DNESDAY

WE APRIL 10, 1974 “THE HERALD, TERRACE, B.C.

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must be construed as folly. income tax service.

ae Text of an Address Delivered By many, many more thousands of people receive no return of their income; ae . . :

. 7" Frederick G. Higgs, Administrative Aselstant . investment, let alone a fair return on it, If the industry were not 2) British Columbia supply-service businesses lose $165,000,000in

a - British Columbia & Yukon Chamber of Mines capable of generating a few “‘winners™ there wouldbeno incentive sales revenue,” . a ;

Sonya)... Vaneouver, B.C. int Terrace April Ist. : for investment of exceptionally high risk capital. Only one in one 3) Other Canadians who provide supplies and services lose, . :
Ss ae ‘ , .. thousand prospects becomes a profitable mine. $30,000,000; and ; e
_Thank you, Mr, Chairman, good evening ladies and gentlemen, -_—-_- Credibility Lost With Government Distrust and Hostility’. 4) The shareholders return’ on an’ investment of. The

Itis'a great pleasure for me to be here with you this evening. My Asa regult of distrust and hostility shown toward the industry the Shareholders return on aninyestment of $10,000,000 is reduced to

brief stay has been highlighted by warm hospitality, and the: ‘government. will be -hard pressed to restore investor confidence 4% percent, representing a loss af: $144,000,000. your

thoughtful’ questions of your press. © thank your Chamber of © evenif the confiseatory and punitive royalties are ‘withdrawn, Such Mineral royalties as proposed by Bill 31 can hardly be described "

-Cammerce for iriviting me to speak tonight. © confidence a8 existed before Bill. 31 was introduced-has been 35 a policy which encourages wise use, let alone one which brings. .
"When [ast viaited this region, weather conditions made air and: shattered. _ about a greater return (o (he people. 544,000,000 pounds of copper.
ground travel difficult, {if not precarious, fortunately, a wild |. Arecent eurvey of 1974 exploration budgets for British Columbla which could otherwise have been mined will be leit worthless in the
midnight ride in'a Pacific Western Airliner off an icy Smilers.  cotducted-by the Chamber, indicates that since the mineral _ ground. ue ae
‘runway, while attempting a lake off, ended without seriqus in- royalties Act was introduced intended exploration expenditures - 1 Summation
cident. Nevertheless, passengers and crew alike were chastend to. havebeen reduced to $14.5 million from $29 million. tis important _ Royalties of any type will ensure a diminishing return from
respect in future the vagaries in winter in Central British 10 Gbgerve.thal only $26.6 million was expended on exploration in “Britigh Columbia's _ mineral resource. Those proposed by Bill 31
Columbia, most recently dramatized by the tragic snowslide on the province in 1973, after Bill 44,. with provisions, for “he © “Mineral Royalties Act’ must be construed as folly by all British .

Highway 16. So oo. gdigeretionary granting of production leases, was introduced,. Columbians.) _ mos a Une

"Air ond ground travel during this trip have presented no unysual _ When this matter was satisfactorily resolved by Amendment ofthe = Ladies and gentlemen, earlier in this speech 1 mentioned the’,
risks, , However, unlike my eat'lier visit, {must reportithat British Mineral Act at the Fall Session and the government announced the . weather, ‘There is precious little that you. , candoabout adverse

Colunibla’s expectations of continued prosperity arising from . postponement of Royalty Legislation, the industry’felt it could .. conditions except escape the elements. There is a very greal deal”.

mining-are in danger of. being smothered by confiscatory and~ place greater trust in the government. The industry actually in-,  youand Ican data ensure responsible and responsive public policy

punitive tegislation, Bill 31 "Mineral Royalties Act”, if enacted tefided to spend $2.5million morein 1974 (han it hadin 1973. "and law in British Columbia, =... oe
and proclaimed as presently drafted, can become a yehicle to“ Forecast! exploration expenditures in 1974 are the lowest in more ‘Write letters, send lelegrams. ‘Organize and sign pelitions .
destroy your mining industry. S” “than'a decade,’ 1975 will witness a further decline unless confidence Advise your Premier, you Minister of Mines and your member of
~. Lintend ta describe Bill 31 and its impact through mining on us ‘igrestored, ax 1974 expenditures largely represent continuation and the Ldgislature thal you want Bill 31 witheld from the Legislature; ..
all. ‘1 hope to arouse your interest, and concern, thereafter, Lam. sompleflon of ‘earlier commitments for praperty work. |” that you wanl-a thorough and co-operative government- Industry
sure you will also wani todo something constructive for the future: ‘No new miné'coustruction prospects have commenced since 1971. examination of. the faets about mining. fo a
and ask-che Government of British Columbia to withdraw Billi, Several companies had been forced to postpone minedevelopment  . Do whal you can today to maintain-a favourable climate fo
wer Pho c Mining in British Columbia ot and production plans as a result of’ previous statements by {he ‘mineral resource development.” Don’t awake later to’ find tha
Vital economic growth, with expanding secondary and tertiary government, until such time as promised tax legislation. was in. . province's second largest industry; that your fulure, as created in °:

