Overview of Exploration in the Tethyanminexconsulting.com/wp-content/uploads/2019/04/SEG... ·...

MinEx Consulting Strategic advice on mineral economics & exploration

Overview of Explorationin the Tethyan

Richard SchoddeManaging Director, MinEx Consulting

Adjunct Professor, Centre for Exploration Targeting , UWA

Society of Economic Geologists 2016 Conference26th September 2016, Çeşme, Turkey


Overview

1. Countries covered in the analysis

2. Trends in exploration spend

3. Number of discoveries made – How many were found and what metal?

4. Location of deposits – Where were they found?

5. Mineral endowment – How “fertile” is the Belt?

6. Location of discoveries made in last 50 years

7. Trends in unit discovery costs – $/oz costs are rising over time

8. Quality and value of the discoveries – focus on finding Tier 1 & 2deposits, and does exploration make money?

9. Conclusions

2


1. COUNTRIES COVERED INTHE ANALYSIS

The Tethyan Belt spans across 33 countries across 2 continents

3


Have used Jeremy Richards model ofthe Tethyan Orogen …

Source: Richards,JP, “Tectonic, magmatic, and metallogenic evolution of the Tethyanorogeny: from subduction to collision”, Ore Geology Reviews, Vol 70 Oct 2015

4


… which spans across the following 33 countries

Includes …China: Provinces of Tibet and YunnanIndia: States of Jammu & Kashmir, Himachal Pradesh,

Uttarakhand, Sikkim and Arunachal PradeshFrance: Corsica

Note: Only part of China, India and Francelie within the Tethyan Belt … in those caseshave selected the relevant Provinces/States

Note: Only part of China, India and Francelie within the Tethyan Belt … in those caseshave selected the relevant Provinces/States

Analysis is based on countries rather thangeographical boundaries; This because

data on exploration expenditures is onlyreported at a National level

Analysis is based on countries rather thangeographical boundaries; This because

data on exploration expenditures is onlyreported at a National level

5


The 33 countries were then consolidated into 6regions along the belt

Himalayas- Arunachal Pradesh (India)- Bhutan- Himachal Pradesh (India)- Jammu & Kashmir (India)- Sikkim (India)- Uttarakhand (India)- Tibet (China)

Asia Minor- Greece- Turkey

Central Asia & Middle East- Afghanistan - Muscat- Armenia - Oman- Iran - Pakistan

South East Asia- Cambodia- Laos- Myanmar- Thailand- Vietnam- Yunnan (China)

Western Europe- Corsica (France)- Italy- Switzerland- Austria

MacedoniaEastern Europe- Albania - Macedonia- Bosnia & Herz - Montenegro- Bulgaria - Romania- Croatia - Serbia- Czech Rep - Slovakia- Hungary - Slovenia- Kosovo

6


2. TRENDS IN EXPLORATION SPENDExploration expenditures have increased dramatically

7


Exploration Expenditures by regionTethyan Belt Countries: 1995-2015

$0

$200

$400

$600

$800

1965 1975 1985 1995 2005 2015

South East Asia

Himalayas

Central Asia & ME

Asia Minor

Eastern Europe

Western Europe

2015 US$m

Sources: MinEx Consulting estimates based on data fromSNL, OECD (for Uranium) and MOLAR (for China)

No data for yearsprior to 1995

Exploration expendituresincreased dramatically in

the mid-2000s

Exploration expendituresincreased dramatically in

the mid-2000s

$58min 2003

$755min 2012

$437min 2015

8

Over the lastdecade the 6

regions in the TBaccounted for3.2% of globalexpenditures

Over the lastdecade the 6

regions in the TBaccounted for3.2% of globalexpenditures


Exploration Expenditures by commodityTethyan Belt Countries: 1995-2015

$0

$200

$400

$600

$800

1965 1975 1985 1995 2005 2015

Other

Uranium

Zinc/Lead

Nickel

Copper

Gold

2015 US$m

Sources: MinEx Consulting estimates based on data fromSNL, OECD (for Uranium) and MOLAR (for China)

