, which should also continue to significantly increase imports. However, even if consumption were also to improve in North America and Europe, levels would remain well below those recorded in 2000.

● Following agreements reached in mid-January, the three top world producers obtained an 18.62% increase in the reference price of fine ores on the European and Japanese markets for 2004, the largest since 1980. More substantial than analysts normally expect, this considerable gain is mainly a result of the surge in Chinese demand, though many other factors, including the increase in world steel prices and the significant depreciation of the American dollar, no doubt also contributed. According to certain analysts, these early agreements show how concerned the steel industry is about ore supply.

● The three Québec-Labrador companies now expect to maintain or increase their shipments in 2004. QCMC is forecasting sales of 13.2 Mt of ore, with 8.8 Mt in pellet form. As for Wabush Mines, it is expecting to use its full 6 Mt pellet production capacity. One third of its production should be headed for the Chinese market. IOC, on the other hand, expects to produce at full capacity and ship more than 16 Mt of ore, 77% of which will be in pellet form.

Niobium

● Ferroniobium shipments in Québec amounted to nearly 3,300 tonnes, a decline of 1.9% with respect to 2002. The appreciation of the Canadian dollar and the drop in the average price of ferroniobium, mainly on the American market, affected profits at the Niobec Mine.

● The Tribunal administratif du Québec and the Superior Court ruled in favour of Niocan inc. in the case brought by opponents of its development project for the Oka niobium deposit.

Vanadium

● During summer 2003, McKenzie Bay Resources Ltd. completed work to obtain the data necessary for designing a pilot production plant for high purity vanadium electrolyte. In July, the company submitted an environmental impact assessment for the construction of a mine and refinery to Ministère de l’Environnement du Québec and Fisheries and Oceans Canada.

● Current progress in the vanadium electrolyte market forced the company to reorient its development strategy and indefinitely postpone construction of its pilot electrolyte production plant. Its new development strategy is based on the sale of its Windstor electricity production system, consisting of a wind turbine combined with vanadium fuel cells.







Gold






Metallic mineralsBase metals

CopperNickelZincMagnesium

Copper

Global context

● Various cutbacks in mining production contributed to stabilizing global refined copper production in 2003. This production discipline, combined with an increase in consumption largely attributable to Asia, and more specifically, to China, therefore placed the global copper market in deficit in 2003, after two years of oversupply. In fact, the copper stocks of metal exchanges have progressively decreased throughout the year; drop by nearly 40%, compared to the end of 2002.

● Due to improved market conditions, but also because of the general interest investment funds have shown in base metals, the average annual cash price of copper on the London Metal Exchange (LME) increased by 14% compared to 2002, rising to US81¢/lb. Although this is its highest level since 2000, it remains far below the average price for the 90s, which was about US$1/lb. However, after a rather calm first half-year semester, the price of copper ended the year on a high note, passing the US$1/lb mark for the first time since 1997. It ended the year at US$1.05/lb, up by about 50% since the end of 2002. Unexpected production disruptions and the threat of strikes contributed to the steep rise at the end of the year.

● Constraints on supplies of concentrates for smelters, resulting from various cutbacks by producers as well as from a significant increase in smelting capacity in China and India, continued in 2003 and translated into additional reductions in treatment and refining charges. In light of information available at the beginning of the year, it appears that these costs will fall again in 2004, at least in the first half of the year.

● The European Commission, coordinating with the US Department of Justice and the Competition Bureau, opened an investigation to determine whether there is any evidence of collusion in the copper concentrate industry.






● In 2003, Québec's copper shipments fell to 80,000 tonnes, a drop of nearly 8% compared to the previous year. The value of shipments amounted to 195 million dollars, which corresponds to a drop about equal to the one for shipments.

● Last October, Noranda announced a restructuring plan for operations at the Horne Smelter. The plan involves a 20% cut in annual production, down to 145,000 tonnes of copper from the 185,000 tonnes normally produced. It should make it possible to preserve 500 jobs.

● Production levels at the Bouchard-Hébert, Louvicourt, and Selbaie mines declined significantly during the year. The slump can be attributed mainly to depletion of their mineral reserves. On the other hand, a significant increase in shipments from the Joe Mann and LaRonde mines has been noted.

● In 2003, the only noteworthy increase in shipments was from the Bell Allard Mine, up by 17% compared to 2002, when there was a one-month work stoppage. During the year, Noranda confirmed that operations would cease at the mine in December 2004 after depletion of mineral reserves.

● Campbell Resources announced, last October, that development work would be resuming on the Copper Rand 5000 Project. Production should begin during the first quarter of 2005.

