Exploration is the core foundation for the future of mining and it is encouraging that there is a much better mood in the exploration sector, delegates to the RIU Explorers Conference in Fremantle were told yesterday.
Spending on exploration increased in 2018 driven by the top end of town, but junior explorers are also playing an important role in the process, said BDO partner, corporate finance Adam Myers.
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In his presentation ‘Exploration – Looking Forward’, Myers said juniors were investing in exploration because they had improved cash balances.
“2018 was a much better year for exploration and we are expecting decent start to 2019.”
“With the amount of exploration being carried out, the industry expects that the next big discovery is due,” he said.
The packed auditorium at the RIU Explorers Conference in Fremantle.
Gold sees biggest inflow
Gold was seeing the biggest inflow of exploration expenditure, closely followed by oil & gas, Myers said. Then followed graphite, nickel, iron ore, zinc, coal and lithium.
Existing projects were attracting most of the exploration spending but he said that there was a need for more commitment to greenfields work.
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Myers explained that one trend that would continue to drive exploration into the future was data-driven merger and acquisition activity, which was becoming increasingly apparent in recent months.
Technology can lead to exploration efficiency
Another was the development of better exploration technology, inclusive of richer datasets, greater downhole information and improved assay efficiency and guidelines.
“It is becoming very apparent that there is a need to drive more effective use of exploration funds and these trends would help facilitate this.”
The conference has attracted record exhibitor numbers.
He said evidence of the increased focus on putting holes in the ground and the desire to specialise on a specific metal of expertise was the number of spin-outs.
Recent examples were Norwest Minerals Ltd (ASX:NWM) and Saturn Metals Ltd (ASX:STN) with a number also on the cards, including Metal Range Limited.
Challenges to growth
The BDO partner stated that challenges facing continued growth in exploration were international competition, a crowded market, the changing landscape of Australia’s economy reflecting a need to diversify away from mining and access to talent.
There was also a need for more industry-wide collaboration to drive more efficient and successful exploration into the future.
This process could be facilitated by government assistance such as that offered in Western Australia, Myers added.
The RIU Explorers Conference winds up this afternoon after attracting record numbers of presenters, exhibitors and delegates.