Presentation: AMEC Convention 2011,
Location: Perth, Australia
The presentation talks about trends in expenditures and discoveries in Australia since 1975.
Key observations are:
- In terms of global exploration spend, Australia is losing market share, now only 12% of total
- Half of all locally-sourced funds is now spent offshore. Foreign companies account for only one quarter of total spend in Australia
- The exploration Industry is cyclical, and currently strong. Of concern though is the current modest level of drilling. The challenge is that if we don’t drill we don’t find !
- There has been a huge switch to bulks . which now account for 40% of exploration spend (up from just 9% in 2000)
- Juniors now account for over half of all Australia’s exploration spend. There are any reasons why major companies have “lost the leadership” and it is not just a local phenomena
- There is an increasing focus on brownfield exploration. While this will extend the life of our existing mines it is unlikely to deliver Tier 1 discoveries
- Discovery costs have risen in recent years – now costs over A$1 billion to make a Tier 1 or 2 discovery
- The industry needs to find new deposits and prove up additional reserves. Based on current reserves and resources, half of all mines >1 mtpa ore could close down within 5-16 years. The challenge is that takes 1-2 decades to find and develop new mines. So we need to fix the problem now.