Outlook for 2004

● Ongoing firm demand in China as well as heightened consumption in the West should keep the refined copper market in a deficit situation in 2004, in spite of the anticipated increase in production. For that matter, the increase in the price of copper in 2003 has already led some producers to reopen their mines or return to normal activities, while others are considering doing the same. The resulting increase in production, as well as the gradual sale of a stockpile of 200 kt of copper cathodes set aside by Chile's Codelco, the world's largest copper producer, could temper price increases. Analysts nevertheless expect that the average annual price of copper will continue to increase in 2004.

● For 2004, Québec's copper shipments are expected to drop by 23% compared to 2003.

Nickel

Global context

● Global consumption of primary nickel increased significantly in 2003. It benefited from growth in stainless steel production, which accounts for almost two thirds of nickel use, and from the limited supply of nickel from recycling of stainless steel. The increase in consumption came primarily from Asia, particularly China.

● This sharp increase in consumption, combined with the fact that production remained relatively stable, resulted in a deficit on the global nickel market; though it was alleviated, in a manner of speaking, by the sale of a 60 kt stockpile by Russia's Norilsk, the world's largest producer. The Western World’s commercial stocks therefore remained relatively low.

● With the strongest fundamentals of all the base metals, the price of nickel soared in 2003, reaching its highest levels since 1989 at year end. The average annual cash price of nickel on the London Metal Exchange (LME) rose from US$3.07/lb to US$4.37/lb, an increase of about 42%. In addition, given that it ended the year at US$7.55/lb, the price of nickel rose more than 130% compared to the end of 2002. This year-end jump was fuelled by speculation surrounding negotiations, then underway, for renewing collective bargaining agreements at Falconbridge's facility in Sudbury. The price of nickel also benefited from the general interest investment funds have shown in base metals.

● Among events marking the global nickel industry in 2003, the 13 week strike at Inco's facilities in Sudbury and the release of nickel stocks by Norilsk are worth noting.


● According to preliminary data, the volume of Québec's nickel shipments remained relatively stable in 2003. However, their value increased by 22% because of the sharp price increase.

● The Raglan Mine, on the Ungava Peninsula, is the only nickel producer in Québec. In 2003, production reached 25.2 kt of nickel, a 2% increase compared to 2002.

Outlook 2004

● Already bolstered by the vitality of Chinese demand, the primary nickel market will also benefit from increased consumption in industrialized countries in 2004. World production of stainless steel is therefore expected to grow substantially. This will result in a sharp rise in demand for nickel, which should translate into a market deficit. In fact, supply will be hampered by the lack of significant new production capacity, a situation that should even last into 2006. In addition, the supply of recycled nickel should remain limited. Therefore everything is set for the average annual price of nickel to increase significantly again in 2004.

● In 2004, the Raglan Mine should produce essentially the same quantity of nickel as in 2003.

Zinc

Global context

● Following the drop in 2002, world production from zinc mines started to climb again in 2003; however, it only led to a slight rise in production of refined zinc. That increase, lower than the one for consumption, led to a significant drop in global oversupply, which still remains high. Unlike copper and nickel, therefore, commercial stocks of zinc in the western world rose again in 2003, though only a little. The zinc market benefited from strong Chinese demand for galvanized steel and the decline in net exports from China.

● Since the fundamentals of the zinc market only improved slightly, its average annual cash price on the London Metal Exchange (LME) only rose by a little more than 6% compared to 2002, to reach US37.6¢/lb. Though the annual average remained low with respect to the 90s, the price of zinc, after two particularly difficult years, nevertheless rose vigorously in the last quarter. It ended the year at US45.7¢/lb, an increase of more than 34% compared to the end of 2002. It therefore benefited from the general interest in

base metals shown by investment funds.

● The problem of concentrate supply for smelters continued in 2003; it translated into reduced treatment charges for a second consecutive year. In fact, this reduction, combined with low zinc prices and the appreciation in local currencies with respect to the American dollar, led to some smelter shutdowns, primarily in Europe.


● According to preliminary data, the volume of Québec's zinc shipments increased by about 7% in 2003, rising from 237,000 tonnes to 253,000 tonnes, while their value increased by less than 1%. The increase in the price of zinc was not sufficient to counter the impact of the considerable appreciation of the Canadian dollar.

● In July 2003, Noranda Inc. sold part of its interest, dropping from 49% to 25%, in the CEZinc refinery in Salaberry-de-Valleyfield. In 2003, the refinery operated at full capacity. The upturn in the price of zinc should make it possible for CEZinc to maintain that production level in 2004.

● In 2003, the only noteworthy increase in shipments was at the Bell Allard Mine, near Matagami. They were 30% higher than the previous year, when operations were affected

by a one-month work stoppage. During the year, Noranda confirmed that operations would cease at the mine in December 2004, after depletion of mineral reserves. In addition, Noranda has advised the local population that the Perseverance Project will not guarantee ongoing mining operations in Matagami; the company is waiting for the price of zinc to reach an acceptable level before beginning development work on the property. There could be a delay of more than 18 months between a production decision and commercial start-up.

