1. Landmark report looks out 40 years critically includes the impact of resource quality, exploration, and uncertainty;
2. Over the short term (<5 years) production will be dominated by existing mines;
3. Over the medium term (5 10 years) production will come from new mines based on known deposits, however, it is not enough to offset the decline (mainly due to ‘quality’ issues);
4. In the long term (10 40 years) exploration success will play a major role in overcoming much of the looming shortfall in gold production…
5. Consequently, in forty years time almost all of Australia’s future gold production will come from exploration successes…
6. ...even so, production and revenues are set to fall by half over the next 40
7. Also note that in 13 years half of Australia’s gold production will come from mines that are yet to be discovered…
8. …but the weighted average delay between discovery and development is also 13 years
9. For the gold industry to maintain production at current levels over the longer term, it will either need to double the amount spent on exploration or double its discovery performance
10. And finally, with sensitivity studies indicating each additional dollar spent on exploration (over the next ten years) generates extra revenue of ~$11.40 over the next 40 years there is incentive for both industry and government to further invest in gold exploration!
This document outlines the author's PhD journey and research process. It describes how the author initially hypothesized that copper supply issues were due to development constraints, but later realized exploration was actually discovery constrained. The author then developed scenario plans to test the resilience of existing copper mines and projects to an uncertain future, but found they generally failed. This led the author to pursue new ideas for mineral exploration beyond analyzing past trends. The document discusses the value of scenario planning but also its limitations in generating truly novel solutions.
Business of greenfields exploration - Sykes & Trench - Apr 2017 - Centre for ...John Sykes
The document discusses the business of greenfields minerals exploration. It notes that the minerals exploration sector is under strain, with junior explorers struggling to raise funds and exploration budgets being cut. Greenfields exploration, which is perceived as higher risk, has been particularly affected. The document examines the traditional business case for greenfields exploration in searching for better quality mineral deposits rather than just more resources. However, it argues that the exploration sector needs to improve efficiency and success rates. It provides ideas on how greenfields exploration could improve, such as focusing on predicting ore quality rather than just presence, and taking a more holistic approach. Finally, the document proposes a renewed business case that incorporates the need for explorers to obtain a social license to operate
A Mining and Exploration Industry Perspective on the Energy TransitionJohn Sykes
The transition to renewable energy from fossil fuels will both fundamentally change the structure of minerals demand, and the process of mining. The mining and exploration sector in its current form may struggle to re-align mineral production to match these new demand patterns, whilst at the same time undergoing a significant shift in production technology.
The ‘CET Scenarios’ Programme was established to investigate structural discontinuities, of this kind, in the future of mining. One discontinuity investigated was the energy transition. Two scenarios were developed: one involving a voluntary and complete energy transition driven by industrial innovation and framed by concerns over sustainable development (‘Wonderland’); and another with a forced and partial energy transition driven by government and framed by geopolitical (strategic) concerns over raw materials security (‘1984’).
Following the development of the scenarios further research was conducted into the interaction of the mining and exploration sector with the energy transition, sustainable development and resource security, with the aim of better informing corporate strategy.
The strategic recommendations to the mining and exploration sector for re-aligning with changing, but unknown minerals demand patterns, and exploration and production technologies, included techniques for monitoring ‘progress in transition’, ‘horizon scanning’, market analysis, capabilities analysis, and ensuring strategic coherence.
An emphasis was placed on developing creative, social, adaptable and varied thinking skills amongst mining and exploration sector professionals and researchers.
NOTE: This presentation was made in 2018 not 2011!!!
Why is developing a new mine so difficult? - Oct 2013 - John P Sykes - Centre...John Sykes
Developing a new mine is difficult due to several factors:
1) Mining is a "wasting asset" industry that requires constant renewal of exploration to find new resources as old mines are depleted. However, exploration takes place over long timescales while success is judged in the short-term.
2) There is a limited exploration search space and resources found do not always be economic to mine given technical and economic constraints.
3) Different actors in the mining industry, such as juniors vs majors, have differing risk horizons and incentives that impact development. Focusing on the "Horizon 2" development stage is key.
4) For a project to be successful, it must be "
Scenario planning to improve exploration - Sykes - Nov 2017 - Centre for Expl...John Sykes
The document summarizes the journey and evolution of the author's PhD research topic. It began focused on analyzing existing copper mine projects and reserves but encountered problems incorporating uncertainty about future economic, technical, environmental and socio-political conditions. The research then shifted to using scenario planning to test the adaptability of mining projects to different futures. This identified limitations in applying traditional portfolio approaches. The research further expanded to consider how explorers could discover deposits better aligned with future demands and paradigms around sustainability. The author ultimately framed the question around the mining industry's transition to an unknown future.
Globalisation & sustainability in mining - Sykes et al - Sep 2017 - Centre fo...John Sykes
This document summarizes a presentation on scenarios for the future of mining considering changing views on globalization and sustainability. It describes four "Dickensian" scenarios named after characters in A Christmas Carol: Scrooge, Marley, Cratchit, and Fezziwig. Scrooge represents a protectionist view focused on profits. Marley favors globalization and free trade for profits. Cratchit prioritizes protectionism and shared value. Fezziwig promotes globalization of shared value. The scenarios draw on shifting political views around these issues to speculate on implications for the mining industry in the long term.
This document outlines the author's PhD journey and research process. It describes how the author initially hypothesized that copper supply issues were due to development constraints, but later realized exploration was actually discovery constrained. The author then developed scenario plans to test the resilience of existing copper mines and projects to an uncertain future, but found they generally failed. This led the author to pursue new ideas for mineral exploration beyond analyzing past trends. The document discusses the value of scenario planning but also its limitations in generating truly novel solutions.
Business of greenfields exploration - Sykes & Trench - Apr 2017 - Centre for ...John Sykes
The document discusses the business of greenfields minerals exploration. It notes that the minerals exploration sector is under strain, with junior explorers struggling to raise funds and exploration budgets being cut. Greenfields exploration, which is perceived as higher risk, has been particularly affected. The document examines the traditional business case for greenfields exploration in searching for better quality mineral deposits rather than just more resources. However, it argues that the exploration sector needs to improve efficiency and success rates. It provides ideas on how greenfields exploration could improve, such as focusing on predicting ore quality rather than just presence, and taking a more holistic approach. Finally, the document proposes a renewed business case that incorporates the need for explorers to obtain a social license to operate
A Mining and Exploration Industry Perspective on the Energy TransitionJohn Sykes
The transition to renewable energy from fossil fuels will both fundamentally change the structure of minerals demand, and the process of mining. The mining and exploration sector in its current form may struggle to re-align mineral production to match these new demand patterns, whilst at the same time undergoing a significant shift in production technology.
The ‘CET Scenarios’ Programme was established to investigate structural discontinuities, of this kind, in the future of mining. One discontinuity investigated was the energy transition. Two scenarios were developed: one involving a voluntary and complete energy transition driven by industrial innovation and framed by concerns over sustainable development (‘Wonderland’); and another with a forced and partial energy transition driven by government and framed by geopolitical (strategic) concerns over raw materials security (‘1984’).
Following the development of the scenarios further research was conducted into the interaction of the mining and exploration sector with the energy transition, sustainable development and resource security, with the aim of better informing corporate strategy.
The strategic recommendations to the mining and exploration sector for re-aligning with changing, but unknown minerals demand patterns, and exploration and production technologies, included techniques for monitoring ‘progress in transition’, ‘horizon scanning’, market analysis, capabilities analysis, and ensuring strategic coherence.
