Exploration

Exploration

The exploration for new gold deposits can be divided into two basic categories: Grassroots exploration, often by individual prospectors or ‘junior’ mining companies, to locate new orebodies. The prospect of Canada’s huge Hemlo gold deposit, for example, was identified in 1980 by two experienced prospectors and a geologist, David Bell (after whom one mine was eventually named). Their initial work was followed up by two Vancouver-based ‘juniors’ who took options in 1981 on two key blocks in the heart of the strike zone. Once they had shown the full potential of the orebody, they sought out joint-venture partners in major mining houses, which led to:

Definition Exploration: highly detailed exploration to define the exact size and shape of the orebody and later the possibility of extensions to it. This stage may take two or three years. In Hemlo’s case it was nearly five years from initial prospecting to the opening of the first mine.

Core samples from exploratory
drilling near Kalgoorlie in
Western Australia (Credit:
Timothy Green)

All mining companies have substantial exploration budgets that must be targeted to find metals which may be in demand five or even ten years ahead. In gold’s case the stagnant price after World War II until the early 1970s meant that gold took a small place in most exploration budgets – if any place at all. It was only in the late 1970s that mining companies, for the first time in a generation, turned towards gold. Encouraged by the high prices in the early 1980s, gold exploration became the vogue, such that by 1986, 80 per cent of the exploration budgets of mining companies worldwide was devoted to the search for gold. That led to the virtual doubling of output by 1992.

Exploration became increasingly diverse through much of Africa, Indonesia and most Latin American countries. In 1996 exploration spending on non-ferrous metals was calculated at $4.6 billion, of which 61 per cent was directed towards gold. Lower prices in recent years, however, have led to severe curtailment of exploration budgets.