● Selbaie Mines' zinc shipments have dropped sharply. It is currently processing the ore left in its stockpiles. The operation should be completed by the beginning of 2004. Shipments also decreased at the Louvicourt Mine.

Outlook 2004

● In 2004, refined zinc will benefit from significant growth in Chinese demand, but also from rising demand in industrialized countries. Increased demand and the limited increase in production resulting, among others, from various smelter closings should place the global zinc market into deficit. In addition, according to certain analysts, exports from China could fall again, since the Chinese government has lowered tax rebate on refined zinc exports. This improvement in the fundamentals of the zinc market will make it possible for the average annual price to increase again, in spite of relatively high levels of worldwide stocks.

● For 2004, a drop of about 12% is anticipated in Québec zinc shipments, from 253,000 tonnes to 222,000 tonnes. This drop is mainly due to depletion of mineral reserves

Magnesium


● The Magnola Plant temporarily ceased production in April 2003. In fact, analysts do not expect it to reopen for several years. In 2003, Magnola produced just over 9,000 tonnes of magnesium from serpentine tailings from the Jeffrey Mine, in the Eastern Townships.

● The Norsk-Hydro plant, in Bécancour, produces magnesium from imported raw material. In 2003, Norsk-Hydro operated at full capacity (48 kt Mg). Management anticipates identical production in 2004.


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Industrial minerals in 2003

ApatiteLimestoneChrysotileDolomiteGraphiteIlmeniteMicaStoneBrineSaltSilicaTalcPeatOutlook 2004

Apatite/Ilmenite

● En 2003, SOQUEM continued development work on the Sept-Îles apatite-ilmenite deposit. The possibility of developing titano-magnetite was evaluated. According to a feasibility study, this residue can be profitably recovered from the concentrator. In addition to Norsk Agri Canada, another foreign company has indicated interest in the Sept-Îles apatite. SOQUEM is currently evaluating the possibility of going ahead with this project and expects to reach agreements with investors and future clients during the coming months.

Limestone

● Ressources d'Arianne Inc. initiated grinding tests in 2003 on calcium carbonate from the





Calcites du Nord quarry. Pilot tests are also underway at the Centre spécialisé en pâtes et papiers, in Trois-Rivières, on incorporating ground calcium carbonate (GCC) to replace kaolin as a filler in commercial pulp, to obtain whiter paper. Industrial tests should be carried out in 2004, with papermakers.

● Last May, Graymont began production at the new limestone quarry (quarry no. 6), in Saint-Adolphe-de-Dudswell. The new quarry should guarantee the supply of quicklime, hydrated lime, and various pelletized products (agricultural lime) to Graymont's customers for the next 40 years. In 2003, the company's total production for the summer was essentially the same as for 2002.

Chrysotile

● Chrysotile shipments dropped by about 28.5% because of strong competition on international markets from Russian and Brazilian producers and the considerable appreciation of the Canadian dollar.

● Jeffrey Mine, which filed for bankruptcy protection under the Companies' Creditors Arrangement Act (C-36) in October 2002, twice obtained the Court's authorization to temporarily resume production to supply certain customers, including Thyokol, an American firm.

● LAB Chrysotile announced that it was temporarily shutting down the Bell Mine, from August to November 2003, and suspending operations at the Lac d'Amiante Mine for an indefinite

period, starting in November 2003.

● Japan announced that it intends to ban the use of several products containing chrysotile as of October 2004.

● An article published in the November 2003 issue of Inhalation Toxicology showed that biopersistence in the lungs is in the same order as glass fibre (recognized as non-carcinogenic by the European Union) while amosite persists almost indefinitely.

Dolomite

● Dolomex Inc., wholly-owned subsidiary of Mazarin Inc., was transferred to the new company, Sequoia Minerals Inc., on December 29, 2003. Sequoia is listed on the Toronto Stock Exchange. Its activities will focus exclusively on developing industrial minerals: niobium, graphite, dolomite, etc.

Graphite

● The TIMCAL Group, owner of Stratmin Graphite Inc., which operates the Lac-des-Îles graphite mine, near Mont-Laurier, has reduced production by 25% compared to 2002. The drop in demand in the steel sector and strong competition from China are the principal reasons. To diversify production, in 2003, Timcal Canada Inc. opened a new natural graphite processing plant in Terrebonne, near Montréal.

Ilmenite

● In 2003, production of titanium slag at QIT-Fer et Titane inc. was down considerably compared to 2002. This situation can be attributed to a drop in demand on the pigment market. QIT produced 250,000 tonnes of UGS slag (94-95% TiO2). It is planning an expansion that

would increase production to 350,000 tonnes, with an investment cost lower that the previous investment.