No data for yearsprior to 1995

2/3rds of theexpenditures wereon gold and copper

2/3rds of theexpenditures wereon gold and copper

9


3. NUMBER OF DISCOVERIES MADE

Over the last 50 years, 246 significant deposits were found in theTethyan Belt, including 63 in the last decade

10


Number of discoveries by sizeMineral discoveries in Tethyan Belt Countries: 1965-2015

0

5

10

15

1965 1975 1985 1995 2005 2015

Moderate

Major

Giant

Number

Source: MinEx Consulting © September 2016

19

235

78

139

Note: Excludes Bulk Mineral discoveries (ie bauxite, coal and iron ore)“Moderate” >100koz Au, >10kt Ni, >100Kt Cu equiv, 250kt Zn+Pb, >5kt U3O8

“Major” >1Moz Au, >100kt Ni, >1Mt Cu equiv, 2.5Mt Zn+Pb, >25kt U3O8

“Giant” >6Moz Au, >1Mt Ni, >5Mt Cu equiv, 12Mt Zn+Pb, >125kt U3O8

11

Need to factorin unreporteddiscoveries for

recent years

Need to factorin unreporteddiscoveries for

recent years

Caution:Incomplete datain recent years


Number of discoveries by sizeMineral discoveries in Tethyan Belt Countries: 1965-2015

0

5

10

15

1965 1975 1985 1995 2005 2015

Est Unreported

Moderate

Major

Giant

Number


19

246

78

139

Giant-sized discoveries arerare … with an average of

only 4 per decade

Giant-sized discoveries arerare … with an average of

only 4 per decade

11

Note: Excludes Bulk Mineral discoveries (ie bauxite, coal and iron ore)“Moderate” >100koz Au, >10kt Ni, >100Kt Cu equiv, 250kt Zn+Pb, >5kt U3O8

“Major” >1Moz Au, >100kt Ni, >1Mt Cu equiv, 2.5Mt Zn+Pb, >25kt U3O8

“Giant” >6Moz Au, >1Mt Ni, >5Mt Cu equiv, 12Mt Zn+Pb, >125kt U3O8

The last giantfound was in 2010(Zhaxikang in Tibet)

The last giantfound was in 2010(Zhaxikang in Tibet)

12


Number of discoveries by commodityMineral discoveries in Tethyan Belt Countries: 1965-2015

0

5

10

15

1965 1975 1985 1995 2005 2015

Est Unreported

Other

Uranium

Zinc/Lead

Nickel

Copper

Gold

Number


98

246

92

11

Gold and Copperaccount for 81% of

all reported discoveriesin the last 50 years

Gold and Copperaccount for 81% of

all reported discoveriesin the last 50 years

15

9

14

11

includes MinEx’sestimate ofunreporteddiscoveries

includes MinEx’sestimate ofunreporteddiscoveries

Note: Based on Moderate-, Major- and Giant-sized depositsExcludes Bulk Minerals (such as bauxite, coal and iron ore)Excludes satellite deposits in existing campsNo significant discoveries reported in the Belt in 1978, 1984 and 2009

13


Number of discoveries by locationMineral discoveries in Tethyan Belt Countries: 1965-2015

0

5

10

15

1965 1975 1985 1995 2005 2015

Est Unreported

South East Asia

Himalayas

Central Asia & ME

Asia Minor

Eastern Europe

Western Europe

Number


10

246

53

64

41

20

48

11

70% of the discoverieswere in Eastern EuropeAsia Minor and SE Asia

70% of the discoverieswere in Eastern EuropeAsia Minor and SE Asia

14

Very few discoveriesin Western Europe



Number of discoveries by locationMineral discoveries in Tethyan Belt Countries: 1965-2015

0%

20%

40%

60%

80%

100%

1965 1975 1985 1995 2005 2015

South East Asia

Himalayas

Central Asia & ME

Asia Minor

Eastern Europe

Western Europe

% of Total


Over the last decade most of the discoveries werein Eastern Europe and Asia Minor (i.e. Turkey)

