Annual Review 1987 - Exploration - Introduction

Most statistical measures of mineral exploration continued downward in 1986. Prospects in 1987, however, appear to have brightened for exploration as the overall economic health of the mineral industry improved. The Society of Economic Geologists (SEG) survey of US and Canadian firms documents the marked decline in US mineral exploration since the early 1980's. From 1981 through 1986, the total exploration expenditure by US firms declined by more than 73% (Fig. 1). Exploration expenditures by US firms declined by 66%%. US based professional exploration staffs were slashed by 70% (Fig. 2). Also, many firms have written off some reserves because of weak markets or have not delineated new reserves to replace production. The Canadian government reported that between 1981 and 1986 Canadian molybdenum re¬serves had declined by 30%, lead and zinc reserves by 20%, and nickel and copper reserves by 15%. The SEG survey also shows the immediate impact of the decline in the dollar on US exploration expenditures abroad. Between 1981 and 1986 the share of the exploration dollar spent by US firms outside of the country declined by nearly one-half and exploration acreage abroad declined by 69%. The downward trend of the last six years may finally be near the end as a leaner and more efficient minerals industry starts to gear up for a period of increased activity. An industry survey reported to Mine Development Bimonthly (Metals Economics Group) indicates that mining firms were expected to increase exploration expenditures in 1987 by at least 10% above 1986 levels. Worldwide expenditures for 1987 by companies covered by the report were expected to top $800 million. It is the first time since 1984 that an increase in exploration expenditures was expected. Also, the US Bureau of Land Management reported a 30% increase in new mining claims for fiscal year 1987 over fiscal year 1986. The bulk of the increase in claims was in states having intense gold exploration, particularly Washington and Oregon. Much of the optimism is undoubtedly due to the increases in metal prices that occurred in 1987. Some of these increases include gold, average price up about 20%; copper, average price up 24%; aluminum, average price up 26%; and nickel, average spot price up 20%. The SEG survey shows precious and base metals accounting for 89% of the exploration expenditures in the US in 1986, up 52% from 1981. The US Bureau of Mines estimates that 80% of US exploration activity in 1986 was directed entirely at gold (1986 Minerals Yearbook). Worldwide exploration plans indicate the continued dominance of gold exploration. New programs were announced for Ghana, Malaysia, and Indonesia. Major new exploration programs were also launched for lead-zinc sulfides in Morocco, platinum and palladium in northwest Brazil, rare earth minerals in Greenland, diamonds in Indonesia, and heavy minerals off-shore Australia. Significant gold discoveries were made at Angels Camp in Oregon; South Africa, near Potchestroom; India, in the Chitradgra district; Northern Ireland near Mt. Speerin; Chile, San Cris-