Mica

● In Québec, mica is produced by Suzorite Mica Products, which belonged to Zemex Corporation. The latter was purchased by Peru's Cementos Pacasmayo S.A.A., in March 2003. The value of the transaction was roughly US$100 million. The deposit is located near Parent, in the Haut-Saint-Maurice RCM. The processing plant is in Boucherville. In 2003, total production was essentially the same as in 2002. More than 75% of production is used for manufacturing automotive plastics.

Stone

● Stone production has dropped by about 12% in Québec compared to 2002. As it did for other producers of construction material, the increase in the Canadian dollar lowered income in this sector.

Brine

● In 2003, Junex drilled a new brine well in Saint-Angèle-de-Laval, 13 km from the Bécancour well. Total production from the site amounted to 850,000 litres in a 30-day test. The concentration of dissolved salts in the well's brine is 34%. Junex Solnat, a Junex subsidiary, markets the natural brine produced. Junex is planning to transform the Bécancour and Saint-Angèle-de-Laval structures into underground storage reservoirs for natural gas, while producing the brine contained in the natural reservoirs.

Salt

● In 2003, Mines Seleine, owned by Rohm and Haas, of Philadelphia, maintained production at a level comparable to 2002. The salt produced is mostly used to de-ice Québec roads.

Silica

● Exploration Québec/Labrador inc. extracted a 3,000-tonne sample of silica from its Lac Daviault quartzite deposit, near Fermont, for pilot testing. The promoter is considering mining the deposit in 2004 to meet demand from national and international markets.

● Unimin Canada Ltd. is the largest producer of silica in Canada. It operates a siliceous sandstone deposit in Saint-Canut and a quartzite deposit in Saint-Donat-de-Montcalm. It also has a processing plant in Saint-Canut. In 2003, total production was essentially the same as in 2002.

Talc

● The steatite quarry, located in the Saint-Pierre-de-Broughton area, is operated by Les Pierres Stéatite inc. The company specializes in producing blocks for sculpture and refractory plates. Production for 2003 is 35% lower than for 2002.

Peat

● Compared to 2002, sales of peat dipped by more than 8%, from 9.56 million bags (6 cu-ft) to 8.78 million. Peat produced in Québec is exported primarily to the United States. The appreciation of the Canadian dollar compared to the American dollar therefore translated into a drop in business income. Most analysts consider that the situation should continue, at least into the first quarter of 2004.

Outlook for 2004

● In 2004, demand for calcite should rise by 2% to 7%, particularly in the form of calcium carbonate (GCC), which replaces kaolin in paper. As for limestone, demand as well as price should remain constant.

● Demand for pelletized dolomitic lime, used as a soil amendment, should rise in 2004.

● Only graphite for the high technology market (batteries) should experience growth in 2004. The graphite market remains largely dominated by China.

● In 2004, demand for de-icing salt should be comparable to 2003. On the other hand, the brine market should experience moderate growth.

● Graphite production from the Lac-des-Îles and Terrebonne plants of the Timcal Group should be similar to 2003.





Gold






Mining investment, financing and taxation in 2003

The mining industry is a sector of the economy that makes substantial yearly investments in mine complex development in order to develop identified deposits and continue mining production. In addition, investments are also made in exploration and deposit appraisal to replenish ore reserves.

In 2003, total mining investment declined for a second consecutive year to a level of about $723 million. This is a drop of $110 million (13%) with respect to the $833 million recorded in 2002. The drop can be attributed to the recent end of major mine construction or expansion projects in Québec as well as to the more limited number and size of new mine projects in the past two years. Investment in mine complex development therefore amounted to $567 million in 2003, which is $154 million less than the $721 million invested the previous year.

Québec's excellent investment climate and the industry's improved economic situation account for the $149 million in exploration and deposit appraisal expenditures observed in 2003. This amount is up $37.4 million (34%) from the $111.2 million recorded in 2002 and rose for the third consecutive year. Gold and nickel were highly sought after commodities, while exploration and deposit appraisal expenditures for diamonds reached $16.2 million in 2003.






Gold






Mining investment, financing and taxation in 2003Principal exploration and development activities

Activities related to exploration titles continued unabated in Québec in 2003:

● Nearly 27,000 new claims were registered in 2003. Bear in mind that 66,419 were registered in 2002, and 42,226 in 2001, as opposed to 18,000 on average, per year, from 1991 to 2000.

● At the end of the year, 152,739 claims were active.

● A great deal of exploration work and development was carried out in the field, in 2003, particularly for diamonds in the Otish Mountain area, for nickel in the Cape Smith Belt (Ungava Trough), and for gold, copper, and zinc in northwestern Québec. Exploration expenditures for diamonds in particular continued to climb for a fourth consecutive year, to reach 16.2 million dollars in 2003.