Over the last decade most of the discoveries werein Eastern Europe and Asia Minor (i.e. Turkey)

15



4. LOCATION OF DEPOSITS

425 significant deposits have been identified in countriesalong the Tethyan Belt

16


Discoveries in the Tethyan Belt : All Years

Au Cu Ni Zn/Pb U Other TOTAL

No. 154 124 28 44 22 53 425

Metal 440.6Moz

208.5Mt

18.5Mt

130.6Mt

462kt U

xx

Countries alongthe Tethyan Belt

17

5.7% of all depositsin the World

5.7% of all depositsin the World

GoldCopperNickelZinc/LeadUraniumOther

Note: Bubble size refers to whether it is aModerate-, Major- or a Giant-deposit


Entire Map : All Years6N to 51N and 6E to 110E


No. 452 222 47 87 122 124 1054

Metal 1304Moz

410Mt

32.3Mt

345Mt

3300kt U

xx

EntireMap

18

Over half of alldiscoveries

were outside theTethyan Belt

Over half of alldiscoveries

were outside theTethyan Belt



Europe : All Years


No. 8 3 - 9 - 10 30

Metal 2.9Moz

1.0Mt

- 11.6Mt

- xx

Western Europe (Italy, Switzerland, Austria, Corsica)


No. 49 26 15 11 18 9 128

Metal 169.0Moz

32.9Mt

5.0Mt

19.5Mt

299Kt U

xx

Eastern Europe (13 Countries)

19



Central Asia & Middle East : All Years


No. 43 20 7 5 1 15 91

Metal 92.3Moz

14.0Mt

10.6Mt

11.8Mt

5Kt U

xx

Asia Minor (Greece, Turkey)


No. 22 27 1 10 - 1 61

Metal 91.5Moz

91.4Mt

0.6Mt

49.1Mt

- xx

Central Asia + Middle East (6 Countries)

20



Himalayas& SE Asia: All Years

Himalaya (Nepal, Bhutan, Northern Nth Indian States)

Tibet)

South East Asia (6 Countries)


No. 1 18 - 2 - 2 23

Metal 26.9Moz

32.6Mt

- 8.2Mt

- xx


No. 31 30 5 7 3 17 93

Metal 58.0Moz

36.6Mt

2.4Mt

30.5Mt

157Kt U

xx

21



5. MINERAL ENDOWMENTHow mineral-rich is the Tethyan Belt ?

22


Size/Cumulative Frequency Curve for GoldTethyan Belt versus the World

1

10

100

1000

10000

0.1 1 10 100

Cumulative No of Deposits

World

World (excluding Sth Africa)

Tethyan Belt

Pre-Mined Resource (Moz)

23



Size/Cumulative Frequency Curve for GoldTethyan Belt versus the World – adjusted for land area

0.01

0.1

1

10

100

0.1 1 10 100

Cumulative No of Deposits per Million km2

World


Tethyan Belt


24



Size/Cumulative Frequency Curve for GoldTethyan Belt versus the World – adjusted for land area

0.01

0.1

1

10

100

0.1 1 10 100



Western Europe

Eastern Europe

Asia Minor

Central Asia & ME

Himalayas

SE Asia


25

Some Regions (such as EasternEurope and Asia Minor) of the Belt

are better endowed than others

Some Regions (such as EasternEurope and Asia Minor) of the Belt

are better endowed than others



Size/Cumulative Frequency Curve for CopperTethyan Belt versus the World – adjusted for land area

0.01

0.1

1

10

100

0.1 1 10 100


World

TETHYAN BELT

Pre-Mined Resource (Mt Cu)



Size/Cumulative Frequency Curve for CopperTethyan Belt versus the World – adjusted for land area

0.01

0.1

1

10

100

0.1 1 10 100


World

Western Europe

Eastern Europe

TETHYAN BELT

Asia Minor

Central Asia & ME

Himalayas

SE Asia

Pre-Mined Resource (Mt Cu)

