Explorers are increasingly turning to historical exploration data to save themselves from rising costs as they try to capitalise on the resources boom.
Explorers are increasingly turning to historical exploration data to save themselves from rising costs as they try to capitalise on the resources boom.
While a large amount of this data has been available for some time, modern technology is allowing fresh geological and feasibility interpretations.
Joint access to Sipa’s vast mineral database, in which Sipa’s exclusive consultant Alfred Eggo will play a crucial role, is considered a major part of an exploration alliance signed in June between junior explorer Sipa Resources and the world’s largest gold miner, Newmont Mining.
Sipa has been busy acquiring publicly available and proprietary data over the past five years and now has one of the largest databases in the country. The investment will be the way forward for many explorers, according to Mr Eggo.
“The system could potentially save Sipa tens to hundreds of millions of dollars in making decisions, it’s hard to estimate,” Mr Eggo said.
Well known for his expertise in the compilation and interpretation of large geological databases, Mr Eggo will play a key role as Sipa looks to capitalise on its alliance, which makes provisions for Newmont to fully fund Sipa until a decision to mine is made.
Mr Eggo said that while most of the data was publicly available through government-owned data-bases, the benefits accrue through the combination of various types of information.
“The competitive advantage lies in what we think we can do with the data,” he said.
Mr Eggo added that others had similar-sized data sets, but that even Newmont, with its considerable resources, was surprised by Sipa’s system.
Recently-listed lead hopeful, Abra Mining, is another to utilise the tool, using data from drilling done in 1981 by Geopeko at its namesake deposit north of Meekatharra. Abra has recently assembled its exploration data onto a digital Geological Information System for the first time, allowing it to view the deposit in a new light.
Abra managing director David Blight said the company’s system was capable of overlaying more modern satellite and other topographic images onto the older results, in order to gain a better understanding of the ore body. This technique also made for new angles on feasibility, he said.
“The real skill is in how you interpret the data,” Mr Blight said.
“It will save us in the order of about $12 million in exploration costs.”
With the resources boom in full swing, drilling contractors’ costs have risen between 20 and 25 per cent in the past two years, according to some estimates, attracting interest in alternative consulting services, including electro-magnetic and other surveys to complement drilling cores, considered the most reliable exploration information.
The cost hike has prompted junior players to explore alternative methods of exploration, inciting resource revisions.
A dramatic example of a company benefiting from historical drilling is South Australia’s Marathon Resources, which last week posted a resource increase at its Paralana uranium prospect in South Australia, on the back of historical data from the 1960s, announcing a JORC compliant resource it says comprises over 33,000 tonnes of uranium ore.
Marathon shares jumped 106 per cent on the news to 79.5 cents.
Glengarry Resources, a locally-based uranium explorer, last week reported results of exploration completed in the early 1980s at the Gregory prospect, by Afmeco in Queensland.
And with the recent sell-off of WMC Resources’ exploration ground in the Kambalda area, older data has more noticeably proved invaluable to buyers.
Sally Malay Mining and Donegal Resources last year bought the Lanfranchi nickel deposit from WMC, which ceased mining in 2002.
The joint venture partners have benefited from exploration done by the previous owner, allowing for a rapid resumption of mining activity at the ore body.
As well, government ground surveys are proving a valuable tool for explorers, as increasing amounts of data become available digitally.
This comes after a decision five years ago by the state geological survey bodies to place all their data onto a single web portal system.
This has improved accessibility of the information, according to Mr Blight, a former director of the Geological Survey of WA.
