Grassroots share of mining exploration budgets hits record low

This article is an extract of the Corporate Exploration Strategies report series which examines mining exploration budgets trend by stage of development.

By Sean DeCoff | 10 January 2017

Despite a modest market rebound through part of 2016, corporate mining exploration budgets for all three stages of project development continued to retreat in 2016 from 2012’s record highs. Grassroots exploration’s share dropped to a new low of 28% of the total budget, while minesite exploration reached a record high of 35%.

Since grassroots spending is associated most strongly with new discoveries, the erosion of grassroots’ share of the worldwide total could potentially put pressure on future production due to a lack of new discoveries.

Historically, minesite exploration attracted the smallest share of annual exploration budgets; however, 2016 marked the third consecutive year in which companies allocated more to minesite work than to grassroots.

The decline in grassroots’ share of overall budgets since the 1990s corresponds with the upward trend in the shares allocated to late-stage and minesite budgets. Companies have spent proportionally more on late-stage projects to move them towards production or to make them attractive for acquisition, while minesite work has been perceived as a less expensive and less risky means of replacing and adding reserves.

In 2017, we do not expect to see significant shifts in budget share by stage. We predict that majors will increase their overall budgets slightly, while junior budgets will show a modest decrease. This means that the current trend of declining grassroots exploration will likely continue, since that work is predominantly carried out by the juniors.

The figure below shows worldwide exploration budgets by stage of development as a percentage of the total budget.

Praesent porttitor malesuada ornare. Etiam pellentesque vitae risus in elementum. Vivamus ex sem, maximus in ligula vitae, dictum luctus felis. Etiam et rutrum mauris, congue hendrerit nisi. Aenean lorem sem, consequat sit amet diam ut, pellentesque aliquet ante. Ut egestas massa mi, nec condimentum ipsum suscipit non. Interdum et malesuada fames ac ante ipsum primis in faucibus.

--- THE END ---

You may also be interested in:

Return to Resource Hub

To find out more about our global Metals and Mining solution, please visit spglobal.com/marketintelligence.

Copyright © 2017 by S&P Global Market Intelligence, a division of S&P Global Inc. All rights reserved. No content may be reproduced or distributed without the prior written permission of S&P Global Market Intelligence or its affiliates. The content is provided on an “as is” basis.

Grassroots share of mining exploration budgets hits record low

Leverage high-quality exploration data
to make critical, well-informed decisions.

Request A Demo

Form Header

Grassroots share of mining exploration budgets hits record low

Leverage high-quality exploration datato make critical, well-informed decisions.

Request A Demo

Form Header

Leverage high-quality exploration data
to make critical, well-informed decisions.