PDAC 2010 held a special panel session looking at the factors behind the decline in the industry's exploration performance.
My contribution to it was to identify the long term trends in the numbers, size , quality and location of mineral discoveries in the world over the last 60 years.
Key observations were:
- Exploration comes in waves. Uranium and Base Metal discoveries were a key feature of the exploration scene in the 1960s and 70's. In the last couple of decades Gold has become much more important
- In spite of the intense efforts on gold exploration, over the last decade the industry has not found enough to replace the ounces mined. This is not sustainable.
- At present, Gold makes up 60-80% of all major discoveries
- In the case of Copper, most of the metal (and the value) is captured in a handful of giant deposits
- The Junior Sector now accounts for over half of all major discoveries made each year. By comparison, in the 1970s they accounted for only a quarter of major discoveries.
Note: Although it wasn't discussed in my presentation (as it was covered by the other panel members), over the same period the Junior Companies share of exploration expenditures has also doubled.
- The location of discoveries moves around the world as new provinces open up and as business risks change.
- Exploration is a high risk/ high reward game – on average, only five to ten Tier 1 and 2 discoveries are made each year around the world. Of these only one or two are truly world-class.