Global Discovery Trends 1950-2009 PDAC March 2010

8/12/2019 Global Discovery Trends 1950-2009 PDAC March 2010

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MinEx Consulting Strategic advice on mineral economics exploration

Global discovery trends 1950-2009:What, where and who found them

Richard SchoddeManaging Director, MinEx Consulting

Panel Discussion:Exploration expenditures are increasing, but discoveries are not. Why?

PDAC 2010, 7 March 2010, Toronto


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Overview

Discovery trends for the World since 1950 . how many deposits

were found, what commodities are involved, where were theyfound and who discovered them ?

Study covered Non Ferrous Metals (Cu, Zn, Pb, Ni, Co, Mo, Mn etc),

Precious Metals (Au, Ag, PGEs), Diamonds, Uranium and

Others (Sn, W, Nb, Mineral Sands etc)

Have excluded Bulk Minerals (coal, iron ore, bauxite) and Industrial Minerals

(kaolin, talc, phosphate, potash etc)

Have excluded discovery of satellite deposits feeding into an existing mill

within an established mining camp

(i.e. count Ekati as one world-class discovery, not 20 small discoveries)

Analysis limited to Major deposits (i.e. > 1 mt Cu-equiv, > 100kt Ni,

> 1 Moz Au, >10 m carats, >25 kt U3O8)

Also assessed quality of the discoveries (Tier 1 & Tier 2)

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Data sources & coverage

Deposit info

Have a database of 48,800 mineral deposits around the world.

Discovery histories on 13,800 deposits

Discovery data on 2600 major deposits

Discovery data on 1390 major deposits found around the world since 1950,

excluding satellite deposits

Estimate that the analysis captures ~95% of all major discoveries Also assessed quality of the discoveries (Tier 1 & Tier 2)

Exploration expenditures

Relied on the Metal Economics Group for exploration spend data post-1992

For prior years, have own estimates, derived from various industry studies

(Mackenzie & Doggett , Tilton etc), government agencies (NRCan, ABS, OECD etc)

and published company reports

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How many major deposits were found ?

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Number of mineral discoveries in the WorldMajor deposits found in the World: 1950-2009

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Number

N = 1390

Excludes bulk and industrial mineral discoveries

Source: MinEx Consulting March 2010

On average 20 to 30Major deposits found

each year

Discovery rate wasbeen significantly

lower in last decade

Note: Major defined as >1 mt Cu-equiv, > 1 Moz Au-equiv, > 100 kt Ni, > 10 m carats >25 kt U3O8

Caution: Incomplete

discovery data for

recent years



Number of discoveries by RegionMajor deposits found in the World: 1950-2009

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Number

N = 1390




Caution: Incomplete

discovery data for

recent years



Number of discoveries by RegionMajor deposits found in the World: 1950-2008

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Over last 20 years there

has been a steady shift

away from the

established countries

(Can+USA+Aust)


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Number of discoveries in Western WorldMajor deposits found in the Western World: 1950-2009

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Number




Caution: Incomplete

discovery data for

recent years

N = 1138

d l


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We are spending more on exploration

but have less to show for itExploration expenditures and Major discoveries in the Western World: 1950-2009

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Number

Caution: Incomplete

discovery data for

recent years

Sources: MinEx Consulting, and exploration data

from 1993 onwards from MEG

Expenditures went up,

but discoveries are down



N = 1138

Exploration $ (2009 $B


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What commodities were found ?

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Number of discoveries by CommodityMajor deposits found in Western World: 1950-2009

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Number

N = 1138


In recent years most of thediscoveries in the Western

World were gold


Caution: Incomplete

discovery data for

recent years


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In the 1980s there was a major shift over to gold explorationMajor deposits found in Western World: 1950-2009

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Gold currently makes up60-80% of all major

discoveries


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Most of the metal found is tied up in a handful of depositsAmount of copper found in primary Cu deposits >0.3 Mt Cu in Western World: 1950-2009

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Note: Chart include minor adjustment for deposits missing from the database

Source: MinEx Consulting Sept 09

Mt Cu

Estimate

Most of the copperfound came from

a handful of

giant deposits

Andina

OlympicDam

Escondida

Grasberg

Collahuasi

Pebble

Oyu Tolgoi


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Most of the gold found is in deposits >1 MozAmount of gold found (including by-product Au) in deposits >0.1 Moz in World: 1950-2009

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Estimate

Moz

Source: MinEx Consulting Feb 2010


Most ounces found are associated

with discoveries >1 Moz. This is

where companies should focus

their exploration efforts


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The gold industry is struggling to replace the ounces it minesAmount of gold found and mined in the World: 1950-2009

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Estimate

Moz

Source: MinEx Consulting Feb 2010


Not all discoveries turn into mines, and not all gold mined is recovered

Over the last decade, gold

production exceeded gold found.