Some Regions (such as EasternEurope and CA & ME) of the Beltare better endowed than others

Some Regions (such as EasternEurope and CA & ME) of the Beltare better endowed than others

The curve for CA & ME is “flatter”than the others … suggesting that

Region has less-explored

The curve for CA & ME is “flatter”than the others … suggesting that

Region has less-explored

… As a general rule ‘in a new district the bigger depositstend to get found first” … resulting in a flatter curve Source: MinEx Consulting © September 2016


Total contained metal per km2 : by regionalong the Tethyan Belt

Oz Au t Cu t Ni t Zn+Pb t U

WORLD a 70 b 27.7 2.5 12.4 0.12

TETHYAN BELT TOTAL 45 21.2 1.9 13.3 0.05

Western Europe 7 2.5 - c 28.7 - c

Eastern Europe 191 37.3 5.7 22.1 0.34

Asia Minor 100 15.2 11.4 12.7 0.01

Central Asia & Middle East 27 26.6 0.2 14.3 - c

Himalaya 15 17.7 - c 4.5 - c

South East Asia 25 15.7 1.0 13.1 0.07

(a): Analysis based on total land area of 135 million km2 for the World which excludes Antarctica (14 million km2)(b): Gold data excludes South Africa, Including South Africa

increases the global figure to 91 Oz/km2

(c): The analysis is based on >=Moderate-size deposits only. Including other(smaller) deposits may result in a non-zero figure for the region

28

Source: MinEx Consulting © January 2015


Total contained metal per km2 : by regionalong the Tethyan Belt

Oz Au t Cu t Ni t Zn+Pb t U

WORLD a 70 b 27.7 2.5 12.4 0.12

TETHYAN BELT TOTAL 45 21.2 1.9 13.3 0.05

Western Europe 7 2.5 - c 28.7 - c

Eastern Europe 191 37.3 5.7 22.1 0.34

Asia Minor 100 15.2 11.4 12.7 0.01

Central Asia & Middle East 27 26.6 0.2 14.3 - c

Himalaya 15 17.7 - c 4.5 - c

South East Asia 25 15.7 1.0 13.1 0.07


(a), (b), (c) : See comments on previous slide

>10x2-5x 6-10x0.2-0.5x<0.2x 0.5-2xRelative to WORLD

29

For selected commodities, parts of the TethyanBelt are better than the World average

For selected commodities, parts of the TethyanBelt are better than the World average


6. LOCATION OF DISCOVERIESMADE IN LAST 50 YEARS

Over the last 50 years, 246 significant deposits were found in theTethyan Belt, including 63 in the last decade

30


Tethyan Belt Discoveries: 1966-1975


No. 4 28 1 3 3 3 42

Metal 50.7Moz

68.8Mt

0.1Mt

9.6Mt

41Kt U

W, Sulphur

Countries along the Tethyan Belt

All by-product

31


Aynak

Monywa

Recsk

Sar Cheshmeh

Rovina Valley

Olympias

Note: Have highlighted the “Giant” deposits Giants = 6





No. 5 10 3 5 3 3 29

Metal 15.0Moz

5.2Mt

1.8Mt

5.1Mt

38Kt U

Graphite, GarnetSoda Ash


All by-product

32


Beypazari [Trona]

Giants = 1





No. 26 11 4 - 2 1 44

Metal 45.2Moz

19.2Mt

1.2Mt

3.0Mt

10Kt U

Ag


All by-product

33


Sungun

Jiama

Giants = 2





No. 35 23 1 - - 4 63

Metal 158.6Moz

52.0Mt

0.6Mt

3.0Mt

- Li, Mo,W,Soda Ash


All by-product

34


Reqo Diq

Rosia Montana

KisladagCopler

Beiya

Jadar [Li]