An emphasis was placed on developing creative, social, adaptable and varied thinking skills amongst mining and exploration sector professionals and researchers.
NOTE: This presentation was made in 2018 not 2011!!!
Why is developing a new mine so difficult? - Oct 2013 - John P Sykes - Centre...John Sykes
Developing a new mine is difficult due to several factors:
1) Mining is a "wasting asset" industry that requires constant renewal of exploration to find new resources as old mines are depleted. However, exploration takes place over long timescales while success is judged in the short-term.
2) There is a limited exploration search space and resources found do not always be economic to mine given technical and economic constraints.
3) Different actors in the mining industry, such as juniors vs majors, have differing risk horizons and incentives that impact development. Focusing on the "Horizon 2" development stage is key.
4) For a project to be successful, it must be "
Scenario planning to improve exploration - Sykes - Nov 2017 - Centre for Expl...John Sykes
The document summarizes the journey and evolution of the author's PhD research topic. It began focused on analyzing existing copper mine projects and reserves but encountered problems incorporating uncertainty about future economic, technical, environmental and socio-political conditions. The research then shifted to using scenario planning to test the adaptability of mining projects to different futures. This identified limitations in applying traditional portfolio approaches. The research further expanded to consider how explorers could discover deposits better aligned with future demands and paradigms around sustainability. The author ultimately framed the question around the mining industry's transition to an unknown future.
Globalisation & sustainability in mining - Sykes et al - Sep 2017 - Centre fo...John Sykes
This document summarizes a presentation on scenarios for the future of mining considering changing views on globalization and sustainability. It describes four "Dickensian" scenarios named after characters in A Christmas Carol: Scrooge, Marley, Cratchit, and Fezziwig. Scrooge represents a protectionist view focused on profits. Marley favors globalization and free trade for profits. Cratchit prioritizes protectionism and shared value. Fezziwig promotes globalization of shared value. The scenarios draw on shifting political views around these issues to speculate on implications for the mining industry in the long term.
Resources versus Reserves - Sykes & Trench - Aug 2014 - Centre For Exploratio...John Sykes
This document discusses the need for a systems-based approach to understanding mineral exploration and mine development. It argues that exploration must consider economic factors from the beginning in order to focus on discovering accessible and economic reserves, rather than just resources. A truly systemic view requires understanding how social, political, and environmental issues can constrain projects. It also requires mining geologists to think more broadly and develop interdisciplinary knowledge to better communicate across technical disciplines and with external stakeholders. Implementing these ideas will require changes to how the industry develops mining professionals.
Using scenarios to guide copper exploration targeting strategies - Sykes - Se...John Sykes
Using scenarios to guide copper exploration targeting strategies - Sep 2015 - Sykes - Centre for Exploration Targeting / Curtin University / University of Western Australia
Why is developing a new mine so difficult? - Oct 2013 - John P. Sykes - Centr...John Sykes
Globally there are problems in bringing new mine capacity on stream. With little new ‘greenfields’ exploration taking place at this time, the pipeline of high-quality mine projects is not being replenished. The problem for the mining industry is that minerals exploration takes place over long timescales, however, “success” is judged along much shorter timescales. Addressing this paradox is a challenge for all in minerals exploration management. This study has sought to address this topic by building on the author’s tacit knowledge, gained through experience in the mining industry, combined with a review of the business management and strategy literature. Emergent from this research are multiple ways for examining mining industry problems and a new approach to developing high-level strategies for facilitating minerals exploration.
Why is developing a new mine so difficult? - Dec 2013 - Sykes et al - Univers...John Sykes
This document provides a conceptual exploration of why developing a new mine is so difficult from a management strategy perspective. It discusses that while mineral commodity prices have reached historical highs, limited new mine capacity has started up due to the disconnect between short-term exploration funding cycles and long development timelines for mines. The development stage from discovery to production is identified as particularly high risk and problematic. Drawing from management strategy literature, the document argues exploration should "begin with the end in mind" by targeting deposits that are not just discoverable but also developable, mineable, and sustainable in the long-term. This narrows the exploration search space and opens up new areas to focus on developing projects more likely to become successful operating mines.
This document discusses the challenges in developing new rare earth mine supply outside of China. It uses examples from three Australian rare earth projects - Mt Weld, Dubbo, and Nolans - to show that rare earth projects face long delays, technical difficulties, financial problems, and government issues. It also finds that the value accretion of rare earth projects is "concave", meaning the value is not fully recognized by markets until late in the project development process. This misalignment between project risk progression and value accretion makes rare earth projects challenging to develop.
Economic perspective on deep and under cover exploration - Trench et al - Mar...John Sykes
Economic perspective on deep and under cover exploration - Trench et al - Mar 2015 - Centre for Exploration Targeting / Curtin University / University of Western Australia
Influencing exploration choices in copper at a strategic level - Sykes et al ...John Sykes
Influencing exploration choices in copper at a strategic level - Sykes et al - Dec 2014 - Centre for Exploration Targeting / Curtin University / University of Western Australia
Renewable energy and battery metals - Sykes & Trench - Nov 2017 - Centre for...John Sykes
The document discusses the renewable energy transition's impact on battery and strategic metal markets. It notes that increased demand for renewables and energy storage is creating new opportunities for metals but also straining supply chains. Some metals like rare earths are becoming "critical" due to potential restrictions on production from geopolitical, environmental or social factors. While mining companies and investors initially piled into battery and energy metals markets, growth has been uneven and some companies have faced failures or bankruptcies. The document examines evidence of past transformative metal market growth and considers which energy metals may have the most potential for growth but also the least constraints, though environmental and social issues add further complexity to projections.
Strategies and scenarios in rare earths - Sykes - Oct 2014 - University of We...John Sykes
This document presents a slideshow on strategies and scenarios for rare earth miners and explorers given the turbulent rare earth industry environment. It discusses how rare earth mining companies can deal with turbulence by focusing on their assets and competencies, competitors, and factors beyond their control. It emphasizes the importance of low costs through high grade, but also notes the value of targeting higher-quality rare earths for end uses. The Boston Consulting Group growth-share matrix is applied to categorize different types of rare earth mine projects from cash cows to problem children.
Australia's advantage on the periodic table and the significance of emerging ...John Sykes
Opportunities are not equal
Some nearer ‘break out’ than others fewer solutions
required
Some challenges are more ‘resolvable’ than others
Some ‘break outs’ will be bigger than others
Key is to focus on those ‘near breakout’ with resolvable (i.e.
technical, geological) issues, and that have a big pay off
Non-technical risks and their impact on mining - Trench, Sykes & Packey - Oct...John Sykes
The document discusses non-technical risks in the mining industry and their impact. It begins with classifying non-technical risks such as country, commodity price, exchange rate, and corporate risks. Country risk is particularly complex with factors like resource nationalism and infrastructure. Price and exchange rate risks are usually the biggest non-technical risks. The document provides perspectives on considering non-technical risks early, integrating them with technical risks, taking ownership of non-technical risks, making choices about non-technical risks, and constantly monitoring them as risks can change over the project life cycle.
Mineral Economics for Geologists: Take the Test Now - Centre for Exploration ...John Sykes
Are you a geologist in the mining sector?
Do you know how mineral economics drives decision making and success in you industry?
Prove it! Take the test now!
Western Australian Iron Ore - Laurent et al - Jul 2017 - UWA Business SchoolJohn Sykes
This document provides an overview and interpretation of key events in the global iron ore market between 2002-2016. It discusses how rapid growth in Chinese demand and imports led to a price boom that encouraged increased supply, both from high-cost producers and more efficient major Australian producers. While the majors were able to maintain production, many smaller producers struggled after 2014 when demand and prices declined from record highs. The document analyzes factors such as the cost curves of different producers and China's changing production and import levels that influenced market conditions over this period.
