Mining exploration spending drops to 11-year low – by Frik Els ( – February 23, 2017)

A new report by SNL Metals and Mining on Corporate Exploration Strategies in 2016 shows an industry still caught in a deep downturn after four years of sharp declines. According to SNL, part of S&P Global Market Intelligence, 2016 exploration budgets at the 1,580 companies covered by the study totalled $6.9 billion, the lowest in 11 years.

Other measures show the extent of the damage to the sector: The average 2016 exploration budget was $4.4 million, the lowest since 2009, and the median budget was $800,000, the smallest in more than a decade.

Spending was dominated by the industry’s largest companies with just the top 10 companies were responsible for over $1 of every $5 spent on exploration – mainly for copper and gold – worldwide last year.

SNL notes that “conventional wisdom holds that the major companies leave grassroots exploration to the juniors,” but today early-stage exploration is being driven by the majors. The 20 biggest spenders alone contributed 34% of all greenfields allocations in 2016.

A consequence of this shift was a drop in overall spending on finding new deposits with greenfield exploration dropping to a new low of some $1.9 billion or 28% of total budgets.

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