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MODERN MINING
September 2016
EXPLORATION AND
GEOSCIENCE
feature
A
s illustrated in the chart below,
the top gold producers have
shown a trend toward increased
mine-site exploration at the ex-
pense of grassroots exploration
over the past 10 years. From 2006 to 2015, the
share of total gold exploration budgets devoted
to near-minework rose from44%to 54%, while
the share allocated to greenfields programmes
decreased from 40 % to 22 %. In dollar terms,
Top gold miners
foregoing
early-stage exploration
Exploration budgets by
stage for top 20 gold
producers (US$M).
An analysis of the data compiled in SNL Metals &
Mining’s recently released profiles of the world’s top 20
gold producers reveals that the major gold miners have
significantly shifted their exploration focus over the past
decade. The profiles form part of the Strategies for Gold
Reserves Replacement study series of reports.
mine-site exploration’s lead over grassroots ex-
ploration jumped from a mere US$36 million in
2006 to US$470 million in 2015.
Since the total gold exploration budget of
top gold producers reached a high of US$3,01
billion in 2012, both grassroots and late-stage
budgets have fallen sharply, while the decline in
mine-site allocations has been much less steep.
The increased focus on mine-site work in
recent years has been due to the major produc-
ers spending more at and near their mines to
replace or increase reserves depleted by min-
ing and to develop new reserves more quickly
at lower costs by using existing infrastructure.
Gold Fields Ltd is a vivid example of this
trend, and has even admitted its lack of success
in greenfields exploration and in taking proj-
ects from initial discovery through construction
and into production. Despite having spent
roughly US$600 million on early-stage explo-
ration since the founding of the modern Gold
Fields in 1998, and despite the discovery of two
multimillion-ounce deposits, Gold Fields has
not taken a single project from discovery to pro-
duction, demonstrating how elusive greenfields
exploration success can be. As a result, the
company has made a strategic shift from capi-
tal- and time-intensive exploration-led growth
to a programme of brownfields exploration and
opportunistic, value-accretive acquisitions.
In late 2013, Gold Fields eliminated its
Growth and International Projects division and
announced a drastic cutback of its greenfields
exploration projects portfolio. Responsibility
for exploration was devolved to the group’s