Battery metals & the energy transition - Wright et al - Sep 2016 - Greenfield...John Sykes
Battery metals & the energy transition - Wright et al - Sep 2016 - Greenfields Research / Rowton Ltd / Centre for Exploration Targeting / The University of Western Australia
Future(s) of mineral exploration - Sykes et al - Apr 2017 - Centre for Explor...John Sykes
This document summarizes the key findings from a study using scenario planning to explore the future of minerals exploration. The study investigated uncertainties around predicting the economic viability and accessibility of undiscovered mineral deposits. Three main scenarios were developed: 1) the industry adapts to emerging changes, 2) new ideas are generated to open up new exploration opportunities, and 3) the future may be difficult to foresee even with scenario planning. The study highlights opportunities around exploring new commodities, behind socio-political and geopolitical barriers, and notes limitations in the industry's ability to develop new ideas beyond optimizing existing asset portfolios. Scenario planning was used to compare exploration strategies against multiple potential futures rather than making single predictions.
Resources versus Reserves - Sykes & Trench - Aug 2014 - Centre For Exploratio...John Sykes
This document discusses the need for a systems-based approach to understanding mineral exploration and mine development. It argues that exploration must consider economic factors from the beginning in order to focus on discovering accessible and economic reserves, rather than just resources. A truly systemic view requires understanding how social, political, and environmental issues can constrain projects. It also requires mining geologists to think more broadly and develop interdisciplinary knowledge to better communicate across technical disciplines and with external stakeholders. Implementing these ideas will require changes to how the industry develops mining professionals.
Using scenarios to guide copper exploration targeting strategies - Sykes - Se...John Sykes
Using scenarios to guide copper exploration targeting strategies - Sep 2015 - Sykes - Centre for Exploration Targeting / Curtin University / University of Western Australia
Why is developing a new mine so difficult? - Oct 2013 - John P. Sykes - Centr...John Sykes
Globally there are problems in bringing new mine capacity on stream. With little new ‘greenfields’ exploration taking place at this time, the pipeline of high-quality mine projects is not being replenished. The problem for the mining industry is that minerals exploration takes place over long timescales, however, “success” is judged along much shorter timescales. Addressing this paradox is a challenge for all in minerals exploration management. This study has sought to address this topic by building on the author’s tacit knowledge, gained through experience in the mining industry, combined with a review of the business management and strategy literature. Emergent from this research are multiple ways for examining mining industry problems and a new approach to developing high-level strategies for facilitating minerals exploration.
Why is developing a new mine so difficult? - Dec 2013 - Sykes et al - Univers...John Sykes
This document provides a conceptual exploration of why developing a new mine is so difficult from a management strategy perspective. It discusses that while mineral commodity prices have reached historical highs, limited new mine capacity has started up due to the disconnect between short-term exploration funding cycles and long development timelines for mines. The development stage from discovery to production is identified as particularly high risk and problematic. Drawing from management strategy literature, the document argues exploration should "begin with the end in mind" by targeting deposits that are not just discoverable but also developable, mineable, and sustainable in the long-term. This narrows the exploration search space and opens up new areas to focus on developing projects more likely to become successful operating mines.
This document discusses the challenges in developing new rare earth mine supply outside of China. It uses examples from three Australian rare earth projects - Mt Weld, Dubbo, and Nolans - to show that rare earth projects face long delays, technical difficulties, financial problems, and government issues. It also finds that the value accretion of rare earth projects is "concave", meaning the value is not fully recognized by markets until late in the project development process. This misalignment between project risk progression and value accretion makes rare earth projects challenging to develop.
Economic perspective on deep and under cover exploration - Trench et al - Mar...John Sykes
Economic perspective on deep and under cover exploration - Trench et al - Mar 2015 - Centre for Exploration Targeting / Curtin University / University of Western Australia
Influencing exploration choices in copper at a strategic level - Sykes et al ...John Sykes
Influencing exploration choices in copper at a strategic level - Sykes et al - Dec 2014 - Centre for Exploration Targeting / Curtin University / University of Western Australia
Renewable energy and battery metals - Sykes & Trench - Nov 2017 - Centre for...John Sykes
The document discusses the renewable energy transition's impact on battery and strategic metal markets. It notes that increased demand for renewables and energy storage is creating new opportunities for metals but also straining supply chains. Some metals like rare earths are becoming "critical" due to potential restrictions on production from geopolitical, environmental or social factors. While mining companies and investors initially piled into battery and energy metals markets, growth has been uneven and some companies have faced failures or bankruptcies. The document examines evidence of past transformative metal market growth and considers which energy metals may have the most potential for growth but also the least constraints, though environmental and social issues add further complexity to projections.
Strategies and scenarios in rare earths - Sykes - Oct 2014 - University of We...John Sykes
This document presents a slideshow on strategies and scenarios for rare earth miners and explorers given the turbulent rare earth industry environment. It discusses how rare earth mining companies can deal with turbulence by focusing on their assets and competencies, competitors, and factors beyond their control. It emphasizes the importance of low costs through high grade, but also notes the value of targeting higher-quality rare earths for end uses. The Boston Consulting Group growth-share matrix is applied to categorize different types of rare earth mine projects from cash cows to problem children.
Australia's advantage on the periodic table and the significance of emerging ...John Sykes
Opportunities are not equal
Some nearer ‘break out’ than others fewer solutions
required
Some challenges are more ‘resolvable’ than others
Some ‘break outs’ will be bigger than others
Key is to focus on those ‘near breakout’ with resolvable (i.e.
technical, geological) issues, and that have a big pay off
Non-technical risks and their impact on mining - Trench, Sykes & Packey - Oct...John Sykes
The document discusses non-technical risks in the mining industry and their impact. It begins with classifying non-technical risks such as country, commodity price, exchange rate, and corporate risks. Country risk is particularly complex with factors like resource nationalism and infrastructure. Price and exchange rate risks are usually the biggest non-technical risks. The document provides perspectives on considering non-technical risks early, integrating them with technical risks, taking ownership of non-technical risks, making choices about non-technical risks, and constantly monitoring them as risks can change over the project life cycle.
Mineral Economics for Geologists: Take the Test Now - Centre for Exploration ...John Sykes
Are you a geologist in the mining sector?
Do you know how mineral economics drives decision making and success in you industry?
Prove it! Take the test now!
Western Australian Iron Ore - Laurent et al - Jul 2017 - UWA Business SchoolJohn Sykes
This document provides an overview and interpretation of key events in the global iron ore market between 2002-2016. It discusses how rapid growth in Chinese demand and imports led to a price boom that encouraged increased supply, both from high-cost producers and more efficient major Australian producers. While the majors were able to maintain production, many smaller producers struggled after 2014 when demand and prices declined from record highs. The document analyzes factors such as the cost curves of different producers and China's changing production and import levels that influenced market conditions over this period.
Battery metals & the energy transition - Wright et al - Sep 2016 - Greenfield...John Sykes
Battery metals & the energy transition - Wright et al - Sep 2016 - Greenfields Research / Rowton Ltd / Centre for Exploration Targeting / The University of Western Australia
Future(s) of mineral exploration - Sykes et al - Apr 2017 - Centre for Explor...John Sykes
This document summarizes the key findings from a study using scenario planning to explore the future of minerals exploration. The study investigated uncertainties around predicting the economic viability and accessibility of undiscovered mineral deposits. Three main scenarios were developed: 1) the industry adapts to emerging changes, 2) new ideas are generated to open up new exploration opportunities, and 3) the future may be difficult to foresee even with scenario planning. The study highlights opportunities around exploring new commodities, behind socio-political and geopolitical barriers, and notes limitations in the industry's ability to develop new ideas beyond optimizing existing asset portfolios. Scenario planning was used to compare exploration strategies against multiple potential futures rather than making single predictions.