Diamonds in the Otish Mountain area

● In 2003, Ashton Mining of Canada and SOQUEM announced the discovery of three additional kimberlitic bodies on the Foxtrot Property (Renard 9 and 10 and Lynx). The Renard cluster now consists of nine kimberlites, while the Lynx Anomaly lies 2 km west of Renard 65. In November, the companies confirmed that a 36.5-tonne cumulative sample of material from four bodies in the central zone of the Renard cluster (2, 3, 4, and 65) returned a diamond content of 0.55 carat per tonne. This result does not take into account the presence of a diamond, with a weight of at least four carats, in drill core from Renard 65.

● Further south, Ditem Explorations and Pure Gold Minerals announced the discovery of two other kimberlite pipes (H-3, H-4) on the Tichégami project.

● Dios Exploration discovered three kimberlitic bodies on the Hotish project.

Nickel in the Cape Smith Belt (Ungava Trough)

● Following the discovery of several new mineralized zones on the Expo-Ungava Property, 15





km south of the Raglan Mine, Canadian Royalties announced, in 2003, that indicated resources for the Mesamax Deposit have been estimated at 1.45 Mt at 2.1% nickel, 2.7% copper, 1.0 g/t platinum, and 4.2 g/t palladium. It also announced the discovery of the Tootoo Zone (10.51 m at 3.14% nickel, 2.56% copper, and 2.6 g/t palladium) in drilling and of a new mineralized zone in the area of the Expo Deposit (4.8 m at 2.86% nickel, 1.46% copper, and 3.44 g/t palladium).

● Anglo American and Knight Resources also announced the discovery of new mineralized zones on the West Raglan Property, 120 km west of the Raglan Mine; a drill hole returned an interval of 14.75 m at 3.04% nickel, 1.13 % copper, and 3.0 g/t palladium.

Gold, copper, and zinc in northwestern Québec

● After spending two years covering nearly 9,400 km2 with airborne MegaTEM surveys, Virginia Gold Mines, Noranda, and Novicourt announced the discovery of two polymetallic mineralized zones in felsic volcanic rocks.

● Cambior continued intensive drilling on the J Zone at the Doyon Mine; an access drift is being driven to mine the zone, which has inferred resources estimated at 356,000 t at 7.5 g/t Au, in 2005.

● Cambior also announced the discovery, at depth, of two gold-bearing zones on the Westwood Property, 2 km east of the Doyon Mine: the North corridor (12.1 g/t Au over 2.9 m) and the Westwood corridor (8.1 g/t over 6.5 m).

● At the Mouska Mine, Cambior will be shutting down production for ten months, in 2004, to sink the internal shaft an additional 210 metres, to 880 metres, allowing access to mineral resources of 142,000 t at 15.4 g/t Au.

● Agnico-Eagle Mines continued exploration of Zone 20 North at the LaRonde Mine; a feasibility study of the LaRonde II project, dealing with development of a new deep mine (3,050 metres), will be completed in 2004.

● On the Lapa Property, Agnico-Eagle Mines announced updated inferred resources of 4 Mt at 8.5 g/t. West of the Lapa Property, Queenston Mining intersected the extension of the Contact Zone (11.5 m at 3.7 g/t Au) in drilling.

● Near Val-d’Or, South-Malartic Exploration completed more than 15,000 metres of drilling on the Croinor Deposit, to produce a new evaluation of mineral resources. The company is planning to take a 20,000-tonne bulk sample.

● North of Rouyn-Noranda, Globex Mining Enterprises carried out a drilling program on the Duquesne West Property, where inferred resources of 665,000 t at 11.4 g/t Au have been estimated on the South, Fox, Shaft, and Liz zones.

● North of Amos, Cambior and Aurizon Mines have begun sinking the Sleeping Giant Mine shaft an additional 200 metres, to a depth of 1060 metres, to provide access to new indicated resources (77,000 t at 12.2 g/t Au) and inferred resources (192,000 t at 10.3 g/t Au) discovered below Level 785, since 2001.

● Aurizon Mines has continued exploration of Zones 118 to 120, previously discovered on the Casa Berardi Property, east of the old West Mine, where inferred resources of 1.7 Mt at 6.1 g/t Au have been estimated, in addition to the proven and probable reserves of 6.9 million tonnes at a grade of 6.7 g/t Au announced in 2000.

● Further north, International Taurus Resources and Fairstar Explorations have begun development work on the Fenelon Deposit. The most recent resource estimate of a limited portion of the known mineralized zone includes both an indicated mineral resource of 49,550 tonnes at a grade of 11.24 g/t Au and an inferred mineral resource of 38,840 tonnes at a grade of 10.49 g/t Au, representing a total of 31,000 ounces of gold.

● Near Chibougamau, Campbell Resources has driven a drift to mine, in 2004, the West Zone of the Joe Mann Mine, where an increase in mineral resources has been estimated. Development work has begun again on the Copper Rand gold and copper project and mining should resume at the end of 2004.

