Role of Technology and Innovation for Identifying and Growing Economic Resources

Presentation: AMIRA International’s Exploration Managers Conference, Location: Hunter Valley, NSW, Australia, March 2019


While the geologist has access to wide range of exploration tools, industry is relatively slow in using new ones.  A good example of this was the impact of LandSat photos for targeting.  A recent analysis by A Nagaraj at MIT (using location and discovery data supplied by MinEx Consulting) found that when “cloud-free” images became available, the discovery rate per block went up by 50% (compared to equivalent other areas).  However, of concern was the fact that it took 10 years for industry to capture the benefit.

I very briefly looked at the general trends in discovery methods and show that the three most important techniques use were (1) “pre-existing evidence of known mineralisation” , (2) geophysics and (3) geochemistry.   In recent years, the former has grown in importance whereas geophysics has remained steady and geochemistry has fallen in importance.  This suggests that geochemistry is losing its effectiveness as the industry chases targets under progressively deeper cover.

The presentation also discusses the long-term trends In exploration efficiency.  On average it now costs ~US$200 million to make a discovery (>=”Moderate” in size) up by a factor of 3.8x over the previous decade.  Past of this was due to cost inflation and reduced fieldwork activities.  Prior to 2005, unit costs were fairly static at $60-80m per discovery

For the first time (in a public document) I report data on the long term trend in the total amount of metres drilled in the World.  In 2018 the figure was 47 million metres, down from a peak of 94 million metres in 2012.  It now takes on average ~700,000 metres of drilling to discover a new deposit – up by a factor of 2.8x over the previous decade and up from ~200,000 metres back in 1985.  This rise is of concern as it shows that (irrespective of cost inflation issues) we are over time becoming less effective at exploration.

Finally, I looked at the components of resource growth.   While geologists are key to making new discoveries and finding extensions to existing deposits, one often overlooks the fact that deposits also grow over time from the efforts and innovations of the mining engineers and metallurgists (to lower costs and improve recovery rates – which enable the  geologist to use a lower cut-off grade when calculating the size of the  resource).  As a rough rule of thumb, on a multi-decade timescale the engineers and processing technologists account for half of the overall growth in the resource.

Given the above I conclude by saying the industry challenge of “how do we find new deposits?” should be reframed to be to “how do we best grow our resources?”   On that basis, a good exploration manager should work together with the engineers and processing technologists to identify new business opportunities.

Note: Please note that the AMIRA Exploration Managers Conference is held every two years and is an invitation-only event and is limited to the most senior people from industry, government and universities.

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