Graphite mining and the energy transition - Sykes - Nov 2017 - MinEx ConsultingJohn Sykes
This presentation is also available on the MinEx Consulting website, along with a number of other detailed presentations on minerals exploration. All are free to download: http://www.minexconsulting.com/publications/nov2017.html
Mineral Economics for Geologists: Take the Test Now! (Dec 2013 - Centre for E...John Sykes
This course is ideal for technical professionals across the mineral exploration, mining and mineral processing industries as a foundation in economic concepts and strategic decision-making in the minerals industries and as a primer for the transition between purely technical roles and management roles.
My PhD Or: How I Learned To Stop Worrying And Love Mining Or: Using Scenarios...John Sykes
Explorers, exploration teams, and exploration companies will require a broader skill set in the future including:
• a better philosophical understanding of the nature of exploration and discovery
• better understanding of the cognitive processes involved in exploration and discovery;
• developing strategies and capabilities to effectively enter emerging commodity markets;
• building a diverse exploration culture to bring in ideas from other industries and disciplines;
• switching from a focus on economic value to shared value;
• developing a stronger innovation and technology culture;
• encouraging creativity and ideation;
• linking short and long term thinking;
• improving the image of exploration;
• monitoring local and global socio political, economic and technological trends and
• measuring and understanding the potential impact of these trends;
• encouraging a collective approach to ‘big exploration’.
Perhaps with these capabilities we can resolve the ‘discovery constraint’ on the minerals industry.
Research on the impact of asteroid mining on global equitySérgio Sacani
This document proposes a model to measure the impact of asteroid mining on global equity over 60 years. It involves:
1. Developing a Unified Equity Index (UEI) model using factors like GDP, education, patents, and stability to measure baseline global equity.
2. Simulating the effects of asteroid mining between 2025-2085, considering mining capabilities, output value, and how this impacts the UEI factors.
3. Analyzing three potential futures for asteroid mining and proposing policy options to help ensure its development enhances global equity for all nations.
BlueBird Battery Metals Inc. (BATT: TSXV) is a well-financed Canadian junior mining company, focused on the exploration of strategic exploration properties in Australia and Canada. The Company is comprised of a proven management group of experienced technical, geological, engineering, and market/finance professionals, tasked with building new strategic partnerships to maximize the exploration activity and discovery potential of its land holdings.
Torex Gold is growing its Morelos Gold Project in Mexico, which includes building its initial open pit mine and exploring for additional deposits. The feasibility study confirmed robust economics for the project, with an after-tax IRR of 24.2% and average annual production of 375,000 ounces of gold over the mine life. Torex has advanced the project significantly, including permitting, community relations, exploration drilling, and a C$380 million equity financing. The company will focus on continuing permitting and development work, while exploring additional targets on its large land package.
100 Years of Resource Growth for Copper - Impact of Costs, Grade and Techn...RichardSchodde
The key drivers of copper resource growth over the last 100 years have been exploration success, changes in costs, and changes in prices. Most copper has been discovered in a small number of giant deposits. Until recently, more copper was being discovered each year than was being mined. Copper reserves have continued to grow 25-fold over the last century due to declining cut-off grades and expanding resources. While ore grades mined have declined over time, discovery grades have remained constant, suggesting lower grades could mean more total metal. Technological improvements and economies of scale have helped drive down mining costs four-fold, offsetting lower grades.
Finding the copper mine of tomorrow - Sykes et al - Dec 2013 - Curtin Univers...John Sykes
This document discusses perspectives on copper resource depletion from an economist, scientist, and geologist. The economist views resources as subject to inevitable decline due to higher costs and lower grades, but believes innovation can overcome this. The scientist sees resources as fixed stocks that will eventually be depleted. The geologist acknowledges declining grades but notes quality is uncertain and more discovery is needed. All agree sustainability is key and must consider social, economic, and environmental factors, not just resource life. Further research is needed to better target reserves for the future and enable sustainable development through continued exploration.
The document discusses Canadian International Minerals Inc., a company exploring for rare earth metals, silica, and copper. It provides an overview of the company's management team and advisory board, as well as details on its projects, which include the Carbo rare earth project in Prince George, BC consisting of 6 claims totaling 1,952.9 hectares that is currently undergoing drilling. The company's goal is to increase shareholder value by defining economic mineral resources and developing mining operations.
Dacha Strategic Metals Inc. owns a physical inventory of rare earth elements and other strategic metals stored in LME approved warehouses outside of China. China controls over 95% of global rare earth supply and has been reducing export quotas, driving up prices. Dacha can capitalize on rising rare earth prices without mining risk by trading its physical inventory. Management has extensive experience in mining finance and rare earth markets. The company aims to become a market maker in rare earths and other strategic metals to generate profits.
The document is a corporate presentation by Revelo Resources outlining their portfolio of mineral exploration projects in Chile. It highlights several key projects including:
1) The Montezuma project, a large copper project under JV with Newmont that is in a major copper mining district.
2) The Las Pampas gold-silver project that is along trend from a producing mine and has defined multiple targets from past drilling.
3) The San Guillermo gold-silver project under option to Austral Gold which surrounds Austral Gold's deposit and has intercepted mineralization in past drilling.
The presentation provides an overview of Revelo's business model, key assets and management team as they aim to advance
Furthering asteroid resource utilization in the next decade though technology...Amara Graps
This document proposes activities to further asteroid resource utilization in the next decade through addressing science knowledge gaps. It provides an overview of the current state of asteroid mining efforts and identifies key areas requiring further research, such as improving knowledge of the near-Earth asteroid population and their compositions. Specific activities are recommended, including enhancing public asteroid databases, increasing spectroscopic characterization of asteroids, and analyzing samples returned from asteroids to better understand their interiors and resource potential. The proposed activities would advance both asteroid science and the development of asteroid mining technologies and industries.
Torex Gold is developing the Morelos Gold Project in Mexico. The company has completed a feasibility study showing robust economics for an initial open pit mine with annual production of 375,000 ounces of gold on average. Exploration is ongoing to expand resources at the project, with a new discovery south of the river showing potential to provide additional mineralization. Torex has the management experience to execute project construction and overcome any risks through careful planning and risk mitigation.
The document describes three development options for the Caspiche gold-copper project in Chile. Option 1 involves a standalone heap leach operation to extract 1.7 million ounces of gold from the oxide resource over 10 years. Option 2 adds an open pit mine and processing of both oxide and sulphide ores over 18 years, producing 4.9 million ounces of gold equivalent. Option 3 involves underground mining of the higher grade core in addition to the open pit, extending the mine life to 42 years and total production to 14.2 million ounces of gold equivalent. All options show positive economics, with Option 3 having the highest NPV and longest payback period.
The document provides an agenda for an Island Gold Technical Session, which will include presentations on: the corporate overview and key highlights; evolution of the Island Gold Mine geology and exploration; an expansion case preliminary economic assessment; the underground mine plan and operating/capital costs; the milling plan and operating/capital costs; a financial analysis; next steps and upside opportunities; and a question and answer period. It also provides background on Richmont Mines' vision, strategy, capital structure, Island Gold's 2016 performance, reserve and resource growth, and 2017 production/cost guidance.
