PERTH (miningweekly.com) – Greenfield exploration in Australia rose to its highest levels since 2012, the Australian Bureau of Statistics (ABS) showed on Monday.

Greenfield mineral exploration reached A$1.2-billion in 2021, the highest since the A$1.12-billion achieved in 2012.

“Total Australian mineral exploration expenditure fell in the final quarter of 2021 following 12 months of strong growth. The ongoing challenges of Covid-19, heightened by the omicron outbreak, continued to impact industry’s ability to access tenements and sufficiently resource projects,” Association of Mining and Exploration Companies (Amec) CEO Warren Pearce said on Monday.

Mineral exploration expenditure in Australia for the December 2021 quarter was 4.4%, or A$44.3-million, lower than September 2021. 

Mineral exploration expenditure in the December 2021 quarter was A$953.3-million, 23.8%, or A$183-million, higher compared to the December 2020 quarter, while greenfield expenditure fell to A$305.9-million, from the A$338.3-million in September 2021, and brownfield exploration expenditure declined by 1.8% to A$647-million, from the A$659.3-million in September 2021.

Greenfield and brownfield expenditure for the December 2021 quarter was higher than the previous year. Greenfield expenditure in December 2021 was 24%, or A$59.3-million, higher than the December 2020 quarter, and brownfield was 23.7%, or A$124-million, higher than December 2020. 

Metres drilled for greenfield exploration slipped by 17% while brownfield grew by 10.3%. The largest increase of minerals sought came from expenditure on silver, lead and zinc up 22%, or A$4.3-million, to A$24.3-million, followed by selected base metals up 12%, or A$28.6-million, to A$265.4-million.

This quarter, total expenditure grew in Victoria by 31%, South Australia by 41%, Tasmania by 6%, and the Northern Territory by 10%. New South Wales exploration remained steady at A$75.5-million, Amec said.  

Total expenditure fell in Western Australia by 9% and in Queensland by 8%.

Amec noted that the expenditure increases in South Australia could be largely attributed to increases in copper and selected base metals exploration, while gold rose in Victoria. Western Australia, despite recording a fall in exploration for the quarter, had record yearly exploration expenditure for both greenfield, of A$779.2-million, brownfield, of A$1.572-billion, and overall, at A$2.352-billion, in 2021. 

Pearce noted that although total mineral exploration declined in the quarter, national exploration expenditure is the highest it’s ever been for copper at A$172.1-million, selected base metals, at A$265.4-million, and mineral sands, at A$14.1-million, in December 2021.

Nationally, gold exploration fell 6% in the quarter to A$393.3-million. The record for gold exploration was in June 2021, at A$429.8-million. Amec noted that gold exploration expenditure was at a record high for the year 2021 at A$1.6-billion.

“We are still in a period of heightened demand, and the commitment to mineral exploration remains the focus of our industry. Continued investment is needed to find the mines of the future and unlock the jobs and growth still waiting to be discovered,” said Pearce.

The ABS statistics echo findings by advisory firm BDO, which found that exploration expenditure by Australian-listed explorers reached an eight-year high of A$973-million in the December quarter of last year, driven by an increased number of new entrants through initial public offerings and an increase in average exploration spend by companies.

Larger investment spends were observed to be undertaken by lithium exploration and development companies primarily in relation to the acquisition of new exploration assets, infrastructure and plant and equipment.

BDO analysis noted that Australian-listed explorers sourced A$3.75-billion of funds in the December quarter, 47% higher than already record levels witnessed in the last two quarters, with battery minerals continuing to be a key investor focus.

“Despite the spike in cash outflows, the cash position of the sector continued to remain the strongest it has been since the commencement of our analysis in June 2013. Eighty-eight per cent of exploration companies reported cash balances of A$1-million or more and further analysis showed that the number of cash balances greater than A$4-million has been growing over the last eight consecutive quarters. This was supported by a A$3.75-billion financing inflow into the sector through equity and debt raisings,” BDO said on Monday.

Consistent with the trends observed in previous quarters, BDO noted that the top four largest exploration spends in the December 2021 quarter related to gold companies, mainly large-size development companies or reporting early-stage producers.

The remaining six companies comprised five oil and gas companies and one nickel/copper explorer.

“We expect that the growth in exploration activity will continue in light of strong cash positions and the higher number of listed exploration companies, but note that this growth may continue to be constrained by the availability of resources, travel restrictions and a shortage of skilled labour,” BDO said.