By Alan Fein

(AXcess News) New York - According to Natural Resources Canada, expenditures on mining exploration in Canada fell 47% in 2009 over the prior year, breaking an 8-year streak of record spending.  But with gold and silver prices rising, the holdback in mine expenditures is about to turn the corner, which in the U.S. the same may be true.

In Nevada, the fourth largest gold producer in the world, the state of Nevada Commission on Mineral Resources Division of minerals latest report on mining exploration noted that $158.1 million had been expended in exploration in 2008 and the following year, it dropped to $133.6 had been spent, marking a decline of 15.5%.  Only half of those mining companies surveyed where able to replace their production with newly found reserves.  A good third of those mining companies surveyed were pessimistic towards domestic exploration, though both economic conditions and commodity market declines most likely played a role in their outlook.

Of the 1/3 of the mining companies that had grown pessimistic in 2009, outside of concern over commodity prices and favorable geology, the no. 3 and 4 reasons for their concern were uncertainty over mining law reform and permitting time frames.  For investors, that could mean the best bets lay in those companies who've already obtained the necessary permits to move into production.  The Commission noted in a separate report that only 11 mining companies were producing gold in Nevada in 2009, spotting the mining company that's already obtained its permits is most likely a candidate for financing and for investors, its shares could be a bargain in the waiting.

Spot gold flirted with a record high Wednesday, closing up 90 cents at $1257.10 after reaching a high this morning of $1,264.40.  Spot silver crossed the $20 per-ounce mark again reaching a high of $20.18 before closing at $19.99.

Gold has climbed 26% over year-ago levels while silver is up more than 21% in the same period.  Commodity markets are also more active than in 2009 and while the global economy is still in a recovery mode, financing for mining is loosening up.  This week saw a sweet deal in platinum after Stillwater Mining Co. (NYSE: SWC) acquired Marathon PGM (TSX: MAR) at an 89% premium, yet rating agency Standard & Poor's didn't budge on its "B/Stable" rating for Stillwater, an unusual occurance in an acquisition of this nature.  The deal will boost SWC's paladium and platinum production 40% within three years.  Stillwater, a major supplier of palladium to Ford Motor Co., is up for renewal of its contract to supply palladium to the automaker later this year.  Rumors are that Stillwater needed to assure Ford that it could meet future demand when it moved to acquire Marathon PGM.

The gold composite closed down 1.0% at 1134 Wednesday.  The silver composite finished down 0.36% at 1181.2.