Engineering & Mining Journal

APR 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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REGIONAL NEWS - EXPLORATION ROUNDUP 32 E&MJ • APRIL 2018 www.e-mj.com Minerals Exploration Spending Turns Up in 2017 Global spending on the search for nonfer- rous metals deposits rose to an estimated $8.4 billion in 2017, up from $7.3 billion in 2016, according to a report released by S&P Global Market Intelligence at the 2018 Prospectors and Developers Associ- ation of Canada Convention in Toronto. It was the fi rst annual increase in explora- tion spending after four consecutive years of declines. Although an improvement over 2016, the 2017 total remained far short of the record high $21.5 billion es- timated exploration spend in 2012. While the main focus was on gold, exploration targeting base metals also re- bounded, especially in the second half of the year. The last quarter of 2017 saw a sharp increase in reported drill results, and fi nancings closed the year on a high note. With the generally positive trend in metals prices extending into early 2018, S&P expects the global exploration bud- get for 2018 to increase by a further 15% to 20% year-over-year. There are some potential headwinds, however, such as ongoing instability in global and national politics, and emerging market volatility, that could have a negative impact, not just on exploration budgets but on the mining sector in general. The traditional top three destinations for exploration spending — Canada, Aus- tralia and the United States — led again in 2017, and with allocations totaling $5.55 billion, the top 10 countries ac- counted for 70% of the global total. Canada was fi rst for the 16 th consecu- tive year, with 13.8% of the global budget; however, its lead over second-place Aus- tralia dwindled to less than $25 million. Ontario took 28% of Canada's total, fol- lowed by Quebec at 21%. With gold allo- cations up by an impressive 35% in 2017, the metal's share of the Canadian total jumped to 62% from 51% the year before. Australia was a close second, with 13.6% of the global budget. Western Aus- tralia, by far the most popular state, took 65% of the nation's total. Gold was again the top target, with a 24% year-over-year increase raising the metal's share of Aus- tralia's budget to 59% from 56% in 2016. Budgets for gold and copper explo- ration in the United States maintained the country's third-place ranking with a 7.7% share. Nevada led with 47% of the U.S. total, and three states — Nevada, Arizona and Alaska — together accounted for 73%. Latin America remained popular, with Chile, Peru, Mexico, Brazil, Argentina and Colombia accounting for 91% of the re- gion's budget. Gold was the top target in Latin America for the third year in a row, garnering 44% of regional spending. Gold attracted the most exploration spending worldwide, with a little more than 50% of the total. Base metals (cop- per, nickel, and zinc-lead) were in second place with about 30%. Allocations for uranium and diamonds each accounted for around 3%, while platinum group metals accounted for less than 1%. Spurred by the growing demand for rechargeable batteries and a surge in battery metals prices, a number of junior companies shifted their exploration focus in 2017, dramatically increasing spend- ing on the search for lithium and cobalt. S&P's research identifi ed 136 com- panies budgeting almost $157 million for lithium exploration in 2017, more than double the 2016 total. Cobalt-fo- cused exploration also increased strong- ly, with 52 companies allocating $36 million in 2017, more than four times the 2016 budget. The 11-page S&P report includes dis- cussions of macroeconomic trends, in- cluding metals prices, that are impacting the mining industry. The report is avail- able at spglobal.com/marketintelligence. Exploration Briefs Iamgold plans to drill approximately 50,000 meters of diamond and reverse circulation holes at its Saramacca deposit in Suriname in 2018, with goals of im- proving resource classifi cation, declaring reserves and advancing mine design stud- ies ahead of production. Exploration ac- tivities are also expanding on the greater Saramacca trend, looking for additional zones of mineralization. The Saramacca project is located ap- proximately 25 km southwest of Iamgold's Rosebel gold mine and milling facility. In addition to ongoing exploration, the Rosebel mine team is working to advance the Saramacca deposit toward production. An Environmental and Social Impact Study (ESIA) is under way, and preliminary engineering work is advancing on mine de- sign and various infrastructure elements, such as ore transport options, access roads and waste rock disposal. In addition, fi eld work has commenced to provide geotech- nical and hydrogeological information and to complete condemnation work over areas of proposed site infrastructure. A compre- hensive metallurgical testing program has begun to refi ne the recovery assumptions and to test the crushing and grinding char- acteristics of the mineralization. Iamgold is targeting a production start at Saramacca in 2019. (www.iamgold.com) Northisle Copper and Gold has signed a joint-venture agreement with Freeport- McMoRan Mineral Properties Canada in relation to Northisle's Pemberton Hills property on Vancouver Island, British Columbia. Under the terms of the agree- ment, Freeport may earn up to a 65% in- terest in the property by funding a total of C$24 million in exploration expenditures, including an initial 49% interest by paying C$50,000 cash to Northisle and funding a total of C$4 million in exploration expen- ditures over three years. The Pemberton Hills target is a 3.5 km by 1.5 km area of advanced argillic alter- ation of a type often found overlying por- phyry copper deposits. Further evidence of a buried porphyry copper deposit is the presence of anomalous copper intersect- ed at the end of an historic 200-m-deep drill hole within the altered area. Northisle President and CEO John McClintock said, "We are very pleased to work with Freeport, as it further demon- strates the prospective nature of our tene- ments while providing signifi cant external funding for exploration." (www.northisle.ca)

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