The Federal ones could place the dollar of multi-million tracing the plan, known as mining industry

Largest mining industry trade union of Canada says that the Federal Government begins it finally in, a national illustrating strategy urgent-necessary multi-million of the dollar to invest alludes.

A spokesman for the Prospectors and Developers Association for Canada made the comment Monday, after a speech at a prospectors' convention by Cassie Doyle, Canada's deputy minister for natural resources.

Doyle, in her speech to delegates, stressed the importance of the decade-long plan to map Canada's resource-rich north, especially in this "pre-budget" period.

"I was left with the impression that the government was going to be funding it," PDAC's Philip Bousquet said in an interview, referring to the mining community's proposed Co-operative Geological Mapping Strategy, which would cost $500 million over 10 years.

"This would be new, and it would be bringing the geological database up to a standard that would increase investment in Canada."

Federal funding for mapping has been a subject of debate at the four-day international commodities convention, which has drawn 16,000 industry players to Toronto.

The strategy, hammered out by federal, provincial and territorial governments, would ensure the industry will have new mineral reserves to draw on to supply to current boom in demand for commodities, expected to be fuelled further by growth in Asia.

Under the proposal, the federal government would spend $25 million annually for 10 years, to be matched equally by the provinces and territories.

Despite this, the association said the federal government's spending on geoscience has declined by 50 per cent since 1980.

The industry is facing a huge supply problem, as demand for metals spikes in developing economies. The supply shortage has meant big companies have been hitching up with rivals in a bid to get new reserves to make up for lost exploration time during the bust years of 1998 to 2002.

Some companies have decided that if they can't find reserves, they can at least buy some, and a flurry of mergers and acquisitions has ensued.

Recent examples include Companhia Vale do Rio Doce of Brazil, which took over Canada's Inco Ltd., and Europe's Xstrata, which took over Falconbridge Ltd.

These mega mining mergers often mean bigger salaries for CEOs, but the deals don't always create better value for investors, one analyst said.

Colossal mergers and acquisitions among major players in the sector have been an industry trend over the past couple of years.

"Whether this has been a benefit to shareholders, though, remains a bit of a controversy," Barry Cooper, a gold analyst with CIBC World Markets, said of the general trend towards mergers among mining behemoths.

"All that seems to have resulted is that a lot of the companies have gotten bigger," said Cooper, adding that CEO salaries have gotten larger and some are overpaid relative to stock performance.

But the best surprises in the sector have come from those smaller companies, said Cooper,

Cooper pointed to companies such as Virginia Mines Inc. (TSX:VGQ) as a true success story.

That company, helped by the Quebec government's advanced refunds on future taxes, saw a massive spike in its stock price as a result of finds at its Eleonore deposit.

The Eleonore project was recently sold to Goldcorp Inc. (TSX:G) for over $500 million.

Other grassroots discoveries in the past four years included Aurelian's (TSX:ARU) Condor project in Ecuador, which pushed its stock up over the past year, and Silver Wheaton, which Cooper called the reinvention of a royalty company.

Base metals have also had their day, Cooper said, referring to FNX Mining Co. (TSX:FNX), which earned a record $68.7 Million in 2006, and HudBay Minerals Inc. (TSX:HBN), which has an ambitious $37-million exploration program.

New discoveries aside, Cooper said the underpinning of the current commodity boom has really been the successful expansion of current deposits, such as the Oyu Tolgoi copper and gold project in Mongolia developed by Ivanhoe Mines Ltd. (TSX:IVN); Pebble, being developed by Northern Dynasty Minerals Ltd. (TSX:NDM); CVRD Inco's Onca-Puma; Greystar Resources Ltd.'s (TSX:GSL) Angostura gold and silver mine in Colombia and Osisko Exploration Ltd.'s (TSXV:OSK) Canadian Malartic mine in Quebec.

source:www.680news.com