During the boom years of the early to mid 2000’s, investment into the junior, mid-tier and major mining sectors reached new heights. The rapid growth of emerging economies drove a surge in demand for commodities, noticeably those used in steel and energy generation, but with impacts across all commodities. With global supply unable to respond quickly, prices surged to historically high levels. In response, investment in the sector rose to record levels, the costs and size of exploration teams similarly rose to new highs.
As the global economic slowdown hit, mass layoffs occurred, many companies closing down their field teams. The major companies in the main refocused on near mine / mine extensional exploration, alongside cost controls at their production centres. The length of the downturn has been unprecedented, and the uncertainty and unpredictable nature of the market has made it very difficult for all exploration teams to obtain budgets & financing – both junior and major. The impact on the industry has been to shift the typical models of exploration funding.
We will look at how exploration has been financed in the past, the impacts of the global downturn on the structure of deals between juniors & majors and the new landscape for funding exploration at the early stages and finally; how will this impact the next round of discoveries?