While exploration expenditure in Western Australia reaches new highs, exploration spending from WA junior to mid-cap explorers remains mixed between domestic, interstate and overseas projects.
While exploration expenditure in Western Australia reaches new highs, exploration spending from WA junior to mid-cap explorers remains mixed between domestic, interstate and overseas projects.
According to data from Intierra Resources Intelligence, a smaller proportion of the highest spending WA-based exploration companies are putting their money into exploration within the state, with most focused on projects in Africa, the US, and South America.
Nickel, gold and iron ore exploration feature heavily among the top WA companies by exploration expenditure.
The biggest exploration spender was West Perth-based Mirabela Nickel Ltd, whose $US263 million Santa Rita nickel project in Brazil involves the largest nickel sulphide resource in South America.
Santa Rita is reportedly the largest greenfield nickel sulphide discovery in the world in the past decade.
The dual Australian Securities Exchange and Toronto Stock Exchange-listed company spent $25 million on exploration in 2006-07.
Mirabela shares a West Perth office with Verona Capital Pty Ltd, with Verona principal Craig Burton sitting on the board as an executive director.
The company is chaired by Bill Clough, with its managing director, Nick Poll, based in Brazil.
This week, the company announced its appointment of Perth-based GRD Minproc to provide engineering, procurement, commissioning and construction consulting services to the Santa Rita project.
The project will include a 4.6 million tonnes per annum open pit mine and a sulphide concentrator, designed to produce 18,500t of nickel concentrate per year.
Subiaco-based Golden State Resources Ltd is also a big spender, spending $17 million on exploration during 2006-07.
Golden State, which has natural gas and uranium projects in Utah in the US and a number of gold projects in the WA’s eastern Goldfields, spent most of its exploration budget in the US.
Only $500,000 was spent on exploration in WA, a figure that’s expected to remain consistent this financial year.
West Perth-based molybdenum and copper explorer Moly Mines Ltd is one of the highest ranked WA companies in terms of exploration expenditure on projects within WA, spending about $18 million last financial year.
Once completed, Moly’s Spinifex Ridge project in the state’s Pilbara region will produce 5 per cent of the world’s molybdenum, making it one of the world’s top five producers.
Nickel miner Western Areas NL also sits highly among WA companies investing in exploration within WA, spending $14 million on exploration last year.
This financial year, the company is looking to increase its exploration budget to about $3 million a month, with 90 per cent of the budget going towards exploration in WA and the remaining 10 per cent to be spent in Canada.
Western Areas managing director Julian Hanna told WA Business News the company would be focusing on exploration targets at Forrestania, after successfully developing its Flying Fox mine.
“We’re shifting back into exploration targets we should have tested two to three years ago,” he said.
“We’re pulling out all of the stops.”
Mr Hanna said apart from delays over environmental approvals, amounting to a couple months, the company has had “a good run.”
The increased use of underground diamond drill rigs had added to the rising cost of exploration and production, with costs rising about 10 per cent each year.
Mr Hanna said the availability of rigs and skilled staff, especially geologists, remained an issue.
Mt Pleasant-based gold miner Centamin Egypt Ltd, which has been exploring in Egypt since 1995, invested about $12 million in exploration last year.
Its $US216 million Sukari gold project in Egypt is scheduled to commence commissioning and production the fourth quarter of 2008.
Fellow gold miner, Balcatta-based Perseus Mining Ltd, spent about $10 million in exploration, focusing around gold projects located in West Africa and Central Asia.
Other WA exploration companies to rank highly in exploration expenditure included Murchison Metals Ltd, Atlas Iron Ltd, Goldstream Mining NL, which has projects in South Australia, Africa and WA, and Universal Resources, which has copper and gold interests in Queensland.