● In the James Bay area, Eastmain Resources has announced a new mineral resource estimate for the Eau Claire gold deposit:

❍ an indicated mineral resource of one million tonnes at a grade of 8.15 g/t Au;❍ an inferred resource of 1.6 million tonnes at a grade of 5.88 g/t Au, for a total of more

than 578,000 ounces of gold .

● In the La Grande Belt, Virginia and its partner GlobeStar Mining have announced a first resource estimate of 200,000 t at 14.5 g/t Au (Orfée Zone) on the Poste Lemoyne Property.

See also

Reports on Exploration ActivitiesHot Spots 2003



http://www.mrnfp.gouv.qc.ca/english/mines/potential/potential-reports.jsp

http://www.mrnfp.gouv.qc.ca/english/mines/spots/spots-hot-2003.jsp





Gold






Mining investment, financing, and taxation in 2003Financing of mineral exploration activities

Funds raised on the Québec capital market by the mining industry finance many exploration projects in Québec. The financing is in the form of common shares, flow-through shares, or debentures.

During the first nine months of 2003, financing from the Québec capital market for mineral exploration projects amounted to 36.4 million dollars, compared to the 46.8 million dollars raised during the same period in 2002. However, the portion of these funds earmarked for exploration projects in Québec was 60% (21.8 million dollars), while it was 38% (17.6 million dollars) in 2002.

● Flow-through shares for exploration investments in Québec during the first nine months of 2003 amounted to 4.4 million dollars.

According to information filed with the Commission des valeurs mobilières du Québec (CVMQ) during the final months of the year, the value of flow-through shares raised in 2003 in Québec, for projects in its territory, should continue its upward trend to reach 15 to 20 million dollars (14.6 million dollars in 2002).

● The Société d’investissement dans la diversification de l’exploration (SIDEX) (Diversification of Exploration Investment Partnership) has closed its second year of activities. In 2003, SIDEX made more than 6.5 million dollars worth of investment agreements with 24 exploration companies.

● Sodemex and Sodemex II made equity investments for more than 8 million dollars in more than 25 exploration companies, most of whose projects are in Québec.

● The Solidarity Fund QFL and Fondaction CSN invested a total of 2 million dollars in the capital stock and debentures of a dozen exploration companies.

● Flow-through and non-flow-through financing sought outside Québec by exploration companies active in Québec should reach comparable or higher levels than in 2002.

The committees working on the huge pan-Canadian project to harmonize and streamline securities regulation throughout the country have made a great deal of progress in 2003. Canadian securities authorities, including the CVMQ, are working on reducing differences between provincial and





http://www.sidex.ca/

territorial laws. Therefore, in December 2003, with its partners, the CVMQ released its proposal for harmonizing securities legislation between Canada's thirteen provinces and territories. For more information, please see the CVMQ website.



http://www.cvmq.com/





Gold






Mining investment, financing and taxation in 2003Mining taxation

Refundable tax credit for resources

● Budget Speech on June 12, 2003: the Québec Government announced a 25% reduction in the refundable tax credit for resources (refundable and non-refundable portions).

● The overall 60% credit to which eligible mining companies could have been entitled is now 45%. The new credit is distributed as follows:

Companies that are not extracting a mineral resource

Other companies

Refundable portion

Non-refundable

portion

Total Refundable portion

Non-refundable

portion

Total

Expenses related to mineral resources

Near or Far North

Elsewhere in Québec

33,75 %

30 %

11,25 %

15 %

45 %

45 %

18,75 %

15 %

26,25 %

30 %

45 %

45 %





Expenses related to mineral resources(cut stone)

15 %

s. o.

15 %

15 %

s. o.

15 %

● From now on, this credit is taxable, both under the Taxation Act and the Mining Duties Act.

● The rate reduction and the taxation of the credit apply to eligible expenses incurred after June 12, 2003.

Flow-through share system

● Extended until December 31, 2004

● The additional deductions of 25% and 50% that could previously be claimed by individual investors have been reduced to 10.42% and 20.83%, respectively.

● Overall deduction of 131.25%.

For flow-through shares issued after the Budget Speech:

● deductions related to issuing expenses for the shares can no longer be transferred to an investor;

● the additional capital gains exemption has been abolished.

Federal Tax Reform

As indicated in the 2003 federal budget, the new federal system for taxation of resource income will be gradually implemented, beginning in 2003, over a period of five years. It includes the following elements:

● allowing an income tax deduction for crown royalties and mining taxes;● eliminating the 25% resource allowance;● reducing the general corporate tax rate on resource income from 28% to 21%;● a 10% tax credit for mineral exploration expenditures. The credit will be granted to

corporations directly incurring qualifying exploration expenditures for the following minerals: diamonds, base metals, precious metals, and industrial minerals that, through refining, become base metals or precious metals.


Gold






Mining environment in 2003

Regulatory controls

● The Ministère de l'Environnement du Québec (MENV) (department of the environment) has continued discussions with the industry concerning renewal of Directive 019 for the mining industry – French only). The Directive specifies the terms and conditions for awarding or renewing the certificates of authorization required by the Environmental Quality Act.

