[hr]Chairman of the Queensland Exploration Council, Geoff Dickie, spoke to Queensland Mining and Energy Bulletin about current exploration hot spots around the state, and why exploration is more important now than ever before.[hr]
With current commodity prices low and capital markets increasingly feeling the squeeze, what incentive is there for companies to invest in exploration in Queensland?
The resources industry is cyclical and for the last two years while commodity prices have been stable or falling, investors have been reluctant to invest in exploration for resources resulting in a bottoming out of financial indicators such as share prices and capital raisings. Companies who recognise this cyclicity can position themselves for a future upturn in the industry by exploring and making discoveries in this period.
Queensland’s prospectivity is being improved by advances in exploration techniques allowing explorers to better define mineral and energy targets and better drilling methods to test these targets. This is especially relevant in mineralised areas that are obscured by younger rocks or by weathering. Data from previous exploration is more readily available, exploration costs have fallen and more ground is being released which will allow companies to develop and test their concepts.
The recently awarded Queensland Explorer of the Year, Minotaur Resources, is a good example of a company who has taken the opportunity of low costs to get out in the field. They have had some very promising drilling results, and now have a joint venture partner putting $6 million on the table. That money will stretch much further at the current subdued stage of the resource cycle.
What is the QEC doing to promote exploration in the state?
The QEC is promoting exploration by attracting investors to companies exploring in Queensland, by advertising Queensland’s prospectivity nationally and internationally and by supporting research into exploration targets and techniques.
QEC organises Investor Forums on the last Tuesday of each month (5.15 – 7.00pm at the Polo Club in the city) where explorers can pitch their company’s prospects to audiences of about 100.
The Council has run successful Capital Raising seminars for the past two years, supported the annual Mining Conference in Brisbane and investor conferences at Noosa and the Gold Coast, and QEC sponsors put on lunch forums every two months for executives of Junior Exploration companies.
Internationally, the QEC co-sponsored, with Brisbane Marketing, a breakfast forum at the Prospectors and Developers Association of Canada in Toronto in March this year to showcase Queensland to North American investors and is considering how to participate effectively in Industry Conferences in Asia.
[hr]“The successes in the Cooper Basin in South Australia have encouraged explorers to take up ground in south west Queensland to test that part of the Basin.”[hr]
The Queensland Exploration Scorecard was launched in late October – what do you see as the ‘take-home’ message from the report?
This year’s Scorecard points out the substantial drop in the level of exploration expenditure for minerals and coal in Queensland (as in many other states and countries) with a small drop in petroleum and gas expenditure. There are similar reductions in share prices and consequently, equity raisings, in mining jobs and training, and in the area covered by exploration tenure. So the industry is at a low ebb, but there was a moderate to significant improvement in explorer sentiment in relation to government/departmental assistance, pre-competitive geoscientific data, policy uncertainty and exploration permit processes. This improvement is a response to the Government efforts to reorganise Queensland’s Department of Mines (DNRM) as an economic development agency with a focus on reducing process times and meeting client needs.
However, explorer sentiment in Queensland remains doggedly negative, and lagging the rest of Australia in regulations covering cultural heritage, Native Title and environment; conduct and compensation agreements, and land availability. The Scorecard points to the ways in which the Government can continue its efforts to upgrade Queensland’s position in global exploration.
Which mineral or resource is generating the most buzz in Queensland’s exploration sector currently?
Gas from coal seams or from shale is probably the hottest exploration play at this time as the LNG plants prepare to export large quantities of gas and the domestic market is tightening. The successes in the Cooper Basin in South Australia have encouraged explorers to take up ground in south west Queensland to test that part of the Basin. But there are other hot spots like the Georgina Basin south of Mount Isa and older rocks towards the Gulf.
One of the projects that industry proposed to the Geological Survey, and was funded in the Government’s Future Resources Program, was to test samples from a number of sedimentary basins in Queensland for the capability of generating shale gas that could ultimately be drilled and produced.
On the minerals side, the combination of copper and gold continues to attract exploration funding and there have been some attractive discoveries in the Cloncurry area. Zinc is predicted by many analysts to have a strong price future but coal is very much in a holding pattern.
The north west of the state seems to be the exploration hot spot at the moment – what work in this region excites you the most?
There are two minerals exploration projects that have generated a lot of interest in the north west and they have been awarded Explorer of the Year for the past two years. Last year, Red Metal drilled a lead- silverzinc prospect near Cannington mine, which returned impressive assays and they have recently resumed drilling and we expect more results before the end of the year. This year Minotaur announced exciting copper and gold results from their Artemis prospect near the Eloise mine and they will continue that drilling into the new year. Both of these discoveries are in ground where there is no surface expression of this mineralisation and have been targeted using geophysics and geochemistry. And there are many other companies testing these hidden targets, indicating that the potential of the northwest is still very high.
As well, there are the Merlin molybdenum-rhenium deposit and the Rocklands copper project moving towards production decisions, which will broaden the base of mining in the area.
Geoff Dickie is the Chair of the Queensland Exploration Council (QEC). Launched by the Queensland Resources Council in October 2010, the QEC aims to have Queensland acknowledged as the minerals and energy exploration leader by 2020 and with Brisbane confirmed as its heart.
With membership comprising a who’s who of the resources sector, together with members drawn from finance, events and marketing, research and government, the QEC endeavours to influence perceptions about the importance of exploration, and promote Queensland’s prospectivity to investors and businesses that support the exploration sector.