Kazan [Trona]Certej

Giants = 8





No. 28 17 - 5 - 2 52

Metal 48.3Moz

20.7Mt

- 8.5Mt

- Cr, Mo


35


South Tegelong

Zhaxikang

Giants = 2



7. TRENDS IN UNIT DISCOVERY COSTSWhile costs have risen, The Tethyan Belt remains competitive

36


Exploration spend and Number of discoveriesTethyan Belt Countries : 1965-2015

0

5

10

15

1965 1975 1985 1995 2005 2015

Est No of Unreported Discoveries

No of Discoveries

Number of Discoveries


Note: Based on Moderate-, Major- and Giant-sized depositsExcludes Bulk Minerals (such as bauxite, coal and iron ore)Excludes satellite deposits in existing campsNo data on exploration expenditures prior to 1995

37


Exploration spend and Number of discoveriesTethyan Belt Countries : 1965-2015

$0

$200

$400

$600

$800

0

5

10

15

1965 1975 1985 1995 2005 2015

Est No of Unreported Discoveries

No of Discoveries

Exploration Expenditures

Number of Discoveries


Note: Based on Moderate-, Major- and Giant-sized depositsExcludes Bulk Minerals (such as bauxite, coal and iron ore)Excludes satellite deposits in existing campsNo data on exploration expenditures prior to 1995

2015 US$mExplorationSpend

Discoveryperformancehas declined

in recentyears

Discoveryperformancehas declined

in recentyears

38


Average cost per deposit foundTethyan Belt Countries versus the World: 1965-2015

$0

$100

$200

$300

1965 1975 1985 1995 2005 2015


Note: Based on a 3-year rolling AverageBased on Moderate-, Major- and Giant-sized depositsExcludes Bulk Minerals (such as bauxite, coal and iron ore)Includes an adjustment for the number of unreported discoveries in recent years

2015 US$m per Discovery

Over the last decadeunit discovery costs have

significantly risen


significantly risen

39

Tethyan Belt

3-Year Rolling Average

$158m

$10mNo data for years prior to 1995


Average cost per deposit foundTethyan Belt Countries versus the World: 1965-2015

$0

$100

$200

$300

1965 1975 1985 1995 2005 2015


Note: Based on a 3-year rolling AverageBased on Moderate-, Major- and Giant-sized depositsExcludes Bulk Minerals (such as bauxite, coal and iron ore)Includes an adjustment for the number of unreported discoveries in recent years

2015 US$m per Discovery

WORLD

40

Tethyan Belt

3-Year Rolling Average

The Tethyan Belt is simplyfollowing the same trendas the rest of the World

$158m

$236m


significantly risen


significantly risen

$53m

$158m

$10m


$52

$23

$18

$26

$138

$29

$49

Western Europe

Eastern Europe

Asia Minor

Central Asia & ME

Himalayas

SE Asia

Tethyan TOTAL

WORLD

Gold : 2015 US$/oz)

na

41

Note: Analysis includes an adjustment for unreported discoveries and likely resource growthSource: MinEx Consulting © September 2016

Unit discovery costs for gold and copperRegions within the Tethyan Belt : 2006-2015


Unit discovery costs for gold and copperRegions within the Tethyan Belt : 2006-2015

$52

$23

$18

$26

$138

$29

$49

Western Europe

Eastern Europe

Asia Minor

Central Asia & ME

Himalayas

SE Asia

Tethyan TOTAL

WORLD

2.3

3.1

7.6

1.6

13.4

3.0

3.6

Western Europe

Eastern Europe

Asia Minor

Central Asia & ME

Himalayas

SE Asia

Tethyan TOTAL

WORLD

Gold : 2015 US$/oz) Copper : 2015 US c/lb)

na

na

Note: Analysis includes an adjustment for unreported discoveries and likely resource growth

The Tethyan Belt iscompetitive, but unit

discovery costs do varywidely across thevarious Regions

The Tethyan Belt iscompetitive, but unit

discovery costs do varywidely across thevarious Regions

42



8. QUALITY AND VALUE OFDEPOSITS FOUND

How many Tier 1, 2 and 3 deposits were found along the Belt?