‘benefits, arising from primary metal extraction depends upon troduced. Bill 31 has effectively destroyed the hopes ‘of these part by mining, has been permanently mortgaged, because miner
seven critical factors: . a . eompanies. = - a Jean . a _.., were frozen out of ‘British | ..Columbia. Tat ae
--]) A favourable geological environment for ore deposition; — * Similarly with the recent substantial increases in'the price of : . _ :

: 2) Technological skill te locate, mine and mill complex mineral gold ‘many placer miners: had anticipated the commencement of
ores; =~ ’ ; et : ae placer mining operations. Their expectations have been dashedas -
‘ 5) Skilled tradesmen and workers to engage in the exploratory, well. . St : Lae ot wR . re oo Ps

production and processing phases; . rr ; a me . Co ‘eo, a

4), ‘Transporation ‘facilities to ensure delivery of equipment. ".” The Government has said that its posture and legislation has not : cP Ai r an n 0 un ces:
‘malerials-supplies to and minerals from mines; m depressed the mining industry, that Bill 31 will have no effect on : Cn aoe,

§) Sufficient. low cost energy for the operation of mine-mill : ” mineral exploration, Yet the statements of the government areat 7 7 h : woe

ee 727 purchases... |

‘ ‘

e@ have tax experls. And we have computers. 7
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; brai - os ae
weandeuteues a ® INineucgeares

“hank youl,

"Mining Industry Depressed

complete variance with the facts. The Government's own records -

* plants;: ot . .
ag) A continuing flow of risk capital to finance the discovery and. show that only 31,738 claims were staked in 1973 compared 10 73,901 . ns soe ad -
development of minds; and =. > : ; ce _. claims in 1972, 8 drop of 60 percent. In addition as of March 21,1974 | Purchase orders for ‘twa jolal Boeing direralt: inc CP 2 /Yours. HIAGADA FLANGE COMPANY LIMITED 7 a
*- 7) Stable mining and tax laws. conductive to ‘assembly of the- © only 135,000 claims are held in good standing. This represents a Boeing 727-200. series (ri-jel” Air-s fleet, to‘17 ineluding 727 eo oo _ . a i
-. ‘above factors with a fair return on the capital employed. : drop of 115,000 claims from the average of 250,000 claims held by — aircraft have been placed-with | 737 and 747 equipment See your phone book for the nearest Niagara office. a
British Columbia has until recently enjoyed the presence or the industry in the-years 1962-1971. The gavernment must realize the Seattle firm. by CP Air. The © . ; , ; i
aan os 9 ots Hf .

‘promise of all conditions necessary for success.” _ that industry activities are not related to-wisi fulffilment on (wo elongated aircraft seating
“2 This province is renowned for its geological environment, which,-.”. anyone's part. Bill 31 has eliminated industry’s confidence in the 132 passengers in.CP Air con-
‘“Wwhile’ surpassed elsewhere, has attracted. new capital in. the: government: Industry statements about. cut backs, of moving figuration will cost a-tolatof $23

“amount of $2.1 billion during the decade 1963-1972 because of the exploration and development capital out of British Columbia are million including spare -parts.

HALF PRICE SALE.

Straten factors. $600 million was expendedin the not threats, they are- announcements of fact, . |. The airline presently has four .
“period. 1969-1972 ‘alone to develop and-equip new mines. lor = ; . Sener a ceetlr G7. 4 of ihe smaller -100. passenger oo

: : Ts “ a: Mineral royalties - An Error In Judgernent oro . tan. wari =
production. $333 million has been spent in the last decade to place “Conservation of mineral resources by a mitdern industrial saciety lype. Boeing ,727-100" series -

serving | (ransconlinental -and |
ee

Paints Pittsburgh Exterior latex and enamels
San Francisco. routes. . . Os,

Mirrors - Se
Flue Lining
Ceiling Tile (odds ‘n ends) °

Sav-Mor Builders Centre Ltd.

_:Endako, Wesfrab, Granisle, Granduc, Bell Copper and Gibraltar in - ee . i
- “production. .An additional $187 million has been spent in north- - demands policies which encourage the extraction of as much
“Western. and’ the: north’ Central Interior. an “exploration and mineral: as is possible from each deposit. © yernment action
’ development in the same periods es . encourage high-grading and the abondonment of lower grade
; _clislogcal, engineering, mlelicy “fave grown swt ie - royalties on mineral production bring about precisely this result. North American ineluding.
jndustry. ta‘ be recognized asthe most proficinet, finders and. __- Royalties per se increase he cost of mine production; therelore | a0. ipa. The {wo new airerall
~ gperatars af low grade ore deposits. inthe world. =... increase the grade-of mineralization which’ can be mined; and Vir be delivered to the :Van-
he, . -We are fortunate to have the éxeellent: mining *" thereby reduce substantially the reserves of each producing mine. couver-based airline: in March
* “departments:at the University of British Columbia ‘and the B.C... The elfect Is'to drastically curtail the potential value of British’ - 344 April 1978 respectively
“Inatitute of Technology to train our young people and conduct. Columbia’s mineral resource. Much long term wealth ‘yielding sili eae an :
- "prioneering research, . °° | m a woe potential in the form of dividends, employment, secondary and. | Jnaddilion; the Boeing
Apart from, a.shorlage of some skilled tradesmen, the‘industry ", vertinty rom ecistin 2 nines by 1 ete area properties nol now Company is manufacturing two