This document discusses forward-looking statements regarding the company's exploration and development activities. It notes that forward-looking statements are based on certain assumptions that may prove to be incorrect. Additionally, it lists several risk factors that could affect the company's forward-looking statements, such as variations in resource estimates, commodity prices, and operational risks.
Industrias Peñoles is a Mexican mining company that is the world's largest producer of refined silver and a leading Latin American producer of refined gold. It has operations in precious metals, base metals, and chemicals. The company owns mines in Mexico and is exploring new projects. It is recommended to buy Peñoles stock due to positive outlooks for precious metals prices, a strong US dollar, and Peñoles' competitive positioning and growth projects. The target price of MXN$566 per share represents a 17.9% projected return.
This document is a project report submitted as a requirement for an MBA degree. It analyzes selected commodities using fundamental and technical analysis. The objectives are to study the Indian commodity market, and analyze gold, silver, and copper. Fundamental analysis includes production, demand/supply, and volatility. Technical analysis uses charts and indicators. The scope is limited to metal indices on the commodity market. There are limitations due to the short time frame and that technical analysis is for the short-run while fundamental analysis is for long-run. The methodology includes collecting primary and secondary data, and presenting it using tables, charts and indicators to analyze the commodities.
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Exploration and discovery: Do frameworks and organisation matter?John Sykes
Framing business complexity in exploration:
First, some things around risk & value complexities…..
Then, some thinking around everyday frameworks and standards…..
Some thoughts on a framework for project-level complexity…
And a simple example: The Sinclair Zone Cesium Mine, Western Australia
Finally, the exploration organisation study that keeps on giving…
A global overview of the geology and economics of lithium productionJohn Sykes
Lithium demand is growing fast, driven by a wide range of battery applications, which are in turn changing the structure of
demand, the lithium supply chain and potentially raw material requirements though much still remains uncertain;
•
Geologically ‘brine’ salars and ‘hard rock’ pegmatites remain the most important lithium deposit types in terms of
production and undeveloped resources, however, there are some interesting emerging sedimentary / clay deposits and
unconventional brine concepts and lithium remains very ‘under explored’ globally;
•
Spodumene pegmatites in Australia are the fastest growing source of supply, however, long term competitiveness may be
dependent on successful downstream integration targeting the battery industry;
•
The concept of a Western Australian ‘Lithium Valley’ is possible, despite high costs, due to the number of quality mines,
proximity to Asia, and the unit reduction in freight costs associated with the low grade spodumene concentrate , in addition
to the ‘cluster effect’ of many minerals businesses, specialists and students;
•
The ‘green’ association of lithium use presents a challenge of ‘strategic coherence’ to explorers and miners impacting
decisions around exploration, mining, investors, stakeholders, and leadership;
•
But remember, we are in an unsustainable ‘lithium boom’ of high prices and high volume growth future long term growth
of the industry is reliant on structurally lower prices, and thus structurally lower costs.
Strategic Thinking About Long-Term 'Above Ground' Orebody Complexity Using Sc...John Sykes
AIMS:
1. Explain what is wrong with strategic planning and why we need scenarios;
2. Explain what scenarios are (and their many variants);
3. Show an example of a scenarios programme: the CET ‘Future of Exploration’ Scenarios
4. MAIN FOCUS: Discuss the benefits of scenarios as a strategic thinking tool
Mining and renewable energy scenarios - Sykes - Jun 2017 - Centre for Explora...John Sykes
John Sykes conducted scenario planning exercises to explore the future of minerals exploration and the mining industry. He generated four sets of scenarios through individual and group exercises with professionals from various fields. The scenarios explored how factors like technological development, economic conditions, environmental and social issues, and geopolitics could impact the mining industry. One set of scenarios specifically looked at how the transition to renewable energy could influence the mining sector and present opportunities to explore for minerals needed for green technologies. The scenarios suggested several possible futures for how the energy transition might unfold and its effects on mining.
Sandstone gold endowment - Davies et al - Apr 2017 - Centre for Exploration T...John Sykes
1) The document analyzes the gold endowment potential of the Sandstone Greenstone Belt in Western Australia by comparing it to the better explored Agnew Gold Camp using a mineral systems framework.
2) It estimates the total residual gold endowment of the oxide zone to be 2.2 million ounces and the total potential primary zone endowment to be 12.1 million ounces based on similarities between the two areas.
3) Applying this mineral systems resource assessment approach at different scales across the entire Yilgarn Craton could help identify relatively underexplored areas with high prospectivity.
Energy transition: mining perspective - Sykes et al - Feb 2017 - Centre for E...John Sykes
This document discusses the energy transition from a mining and exploration industry perspective. It covers topics like batteries, renewable energy sources, battery metals, renewables metals, supply and demand trends, price volatility, case studies, and scenarios for how the energy transition may progress. Diagrams show historical growth trends for various metals and the potential constraints on future supply. The conclusion discusses different paradigms and scenarios for how geopolitics and business capabilities may influence winners and losers.
The Energy Transition: Miners Perspective - Sykes et al - Nov 2016John Sykes
The document discusses the energy transition underway as the world shifts from fossil fuels to renewable energy sources and electric vehicles. This transition is creating new opportunities for metals used in batteries and renewable technologies, but the growth in demand and markets for these "energy metals" has been mixed so far. The mining sector and investors have invested heavily in lithium, rare earths, and other energy metals in recent years. However, navigating the complex energy transition will be challenging, as major market shifts have occurred unpredictably in the past and were complicated by technological innovations and societal changes. The transition presents opportunities but also uncertainties that explorers, miners and investors must navigate carefully.
Putting the Co-operative into Co-operative Research Centre - Trench & Sykes -...John Sykes
The document discusses strategies for effective cooperation within Cooperative Research Centres (CRCs). It notes that cooperation is most effective when the payoffs are higher than working alone, stakeholders are balanced and aligned, and there is mutual trust and respect. However, achieving effective cooperation can be challenging, as stakeholders may have contradictory desires or priorities that cause innovation to become incremental rather than transformative. The document also draws from research by Adam Grant on different types of individuals - givers, takers, and matchers - and how successful cooperation involves a balance of these types working towards shared goals. It emphasizes the importance of incentivizing and inspiring cooperation through clear priorities and removing constraints.
Challenges of rare earths - Wright et al - Sep 2016 - Argus Rare Earths Confe...John Sykes
Challenges of rare earths - Wright et al - Sep 2016 - Argus Rare Earths Conference - Greenfields Research / Rowton Ltd. / Centre for Exploration Targeting / UWA Business School / The University of Western Australia
Discovering Delhi - India's Cultural Capital.pptxcosmo-soil
Delhi, the heartbeat of India, offers a rich blend of history, culture, and modernity. From iconic landmarks like the Red Fort to bustling commercial hubs and vibrant culinary scenes, Delhi's real estate landscape is dynamic and diverse. Discover the essence of India's capital, where tradition meets innovation.
Explore the world of investments with an in-depth comparison of the stock market and real estate. Understand their fundamentals, risks, returns, and diversification strategies to make informed financial decisions that align with your goals.
Calculation of compliance cost: Veterinary and sanitary control of aquatic bi...Alexander Belyaev
Calculation of compliance cost in the fishing industry of Russia after extended SCM model (Veterinary and sanitary control of aquatic biological resources (ABR) - Preparation of documents, passing expertise)
KYC Compliance: A Cornerstone of Global Crypto Regulatory FrameworksAny kyc Account
This presentation explores the pivotal role of KYC compliance in shaping and enforcing global regulations within the dynamic landscape of cryptocurrencies. Dive into the intricate connection between KYC practices and the evolving legal frameworks governing the crypto industry.
