Recent trends in Australian exploration

Presentation to the AMEC 2011 National Mining Congress, Perth, June 2011

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.

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