Exploration

 

 May 2011

EXPLORATION PROCESS

• Exploration is the key to sustainability in the mining industry - it is often referred to as the "R & D" (Research & Development) of the industry.  New resources are required to replace ore that is mined out.

• It takes between 10 and 20 years to bring an exploration discovery into production.

• Because mineral components are found in almost all consumer goods, mining will continue to be a dominant industrial sector in our global economy as emerging economies such as China requires more metals to support their growth.

• Exploration has evolved into a highly sophisticated, multi disciplinary science using principles of geology, physics, chemistry, and even biology to probe deep beneath the earth's surface. 

• Exploration is the high risk end of the industry as it involves investing large sums of capital for which there is no guaranteed return.

• Less than 2% of mineral showings or initial discoveries will actually evolve into mines.

• In Saskatchewan most of the mineral rights are owned by the province and companies or individuals obtain the rights to explore by staking a claim or acquiring a permit or a lease.

• The first stages of exploration are low impact,  involve making observations about the rocks or soils on the land surface (geological mapping), and taking samples for various types of chemical analyses. Computer-processed images of the land surface taken from satellites are also widely used to evaluate structures that may provide clues to potential areas of mineralization.

• Later stages may consist of measuring the physical, magnetic, or electrical properties of the rocks using high-tech instruments located on the ground or in an aircraft flying over the land surface. Extensive computer processing and scientific interpretation are used to intrepret what lies beneath the surface.

• If enough evidence is found to indicate mineralization, drilling equipment is used to obtain rock samples from below the surface. In circumstances where the minerals are not buried deeply, shallow pits or trenches may be excavated, again, to obtain additional samples.

• Mineral exploration provides employment, particularly for aboriginal residents of northern Saskatchewan adn the northern service sector.  The MinExplo Expo is an SMA initiative to increase the participation of northern businesses and individuals in the exploration industry.

EXPLORATION EXPENDITURES

• In 2010 exploration expenditures in Canada re exp0ected to increase to $2.2B, an increase of 24% over 2009 levels.

• 21 of Canada's Top 100 Exploration and Development Appraisal Proejcts (by$) are in Saskatchewan;10 are postash-related; 9 are uranium-related.

• In 2010, statistics from Natural Resources Canada indicate Saskatchewan exploration expenditures are anticipated to be ar9ound $293 M including $102 M for uranium; $12.5 for diamonds; $7.9 for precious metals; $0.1 M for base metals and $171M for industrial minerals - primarily potash.  this does not include development expenditures of over $240M that have also been anounced for BHP's Jansen Potash project.

• IIn 2009, all Canadian mining jurisdictions experienced exploration and deposit appraisal /exploration decreases in terms of total spending per province/territory.  The three leading jurisdictions for exploration expenditures were Ontario, Quebec and Saskatchewan which accounted for 64% of total spending of $1.7 Billion.

• 2009 exploration expenditures in Saskatchewan were $293 Million including $124 M for uranium, $13.8 M for diamonds; $2.6 M for gold; $1.7 M for base metals and $151 M for industrial minerals -primarily potash with some coal.
  

• 2008 exploration expenditures were a record $474 Million in 2008 including $204.4 M for uranium, $73.2 M for diamonds, $8.9 M f9or gold, $6.8 M for base metals, and industrial minerals including potash, clays, coal and rare earth elements totaling $181.7 million.

MINERAL COMMODITIES

• In Canada, 2010 exploration expenditures are primarilly focused on precious metals, followed by "other" (predominantly potash), base metals and uranium.

• The Saskatchewan commodity basket of potash and uranium is distinct from the national trend.

• In Saskatchewan, 2010 exploration expenditures for industrial minerals, including potash and coal, will continue to be predominant over historical favorites uranium and diamonds.  There is some strenghtening of both the uranium and gold sectors. 
  

• In the past 3 years, over $1 Billion has been invested in mineral exploration and development in Saskatchewan.

• Potash exploration continues, fueled by growth in the fertilizer industry that is responding to increased consumer demand in emerging economies in China, Brazil and India.

• Saskatchewan has significant untapped mineral resource potential, not only for the commodities that we are well known – potash and uranium, but also for a variety of other minerals including  diamonds, gold, platinum and palladium, rare earth elements, copper, zinc, nickel and mineralized brines.

• The bulk of the mineral exploration activity currently takes place in north and central Saskatchewan. Potash exploration is occurring in NW - SE oriented 200 km wide band stretching across eht provicne from Saskatoon to Rocanville; coal exploration is occurring in regions adjacent to the traditional coal mining areas in southern Saskatchewan as well as a newer play in the are aound the town of Hudson Bay; diamond exploration is currently being focused on an area east and northeast of Prince Albert; gold exploration is primarily north-east of LaRonge, base metal activity is west and southwest of Creighton and uranium exploration activity is in the Athabasca region.

REGULATION

•  The Exploration Industry is primarily regulated by the MInistry of Environment and Ministry of Energy and Resources.  The Ministry of Environment requires permits for all surface activities related to mineral exploration projects including, but not limited to, the development of trails and roads; camp permits, drilling, line-cutting, and shore alteration (such as docks).  

• The SMA Exploration Committee has worked with government regulators to develop 14 Best Management Practices for Mineral Exploration Activities to assist government and industry in the application and approval process for activities on land administered by Saskatchewan Environment. This guide provides information to assist in the planning, initiation and completion of a mineral exploration program in a fashion that will help minimize environmental impacts and meet relevant legislative requirements.  http://www.saskmining.ca/news/News/Main/Best+Management+Practices/news.html

• The SMA Exploration Committee has developed a Best Practice on Engagement with First Nation and Métis Communities.  It is intended as a practical guide on how to promote and sustain effective working relations with first Nations and Métis communities for companies conducting mineral exploration programs in Saskatchewan.

• The Exploration Safety Sub-Committee successfully hosted their second Exploration Safety Workshop in May 2010, with over 70 participants from a dozen companies in attendance.