May Two-Four: Canadian miners’ glass half-full outlook

“The greatest Canadian stories are about people who went to faraway places to make their fortune in natural resources, be it mining, forestry, oil and gas, and even hydroelectric power.” – E-Power Resources CEO James Cross.

Today (19 May) is Victoria Day in Canada, declared a federal holiday back in 1845. This year’s May Two-Four series by Mining.com.au celebrates the resources sector and its workers as Canada honours Queen Victoria’s birthday.

After Confederation, Queen Victoria’s birthday was celebrated every year on May 24 unless that date was a Sunday, in which a proclamation was issued providing for the celebration to be held on May 25. The (tweaked) series title is derived from a common moniker in modern day Canada being ‘May Two-Four’ – a double-entendre. Not just a reference to the date of the celebration – it marks the unofficial start of the cottage season where cases of beer are consumed by hardworking Canadians.

Last year, Mining.com.au published its inaugural series in celebration of the statutory holiday to honour the Australia-Canada trade relationship and Canada’s globally significant mining sector.

The two countries share many similarities. Much like Australia, minerals and metals are produced in every province and territory but just four in Canada account for more than 75% of the total value of total production – Ontario, Québec, British Columbia, as well as Newfoundland and Labrador.

Canada holds vast mineral reserves. The mining sector directly or indirectly provides about 711,000 jobs and represents 5.9% of the Canadian economy. 

As of September 2024, there were 504 major projects under construction or planned over the next decade in Canada in the energy, forest, and mining sectors, which have a combined potential capital value of C$632.6 billion ($707.4 billion). This is an increase from 2023 when 493 projects and capital value C$570.5 billion was recorded.

In the 2024 inventory, there are 138 mining projects with a combined value of C$117.1 billion.

Glass half-full outlook

Consensus among executives of Canadian mining companies polled by this service is that critical minerals, as well as precious and base metals will be on most investor’s radars throughout 2025, as will flow-through financing, tax incentives, and a concerted push for being self-sufficient following the federal election. 

Protracted project development timelines, high capital expenditure requirements, market influence over prices, and the potential for supply disruptions amplify critical mineral value chain risks in particular, executives agree.

Graham Carman, Managing Director of zinc-focused explorer Tinka Resources (TSX-V:TK) identifies several emerging and current trends including Canada’s commitment to funding mineral exploration, including critical metal projects that will support future growth in the mining and exploration sector. 

“Additionally, favourable tax incentives and policies will encourage investments in these industries,” Carman opines.

“The increased demand for metals required for clean energy infrastructure and technology will also continue to benefit Canada’s mining and exploration companies.”

Opawica Explorations (TSX-V:OPW), which is a junior mineral explorer focused on precious and base metals within the Rouyn-Noranda region of the Abitibi Gold Belt in Québec, Canada, believes gold will remain a market focus for many.

Speaking to Mining.com.au, CEO Blake Morgan says the precious metal continues to reach new highs however, the market is yet to see that transfer over to the Canadian mining sector. 

“As gold continues to push higher and higher throughout 2025 I think we will see a dramatic increase in interest in the Canadian junior gold market,” Morgan says nonetheless.

According to North Bay Resources (OTC:NBRI) CEO Jared Lazerson, there are two aspects influencing the market regardless of the gold price.

“Within the junior market, I think that the people are starting to look again, both retail and investment-wise, direct investment, at the good projects. I think if you don’t have a good project, it’s certainly not back to the days of just because you’re in mining, the stock is going to move, you’re going to be able to raise a bunch of money. We’re a long way from that,” Lazerson says.

“But overall, I would say we’re more into a traditional market. The good companies with robust projects and particularly good management, people that are trusted or even unknown. But the bad guys are going to struggle. Guys that have screwed it up and rolled their company back and changed the name. 

