METALS ECONOMICS GROUP estimates that the 2005 worldwide exploration budget will total US$5.1 billion, just shy of the high US$5.2 billion set in 1997 at the peak of the last exploration boom. The estimate comes from MEG's preliminary analysis of budgets from its 2005 edition of Corporate Exploration Strategies.
The study shows that exploration budgets in 2005 have increased for a third consecutive year to almost US$4.9 billion, about a 38% increase over 2004. This year, more than 1,400 companies' exploration budgets, covering more than 95% of worldwide commercially-oriented nonferrous exploration budgets, were included in the study.
Regionally, Latin America continues to be the most popular destination for exploration spending, followed by Canada, and then Africa. Nationally, Canada retains the top spot for the third year running, and the gap with second-place Australia is widening.
While gold exploration budgets continue to exceed base metals budgets in dollars, base metals budgets show the greatest dollar increases in 2005. Copper exploration budgets increased substantially, but the real standouts are zinc exploration budgets, which increased about 90%, and nickel exploration budgets, which increased almost 65%.
Late-stage exploration has become increasingly important in the current exploration cycle, as juniors prepare projects for joint-venture or acquisition, and miners push to bring projects to production in order to take advantage of historically high metals prices. The total budgets for late-stage exploration (including feasibility work) have exceeded grassroots exploration budgets for the first time since MEG began publishing the Corporate Exploration Strategies series of studies in 1989.
The 16th edition of Corporate Exploration Strategies will be published in October 2005. Volume I provides a 10-year summary of trends in exploration spending and an industry-wide analysis of allocations by location, target, stage of development, and more. Volume II reports each company's exploration budget by country, target, and stage of development. The 50 companies with the largest exploration budgets are given special attention - each company's current exploration program, strategy, and most advanced exploration projects are profiled in detail. The study also includes an appendix of companies that do not have exploration budgets but which do have significant exploration projects for which they are seeking financing or joint ventures in 2005.
Corporate Exploration Strategies is available (on the internet and in print) for Cdn$15,000 prepublication (Cdn$18,000 post-publication) from Metals Economics Group, P.O. Box 2206, Halifax, Nova Scotia, B3J 3C4, Canada. Phone 902-429-2880; Fax 902-429-6593; E-mail meg@MEGinformation.com; Website www.MetalsEconomics.com.
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