Exploration News (April 01, 2001)

Exploration Spending Nearing Bottom of Cycle

According to Metals Economics Group (MEG)’s recent edition of Corporate Exploration Strategies, total spending allocated for worldwide nonferrous exploration steadily increased from 1993 through 1997, when the total peaked at an estimated US$5.2 billion. The upward trend dramatically reversed in 1998, when allocations declined by approximately 29%, and then decreased again in 1999 by 24%. However, the 7% decrease in 2000 (to $2.6 billion from $2.8 billion) indicates a much slower pace of decline.

MEG estimates that the most recent analysis of 656 companies’ exploration budgets totaling about $2.34 billion covers approximately 90% of worldwide expenditures for commercially-oriented nonferrous metals exploration; therefore total 2000 expenditures are estimated at about $2.6 billion.

Metals Economics Group expects exploration budgets to continue at a reduced level in the near term, but it appears that we are approaching the bottom of the cycle. Although the gold price continues to languish, base metals and platinum group metals prices have shown signs of significant upswings since mid-1999.

Canada, which is going against the worldwide trend of lower exploration spending, is the second-largest destination for exploration spending on a regional basis. Canadian projects received $348 million in 2000, a $38.1 million (12.2%) increase over the $309.9 million allocated in 1999. Canada also shows the largest percentage increase, rising to 14.9% of the overall 2000 total from 12.1% in 1999. These increases are mainly due to stepped-up efforts in pursuing diamond and platinum exploration.

For more information, contact Metals Economics Group, P.O. Box 2206, Halifax, Nova Scotia, B3J 3C4, Canada. Phone (902) 429-2880, fax (902) 429-6593, email: meg@metalseconomics.com, web site: www.metalseconomics.com

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