“People watch that very, very closely now. I wouldn’t say there’s big dollars coming back into the market, but I would say that people are starting to look at it seriously. What I’m seeing in my case, though, is the larger investment groups or institutions or smaller institutions want to play in the mining sector. There’s a new set of eyes. It may still be mining guys, particularly in the gold – there’s a new set of eyes that are trying to figure out how to get into the market.

“They don’t really want to play in the junior mining space. They don’t really want to get involved in these microcap companies. They don’t really want to get involved in exploration. But there’s just a huge amount of dollars right now that would love to get involved in gold because of the price.”

At the time of writing the gold price was sitting at US$3,231 ($5,027).

Copper Lake Resources (TSX-V:CPL) CEO Terry MacDonald deems base metals to finally return to the radar of investors with opportunistic deals to present themselves. MacDonald opines that there are many junior mining companies in Canada that have “good properties, many with resources, but are greatly undervalued”.  

“This is most prevalent in the base metals sector which has been in a down cycle for several years now, despite the recent improvement in base metal prices. This represents a once-in-a-generation buying opportunity for the savvy investor,” he tells Mining.com.au.

Copper Lake’s CEO believes the decline in value in many juniors is largely attributed to the difficulty in obtaining financing in Canada over the past two years. The decline in share price is also noticeable where companies have used flow-through financing.

“Unfortunately for companies that utilise this form of financing, much of the investing is done through special funds, and these funds often sell the shares as soon as the four-month hold period expires,” MacDonald says. 

“This can result in a huge number of shares being sold which can significantly depress the share price. This was a significant contributing factor for Copper Lake in April 2022 and April 2023. In short, you have a company with valuable resources and significant additional exploration potential that is trading at a fraction of its value.”

Flow-through financing is a Canadian tax incentive that allows the investor to claim the value of their investment as a tax deduction – the government is effectively allowing the company to flow through their tax losses to the investor, making the investment much more attractive for the investor.  

This type of financing contributes almost 70% of the capital raised for exploration undertaken in Canada, according to the Prospectors and Developers Association.

Patrick Cruickshank, CEO of Toronto-based critical minerals explorer Nine Mile Metals (CSE:NINE), has a different perspective in that he believes Canada is lucky to have flow-through funding and tax incentives for Canadian taxpayers and institutions. 

“We do have a way for Australians and Americans to participate in that now. And I do believe regardless of the environment with the government, the environment, with the provincial government, the tax advantages investing and the opportunity is only going to get better going forward because critical minerals are required and they’re here to stay,” Cruickshank explains to this news service.

“And we’re lucky enough that we also have gold as apart of our deposit. It’s not like we’re just a gold company because right now what if gold was to reset back to US$2,000?”

Above all, James Cross, CEO of Canadian graphite explorer E-Power Resources (CSE:EPR), believes the “obvious” emerging trend in 2025 centres on critical minerals.  

According to the Government of Canada, some 67 mining projects in 2025 will process or extract some form of critical minerals, worth C$72.4 billion in potential investment. Of these critical minerals mining projects, 36 projects valued at C$41.7 billion will extract or process copper, nickel or lithium, three key components of EV batteries.

“Everything has to be fast-tracked, or Western Industry grinds to a halt. Now, they, meaning governments and industry, need us more than we need them. Failure to understand that could bring them all down,” Cross tells Mining.com.au.

Tinka’s Managing Director Graham Carman agrees, adding that investors should watch for several key trends in Canada’s resource sector along with a growing focus on critical minerals. This includes metals in Tinka’s Ayawilca deposit such as zinc, silver, and tin, which are becoming crucial for use in energy storage batteries and as renewable energy technologies ramp up around the globe. 

“Investors should pay attention to companies involved in the exploration and production of these minerals in safe mining jurisdictions,” Carman says.

With the global transition to a low-carbon economy, Carman suggests mining companies in Canada will be increasingly driven by environmental, social, and governance (ESG) considerations. Companies that adopt sustainable practices with local indigenous peoples and in stakeholder engagement, as well as integrate clean technologies in their operations, will attract premium valuations and investment, Tinka’s Managing Director adds.

