Mining Exploration Insights

Exploration index falls sharply as 3 of 4 metrics decline

By: Robert Anders | December 17, 2019

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:


Significant financings, initial resources and positive project milestones all declined in November while significant drill results improved only slightly as S&P Global Market Intelligence's Pipeline Activity Index, or PAI, fell to 79, from 96 in October. The gold PAI dropped to 123 from 148, while the base metals PAI declined to 43 from 57 over the same period.

Mirroring the decrease in the PAI, metals prices declined for the first time in six months in November as S&P Global Market Intelligence's Exploration Price Index, or EPI, dropped to 130 from 132. The indexed price fell for five — gold, silver, nickel, zinc and molybdenum — of the eight constituents of the index and rose slightly for copper, cobalt and platinum.

After jumping from three to eight in October, the number of initial resource announcements dropped back to three in November. All of the new resources were from gold projects.


Global drilling activity improved for a third consecutive month in November, with the total number of distinct projects reporting drill results increasing to 232, from 219 in October. The increase was due largely to a strong gain in results from gold projects, with their number jumping month over month to 151 from 133. Reported drilling also increased for copper assets, to 28 from 24, while activity at nickel, minor base metals and specialty commodity projects all decreased. The numbers of drill results reported from silver, platinum group metals and lead-zinc projects were unchanged from the previous month.

The number of financings by junior and intermediate companies fell to 159 in November from 188 in October, the lowest number of reported financings since February. The total number of significant gold and base metals financings was also down in November, to 36 from 42 in the previous month. The decrease was due primarily to the month-over-month fall in significant financings for gold projects to 23 from 28, exacerbated by a slight decline in base/other metals financings to 13 from 14.

Positive project milestone activity was down sharply in November after rising for two consecutive months, with the number of positive project milestones dropping to four from 10. Three of the milestones were for gold projects and one was for silver. There were also three negative milestones.

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Despite the decrease in the PAI, mining equities rose, albeit slightly, for a second consecutive month in November as S&P Global Market Intelligence's aggregate market value of the industry's listed companies, based on 2,353 companies, was up 0.25% month over month at US$1.35 trillion. The aggregate market cap of the industry's top 100 companies was up 0.81% in November at US$1.14 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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