After years of underinvestment, #Miners set to massively increase spending in #Exploration Hunt - Bloomberg

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  Exploration Spending forecast to rise more than 75% through 2025 to $18 Billion: MinEx
• Discovery of world-class deposits has slowed in past decade

https://www.bloomberg.com/news/articles/2017-03-23/miners-regain-mojo-to-spark-18-billion-in-global-exploration

Miners Regain Mojo to Spark $18 Billion in Exploration Hunt

More stories by David Stringer

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David Stringer

March 23, 2017, 7:00 PM GMT+1 March 24, 2017, 9:44 AM GMT+1

• Spending forecast to rise more than 75% through 2025: MinEx
• Discovery of world-class deposits has slowed in past decade

A rebound in exploration by global miners could see spending hit $18 billion by 2025 with China the front runner in the search for a new generation of giant discoveries.

Exploration budgets are rising after they plunged to an 11-year low of about $10 billion last year as mining companies slashed costs in the wake of a collapse in prices, according to Richard Schodde, managing director of Melbourne-based MinEx Consulting Pty, an industry adviser.

"We are coming out of the bottom of the cycle. I actually see the opportunity for the exploration sector to regain its mojo and quickly deliver a pipeline of good discoveries," Schodde said in an e-mailed response to questions. "It's catch-up time for the industry."

China, the top spender on exploration, is likely to continue to dominate in the hunt for new deposits, while Canada and Ecuador are currently among hot targets for more investment by miners, according to Schodde. The U.S. could be poised for a rise in exploration with President Donald Trump regarded as likely to be more favorable toward resource development, S&P Global Market Intelligence said in a report published in January.

Discoveries of so-called tier one projects, deposits with a net present value of more than $1 billion, have stalled. Only 12 were uncovered in the past decade compared to an average of two to three a year since 1950, according to MinEx. The average cost of finding a significant mineral deposit has tripled in the last 10 years to about $238 million, the consultancy said in a March 6 presentation.

China, the target of more than a quarter of global exploration spending in 2016, is yet to reap major rewards. An estimated $42 billion spent on the nation's hunt for new mines since 2007 has seen only two large discoveries announced and found a total slate of projects worth about $13 billion, according to MinEx. Global exploration budgets peaked in 2012 at $33 billion, the data show.

Since 1960 #juniors spent about $61 billion on #mining #exploration in Canada

Since 1960 juniors spent about $61 billion on exploration in Canada - 36 percent of the total exploration spend - and made about 45 percent of total discoveries

Junior vs. Senior - Discovery performance in charts

Mineweb.com EXPLORATION

We take a look junior performance in Canada, versus seniors, through research provided by Richard Schodde over at Minex Consulting.

Author: Kip Keen
Posted: Tuesday , 26 Nov 2013 HALIFAX, NS (MINEWEB) - 
In a recent presentation Richard Schodde over at Minex Consulting draws a striking picture of the performance of juniors and seniors in mineral exploration in Canada and abroad. We thought it worthwhile sharing a few of his graphs (with his permission) that draw a clear picture of the importance of juniors in the Canadian exploration scene.

 The summary statistic is this. Since 1960 juniors spent about $61 billion on exploration in Canada - 36 percent of the total exploration spend - and made about 45 percent of total discoveries, Schodde says.
Here we see the raw spending, seniors versus juniors:

In recent decades it's apparent that junior spending has skyrocketed, a fact that can in part be attributed to the increasing power of the personal computer. Bare bones companies, starting in the 1980s could compete with majors in the exploration game.
Discoveries followed the money:

We see that juniors made many of Canada's discoveries in recent decades, indeed, most of them in the past 10 years. Often exploration is a fruitless task, however. You spend money and find nothing and this is evident Schodde's overall ratio of total exploration spend to the value of discoveries. For juniors this was 0.89.
Typically, it's the rare, major discoveries that make for massive returns (though not only). This is evident in the next graph where Tier 1 discoveries - big ones - drive Schodde's estimates of discovery value far above what was spent. Juniors in the past decade have ruled this roost (yellow bars=value created, red line=spending) making most of the big discoveries.

Where do we go from here? Metal prices dominate the exploration cycle in Schodde's analysis (though there are other contributing factors) and he extrapolates future exploration spending in a variety of gold price scenarios. His general sentiment: the sky isn't falling. Taking $1,200 an ounce gold, he forecasts exploration spend to average about $1.3 billion a year in Canada in the coming years. That's well off 2012, a banner year. But historically speaking, it's still quite a healthy level.

Credit: Minex Consulting

Read the article online here:  Junior vs. Senior - Discovery performance in charts - EXPLORATION - Mineweb.com Mineweb