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Majors Are Driving Mining Exploration Budgets – SNL Metals & Mining

By Alex Létourneau of Kitco News
Tuesday December 09, 2014 9:54 AM

(Kitco News) - While the general ideology is that junior companies are responsible for a large part of exploration, a study by SNL Metals & Mining shows that major miners account for 40% of global exploration allocation.

Mining research firm SNL said in its 25th annual Corporate Exploration Strategies study “$50 million for exploration is available on the SNL company briefing books.  In 2014, these 39 larger players budgeted a total of $4.33 billion and accounted for 40% of the $10.74 billion worldwide exploration total.”

The top three explorers were Antofagasta, a copper producer; Vale, a diversified major; and Fresnillo Plc, a precious metals producer and the world’s leading silver producer.

SNL said Fresnillo’s budget is divvied up evenly between all stages of exploration, with a small emphasis on advancing several pipeline projects.

“Together, the 39 larger players contributed 40% of the worldwide exploration total in 2014, with gold representing 41%, copper 32% (41% base metals), and 7% each for diamonds and other targets (including silver, potash, phosphates, and manganese),” the report said. “Two of the larger players, Alrosa and De Beers, accounted for 69% of worldwide diamond exploration.

“The 25 larger players with gold exploration budgets were responsible for 39% of worldwide gold allocations,” they said. “In the middle, the group’s copper explorers accounted for just over half the total copper budget.” 

Touching on junior miners, the report stated that a unrelenting “financing drought has squeezed juniors’ budgeting to the point that the majors have become the biggest drivers of early-stage exploration. Similarly, the larger players traditionally dominate minesite spending; in 2014, however, they account for only 51% of the near-mine work as their investors demand improved returns over growth.

“It is also interesting to note that the larger players are responsible for just 32% of late-stage exploration and feasibility work.”

The CES study also noted that Chile has replaced Canada as the leading jurisdiction for allocated exploration budgets. Also falling on the list were the United States, Russia and China.


By Alex Létourneau of Kitco News aletourneau@kitco.com
Follow Alex Letourneau @alex_letourneau




Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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