BY CSA GLOBAL MANAGING DIRECTOR, JEFF ELLIOTT
Presentation at China Mining Congress & Expo 2016Tianjin Meijiang Convention & Exhibition Centre
People’s Republic of China
CSA Global is one of the largest independent mining consultancies globallyExploration to mining expertise, all mineral commodities, all mining methods
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CSA Global – Exploration & Mining
Market Cycles
Source: SNL Metals & Mining, an offering of S&P Global Market Intelligence
Global financial
crisisWeakening equity markets & falling commodity prices
Booming again
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Globalfinancial
crisis
Decreasing exploration
Booming again
Recovery
2008
2009
2012
Booms & Busts
Exploration sentiment & activity follows market trends
Global Exploration Budget vs Metal Price
Source: SNL Metals & Mining, an offering of S&P Global Market Intelligence
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0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
0
2
4
6
8
10
12
14
16
18
20
22
24
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15
Indexed Metals P
rice (1996=1)N
onfe
rrou
s E
xplo
ratio
n B
udge
t (U
S$B
)
Estimated Exploration Total Nonferrous Exploration Budget Total
$2B
$14B
$20B
$9B
$4B
$8B
Boomingagain
GFC
10 Year Price Trends – Ni, Au, Al, Zn
Decreasing exploration
Recovery
GFC
Source: SNL Metals & Mining, an offering of S&P Global Market Intelligence
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10 Year Price Trends – Coal, Iron & Copper
Booming again
Source: SNL Metals & Mining, an offering of S&P Global Market Intelligence
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Decreasing exploration
GFC
Exploration boom
Recent Price Trends – Gold & Zinc
Increased demand for physical Au
Long anticipatedbreakout?
Source: SNL Metals & Mining, an offering of S&P Global Market Intelligence
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Recent Price Trends – Copper & Nickel
Cycle-low prices, recent improvement due to Asian supply concerns
Stagnating prices reflect concerns with the global economy
Source: SNL Metals & Mining, an offering of S&P Global Market Intelligence
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What are the Explorers Targeting?
• Surging interest in gold & zinc projects
• Low interest in exploration for steel minerals
• Similar pull-back in exploration activity on uranium & coal projects
• Strong demand for graphite, lithium & cobalt projects
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Similar trends in Australia with gold dominating & improving
Source: SNL Metals & Mining, an offering of S&P Global Market Intelligence
~U$9B in 2015
Source: ABS, Matau Advisory, Andrew Pedler
Who’s Exploring?
Gov’t / other
Intermediates
Majors
Juniors
Juniors often lead investment in new terranes & higher-risk regions
Source: SNL Metals & Mining, an offering of S&P Global Market Intelligence
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• Junior explorers have been starved of risk capital for several years
• Majors now accounting for larger share of exploration investment
What’s the Exploration Focus?
Mine site
Late stage
Grass-roots
~U$9B in 2015
Source: SNL Metals & Mining, an offering of S&P Global Market Intelligence
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Falling regional & generative work has a long term impacts on rates of discovery & the project pipeline
• Continued trend of increased brown-fields exploration at mine sites
• Falling investment in grass-roots exploration
What Regions are Considered Attractive?
~4000 companies
surveyed in 2015
Australia, Canada & the US viewed favourablyAfrica, Asia, Latin America perceived as higher risk
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Fraser Institute – 2015 Mining Survey
Investment
Attractiveness
Where is the Exploration Activity?Global non-ferrous exploration spending by public-listed companies
Source: SNL Metals & Mining, an offering of S&P Global Market Intelligence
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Worldwide non-ferrous exploration budgets fell by 19% in 2015
New Frontiers for Mineral Exploration
Mineral exploration in spaceSpace mining absolutely viable says NASA
Submarine explorationSea floor exploration for precious & base metals
New “search spaces”Nickel in felsic rocks e.g. the Titan project in Nigeria
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Trends in Geophysics
2D / 3D seismic for mineralsDefining structure & targets at depth
Passive seismicLow-cost mapping of cover thickness
High-powered electrical methodsGround EM/IP & airborne VTEM / ZTEM
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Trends in Geochemistry & Mineralogy
More use & integration of geochemistry / mineralogy- for alteration mapping & mineral systems analysis
- field-based chemical analysis & mineral identification
- handheld hyperspectral & XRD devices, core scanners
Widespread application of field portable XRF
Other portable & non portable mineralogy systems
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Trends in Information & Communication Technology
Low cost & increased
mobile coverage
Increased connectivity
between field devices
Huge increase in computing
processing power
Improved data analysis & modelling
software
Much larger exploration
datasets
Greater ability to access data
in real-time
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Your mobile phone has more computing power than the computers used for the Apollo 11 moon landing
Innovations in the Exploration Industry
Coiled tubing drilling- less weight, impact & cost
Down-hole tools- logging while drilling
Lab at rig- onsite analysis & mineralogy
Drone-based sensors- for surveying & geophysics
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Social Trends
Faster access to information
mans that it is much easier for interest groups
to connect
Need for far more effort on
community engagement & transparency
Increasing community
focus on environment,
sustainability & maintaining a social license to operate
Social & economic
pressures are leading
to industrial relations issues
& resource nationalism
Greater interest in collaboration from industry participants & more support for research & development
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Reporting & Compliance Trends
Tighter corporate governance & regulation globallyMore focus on principles of transparency, materiality & competence
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Increasing adoption of international reporting codes
Summary of Exploration Trends
Market volatility reduces exploration effectiveness- short termism driving a long-term R&D style business
Exploration activity aligns with mineral commodity trends- gold dominates, huge interest in battery minerals (Cg-Li-Co), base metals
Regional trends are driven by geo-political risk & mineral potential- governments can encourage or discourage exploration
Discovery costs are increasing & rates of discovery are falling- deeper, more complex targets with lower grades require more smarts
Emphasis has been on brownfields exploration- less availability of risk-capital so targeting easy wins within mine camps
Little regional target generation or green-fields exploration- need to re-stock the project pipeline, review target models & search space
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CSA Global is proud of its decades long history with Chinese industry
- Experience on numerous Chinese gold, base metal & industrial minerals projects
- Have worked with many Chinese companies in Australia, Asia, Africa & the Americas
Our focus is on collaboration, respect & capability growth
- CSA Global is one of the largest independent mining consultancies globally
- We provide exploration to mining services, all mineral commodities, all mining methods
Thank-you, for contact information visit www.csaglobal.com
CSA Global’s History with China