No, you are not seeing double. There was more worldwide exploration money spent in 2004, and there is more worldwide exploration money to be spent in 2005. So says the METALS ECONOMICS GROUP of Halifax. In fact, $3.8 billion (all figures in US dollars) was the highest spending level since 1997.
Using a cut-off of $100,000 the Metals Economic Group analyzed the budgets of 1,138 exploration companies. For the 95% of global commercially oriented non-ferrous expenditures the group was able to confirm, the amount was $3.55 billion. Add another estimated 5% of spending, and the total rises to $3.8 billion.
Worldwide nonferrous exploration budgets steadily increased through the early 1990s to peak at $5.2 billion in 1997, reports the group, before falling for five straight years to a 12-year low of $1.9 billion in 2002an overall decline of more than 63%. Since that time, exploration budgets have risen for two straight years, rebounding to a level just slightly above the 1998 estimate. This year's $3.8 billion estimated total is up 58% over last year's, and is double the estimated worldwide total seen at the bottom of the cycle in 2002.
We at CMJ have known by the extraordinary number of press releases on the subject, that Canadian companies are raising exploration money with relative ease this year. Of the hundreds of flow-through share offerings and private placements we have seen, we can think of only one that was withdrawn. This year's high commodity pricesgold, nickel, copper, uraniumare having the desired effect of stepping up the hunt for future producers.
Spending in Canada is second only to that in Latin America, according to Metals Economics. Exploration spending in Latin America was 21.8% of the worldwide total, followed by Canada at 19.6%. Other regions examined were Africa (16.1%), Australia (14.7%), the United States (8%), the Pacific and Southeast Asia (4.4%), and the rest of the world (15.4%).
Moreover, the group forecasts that exploration spending will continue to rise in 2005, led by junior and mid-tier companies.
All this good news from Metals Economics is music to the ears of the Canadian mining industry.
There is only one tiny bit of bad news in the report: companies that buy this valuable document may have to drill one less hole. The 900-page two-volume study is available (on the Internet and in print) for US$12,000 from Metals Economics Group, P.O. Box 2206, Halifax, Nova Scotia, B3J 3C4, Canada. Phone: (902) 429-2880; fax: (902) 429-6593; email: meg@meginformation.com; website: www.metalseconomics.com.
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