The Rise and Fall of Ponzi Schemes in America.pptxDiana Rose
Ponzi schemes, a notorious form of financial fraud, have plagued America’s investment landscape for decades. Named after Charles Ponzi, who orchestrated one of the most infamous schemes in the early 20th century, these fraudulent operations promise high returns with little or no risk, only to collapse and leave investors with significant losses. This article explores the nature of Ponzi schemes, notable cases in American history, their impact on victims, and measures to prevent falling prey to such scams.
Understanding Ponzi Schemes
A Ponzi scheme is an investment scam where returns are paid to earlier investors using the capital from newer investors, rather than from legitimate profit earned. The scheme relies on a constant influx of new investments to continue paying the promised returns. Eventually, when the flow of new money slows down or stops, the scheme collapses, leaving the majority of investors with substantial financial losses.
Historical Context: Charles Ponzi and His Legacy
Charles Ponzi is the namesake of this deceptive practice. In the 1920s, Ponzi promised investors in Boston a 50% return within 45 days or 100% return in 90 days through arbitrage of international reply coupons. Initially, he paid returns as promised, not from profits, but from the investments of new participants. When his scheme unraveled, it resulted in losses exceeding $20 million (equivalent to about $270 million today).
Notable American Ponzi Schemes
1. Bernie Madoff: Perhaps the most notorious Ponzi scheme in recent history, Bernie Madoff’s fraud involved $65 billion. Madoff, a well-respected figure in the financial industry, promised steady, high returns through a secretive investment strategy. His scheme lasted for decades before collapsing in 2008, devastating thousands of investors, including individuals, charities, and institutional clients.
2. Allen Stanford: Through his company, Stanford Financial Group, Allen Stanford orchestrated a $7 billion Ponzi scheme, luring investors with fraudulent certificates of deposit issued by his offshore bank. Stanford promised high returns and lavish lifestyle benefits to his investors, which ultimately led to a 110-year prison sentence for the financier in 2012.
3. Tom Petters: In a scheme that lasted more than a decade, Tom Petters ran a $3.65 billion Ponzi scheme, using his company, Petters Group Worldwide. He claimed to buy and sell consumer electronics, but in reality, he used new investments to pay off old debts and fund his extravagant lifestyle. Petters was convicted in 2009 and sentenced to 50 years in prison.
4. Eric Dalius and Saivian: Eric Dalius, a prominent figure behind Saivian, a cashback program promising high returns, is under scrutiny for allegedly orchestrating a Ponzi scheme. Saivian enticed investors with promises of up to 20% cash back on everyday purchases. However, investigations suggest that the returns were paid using new investments rather than legitimate profits. The collapse of Saivian l
A toxic combination of 15 years of low growth, and four decades of high inequality, has left Britain poorer and falling behind its peers. Productivity growth is weak and public investment is low, while wages today are no higher than they were before the financial crisis. Britain needs a new economic strategy to lift itself out of stagnation.
Scotland is in many ways a microcosm of this challenge. It has become a hub for creative industries, is home to several world-class universities and a thriving community of businesses – strengths that need to be harness and leveraged. But it also has high levels of deprivation, with homelessness reaching a record high and nearly half a million people living in very deep poverty last year. Scotland won’t be truly thriving unless it finds ways to ensure that all its inhabitants benefit from growth and investment. This is the central challenge facing policy makers both in Holyrood and Westminster.
What should a new national economic strategy for Scotland include? What would the pursuit of stronger economic growth mean for local, national and UK-wide policy makers? How will economic change affect the jobs we do, the places we live and the businesses we work for? And what are the prospects for cities like Glasgow, and nations like Scotland, in rising to these challenges?
An accounting information system (AIS) refers to tools and systems designed for the collection and display of accounting information so accountants and executives can make informed decisions.
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Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
Australian gold in 40-years: The need for greenfields exploration
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MinEx Consulting Strategic advice on mineral economics & exploration
Australian gold in 40 years:
The need for greenfields exploration
Richard Schodde (Report Author)
Managing Director, MinEx Consulting
Adjunct Professor, Centre for Exploration Targeting (CET), School of Earth Science (SES), UWA
John Sykes (Today’s Presenter)
Strategist, MinEx Consulting,
PhD Candidate, CET, SES, UWA & Sessional Lecturer, Business School, UWA
Orogenic Gold Workshop: From Philosophy to Exploration?
12th February 2019, Perth, WA
Image: Terrain near Tropicana gold mine, Western Australia (Independence Group)
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MinEx Consulting Strategic advice on mineral economics & exploration
Critical Issue: The slow-burning story
By 2032 (i.e. in 15 years 13 years time), half of all Australia’s
gold production will come from deposits yet to be discovered
Of concern is the fact that the average delay between
discovery and development is 13 years
If we don’t act now, and support exploration today there is a
real risk of a significant supply disruption in the medium-term
2
Image: Shutterstock
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MinEx Consulting Strategic advice on mineral economics & exploration
1. OBJECTIVES OF THE REPORT
Australian gold in 40 years: The need for greenfields exploration
3
Image: First gold bar from the Tropicana gold mine (Independence Group)
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MinEx Consulting Strategic advice on mineral economics & exploration
• The 12 sponsors can be broken down into three groups
– State & Federal Geological Surveys (WA, SA, NSW, NT and GA) + Dept of
Industry, Innovation & Science
– Industry R&D Groups (CSIRO, CET and DET CRC)
– Industry Lobby Groups (AMEC, AIG and CME WA)
• Each group has its own interests & priorities
– The Surveys need hard data to build the business case on why Government
should support the mining & exploration industry … principally the revenues
and employment that flow from it;
– The R&D Groups need hard data to assess the economic and social payoff
from being “smarter” at exploration;
– The Lobby Groups want to raise public awareness on the critical issue that
exploration and mine development are both slow-burn stories. By the time
you realise that production is falling, it may be too late to fix it!
The report provides ‘hard data’ on the future of
exploration for a range of stakeholders
4
Long-term issues often
require collaboration to
resolve…
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MinEx Consulting Strategic advice on mineral economics & exploration
The report is not an advocacy document
… it doesn’t identify or promote possible
solutions
Instead the report attempts to provide fact-based evidence on the
likely long term trends for the Australian Mining & Exploration
sectors.
... and from this, stimulate informed discussions with the key
stakeholders which will lead to robust policies to address the key
long term challenges facing the industry.
5
However, I will discuss some potential
internal and external solutions (e.g.
management, technology, public policy, etc.,)
at the end of this presentation.
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MinEx Consulting Strategic advice on mineral economics & exploration
Where can I get hold of the report?
Richard (and myself) would like to thank Robbie Rowe
for coming up with the study concept, raising the
necessary funds from the 12 sponsors, and tireless
energy in pushing Richard to complete the work!
Similar reports on Australia’s other key commodities (base metals,
uranium, coal and iron ore) will be progressively released over the
next few months
A copy of this presentation will be
made available on the MinEx
website in due course
6
A copy of the report is available in the
workshop materials (and can be
downloaded from the MinEx website)
Other similar presentations can also be downloaded for
FREE on the MinEx website:
www.minexconsulting.com/publications
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MinEx Consulting Strategic advice on mineral economics & exploration
2. THE PERILS OF FORECASTING
Australian gold in 40 years: The need for greenfields exploration
7
Image: Shutterstock
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MinEx Consulting Strategic advice on mineral economics & exploration
$0
$500
$1,000
$1,500
$2,000
$2,500
Q1 2005 Q1 2007 Q1 2009 Q1 2011 Q1 2013 Q1 2015 Q1 2017 Q1 2019 Q1 2021 Q1 2023 Q1 2025
Gold Price: Forecast vs Actual
Actual
Forecast
Gold analysts have a
mediocre price forecasting record
2017 US$/oz
Source: Consensus Economics, various years
8
Under-forecasting on
the way up…
…and over-forecasting
on the way down!
