Exploration

 

 May 2009

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.

• To be a sustainable industry, mining companies need to identify new resources to replace the ore that is mined out.

• The length of time to bring an exploration discovery into production is constantly increasing and currently averages 10 to 20 years.

• Because mineral components are found in almost all consumer goods, mining will continue to be a dominant industrial sector in our global economy.

• Growth in the economies of many developing countries is causing an increasing demand for many metals and minerals.

• Exploration is the search for new economic sources of minerals most of which are now buried deep beneath the surface of the earth.

• 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.

• Exploration requires patience and persistence as fewer 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 typically 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. Again, extensive computer processing and careful scientific interpretation is needed to find out what lies beneath the surface.

• These early stages of exploration generally have little or no lasting impact on the land.

• If enough evidence is found to indicate that an ore deposit might be present, drilling equipment is often 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.

• Protection of the environment starts right at the beginning of the exploration cycle.  As the exploration work becomes more involved the proponents may be required to make environmental impact submissions.

• Right from the first phase of exploration proponents require a variety of permits before undertaking any activity.

• The most significant disturbances caused by exploration are access roads; these are either retained for future use by local residents, or reclaimed.

EXPLORATION EXPENDITURES

• Exploration expenditures in Saskatchewan reached a record $474 Million in 2008 including $204.4 M for uranium, $73. 2 M for diamonds, $8.9M for gold, $6.8 M for base metals, and industrial minerals including potash, clays, coal and rare earth elements totaling $181.7 million.

• Exploration Expenditures in 2009 are expected to be reduced to approximately $244 Million, reflecting the junior mineral sector’s difficulty in raising financing on the equity markets.

• In 2009 exploration for industrial minerals, including potash and coal, will overtake both uranium and diamonds to become the focus of mineral exploration in Saskatchewan.

• In the past 3 years, over $1 Billion has been invested in mineral exploration in Saskatchewan, primarily for uranium.

• Exploration expenditures in 2007 were $277 million. Uranium accounted for 54% of total exploration expenditures, diamonds for 28%, and 6% for gold, base metals, and REE.  Potash exploration, which has previously been virtually non-existent 2 years earlier has escalated to almost 12% of the total expenditures.

• Saskatchewan ranked #1 in Canada in terms of greenfield exploration expenditures for both 2006 and 2007 (18%) compared to 6th place in 2004 (6%).

• Potash exploration continues, fueled by growth in the fertilizer industry.

• Over 16 million hectares (25%) of the province is being explored for its diverse mineral potential.

• 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. The diamond exploration is currently being focused on an area east and northeast of Prince Albert. The 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.

 

• 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.

• 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.

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

• Given the demands for trained field staff in the exploration sector SMA representatives, in conjunction with government officials designed a Mineral Exploration Technician Training course which was offered in the fall of 2005 at the Key Lake site.

• New discoveries act as a magnet to attract new exploration activity. A strong exploration sector is fundamental to ensuring growth of this important sector of our provincial economy.

• The Exploration Safety Sub-Committee successfully hosted their first Exploration Safety Workshop in May 2009, with over 120 participants from a dozen companies in attendance.