● As part of the Programme de réduction des rejets industriels – French only (PRRI) (Industrial Waste Reduction Program), the Québec Mining Association and the MENV have reactivated the joint panel on Environmental Waste Objectives (EWOs). These objectives will be used to calculate the fees to be paid by companies, which is why a consensus is important.

● On February 26, 2003, the Conseil des ministres adopted the Land Protection and Rehabilitation Regulation – French only. The regulation sets the limits for concentrations of a range of contaminants and therefore establishes clear guidelines for the rehabilitation of contaminated sites. Safe reuse of land and better control of groundwater quality are therefore ensured. The list of experts authorized to certify certain documents (characterization reports, etc.) under this regulation was published on June 18.

● Following its statement on the toxicity of road salts, the federal government published, on September 20, 2003, the proposed Code of Practice for the Environmental Management of Road Salts to reduce their environmental impacts. The Code will apply to activities requiring more than 500 tonnes of road salts in a winter season.

● Amendments to the Canadian Environmental Assessment Act came into force on October 30, 2003. The Canadian Environmental Assessment Registry, available on the Internet, will therefore make it possible to improve public participation in environmental debates relating to the projects presented. A Federal Environmental Assessment Coordinator will also be appointed for each project. One of the Coordinator's tasks will be to coordinate federal and provincial action.

● On December 10, the MENV published a proposed administrative agreement with Environment Canada concerning the environmental assessment processes required by Québec's Environment Quality Act and by the Canadian Environmental Assessment Act. When projects are subject to environmental assessment by both governments, a joint assessment committee will have the responsibility of managing the projects. This new way of





http://www.menv.gouv.qc.ca/milieu_ind/bilans/mines97/chapitre_2.htm

http://www.menv.gouv.qc.ca/programmes/prri/index.htm

http://www.menv.gouv.qc.ca/sol/terrains/loi-reg.htm#reglement

http://www.menv.gouv.qc.ca/sol/terrains/loi-reg.htm#reglement

http://canadagazette.gc.ca/partI/2003/20030920/html/notice-e.html#i2

http://canadagazette.gc.ca/partI/2003/20030920/html/notice-e.html#i2

http://www.acee-ceaa.gc.ca/013/nr031030_e.htm

doing things should contribute to reducing delays and costs of the studies, for governments as well as businesses, while maintaining the quality and integrity of the process.

● The Mining Act has been amended. The Department can demand payment of the entire financial guarantee related to the restoration of a mine site when the financial situation of the operator deteriorates. Plans and specifications for restoration of mine sites closed before 1995 are now prepared at the expense of those responsible for the mine.

● The Regulation Respecting Groundwater Catchment was passed in June 2002, but the bulk of its provisions came into force on June 15, 2003. Any company wanting to pump groundwater to keep its mine site dry must first obtain an authorization from the MENV. Dewatering of a site with the intention of reopening a mine is also subject to this regulation.

● Even if Section 232.11 of the Mining Act gives the Department the power to enjoin a company to perform restoration work on its site if it was closed before 1995, some of the companies responsible no longer exist or are insolvent. Such sites are known as abandoned/orphaned mine sites.

A pan-Canadian committee analyzed the problem and suggested an action plan during the Mine Ministers' Conference held in Halifax, in fall 2003. The plan includes a proposal to develop intergovernmental cost-sharing arrangements to address remediation at high priority sites. These agreements could be used as guidelines for other financial agreements regarding restoration of contaminated sites.

Restoration

● In 2003, the Department invested nearly $200,000 in environmental supervision, maintenance, and monitoring of sites that were transferred back to the Government.

● Restoration of the East Sullivan site continued with coverage by forest waste and treatment of acid mine drainage. Various stabilizing and planting operations were also carried out at the Wood Cadillac and Canadian Malartic sites.

● The Department has begun developing an action plan for restoration of abandoned mine sites. In addition, nearly $220,000 has been spent on a geotechnical study and a hydrogeochemical characterization study of the Manitou site.

● In 2003, The Department came to an agreement with IOC for restoring mine sites in the Schefferville area. The agreement led to restoration work on tailings areas and open pits and to improving their security. Abandoned buildings were also dismantled and stripped areas were planted.

See also

Research and development in 2003

http://www2.publicationsduquebec.gouv.qc.ca/cgi/fetcher.cgi?type=2&file=/M_13/M13_A.htm&PHPSESSID=e675ae006298874881fde7d623f5fcb7

http://www.menv.gouv.qc.ca/eau/souterraines/index-en.htm

http://www.nrcan.gc.ca/mms/mmc/2003/aplan02-e.pdf


Gold






Strategic activities in 2003

Natives

● Through the Paix des braves agreement reached with the Cree on February 7, 2002, and the Sanarrutik agreement reached with the Inuit on April 9, 2002, Québec has made a commitment to encourage and facilitate the signature of agreements between mining promoters and the Cree and Inuit.