This is the problem with
using ‘reversion-to-mean’
forecasting over the short-
term (instead of the long-
term)*
* In general, over the short-term, you’re usually better off extrapolating the trend, i.e. prices
will continue going up, or prices will continue going down – that is, of course, until they do not!
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MinEx Consulting Strategic advice on mineral economics & exploration
Experts predict a looming shortage in copper
supply…
Source: Wood Mackenzie Q1 2017 as reported by Amerigo Resources Nov 2017
9
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MinEx Consulting Strategic advice on mineral economics & exploration
… but they always do!
Source: Wood Mackenzie Dec 2011
Same forecast, but
6 years earlier!
10
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MinEx Consulting Strategic advice on mineral economics & exploration
For disclosure, I have been known to be
involved in incorrect forecasts too
Forecasts I was involved in – same
pattern of over and under forecasting
TBF, it was
the GFC!
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MinEx Consulting Strategic advice on mineral economics & exploration
…many times…!
Making things more ‘sophisticated’
with scenarios didn’t necessarily help!
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MinEx Consulting Strategic advice on mineral economics & exploration
Forecasting is a fraught activity…
“Scythia has an abundance
of soothsayers who foretell
the future. They are judged
by results and the losers are
loaded on to oxcarts which
are set on fire.”
- Herodotus, Histories (440BC)
NB: This is a paraphrasing of the original text by former CRU colleague, Jon
Tomlinson.
Image: Karen B. Jones / Shutterstock.com
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MinEx Consulting Strategic advice on mineral economics & exploration
…but we can’t just give up!
“My interest is in the
future because I am
going to spend the
rest of my life there.”
- Charles “Boss” Kettering
(American engineer & inventor, 1876-1958)
Image: Time magazine cover 9 January 1933. Title: "Charles Franklin Kettering".
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MinEx Consulting Strategic advice on mineral economics & exploration
• Often are single-line forecasts (no uncertainty !);
• Mainly focused on existing mines and known projects with a
high-likelihood of development;
• Use arbitrary rules of thumb on likelihood of “Probable”,
“Possible” and “Speculative” projects being developed;
• No adjustment for effect of changes of commodity prices on
head grades / mine life / likelihood of mine development;
• No allowance made for growing the resource;
• No allowance made for exploration success!
The key issues with existing supply forecasts
These simplifications are OK if you are looking 5-10 years
out ... but not so if you are doing a 40 year forecast !
15
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MinEx Consulting Strategic advice on mineral economics & exploration
3. METHODOLOGY
Australian gold in 40 years: The need for greenfields exploration
16
Image: Core samples from the Super Pit, Kalgoorlie (KCGM)
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MinEx Consulting Strategic advice on mineral economics & exploration
• Model likely production from 3 sources:
– Existing mines
– Possible new projects (based on known resources)
– Exploration success (based on ‘unknown’ resources)
• Future production will be influenced by the gold price
– Higher prices will encourage (marginal) new production to come online
– Lower prices will cause mines to increase their cut-off grade (so as to survive)
… but this severely impacts on the size of the remaining available resources
– Exploration spend (and the rate of discovery) is strongly influenced by
commodity prices
• Embrace uncertainty
– Run 1000 different price scenarios
– Incorporate uncertainty into exploration success and timing of new projects
This study seeks to correct many of the supply-
side forecasting problems
17
We can predict rates and
volumes of metal discovery, but
alas, not where they will be
made – or who will make them!
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MinEx Consulting Strategic advice on mineral economics & exploration
1. Build a production & cost model for each mine
2. Forecast the future gold price. And with this …
3. Based on cash costs (supplied by CRU) estimate whether the mine is
profitable. If not …
4. Adjust the head grade / cut-off grade to make the mine survive. If not,
put mine on care & maintenance until prices rise
5. Based on the new cut-off grade, and mine depletion estimate the likely
remaining reserves
6. Add in fresh resources associated with mine-site exploration success
(this is a function of the age of the mine)
7. Based on the new head grade, calculate likely metal production (koz pa)
8. Adjust numbers for uncertainty in output (i.e supply disruptions)
First step: Forecast future production from
existing gold mines
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MinEx Consulting Strategic advice on mineral economics & exploration
Use the same methodology as existing mines, but with the additional factor
that …
1. Based on the unit capital and operating costs, estimate the gold price
required to trigger mine development
- Development only occurs if the gold price exceeds the trigger price for 3 years
- Development may be delayed by the current status of the project
(it takes time to complete a Feasibility Study)
Second step: Forecast future production from
known gold projects
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MinEx Consulting Strategic advice on mineral economics & exploration
1. Forecast the future gold price. And with this …
2. Forecast the likely level of exploration spend ($m)
3. Predict the likely average unit discovery cost ($/oz)
4. Estimate the average amount of gold discovered per year (Moz pa)
5. Use historical size-frequency curve to predict the size and number of
discoveries per year (i.e. lots of small deposits, and the occasional giant)
6. Using historical data model the likely range in grade for each discovery
(i.e. most will be low grade, some will be high grade)
7. Based on size and grade, model the likelihood that the deposit will be
developed and, if so, estimate the likely in time delay involved between
discovery & production
8. Based on the size of the deposit, and the likely mining method used
(open pit, underground or mixed) predict the likely mining rate, gold
output (koz pa) and mine life
Final step: Forecast future production
from undiscovered deposits
20
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MinEx Consulting Strategic advice on mineral economics & exploration
4: THE FUTURE GOLD PRICE
Australian gold in 40 years: The need for greenfields exploration
21
Image: Shutterstock
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MinEx Consulting Strategic advice on mineral economics & exploration
Assumptions used to generate the gold price forecast
• As a starting point, used the industry’s forecasts as a “base line”;
– But these generally only go out 5 years – so extrapolated out to 40 years;
– For convenience have used the forecast provided by the Office of the Chief Economist
(from the Australian Federal Department of Industry);
• Assume that business cycles will continue to occur in the future;
– Future price volatility will match that seen in the past;
– Short term prices will revert to the “mean” over the longer term;
• Assume that commodity prices are linked to each other;
– Metal prices tend to move in unison – but there is some variability;
– Have assumed that the historical level of “covariance” remains the same into the
future;
• To handle uncertainty, have modelled 1000 random price scenarios;
– Modelling done using @RISK software in Excel;
– The results have the same general “pattern” as historical price cycles.
First, forecast the future gold price…
22
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MinEx Consulting Strategic advice on mineral economics & exploration
5. FUTURE PRODUCTION FROM
EXISTING MINES
Australian gold in 40 years: The need for greenfields exploration
24
Image: Gwalia gold mine, Leonora, Western Australia (St. Barbara)
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MinEx Consulting Strategic advice on mineral economics & exploration
6: FUTURE PRODUCTION FROM
KNOWN PROJECTS
Australian gold in 50 years: The need for greenfields exploration
31
Image: Mt Henry gold project, Western Australia (WestGold Resources)
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MinEx Consulting Strategic advice on mineral economics & exploration
…because, “Once a dog – always a dog!”
