Miners to spend $21 billion on exploration by 2025

“As deposits get harder and more expensive to find and after such an extended period of inactivity in the exploration space, I believe we need to be back at the levels seen in 2012 to replace resources and reserves required to sustain growth,” he told MINING.com.

Gold, by far, is the commodity leading the uptick in exploration spending, he says. The relatively stable and reasonably high current price has allowed producers to secure good margins again, Wholley notes, adding that many are beginning to use that surplus not only in exploration, but also in acquisitions.

One of the most recent examples is Goldcorp’s (TSX:G) (NYSE:GG) spending spree unveiled this week. The world’s No.3 producer of the precious metal by value not only is allocating more than $700 million to partner up with Barrick Gold Corporation (TSX:ABX) on a 50-50 joint venture in Chile, but it has also taken over Exeter Resource Corp. (TSX:XRC) in a deal worth $185 million.

The expert, who has more than 25 years of experience in exploration and mining geology, is quick to add that the precious metal is not the only resource companies are after these days.

Stan Wholley, President for the Americas at CSA Global.

“We have seen great interest in what I call ‘battery metals’ (such as lithium) and zinc, as well as graphite, particularly in Australia, Latin America and Russia,” says the consultant at CSA Global, which expanded operations to Canada in August last year.

While Wholley believes Down Under is leading the way in terms of recovery in mining exploration, he adds that those companies are not necessarily searching for riches in their backyard.

“Most are venturing abroad, with gold projects in West Africa being the top investments, but we’ve also seen renewed interest in Latin America, particularly Argentina and Mexico,” he notes.

Suppliers not feeling the love

Wholley acknowledges that suppliers and equipment providers don’t seem to be “feeling the love” just yet, but he is quite optimistic about the medium-term prospects. He says 2017 is, and will continue to be, a recovery-year and that a significant shift is coming towards the end of this year.

“We’ve got to the bottom of the cost-cutting trend of the last four to five years (…) Most of the majors are now in acquisition-mode or exploration-mode and that’s great news,” he says. “If I were a machinery maker, I would be pretty optimistic about the next 12 to 18 months to two years,” he concludes.