This document discusses where future mining opportunities may be located. It notes that exploration spending is now split evenly between greenfield (new) and brownfield (existing mine) sites, down from a previous focus on greenfield. High taxation, costs, and difficulties raising capital make Australia less competitive for mining investment. The quality of Australia's geoscience database is praised but challenges remain such as deeper, more remote deposits and workforce issues. The Northern Territory is highlighted as having competitive policies and rising exploration but more certainty is still needed to encourage investment. A national response is required to improve competitiveness through tax reform and other policies.

1. WHERE ARE THE MINES OF TOMORROW?
Mining the Territory 2012
Bernie Hogan
Regional Manager - QLD and NT
Association of Mining & Exploration Companies

2. About AMEC
• Established 30 years ago
• Over 350 company members and growing
• Emphasis on junior to mid tier mining companies
• Members include explorers, producers, and service industries
• National coverage – coordinated voice of the industry from
Brisbane, Perth and Sydney
• Advocacy, policy development and advisory
2

3. Exploration & Mining in
Australia
• UWA paper – “Where are Australia’s mines of tomorrow”
• Where are exploration funds spent
• High tax, high cost, low productivity
• Capital harder to raise
• Availability of quality geoscience data
3
Australia must be globally
competitive

4. 4
Greenfield spend is now
half that of Brownfield
0%
20%
40%
60%
80%
100%
1996 1998 2000 2002 2004 2006 2008 2010 2012
MinEx
estimates
Percentage of Total Spend
Greenfield
Exploration
Late Stage &
Feasibility
Mine Site
(ie Brownfield)
Brownfield Exploration
35%
Source: © Metals Economics Group,
Corporate Exploration Strategies 2011
Note: Base metal + gold + diamond exploration expenditures by All
Companies
Excludes exploration on Bulk Minerals and Uranium
Detailed breakdown for 1996 & 2012 are MinEx estimates
Assumes that all of the Grassroots spend by Majors and half of the
Grassroots spend by Juniors is on Greenfield targets
21%
39%
47%

5. Government Policies
• Taxation
– Royalties
– MRRT
– Carbon Tax
– Business Tax Working Group (BTWG)
• Cost Recovery
• Diesel Fuel Tax Credits
• Regulation
• Native Title and Heritage negotiation
Creates a High Cost Environment
5

6. 6
-
2.00
4.00
6.00
8.00
10.00
12.00
-
5.00
10.00
15.00
20.00
25.00
2008 2009 2010 2011 2012
Average
Capital
Raising
($m)
Total
Capital
Raising
($’00m)
Source:
Average Amount
raised in $millions
Total Amount
raised in $’00m
YTD
$517m
Australian exploration
companies are not
raising as much as
they used to
ASX Capital Raisings
for Exploration

7. Quality of geoscience database
7
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Canada USA Australia Oceania Africa Latin America Eurasia
Source: Fraser Institute
98% of exploration
company executives believe
Australia’s geoscience
database encourages
investment

8. Positive news from the NT
• Fraser Institute Report. NT ranked 11th ahead of “mining
states” WA & Queensland
• Increased funds spent on exploration, particularly post
financial crisis
• Success of the co-funded drilling programs – Bringing
Forward Discovery
8
8

9. Challenges ahead
• New Government
• Discoveries are deeper and more remote
• Small population - limited workforce – greater costs
• Conservation estate, including marine parks – creates
uncertainty
• Few mines paying royalties, and they don’t last forever!
• Regional and remote nature of the Northern Territory
9
9

10. 10
Expenditure on the rise?

11. 11
But are the metres growing?

12. So how does NT remain
internationally competitive?
• AMEC NT policy platform
• Approvals reform – statutory timelines for approvals
• Conservation estate including moratoriums
• ALRA (needs to be better understood)
• Infrastructure – water, power, road, rail and port (be the
gateway to Asia)
• Back the co-funded programs
Provide Investor Certainty – Clarity in policy
12
12

13. And on a national scale?
• Must be a coordinated National response - SCER
• Remove tax burdens that make projects unsustainable
(MRRT/Carbon/reduction in Diesel Fuel rebate/ Cost recovery)
• Support Exploration Tax Credit – mix of Flow-through
shares and dividend imputation schemes
• Workforce Planning – including immigration
• Workforce Relations
• Mining Environmental Rehabilitation Fidelity Fund
13
13

14. Thank You
14
Unless otherwise credited the graphs in this presentation
can be found in the following report:
WHERE ARE AUSTRALIA’S MINES OF TOMORROW?
Richard Schodde, Managing Director MinEx Consulting, Adjunct
Professor, The University of Western Australia (UWA) and,
Pietro Guj, Research Professor, Centre for Exploration Targeting
(CET), The University of Western Australia (UWA)
September 2012
Visit www.amec.org.au to download the paper