Commodity Price
Production Cost
Price, Cost $
Time →
negative
return
negative
return
positive
return
Normal Business Cycle
[Project is sub-economic]
Early Boom
[Project is economic]
Late Boom
[Marginal]
Crash
[Project is un-economic]
Normal Business Cycle
[Project is sub-economic]
Marginal projects are
only economic for a
short window of time
34
Source: McCuaig, March 2009
CAUTION: Cartoon only – not real data!
“Once a Dog – always a Dog”
Cam McCuaig
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MinEx Consulting Strategic advice on mineral economics & exploration
7. FUTURE PRODUCTION FROM
UNDISCOVERED DEPOSITS
Australian gold in 40 years: The need for greenfields exploration
36
Image: Exploration near Tropicana gold mine (Independence Group)
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MinEx Consulting Strategic advice on mineral economics & exploration
7A. FUTURE EXPLORATION
EXPENDITURE
Australian gold in 40 years: The need for greenfields exploration
37
Image: realestate.com.au
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MinEx Consulting Strategic advice on mineral economics & exploration
1. Forecast the future gold price. And with this …
2. Forecast the likely level of exploration spend ($m)
3. Predict the likely average unit discovery cost ($/oz)
4. Estimate the average amount of gold discovered per year (Moz pa)
5. Use historical size-frequency curve to predict the size and number of
discoveries per year (i.e. lots of small deposits, and the occasional giant)
6. Using historical data model the likely range in grade for each discovery
(i.e. most will be low grade, some will be high grade)
7. Based on size and grade, model the likelihood that the deposit will be
developed and, if so, estimate the likely in time delay involved between
discovery & production
8. Based on the size of the deposit, and the likely mining method used
(open pit, underground or mixed) predict the likely mining rate, gold
output (koz pa) and mine life
Where are we in the process?
38
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MinEx Consulting Strategic advice on mineral economics & exploration
7B. FUTURE EXPLORATION SUCCESS
Australian gold in 40 years: The need for greenfields exploration
43
Image: Exploration near Tropicana gold mine (Independence Group)
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MinEx Consulting Strategic advice on mineral economics & exploration
1. Forecast the future gold price. And with this …
2. Forecast the likely level of exploration spend ($m)
3. Predict the likely average unit discovery cost ($/oz)
4. Estimate the average amount of gold discovered per year (Moz pa)
5. Use historical size-frequency curve to predict the size and number of
discoveries per year (i.e. lots of small deposits, and the occasional giant)
6. Using historical data model the likely range in grade for each discovery
(i.e. most will be low grade, some will be high grade)
7. Based on size and grade, model the likelihood that the deposit will be
developed and, if so, estimate the likely in time delay involved between
discovery & production
8. Based on the size of the deposit, and the likely mining method used
(open pit, underground or mixed) predict the likely mining rate, gold
output (koz pa) and mine life
Where are we now?
44
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MinEx Consulting Strategic advice on mineral economics & exploration
7C. CONVERSION OF EXPLORATION
SUCCESS INTO MINES
Australian gold in 40 years: The need for greenfields exploration
50
Image: Early digging at Gruyere gold mine (Gold Road Resources)
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MinEx Consulting Strategic advice on mineral economics & exploration
1. Forecast the future gold price. And with this …
2. Forecast the likely level of exploration spend ($m)
3. Predict the likely average unit discovery cost ($/oz)
4. Estimate the average amount of gold discovered per year (Moz pa)
5. Use historical size-frequency curve to predict the size and number of
discoveries per year (i.e. lots of small deposits, and the occasional giant)
6. Using historical data model the likely range in grade for each discovery
(i.e. most will be low grade, some will be high grade)
7. Based on size and grade, model the likelihood that the deposit will be
developed and, if so, estimate the likely in time delay involved
between discovery & production
8. Based on the size of the deposit, and the likely mining method used
(open pit, underground or mixed) predict the likely mining rate, gold
output (koz pa) and mine life
Where are we now?
51
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MinEx Consulting Strategic advice on mineral economics & exploration
8. COMBINED RESULTS
Australian gold in 40 years: The need for greenfields exploration
59
Image: Ball mill at Gruyere gold mine (Gold Road Resources)
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MinEx Consulting Strategic advice on mineral economics & exploration
9. THE IMPACT OF RESOURCE
QUALITY ON MINE PRODUCTION
Australian gold in 40 years: The need for greenfields exploration
65
Image: Ore from the Fimiston pit, Super Pit, Kalgoorlie (KCGM)
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MinEx Consulting Strategic advice on mineral economics & exploration
10. HOW DO WE SLOW THE
DECLINE IN GOLD PRODUCTION?
Australian gold in 40 years: The need for greenfields exploration
69
Image: Exploration near Tropicana gold mine (Independence Group)
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MinEx Consulting Strategic advice on mineral economics & exploration
11. CONCLUSIONS
Australian gold in 40 years: The need for greenfields exploration
77
Image: Runway at Gruyere gold mine, Western Australia (KCGM)
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MinEx Consulting Strategic advice on mineral economics & exploration
1. Landmark report – looks out 40 years – critically includes the impact of resource quality,
exploration, and uncertainty;
2. Over the short-term (<5 years) production will be dominated by existing mines;
3. Over the medium term (5-10 years) production will come from new mines based on known
deposits, however, it is not enough to offset the decline (mainly due to ‘quality’ issues);
4. In the long term (10-40 years) exploration success will play a major role in overcoming much
of the looming shortfall in gold production…
5. Consequently, in forty years-time almost all of Australia’s future gold production will come
from exploration successes…
6. …even so, production and revenues are set to fall by half over the next 40 years;
7. Also note that in 13 years half of Australia’s gold production will come from mines that are
yet to be discovered…
8. …but the weighted average delay between discovery and development is also 13 years;
9. For the gold industry to maintain production at current levels over the longer term, it will
either need to double the amount spent on exploration or double its discovery performance;
10. And finally, with sensitivity studies indicating each additional dollar spent on exploration
(over the next ten years) generates extra revenue of ~$11.40 over the next 40 years there is
incentive for both industry and government to further invest in gold exploration!
Quantifying the importance of exploration on
the future of Australian gold mining
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MinEx Consulting Strategic advice on mineral economics & exploration
A final note on ‘peak’ forecasts…
• The study is a ‘business-as-usual’ forecast – it is not a
‘peak’ forecast per se [exploration and innovation are
considered in an very detailed manner];
• As Dryblower suggests ‘peak’ forecasts are nearly
always wrong [citing the example of the Hubbert Curve
in oil], as exponential growth is always contained by an
assumption of finite resources;
• Supply will meet demand over the long term – due to
some unspecified discoveries and innovations we can’t
yet determine [Dryblower notes the Pilbara
‘conglomerate gold’ as an example];
• However, the expected supply does not have to come
from Australia [and to an extent it does not matter to us
commentators whether we’re writing about gold mines
in Australia or elsewhere in the world];
• National industries do decline if they become
uncompetitive – think South African gold, US copper, or
British coal [or Australian cars];
• Thus, industry and government (i.e. “us”) must take the
initiative to invent its own future;
• This includes developing policies that stimulate
exploration, but also innovation that makes exploration
more effective – critically greenfields exploration in new
‘search spaces’…
• …the challenge is that we need to act now!
79
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MinEx Consulting Strategic advice on mineral economics & exploration
Contact details:
Richard Schodde
Managing Director, MinEx Consulting
Melbourne, VIC
Email: Richard@MinExConsulting.com
John Sykes
Strategist, MinEx Consulting
Perth, WA
Email: John.Sykes@MinExConsulting.com
Website: MinExConsulting.com
Copies of this and other similar
presentations can be downloaded
from the MinEx website