“As global supply chains face ongoing disruptions, there is a growing trend in the resource sector to focus on developing projects in safe, reliable, and stable mining jurisdictions such as Canada, and other well-endowed mining jurisdictions in the Americas such as Peru,” Carman continues.

Will election policies flow-through? 

Like Australia, Canada has long been a safe, reliable, and stable mining jurisdiction, which is well-endowed with minerals and resources. The country’s newly elected federal government emphasises pro-mining policies, promising to expedite project permitting, offer new incentives, and deliver infrastructure spending for the resources sector.

Copper Lake’s MacDonald acknowledges the country has vast resources that have not been developed due to access issues, such as poor roads infrastructure and a slow permitting process over the past two decades. However, the recent change in attitude by the Ontario and federal governments should help to accelerate development and open up new areas.

On 28 April 2025, the Liberal Party won, establishing a minority government with 168 seats. Led by Prime Minister Mark Carney, the Liberals are aiming to create energy corridors and streamline permitting processes, particularly for minerals essential for clean energy and decarbonisation.

Energy and Natural Resources Minister Jonathan Wilkinson recently announced the government will extend the mineral exploration tax credit by two years to encourage investment in junior mining companies. This was due to expire at the end of March this year.

The tax credit provides investors with a 15% incentive to invest in flow-through shares of small project holders. It provides important support to junior exploration companies and its extension is expected to provide C$110 million to support mineral exploration investment.

Minister of Finance and Intergovernmental Affairs Dominic LeBlanc says the extension of the Mineral Exploration Tax Credit is a “testament to our belief in Canada’s vast mineral potential”.

“By supporting the talent and innovation of our resource sector, we are driving economic growth, creating jobs, supporting communities and positioning Canada as a global leader and reliable supplier of critical minerals to the world”

“By supporting the talent and innovation of our resource sector, we are driving economic growth, creating jobs, supporting communities and positioning Canada as a global leader and reliable supplier of critical minerals to the world,” LeBlanc says.

Minister Wilkinson adds that Canada has long been a mining nation, with the responsible and sustainable management of its mineral resources driving job creation and economic growth for generations.

“The Mineral Exploration Tax Credit provides support to junior exploration companies as they develop the mines of the future and lay the groundwork to supply the world with the minerals it is looking for,” the Minister says.

The 15% Mineral Exploration Tax Credit helps exploration companies – especially junior mineral exploration companies – raise capital by providing individual investors with an additional incentive to finance early stage ‘grassroots’ mineral exploration using flow-through shares. 

In 2022, the tax credit supported about 200 companies to raise equity by issuing eligible flow-through shares to more than 10,100 investors. As part of Canada’s Critical Minerals Strategy, in 2022 the federal government introduced the 30% Critical Mineral Exploration Tax Credit, which supports certain critical mineral exploration expenses incurred in Canada and renounced to flow-through share investors.

The tax credit applies to exploration expenditures targeted at minerals used in the production of batteries and permanent magnets – both of which are used in zero-emission vehicles or are necessary in the production and processing of advanced materials, clean technology, or semi-conductors.

Canada’s government is also spruiking projects of national interest, working in partnership with provinces and territories to facilitate faster development, while lowering taxes, as well as red and green tape.

In April, PM Carney said Canada has a tremendous opportunity to be the world’s leading energy superpower, in both clean and conventional energy,

“We are going to aggressively develop projects that are in the national interest in order to protect Canada’s energy security, diversify our trade, and enhance our long-term competitiveness – all while reducing emissions. We can lead the energy transition while ensuring affordable energy at home and building the strongest economy in the G7,” he said at the time.

Push for self-sufficiency

Elaborating on the PM’s comments, Opawica’s Blake Morgan says it’s an interesting situation currently following the US election in that the push for Canada to be self-sufficient is massive. 