43


Tethyan Belt Discoveries by Tier : 1996-2015

Tier 1 Tier 2 Tier 3 Unclassified TOTAL

No. 2 12 38 63 115


Tier 1Tier 2Tier 3Unclassified

Jadar[Li,B] : 2004

Jadar[Li,B] : 2004

Beiya: 125 mt @ 2.42 g/t Au + 39 g/t Ag + 0.48% Cu found in Yunnan

Jadar: 117 Mt @ 1.8% Li2O + 16.2% B2O3 found in Serbia

Over the last 20 years only 2 Tier 1 and 12 Tier 2deposits were found in the Tethyan Belt

Over the last 20 years only 2 Tier 1 and 12 Tier 2deposits were found in the Tethyan Belt

Beiya[Au] : 2005

Beiya[Au] : 2005

Kisladag [Au] : 1998

Kazan [Trona] : 1998

Copler [Au] : 2001Brestovac [Cu] : 2012

Rosia Montana [Au] : 1998

Duolong [Cu] : 2000Duobuza [Cu] : 2000

SthTegelong [Cu] : 2008

Reko Diq [Cu] : 1997

Zhaxikang [Zn,Pb] : 2010

Nui Phao [W] : 2001

Beiya North[Pb] : 2007

44



Number of discoveries by qualityTier 1, 2 and 3 discoveries in Tethyan Belt Countries: 1965-2015

0

5

10

15

1965 1975 1985 1995 2005 2015

Unclassified

Tier 3

Tier 2

Tier 1

Number


3

235

22

71

Tier-1 discoveries areextremely rare … with only3 found in the Belt in the

last 50 years

Tier-1 discoveries areextremely rare … with only3 found in the Belt in the

last 50 years140

Note: Excludes Bulk Mineral discoveries (ie bauxite, coal and iron ore)

Caution:No adjustment made forunreported discoveries

Sar Cheshmeh(Cu: 1967)

Jadar(Li,B: 2004)

Beiya(Au: 2005)

45

On average, find one Tier-1every second decade, and4-6 Tier-2s every decade


Most of the wealth created are in Tier 1 and 2 discoveriesEstimated value of 115 discoveries found in Tethyan Belt Countries between 1996-2015

0%

20%

40%

60%

80%

100%

Number ofDeposits

NPV

Tier 1

26%

4%

28%

Note: Limited to deposits >=“Moderate “ in sizeNPV values refer to the Net Present Value at the Decision-to-Build stageEV = Expected Value, which is the weighted average value of the NPV rangeValues are based on long run commodity prices as prevailing at Jan 2013

Caution: Values are indicative / approximate-only

‘Tier 1 deposits’ are Company making" mines.They are large, long life and low cost. … ie >20Years ,>200 ktpa Cu or >250koz pa Au, andBottom Quartile costs. Have an NPV of>$1000m, and EV of ~$2000m in 2013 Dollars

‘Tier 3 deposits’ are small / marginal depositsWhile they can be profitable they often only getdeveloped at the top of the business cycle . Atthey don’t meet more than one of the Tier 1 or 2criteria. NPV of $0 to $200m, EV of ~$100m

Definitions

Example: Sar Cheshmeh [Copper]

Example: Copler [Gold]

Example: Ban Phuc [Nickel]

Tier 2

Tier 3

Unclassified

Tier 1

Tier 2

Tier 3

‘Unclassified deposits’ are small depositsthat are less than “Major “in size and/or ofminimal value. EV of (say) ~$10m

Example: Red Rabbit [Gold]

42%

Unclassified

2%

33%

55%

10%

‘‘Tier 2 deposits’ are “Significant” deposits -but are not quite as large or long life or asprofitable as Tier 1 deposits . They have anNPV of $200-1000m and EV of ~$500m

46



Estimated value of discoveriesTier 1, 2 and 3 discoveries in Tethyan Belt Countries: 1965-2015

