About a month or so ago, Michael Whiting-a senior partner at Taylor Collison in Adelaide, gave a presentation at a mining related conference on the poor performance of exploration stocks since listing over the past eighteen months.
He pointed out the exploration efforts have been principally 'brownfields' related (ie extensions of old mines) with little in the way of 'virgin' exploration('greenfields') and with poor results overall.
I annoyed some broker friends the other day to dredge up some info-in 2004 the ASX raised just on $2billion in mining stocks. Taking out the restructured producers such as Zinifex, the investment funds, and other non-exploration orientated mining vehicles, the figure raised for fresh exploration was around $160million.
In 2005 we have raised around $85million for pure exploration plays, but that potential market is shrinking rapidly given recent sharemarket performances.
The average float size in 2004 by the 40 odd newbies was just under $5million. This year it is marginally bigger.
In addition to the above we have had the plethora of capital raisings by existing explorers. Not having searched these particular figures, I would only guesstimate that the overall exploration company funding would more than double the above., ie around $500 million over the past 18 months.
And what have we got to show for it? Nice underground stuff from Avoca is in the virgin category, as is De Grey at Turner River (albeit small), couple of small deposits from Troy in the Sandstone Belt, good results from BMO at Twin Hills saw a rapid development of a known area, extensions to the Allegiance deposit in Tassie, a few more extensions to the Kambalda nickel deposits plus some good stuff from Jubilee and Western Areas-hardly a satisfactory return on all those dollars invested.
When was the last decent gold discoveries-4 or 5 years ago? Thunderlarra , Wallaby and Raleigh/ABC trendline at Kundana in WA?
Starting to feel that all the easy stuff has been found-geophysics is our last hope? Time to explore elsewhere soon?
Come on guys , get lucky, the Aussie juniors need you to get some interest going again.
The uranium rush is a flash in the pan-hey they searched pretty hard back in the 60s and 70s on the logical/simple stuff (and we even have states that preclude mining but that doesn't stop punters investing on companies active in those states-fools).
Iron ore-the easy pickings have already been pegged and put into production, but don't tell the promoters that!LOL.
It is a long time since we had a world class discovery-we need one please.
Cheers,TAS
no exploration success
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