“A key factor in self-sufficiency is mining and I think we will see a large push in regards to the sector,” the CEO says.

“Canada is a very mining friendly region, making capital raising, permits etcetera much more streamlined than other regions. From an investment point of view the opportunities are endless with multiple tax concessions and next to no geopolitical issues, making it a great region for investment.” 

Adding to this, Copper Lake’s CEO expects there to be a significant focus in 2025 on building an economy in Canada that is much less reliant on the US. MacDonald says this should mean an increased focus on shortening the approval time for new mines, accelerating infrastructure development such as road and rail access to the Ring of Fire area in Ontario, and increased investment to find new deposits for critical minerals.

E-Power’s James Cross adds that the election is now over, but there could be another soon.

“Regardless of which side holds power, there needs to be massive deregulation, and essentially, an end to the strangulation of Canadian companies, especially juniors, who are mired in paperwork, before they ever leave the office to go do some exploration,” says Cross.

“For generations, Canada was a top mining jurisdiction, both for doing work on the ground, and financing projects outside Canada, through Canadian companies, and employing a lot of Canadian talent. However, that has been declining for many years, and in the last decade, the decline has been in overdrive. The ingredients to turn it around, very fast, in a matter of weeks, are there.”

Toast of the town

Canada produces more than 60 minerals and metals. The total value of Canadian mineral production in 2022 was C$74.6 billion, up from C$58.6 billion in 2021. This growth was led by the increase in production values for nonmetals and coal.

The total value of mineral and metal production has quadrupled since 2000.

Canadian mining companies also hold assets in 96 countries and have increased direct investment abroad to just over C$106 billion. Foreign direct investment in Canada has also reached new highs – in 2022, it was C$65 billion, which made up 5.1% of Canada’s inbound foreign direct investment. 

Mining province Québec in particular is consistently in the top 10 for investment attractiveness in the Fraser Institute’s Annual Survey of Mining Companies, advancing three spots in 2023 to take fifth place.

According to E-Power’s CEO, this is all just part of the story why Canada should be toast of the town as an attractive destination for mining and investment.

“For starters, mineral endowment, vast tracts of land, combined with a small population make Canada a still, barely explored, land of opportunity. There is also a long history of making a living, and even becoming rich, through discovery and mining,” Cross explains.

“The greatest Canadian stories are about people who went to faraway places to make their fortune in natural resources, be it mining, forestry, oil and gas, and even hydroelectric power”

“The greatest Canadian stories are about people who went to faraway places to make their fortune in natural resources, be it mining, forestry, oil and gas, and even hydroelectric power.

“In the Canadian investment world, there is still some knowledge of mining. It is a significant part of the landscape, even if that has declined in recent years. If you work on Bay Street, you are expected to know something about mining. On Wall Street, they have absolutely no idea what mining is. The competitive advantage for Canada is there, but it only matters if it is exploited.”

Tinka’s Graham Carman echoes these sentiments, noting that Canada remains an attractive destination for mining investment due to its stable political environment, robust public markets, rich resource endowment, and world-class mining infrastructure. 

“Both Canada and Peru, where Tinka operates, offer a well-established legal framework for exploration and mining, including transparent regulatory processes and well trained and experienced mining people,” Carman tells this news service.

“Both countries have vast and diverse mineral reserves, particularly in critical metals essential for the green energy transition, which position Canada and Peru as key players in the global mining sector.”

Part two of the May Two-Four series investigates how a defining theme in 2024 was the dominance of resources companies on the TSX Venture Exchange, which accounts for 31 out of the 50 top performers last year.

Could 2025 be a better year still? Find out when Mining.com.au publishes part two.

Write to Adam Orlando at Mining.com.au

Images: Mining.com.au, Copper Lake, E-Power, Opawica, Tinka & Canadian Centre for Policy Alternatives