$0

$1,000

$2,000

$3,000

1965 1975 1985 1995 2005 2015

Unclassified

Tier 3

Tier 2

Tier 1

2015 US$m


$4.1b

$25.9b

$6.1b

$3.9 b

$0.6b

Note: Excludes Bulk Mineral discoveries (ie bauxite, coal and iron ore)Caution: Values are indicative / approximate-only

Sar Cheshmeh(Cu: 1967)

Jadar(Li,B: 2004)

Beiya(Au: 2005)

1996-2015

47



Estimated exploration spend and value of discoveriesTier 1, 2 and 3 discoveries in Tethyan Belt Countries: 1965-2015

$0

$1,000

$2,000

$3,000

1965 1975 1985 1995 2005 2015

Unclassified

Tier 3

Tier 2

Tier 1

2015 US$m


Note: Excludes Bulk Mineral discoveries (ie bauxite, coal and iron ore)No expenditure data available prior to 1995

Caution: Values are indicative / approximate-only

ExplorationSpend

$4.1b

$14.7b

$6.1b

$3.9 b

$0.6b

1996-2015

$6.1b

Over the last 20 years, US$6.1b was spenton exploration, delivering US$14.7b of value

… ie a “Bang per Buck” of 2.41

Over the last 20 years, US$6.1b was spenton exploration, delivering US$14.7b of value

… ie a “Bang per Buck” of 2.41

Over the last decade the “Bangper Buck” dropped to 0.87

48



How does The Tethyan Belt compare to the Rest of the World?Spend & performance by Region: 2006-2015

Region ExplorationSpend (2015 $b)

No ofDiscoveries #

Tier 1+2Discoveries

Estimated Value(2015 $b)

Value /Spend

Australia $13 9% 108 17% 9 12% $8 8% 0.62

Canada $25 17% 71 11% 13 18% $13 13% 0.51

USA $11 7% 24 4% 5 7% $8 8% 0.74

Latin America $35 24% 105 17% 13 18% $19 21% 0.58

Pacific/SE Asia $8 5% 24 4% 2 3% $4 4% 0.51

Africa $20 14% 157 25% 18 25% $23 24% 1.13

W Europe $4 3% 37 6% 1 1% $2 2% 0.55

Rest of World $32 22% 106 17% 12 16% $18 19% 0.58

----- ------ ------ ------- ------ ------- ------- ------- -------

TOTAL $146 100% 632 100% 73 100% $96 100% 0.65

Tethyan Belt $4.7 3.2% 52 8.2% 4 5.5% $4.1 4.3% 0.87

Note: Analysis excludes bulk minerals, and excludes satellite deposits found within existing campsDiscoveries refer to Moderate-, Major- and Giant-sized deposits.“Rest of World” includes China, FSU and Eastern Europe

The Estimated Value is approximate only, and ignores the value of unreported discoveries

i.e. “Bang-per-Buck”i.e. “Bang-per-Buck”The Tethyan Belt was the second-best region (after Africa) to explore in the WorldThe Tethyan Belt was the second-best region (after Africa) to explore in the World

49


As more discoveries are drilled-out & reported, these returns

should improve over time

As more discoveries are drilled-out & reported, these returns

should improve over time


The returns vary widely across the BeltSpend & performance by Countries within the Tethyan Belt: 2006-2015

Region ExplorationSpend (2015 $b)

No ofDiscoveries #

Tier 1+2Discoveries

Estimated Value(2015 $b)

Value /Spend

W Europe $0.02 0% 1 2% 0 0% $0.01 0% 0.43

E Europe $0.84 18% 10 19% 1 25% $0.87 21% 1.04

Asia Minor $0.96 20% 22 42% 0 0% $0.96 23% 0.99

CA & ME $0.73 16% 6 12% 0 0% $0.24 6% 0.33

Himalayas $1.02 22% 6 12% 2 50% $1.33 33% 1.30

SE Asia $1.12 24% 7 13% 1 25% $0.66 16% 0.59

----- ------ ------ ------- ------ ------- ------- ------- -------

TOTALTethyan Belt

$4.70 100% 52 100% 4 100% $4.08 100% 0.87

Note: Analysis excludes bulk minerals, and excludes satellite deposits found within existing campsDiscoveries refer to Moderate-, Major- and Giant-sized deposits.“Rest of World” includes China, FSU and Eastern Europe

