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S&P Global Market Intelligence highlights 83% reduction in major copper discoveries

The drop-off in discoveries of more than 500,000 tonnes was experienced despite a 114.5% increase in exploration expenditure between the two periods.

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PolarX returns visible copper

S&P Global Market Intelligence has found only 140 million significant tonnes of copper were discovered in the last 10 years, a dramatic reduction on the 862.8 million tonnes defined in the 18-year period before the past decade.

Senior metals and mining research analyst Kevin Murphy noted only 29 significant discoveries were made worldwide in the last decade, compared to 191 made in 1990 to 2007.

Murphy said: “Although copper exploration budgets have fallen from an all-time high in 2012, spending on finding new copper reserves remains at historically high levels

“However, the increased funding has so far failed to identify more new discoveries compared with the previous period.”

The 83.8% reduction in tonnages between the two periods occurred despite a 114.5% increase in exploration expenditure between the junctions of 2008-2017 and 1990-2007.

A more than doubled sum of US$26.6 billion was served up for copper exploration over the decade that ended on December 31, compared to the US$12.4 billion spent over the preceding 18 years.

US dollar bill

Lower risk, fewer tonnes

S&P flagged less grassroots exploration in the decade up to 2017, contributing to the decline in major discoveries.

Murphy highlighted junior explorers focusing on expanding established deposits and bigger players exploring at their existing operations.

He said: “Although some new major discoveries have been found at late-stage projects and existing mining camps, the potential to find new major discoveries at such projects is less likely than at riskier, early-stage prospects.”

The senior research analyst said: “In terms of the return in copper discovered for exploration dollars spent, the 1990s were a considerably more successful decade than the 2000s.

“Of the 220 major discoveries in the past 28 years, 106, or almost half, were made in the 1990s and contain half of the discovered copper.”

A PolarX core sample

A PolarX core sample.

Step-up predicted

S&P predicted a 105 million tonne or 75% increase in the volume of discoveries for the decade starting in 2018.

Murphy said: “Even after adjusting for more recently identified deposits eventually surpassing our threshold for a major discovery and for major discoveries with potential to expand, we forecast that the copper in major discoveries will likely only increase to about 245 million tonnes over the next decade.”

S&P’s threshold of only including discoveries of more than 500,000 tonnes takes in reserves, resources and past production, with a few rare exceptions.

Despite S&P holding a better outlook for the next decade, the predicted tonnages of major discoveries would still only be 28.4% of those defined in the 1990-2007 period.

Copper

Still on the hunt

A number of companies on the Australian Securities Exchange are in the business of copper exploration.

These include PolarX Limited (ASX:PXX), Havilah Resources Ltd (ASX:HAV) (FRA:FWL), Great Boulder Resources Ltd (ASX:GBR), St George Mining Ltd (ASX:SGQ) (FRA:S0G), Aeris Resources Ltd (ASX:AIS), and Australian Mines Limited (ASX:AUZ) (FRA:MJH) (OTCMKTS:AMSLF).

Earlier today PolarX revealed it expected to increase copper, gold and silver resources at its Alaska Range project in Alaska.

The company had drilled visible copper sulphides and received strong high-grade, near-surface results from drilling at the Zackly deposit.

These included 55 metres grading 2.8 g/t gold, 0.6% copper and 9.4 g/t silver from 2.5 metres.

READ: PolarX hits high-grade gold and copper, Alaska Range resource increase expected

Havilah’s copper equivalent ore reserve at the wholly-owned Kalkaroo copper-cobalt-gold project in far-east South Australia is considered the largest in Australia.

The ore reserve is a significant 100.1 million tonnes grading 0.47% copper and 0.44 g/t gold.

Havilah is tipped to complete the project economics for its pre-feasibility study by the end of the year and divested its North Portia Copper-Gold Project to Broken Hill-based Consolidated Mining & Civil Pty Ltd (CMC) last month.

READ: Havilah Resources considers its options for copper-cobalt-gold project

Great Boulder is proving up the scale of the Mt Venn copper-nickel-cobalt asset in Western Australia with drilling and has encountered massive sulphides during the effort.

The company has encountered extensive sulphide mineralisation with first holes at the project’s Eastern Mafic complex over a 5 kilometre strike length.

Intervals have been shown to be up to 70% sulphide at the complex.

Drilling at Mt Venn is ongoing.

READ: Great Boulder Resources shares up 40% as it hits massive sulphides at Eastern Mafic

St George’s Mt Alexander Project in Western Australia is a recent nickel-copper sulphide discovery.

The 75%-owned project hosts the Cathedrals, Stricklands and Investigators prospects and is held in a joint venture by Western Areas Ltd (ASX:WSA) which has a 25% stake.

St George is conducting definition drilling at Mt Alexander where mineralisation is found 30 metres from the surface.

The company revealed last month it had drilled high-grade nickel-copper sulphides at the project’s Investigators prospect.

READ: St George Mining drills high-grade nickel copper sulphides at Investigators

Aeris called its June quarter its best for the 2018 financial year after producing 7,592 tonnes of copper in the period, an 11% increase on the previous quarter and the best quarterly it achieved in the financial year.

The company’s June quarter costs were $2.10 per pound for net direct cash costs and $2.79 per pound for all-in sustaining costs.

Aeris reported last month 28 anomalies had been discovered at the Torrens project in South Australia it holds in a joint venture with Argonaut Resources NL (ASX:ARE).

The discovery backed arguments the project area was highly prospective for iron-oxide copper-gold mineralisation.

READ: Aeris Resources identifies 28 anomalies at Torrens Copper-Gold Project

Australian Mines is currently undertaking a definitive feasibility study for its flagship Sconi project at the historic Greenvale mine in Queensland.

The company’s Sconi pre-feasibility study tipped average annual production of 3,010 tonnes of cobalt sulphate, 24,420 tonnes of nickel sulphate and 77 tonnes of scandium oxide for at least the first 20 years, with 0.11% cobalt, 0.81% nickel and 109 g/t scandium average feed grades.

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