The following presentation was given at a conference organised by the South Australian Government. It gives a high-level overview of the recent trends in exploration expenditures, drilling activity and discoveries for Australia from 1990 to 2017.
It includes a chart showing the business case for why we need to explore. In the case of copper, the World will consume as much metal over the next 26 years as what has been mined in all history (687 Mt Cu). For the industry to be sustainable, it needs to find new / high quality deposits to replace it mines.
It also has an interesting chart that plots the number of copper discoveries (ranked by size) found in Australia and the World per unit expenditure over the last 20 years. At a global level, if you spend a billion US Dollars you will find (on average) 6 deposits >100kt Cu. Included within this are 2.5 deposits >1 Mt Cu and a 0.4 of a chance of finding deposit >10 Mt Cu. The success rate for finding a given-sized copper deposit in South Australia is twice the global average.
This chart can be used to effectively calculate the probability of success for exploration. For example, if the average exploration program costs (say) $5 million then $1 billion “buys” you 200 rolls of the dice. On this basis, the probability of finding a deposit containing >1 Mt Cu will be one chance in (200/2.5 =) 80, and the chance of finding a >10 Mt Cu deposit is one chance in (200/0.4 =) 500.
The presentation concludes with a chart showing the financial status for junior exploration companies in Australia. It shows that, after 4 years of struggle, significant new funds are now being raised by the Junior sector. There are early signs that the industry is now back out in the field and exploring. In other words, it looks like we have turned-the-corner. If so, good times are ahead.