The Estimated Value is approximate only, and ignores the value of unreported discoveries

Over the last decade the best performing region was (Tibetan part of the) HimalayasOver the last decade the best performing region was (Tibetan part of the) Himalayas

50



9. CONCLUSIONS

The Tethyan place is a fertile and profitable place to explore.Some regions within the Belt are better than others


Conclusions: [1/5]

1. Countries covered in the analysis

- The Tethyan Belt covers 7% of the earth’s surface and spans 33 countries

- Have broken up the Belt into 6 Regions- Western Europe, Eastern Europe, Asia Minor, Central Asia & Middle East, Himalayas and

South East Asia

2. Trends in exploration spend

- Expenditures have grown substantially since the early 2000s

- Over the last decade, the Belt accounted for 3.2% of global explorationexpenditures on non-bulk minerals

- Over half of the spend was in Eastern Europe and Asia Minor

- The two main targets are gold and copper

3. Number of discoveries made

- Over the last 50 years, 246 significant deposits have been found and industrycontinues to find ~5-8 new deposits each year

- Gold and copper accounted for 81% of the discoveries


Conclusions: [2/5]

4. Location of deposits

- The Tethyan Belt hosts 425 significant (non-bulk) mineral deposits. Thismakes up 5.7% of the World’s total.

- Three-quarter of these are in three (of the six) regions- 128 in Eastern Europe

- 93 in South East Asia

- 91 in Asia Minor

5. Mineral Endowment

- After adjusting for differences in land area, the size-frequency of the Belt’scurrent mineral endowment for gold and copper is comparable to the Worldaverage

- The two most fertile regions are East Europe and Asia Minor

- Central Asia & Middle East appear to be grossly under-explored


Conclusions: [3/5]

6. Location of discoveries in the last 50 years- The focus of exploration success moves around

- In the 1960s the hot spot was Eastern Europe and Central Asia & Middle East.- In the 1980s and 90s it was SE Asia.- In early 2000s it was Tibet in the Himalayas; and- In the last decade it has been Eastern Europe and Asia Minor.

7. Trends in unit discovery costs- The average cost per significant discovery has risen from $10m (in 2003)

to over $158m in 2015- The rise in costs echoes that seen elsewhere in the World. Costs in the Tethyan Belt

are 2/3rds of the Global average

- Over the last decade the average cost of finding gold in the Tethyan Beltwas $29/oz (versus a World average of $49/oz)

- The average discovery cost for copper was 3.0 cents/lb (versus 3.6 c/lb)

- Wide range of discovery performance for individual countries/regions within the Belt. Atpresent the best performers are Eastern Europe, Asia Minor and Himalayas (Tibet).


Conclusions: [4/5]

8. Value and Quality of the discoveries- 70% of the value created by industry comes from finding Tier-1 and

Tier-2 deposits

- Within the Belt, on average industry has found one Tier-1 everysecond decade, and 4-6 Tier-2s every decade

- Over the last 20 years, US$6.1b was spent on exploration within theBelt, delivering US$14.7b of value … a “Bang per Buck” of 2.41

- Over the last decade the Bang per Buck has declined to 0.87.- Even so, it is better than the Global Average (of 0.65), and is

second-only to Africa (with 1.13)


Conclusions: [5/5]

In conclusion, the Tethyan Belt is fertile for gold and base metals. To date,much of it is under-explored and is ripe for significant major new discoveries.

All it needs is a brave/smart geologist with the right toolsto unlock the treasure


Contact details

Richard SchoddeManaging DirectorMinEx ConsultingMelbourne, Australia

Email: [email protected]: MinExConsulting.com

Copies of this and other similarpresentations can be downloaded

from my website

Copies of this and other similarpresentations can be downloaded

from my website

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