Sunday, 21 September 2014

Retreating Discovery Rates and Exploration Expenditures - David Cox - SNL - At Denver Gold Show

Presentation at Denver gold Forum (select Tuesday)   PDF Document ..... more notes below

  • Expect to see a premium for new mines, finds and camps
  • Higher grade smaller reserve growth
  • Spin offs from majors
  • Private Equity for exploration? - More likely for near mine expansion etc than true grass-roots?
  • Expect Industry Consolidation
  • Pressures on price
  • Price determines resources vs reserves. Average 18 years life for the Major miners.
  • Discoveries often copper-gold dependent on copper prices to make economic.
  • Who will finance exploration against uncertainty and very long development cycles
  • At lower gold prices companies will seek to optimise cash-flows, accelerating resource depletion as described in the Whittle Consulting presentation. New discoveries will be key to the industry's future.
  • Charts identifying expenditures by metal, by seniors vs juniors,
  • Grassroots exploration has declined as a share through the bull market, focus has been on drilling existing deposits. Total spend has increased however.
  • Selected jurisdictions have recently seen increased grass-roots exploration, noticably Canada, US, Mexico. Does this suggest where we should see new discoveries?
Gold projects in Feasibility will product a potential 22m oz pa, however taking out high risk jurisdictions and low grades would reduce this to 9m oz. 

Despite increasing spends discovery rates are falling

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