ig a BDO! an ‘E Utilization “af the “new equip-
mineralization contradicts this hasie philosophy of “wise use’’. Yel ment is planned for the routes in

+

* "thas been able io count‘ugon a qualified and productive work force... 3; F sy into producti der” 400 passenger. 47 wide-body
doa ne indrecy empleo in prodyon il wapean, ETN Fe a Oe Seen tie al rea re)
radar adart aa? task : be . : " Leg eda 7 eraheirete dyes” f X le this - . ta : '
resiilf’ of mining.expenditures: "220867 0%) spas ony Presently, British Columbia's 3). h hae fhe PAE Tatest ofdér will bring Whe 635-7224

to provide * ‘pegerves. of more: .than::2,400,

J for the elficient handling of large tonnages ¢f ‘bulk materials
‘supplies, ores and concentrates to ailow-support of mines and the» aR’
shipment of minerals to-world markels. as 4 ee . ; hich are considered; as potential
... Sufficient low cost energy is available now and can be in t eC Col 6.900,000,.000.tans; almost all of which has bee
-* future’ to siistain mine-mill-smeltingrelining plants "hroughout; Peer aha tie teat twenty, years; = ° “ . = 7 n

Transportation, or its promised, evelopment, ex i

~ $) Make w

oo dn these. years the value of melal, |

* ‘production rose from $18 million to $a million. he fa 2 ne J
2""In summary, British Columbia has benelit rom the favourable © P “Piged . a Pi :
“combination of all conditions necessary for’ development of the “Silver Standard’s Liard,” Copper-Molyodenum Property: Hudson

2 rere and tax laws a these the mts is stability of Molybedenum's Ruby: Creek,::Molybdenum property;; Granby's’

7s ow February’ 19, 1974 Bill 31 “Mineral Royaltles.A. CE" WAS ' Varden’s Alice Arm, SilyerLead-Zne Properly. | caplet it
1 Ne ee ‘ ae See e stig: ce. thes duction is
-” "mining industry have come lo the conclusion since ‘thal Black  Stimated al $1,260,000,000, As new mines these properties would

a-Silver Standard

co laxes; as well as wide policing and punitive powers. Bill 31 appears - .
_ elo of the government loexpropriate from Terrace 1a Gr

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Profits Deflated - ot
iment clearly shows. (hal. in’.
tn ori investment in British: -
as 9.18 percent, while the. average. Hee . roy
. 4 wo . -AHypathetical Case
s bonds was 6.7 percent, It Is 8P- phe following example illustrates*how Bill 31 would affect an
individual mine, . ti ied ith th ci ' ; samploted
; + _” , Mining engineers assoc! aled with the Chamber have comp! ete
investor needs a much higher yield \ atvanalysis of a hypathelical typical open pit copper mine with
OF - = 0,000,000 tons of ore containing an average 0 len pounds o
turn of capital, While the investory IH”. . copper per. ton;,. Under current tax legislation, the mine operating
P ig ti at 30,000 tons per day. concentrator capac ty has alife of 20 years'.
value; [he value of.a mine declines over lime so that {Lis worth, . * and generate 1.200000in (otal wealth fr Cenads at $1.60 per =
‘ on : dcopper. Under Bil 31 the following occurs: ; aa
de not only a return on investment bul also provide for. q oun bas >
iturn of capital." In addition to a fallure'lo appreciate the true ore ) eee of the minaia reducedtie 10 years, as 80 percent of the
‘profitability of mining in British Columbia, acceptance of the myth 7" . aT aalemp! oyment, represente d by $264,000,000 in salaries an a
of exhorbitant profits implies a lack of understanding about te |, wages to mite employees is reduced Lo $132,000,000; _
<1. 9)., Total: .wealt z-generaled: Ih. Cana tO reduced from
. | $1,200,000, 000° ta $72,000,000, a drop af, $408,000,000,,- on
them aimed and Bs Aa ace thousands,“ in hia hypothetical case the only beneficiary of mineral royals :
"he industry »-omplex oxpends tlltons of dollars fer each new. inthe Province woernment Which Inereases its (ake by 8179
mine which commences - production, ‘ew (housands 9 ‘ very Pon : a -
‘shareholders obtain the bent of a profitable mine investment, 4) British Columbian mine workers lose #152,000,000 in personal

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