● Individuals and businesses engaged in mining exploration activities in the James Bay or Nunavik areas have been invited to send the Cree or Inuit any information that could help to understand their projects as well as any requests for goods and services.

● There are currently three Native mineral exploration funds: the Nunavik Mineral Exploration Fund, established in 1998, the Nitassinan Innu Mining Fund, established in March 2000, and the Cree Mineral Exploration Board, created in March 2002.

● In 2003, there were 75 Cree workers (25%) at the Troilus gold mine, north of Chibougamau, and 65 Inuit workers (14%) at the Raglan nickel mine in Nunavik.

The Québec Protected Areas Strategy

● The Department is contributing to efforts to create protected areas, while looking out for the interests of the mining industry.

● The space reserved for protected areas – French only – continued to grow. It rose from 2.9% in

1999 (48,000 km2) to 5.3% in March 2003 (87,700 km2). The Québec Protected Areas Strategy is targeting the protection of 8% of Québec's land area, or 133,000 km2, by 2005.

● The designation of new areas in the Abitibi-Témiscamingue Region and the James Bay Territory will be announced shortly.

● In 2003, a strategy for protecting outstanding geological sites was developed. (MRNFP - Outstanding Geological Sites).





http://www.mrnfp.gouv.qc.ca/aires/index.jsp

Pan-Canadian Diamond Strategy Steering Committee

● The premiers of the provinces and territories asked their mine ministers to develop an action plan for a pan-Canadian diamond strategy that would maximize the benefits for Canadians from all stages of the emerging diamond industry. The Northwest Territories and Québec were given joint responsibility for preparing the strategy.

● The committee has begun its work. It will be undertaking various consultations over the coming months. A proposal will be presented at the next meeting of ministers, which will be held in Iqaluit, in July 2004.

Comité sur l’efficacité accrue de l’exploration

(committee for improving exploration efficiency)

● The Committee, consisting of industry representatives, was set up to suggest measures to stimulate mineral exploration. It submitted its recommendations at the end of October 2003. The Minister's reaction to most of the recommendations was favourable.

● Several measures related to the development of geoscience information and the management of mineral titles could be implemented in 2004. In addition, the Department intends to support the mineral exploration industry in seeking foreign investment as well as in recommending certain tax measures to the Ministère des Finances.

Comité sur le soutien à l’exploitation minière

(committee on support for mining operations)

● The Committee, consisting of industry stakeholders, will propose measures to improve mining productivity. It will specifically study the following issues:

● Renewal of reserves● Taxation● Research and development● Labour-force training● Environment● Regulations

● The Committee will be submitting its report at the end of March 2004.

Geoscience activities of the MRNFP (mines)

● The Department, through Géologie Québec, has earmarked a budget of nearly 6 million dollars for inventories and geoscience surveys. During the year, nine new geological maps (covering more than 35 000 km2) were produced. They consist of three 1:250,000 maps of territory in the Far North and six maps at a scale of 1:50,000 of areas in the Abitibi Region and the Grenville Province. In addition, twenty or so studies dealing with a theme or an area, including metallogeny, industrial minerals, geochemistry, or geochronology, were carried out in various regions of Québec. The results were disclosed at Québec Exploration 2003, last November.

See also

Department field work

Québec Exploration 2003

From November 24 to 27, Québec City hosted the Québec Exploration 2003 event. A cooperative effort involving the Department and the Québec Mineral Exploration Association, this first edition attracted 1,100 participants from the mining, financial, and research sectors. Due to its success, the event will be repeated from November 22 to 25, 2004 in Québec City.


http://www.mrnfp.gouv.qc.ca/english/mines/potential/potential-work.jsp




Gold






Production

Note to Readers

The 2003 data on mining industry shipments and investments in Québec are preliminary. They were compiled from statistical surveys carried out in the fall of 2003. Updating was completed on February 4, 2004.

Coordination and Text

Direction du développement minéralDirection de Géologie QuébecDirection de la politique et de l’économie minéralesDirection des communications

Photographs

Marc-André Grenier

Production

Ministère des Ressources naturelles, de la Faune et des ParcsDirection du développement minéral5700, 4e Avenue Ouest, C 408Charlesbourg (Québec) G1H 6R1





Téléphone : (418) 627-6295Ligne sans frais : 1 800 463-3357 (sans frais au Canada)Télécopieur : (418) 643-9297Courriel : [email protected]

Distribution

This publication is available online only, at: www.mrnfp.gouv.qc.ca/bfs2003/english


mailto:[email protected]

http://www.mrnfp.gouv.qc.ca/bfs2003/english/index.htm



MRNFP - Summary and highlights for 2003

Documents

Transcript of MRNFP - Summary and highlights for 2003