Mining Exploration Insights

Exploration index recovers as drilling and new resources improve

By: Robert Anders | May 14, 2020

The following analysis is an extract of S&P Global Market Intelligence monthly Industry Monitor, which reviews exploration activity and development in the mining industry. The full report and data files are made available to our Metals & Mining subscribers onlyHere are the highlights from our latest issue:


While the impact of the COVID-19 pandemic on mining projects appears to be winding down somewhat, the economic repercussions of the outbreak continue to plague the sector's ability to raise money. Increases in significant drill results and initial resources in April were offset by a decrease in significant financings — the number of positive project milestones was unchanged — as S&P Global Market Intelligence's Pipeline Activity Index, or PAI, rose to 67 from 53 in March. The gold PAI jumped to 104 from 86, while the base metals PAI increased to 38 from 27 over the same period.

Global drilling activity rebounded in April, with the total number of distinct projects reporting drill results rising to 195 from 152 in the previous month. Reported drilling increased sharply for gold and was also up for silver, nickel, copper and specialty commodities projects. Drilling was down for platinum group metals, zinc-lead and minor base metals projects, and was unchanged for copper.

After dropping to three in March, the number of initial resource announcements increased to four in April. All four new resources were for primary gold projects.

Metals prices improved in April, as S&P Global Market Intelligence's Exploration Price Index rose to 132 from 128. The indexed price rose for three — gold, silver and molybdenum — of the eight constituents of the index and decreased for platinum, copper, nickel, zinc and cobalt.

The number of financings by junior and intermediate companies fell for a second consecutive month in April, to 107 from 124 in March, although the US$375.6 million raised was up 21% from US$311 million in the previous month. It was the lowest number of financings reported since January 2016, and the amount garnered in the first four months of 2020 was down more than US$1 billion from the year-ago period.

April's positive milestones included two projects entering feasibility, one project entering preproduction and one new mine starting production. Three milestones were for gold projects and one was for base/other metals. There were no negative milestones.

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Equities recover

With disruptions to mining operations now appearing to be less severe than some had initially feared, mining equities recovered somewhat in April, as S&P Global Market Intelligence's aggregate market value of the industry's listed companies, based on 2,331 firms, rose 18% month over month to US$1.24 trillion. The aggregate market cap of the industry's top 100 companies was up 17% in April at US$1.05 trillion. The number of tracked mining companies remains at a 10-year low, declining steadily from a high of 2,921 companies in March 2012.


The Pipeline Activity Index, or PAI, measures the level and direction of overall activity in the commodity supply pipeline by incorporating significant drill results, initial resource announcements, significant financings and positive project development milestones into a single comparable index.

The Exploration Price Index, or EPI, measures the relative change in precious and base metals prices, weighted by the percentage of overall exploration spending for each metal as a proxy of its relative importance to the industry at a given time.

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