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Bernie Hogan - AMEC - The outlook for mid-tier miners and explorers in the NT and across Australia

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Bernie Hogan delivered the presentation at the 2014 Mining the Territory Conference. …

Bernie Hogan delivered the presentation at the 2014 Mining the Territory Conference.

With record year on year investment in mining developments and exploration in the Northern Territory, the 8th Annual Mining the Territory Conference is perfectly placed to hear latest information on this booming region.

For more information about the event, please visit: http://bit.ly/MiningtheNT2014

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  • 1. EXPLORATION AND MINING IN AUSTRALIA Bernie Hogan Regional Manager Association of Mining & Exploration Companies
  • 2. About AMEC • Established over years ago • Over 300 company members and growing • Members include explorers, producers, and service industries • National coverage – offices in Brisbane, Perth and Sydney • Policy development and advocacy AMEC is totally committed to obtaining the best business environment for the mining and exploration industry across Australia 2
  • 3. After 12 months… 3
  • 4. This is what we have… 4
  • 5. Australia’s challenge unchanged • Australia is losing exploration market share • Continued global competition • Costs spiralling • Certainty and regulation affecting investment • Scarce capital • EDI, ESS, 457 5
  • 6. More capital in the system • Exploration Development Incentive • AMEC policy leading into 2013 election • Tax deduction for investors – rewards risk takers • $100M over 3 years • Australian projects • Australian Company (tax rate) • Australian Investor • Still with Dept of Industry 6
  • 7. Helping start-ups • Employee Share Schemes • Ruined as a Long Term Incentive • Difficult for explorers to compete • Discussions with Government to return to 2009 legislation • Opportunity for cross-bench “heroes” 7
  • 8. Developing Northern Australia • Opportunity must be grasped • Committee has conducted wide ranging interviews • Infrastructure and stranded assets • Planned growth and incentives • Funding options • Remove legislative barriers to land access. 8
  • 9. 457 • Important debate for Northern Territory • AMEC policy to support where labour supply is short – particularly skilled labour • In some instances, skilled migration will be a valuable HR alternative 9
  • 10. Estimated Remaining life for Major Australian Mines (based on all operations mining >1 Mt ore in 2010. Excludes Bulk Minerals) 10 2011 2015 2020 2025 2030 2035 2040 Closure Date based on current Reserves Estimated Mine Lives are approximate only and are based on dividing the current P&P Reserves and MI&I Resources by the production rate reported for 2011 Half of Australia’s existing mines could close down within 7 to 18 years Closure Date based on current Resources Source: MinEx Consulting © August 2012
  • 11. Brownfield vs Greenfield Exploration in Australia 0% 10% 20% 30% 40% 50% 60% 70% 80% Sep-2003 Dec-2003 Mar-2004 Jun-2004 Sep-2004 Dec-2004 Mar-2005 Jun-2005 Sep-2005 Dec-2005 Mar-2006 Jun-2006 Sep-2006 Dec-2006 Mar-2007 Jun-2007 Sep-2007 Dec-2007 Mar-2008 Jun-2008 Sep-2008 Dec-2008 Mar-2009 Jun-2009 Sep-2009 Dec-2009 Mar-2010 Jun-2010 Sep-2010 Dec-2010 Mar-2011 Jun-2011 Sep-2011 Dec-2011 Mar-2012 Jun-2012 Sep-2012 Dec-2012 Mar-2013 Jun-2013 Sep-2013 Dec-2013 Mar-2014 Percentage of Total Metres Drilled % Green % BrownSource: ABS 8412.0
  • 12. 81% 64% 47% 61% 49% 33% 19% 36% 53% 39% 51% 67% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 2008 2009 2010 2011 2012 2013 Percentage % Australian Projects % Global Projects Source: To 31 October 2013 * Exploration includes Greenfields and Brownfields Exploration Destination of Exploration Funds Raised on ASX 12 ASX raised funds for overseas projects More ASX raised funds still heading overseas!!
  • 13. 13 Australia’s Share of Worldwide Exploration Expenditure (non-ferrous) 13 Source: Metals Economics Group Source: Metals Economics Group Australia 12% Canada 16% USA 8% Latin America 18% Pacific/SE Asia 16% Rest of World 14% Africa 16% 2012Australia 20% Canada 14% USA 11% Latin America 27% Pacific/SE Asia 11% Rest of World 6% Africa 11% 1996
  • 14. How to stifle exploration… • Constant tinkering with regulation in all forms has undermine investor confidence • Land Access is major hurdle for Northern Territory • Environmental Approvals has been highest profile battle ground • Uncertain taxation and transfer duties • Overly prescriptive legislation. Regulatory creep. 14
  • 15. Remove the barriers • Cost recovery mantra from governments Territory and Federal. Provide core services. • Cultural and Heritage Surveys (estimated at over $1Billion). Cannot become another opportunity to delay • Infrastructure – capacity needs to build and access needs to be assured for junior entrants. • Senate uncertainties to key reforms Remove obstructions to exploration and development with outcome based policy. Gov’t to focus on compliance instead of regulation 15
  • 16. 16 THANK YOU Visit www.amec.org.au for more information Bernie Hogan Bernie.hogan@amec.org.au

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