This is not sustainable!

A d t th ti th d f ld


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And at the same time, the average grade of gold

found and mined continues to decline

Grade (g/t Au)

Sources: Discovery data from MinEx Consulting Jan 2010

1950 -2000 Production data derived from Mudd Nov 2007

2000-10 Production data from GFMS Mine Economics Feb 2010

Average grade of gold discovered in the World(3-Year rolling average for discoveries >1 Moz)

Average grade of gold

mined in the World

Average grade of gold mined in

USA + Canada + Australia + South Africa

Note: Primary gold deposits only

1.8 g/t

6.6 g/t

in 1980

2.0 g/t

in 2008

0.92 g/t

G ld Di i i h W ld


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Gold Discoveries in the WorldAmount of gold found (including by-product Au) in deposits >0.1 Moz

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1950-59


All Years

G ld Di i i


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Gold Discoveries over timeAmount of gold found (including by-product Au) in deposits >0.1 Moz

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1950-59


G ld Di i ti


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1960-69

Key observation is that the

industry keeps finding new

areas to explore

G ld Di i ti


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20


1970-79



areas to explore

Gold Discoveries over time


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21


1980-89



areas to explore



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22


1990-99



areas to explore



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2000-09



areas to explore



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2000-09and current

hot spots

Columbia

& Ecuador

West Africa Central

Africa

China

Far East Russia

Alaska &

Yukon


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How good are these discoveries ?

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Only a handful of the discoveries made each year


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Only a handful of the discoveries made each year

are Company-MakersAll Tier 1 & 2 deposits found in the World: 1950-2009

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Number

NTier1 = 114

Note: Excludes bulk and industrial mineral discoveries


The industry only finds

5-10 Tier 1&2 deposits

each year

NTier2 = 281

and only 1-2 of these

are World-Class

Caution: Incomplete

discovery data for

recent years

Recent Tier 1 discoveries include

2007: Los Sulfatos (Cu)

2006 : Fruta del Norte (Au), La Colosa (Au) and Rossing South (U3O8)

2004 : Moto (Au) and Eucla (Mineral Sands)

2002: Oyu Tolgoi (Cu-Au) and Pebble (Cu-Au)

2001: Lagunas Norte (Au) and Aurora (Au)

2000: La Sampala (Ni)


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Who made the discoveries ?

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Who made the discoveriesMajor deposits found in the Western World: 1950-2009

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Number

Have pro-rated shared discoveries

Note: Major defined as >1 mt Cu-equiv, > 1 Moz Au-equiv, > 100 kt Ni, > 10 m carats >25 kt U3O8 Source: MinEx Consulting March 2010

Caution: Incomplete

discovery data for

recent years

N = 1138

h d h di i


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Who made the discoveriesMajor deposits found in the Western World: 1950-2009

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Junior Companies now

account for over half of

all Major discoveries inthe Western World

Note: Major defined as >1 mt Cu-equiv, > 1 Moz Au-equiv, > 100 kt Ni, > 10 m carats >25 kt U3O8Have pro-rated the unknown deposits across the other discovery categories


C l i


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Conclusions

Since 1980, the main game in-town has been gold

Currently 60-80% of all major discoveries are gold

The current hot spots for gold are Columbia/Ecuador, West Africa and Central Africa

Very few major lead-zinc, diamond or uranium deposits have been found in the last decade

In the last 20 years there has been a steady shift away from the established countries

In the 1980s, Canada + USA + Australia accounted for over half of all major discoveries.

Now it is less than 20%

Since the 1990s Juniors have played a significant role in discovery

Currently over half of all major discoveries in the Western World are made by Junior companies and

small producers

In spite of record exploration expenditures, the rate of discovery has declined

over the last decade

Industry now finding less than 10-20 Major deposits per year

Only 1-2 of these are World-Class The gold industry is struggling to replace the ounces it mines

The size and grade of the discoveries (for gold) is declining

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QUESTIONS ?

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Contact details

Richard SchoddeManaging Director

MinEx Consulting

Melbourne, Australia

Email: [email protected]

Global Discovery Trends 1950-2009 PDAC March 2010

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