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External Presentations and Publications:

Title
Schodde RC, "The Global Shift to Undercover Exploration - How fast? How effective?" Keynote paper for the Society of Economic Geologists 2014 Conference, Keystone Colorado September 2014.

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The purpose of this paper was to tease out a more considered view on the depth-of-cover issue for mineral exploration. While it is correct to say that that on average, the industry is exploring under progressively deeper cover, it is incorrect to say that there all of the outcropping deposits in the World have now been found. It is also incorrect to say that the recent dramatic decline in discovery performance is entirely due to our inability to identify and delineate good targets under-cover. The nuanced answer is that it all depends on the country, commodity, deposit style, search technology and the business cycle.

Key observations are:

  • Exploration performance has declined in the last decade, with unit discovery costs increasing 2x to 3x. This mainly due to higher input costs such as drilling, labour and admin costs and land access issues. Some of these costs are cyclical and will come down in the current recession
  • Industry is having to progressively look under deeper cover but it should be noted that the rate of increase (in depth) is slow. On average Base Metals are 2x deeper than gold; and Brownfields exploration is 2x to 3x deeper than greenfields
  • Notwithstanding this 51% of all recent gold discoveries and 20% of all base metal discoveries are outcropping. These tend to be in frontier regions where you trade-off geological risk for business risk
  • A detailed analysis of discovery costs indicates that they are (loosely) correlated with the depth of cover. Going from 25 to 75 metres average depth, doubles the discovery cost
  • The good news is that deeper discoveries tend to be more valuable (it's a fresh search space!)
  • Consequently in mature terrains this benefit may help offset the higher exploration costs
  • The discovery method used varies over time. Is a function of commodity type, deposit style technology, scale of the exploration program (project versus prospect targeting) and the depth of cover
  • At present we don't have effective tools for exploring under +200 metres cover for gold.

In summary the challenge of increasing depth of cover is important but it is "slow-burning" issue, which is most felt in brownfield exploration and mature countries (like Australia, Canada and the US). To offset the decline in exploration performance industry constantly needs to develop new search concepts and technologies. As deep cover is effectively a new search-space, the prize for effectively exploring under deep cover can be huge.

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