Monday, 10 March 2014

Have we reached Peak Discoveries?

Discussion by Kitco at PDAC.
Brent Cook, Miles Thompson, Catherine McLeod Seltzer, Alex Davidson.

Always change, smarter, look deeper, look in different countries, increased risk tolerance.
May be deeper require higher grade. Refine mining methods to extract cheaper.
Mining industry lacking technology to make discoveries?
Thinking about things in a different way, like Lowell in copper porphyry exploration.
Higher metal prices will lead to deeper drilling and exploration - play the cycles.Technology will change.
Resources and reserves depend on economics. Raise the price and there is more ore.
Looking through cover, looking deeper. Technology for bulk underground mining. New technology and ideas. Adaptability.
Price of gold went from $300 to $1500, costs went up, profits didn't follow.
Cyanide heap leaching changed the concept in the 70's. Boomtimes cause high capital and labour costs.
Pushback on large low grade open pits. Move to higher grade underground, cut back capex?
Companies doing what investors ask, adding cash to balance sheet, paying dividends, will face a cliff need junior JVs, need to find reserves, a cycle. Even in bad markets activity for quality. Serious people able to raise money. Quality work being done.
Not seeing concrete examples of investors coming back, rebuilding confidence. BMO investors, $600m financing this year against $500m all of last year, heavily hedge funds, short term money, and retail - long term money understand process or short term seeing value?
Insurance and PE money moving in. General public does not trust. Good projects attracting finance. Fear hot money chasing. Or contrarians coming in. Exploration doesn't need $100m's, can do good exploration with limited funds.

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