Exploration expenditure data for Australian Stock Exchange-listed exploration companies has confirmed last quarter’s prediction that expenditure could level out in the March quarter.
Exploration expenditure data for Australian Stock Exchange-listed exploration companies has confirmed last quarter’s prediction that expenditure could level out in the March quarter.
Exploration spend was down 11 per cent to $131 million, the first significant fall in spending for five quarters. However, exploration levels still remain well over twice those of 2002-2003.
New cash raisings more than made up for exploration outflows. Cash to hand at the end of the quarter was up 13 per cent to $1.22 billion, and the explorers are budgeting a healthy $165 million to June 30 – the highest exploration budgets since the survey started in 2001.
The top 10 explorers this quarter are an eclectic mix, showing the broad range of commodities that are enjoying boom times and record prices at present. Top explorer by expenditure was Andrew Forrest’s Fortescue Metals Group, with $14.5 million spent on a tilt at developing a new iron ore production centre in the Pilbara. We can only hope they are successful, as $8 million went out the door last quarter as well. The push comes on the back of an impressive $95 million increase in cash position from the issue of convertible notes.
The second explorer was Aztec Resources at $3.9 million for a bankable feasibility and development on its Koolan Island Iron ore deposit in the Kimberley.
The increased activity is generating some promising new projects. Jubilee Mines continued to deliver exciting hits at its Prospero nickel deposit near Wiluna, including 14 metres at 6.56 per cent nickel. Fox Resources announced a spectacular copper intercept at its Whundo prospect near Dampier (10 metres at 23 per cent copper).
De Grey Mining continues to extend the potential of its extensive Turner River project in the Pilbara; the Mt Berghaus prospect returned a drillhole of six metres at 15.37 grams per tonne gold.
Avoca Resources continues to grow the Trident project near Higginsville, with extension drilling finding 43 metres at 2.3 grams per tonne gold.
There should be continued strong activity next quarter, particularly in nickel, copper, iron ore and gold, and there is a major resurgence in uranium prospecting, with the political debate on greenhouse-friendly fuels starting to reconsider this fuel source.
• Mike Kellow is sales and marketing manager at Intierra.
