The state of African mining - Chris Hinde, Editorial, Director, IntierraRMG
27
Presenter: Chris Hinde / Glen Jones Research: Jeremy Thompson [email protected] Mining On Top: Africa – London , 25 June 2013 State of the Market State of Africa Mining
-
Upload
mining-on-top -
Category
Business
-
view
438 -
download
0
description
The state of African mining Speaker: Chris Hinde, Editorial, Director, IntierraRMG Mining On Top: Africa - London Summit 25-26 Jun 2013 | London
Transcript of The state of African mining - Chris Hinde, Editorial, Director, IntierraRMG
Presenter: Chris Hinde / Glen Jones
Research: Jeremy Thompson [email protected]
Mining On Top: Africa – London , 25 June 2013
State of the Market State of Africa Mining
Leadership: Over 30 years of providing mining information
(through two databases, consultancy, maps, conferences/
seminars and published reports)
Information: Lease locations and ownership, company
intelligence, drilling data, project pipeline, due diligence
reports, production statistics, finance and M&A activity
Reports: Quarterly examination on trends in exploration,
mine development and metals production, analysis of the
market and financing, and expert comment on the industry
Disclaimer:
IntierraRMG makes reasonable and diligent efforts to obtain accurate information for our clients and presentations. No warranty, expressed or implied is made regarding the accuracy, adequacy,
completeness, reliability, or usefulness of any information contained herein. Neither IntierraRMG nor the contributors of data to this presentation shall be held liable for any improper or incorrect use of
the information contained herein and assume no responsibility for the use of the information.
About IntierraRMG
• Global
Overview
• Africa
Exploration
Development
Production
Outline
By the end of the March quarter, the mining industry
had found itself between a rock and a hard place:
Rock: Falling metals prices, with little prospect of an
early recovery because of lacklustre demand.
Hard Place: Pressure on operating costs and a
heightened threat of resource nationalism.
Problems compounded by the restricted supply of
finance, especially for mineral exploration.
Disclaimer:
IntierraRMG makes reasonable and diligent efforts to obtain accurate information for our clients and presentations. No warranty, expressed or implied is made regarding the accuracy, adequacy,
completeness, reliability, or usefulness of any information contained herein. Neither IntierraRMG nor the contributors of data to this presentation shall be held liable for any improper or incorrect use of
the information contained herein and assume no responsibility for the use of the information.
State of the Market: Mining
Base Metals Gloom (but Gold OK)
0
100
200
300
400
500
600
700
800
900
1000
REA
L (£
/oz)
|----100 years---|
Gold at record real-price
of over £1,000/oz
Gold floods into Europe
from Spanish conquests
in 16th century, causing
inflation spiral
1489: Royal Mint issues
Sovereign (£1 = 0.5oz)
1717: Isaac Newton
fixes £1 at 0.235oz
USA discovered (1492)
All-Time High For Gold
Prices Stall for Coal, Iron and Copper
Mid-2012 Prices MINED
(‘000t)
PRICE
(US$/t)
VALUE PA
(US$ bn)
Coal 7,700,000 90 693
Iron Ore 1,980,000 120 238
Gold 2.57 51,440,000 132
Copper 16,300 7,500 122
Bauxite 203,000 350 71
Nickel 1,400 16,400 23
Zinc 12,000 1,900 23
PGMs 0.38 38,560,000 15
Diamonds 0.032 350,000,000 11
Lead 4,000 1,900 8
Top Ten Total 9,916,700 (134) 1,336
Shape of an Industry
Drilling Trends
17 month decline
Drilling Reports
Drill Announcements Mar Q 2013 Dec Q 2012 Mar Q 2012
Gold Prospects 651 702 1,119
Copper Prospects 192 238 315
Silver Prospects 154 174 274
Zinc Prospects 63 72 104
Reported Ore Reserves (contained metal)
Metal Deposits Mar Q 2013 Dec Q 2012 Mar Q 2012
Gold (‘000oz) 23,752 15,665 50,059
Copper (‘000t) 1,110 5,239 8,537
Silver (Moz) 574 469 309
Zinc (‘000t) 2,264 872 1,901
Copper/Gold Open-Pit Developments
Copper and gold deposits that have received a capital expenditure
forecast (during the past two years) for an open-pit development
Metals M&A Activity
Metals Deals: US$11.9
billion in March quarter
(US$14 billion in Dec Q)
An Industry Devalued
20 month
decline
6 month
recovery
Copper Discovery Rates
Average
Feasibility
Study Grade
Gold Discovery Rates
Average
Feasibility
Study Grade
Funds Raised (US$m)
Company Size (US$m)
Q1 2013 Q4 2012 Q1 2012
<10 Market Cap 246 179 593
10 – 49 537 954 1,181
50 – 100 301 498 1,182
>100 4,075 5,137 2,914
Total 5,159 6,768 5,870
Explorers 1,451 3,405 3,418
Producers 3,710 3,364 2,454
Falling total, and
smaller share
End-2012 corporate cash holdings of US$300 billion
(under US$15 billion of this held by explorers)
Regional Spending
Operating Costs Held at Base Metals Mines
Up only
12% on
2008
But Costs Soar at Gold Mines
Up 62%
on 2008
Africa Focus
• Prospecting
• Sampling
• Exploration drilling
• Resource definition drilling
• Surveying
• Preliminary metallurgical
African Exploration
Exploration Capital Raisings
2 Year Total US$ 829M
West Africa, $341,438,000
Other Africa, $338,736,000
Southern Africa, $148,641,000
41%
41%
18%
Exploration Capital Raisings
56.4%
7.9% 7.9% 6.3%
2 Year Total US$ 829M
5.1%
Drilling Activity - Africa
• Exploration activity significantly decreased
• New or expanded resources at risk
• Africa has significant future in resource
development
• Must overcome many of the issues discussed
in the next two days
Conclusions
Thank You
Inquire about subscription to:
• State of the Market – Africa
• State of the Market – Mining and Finance
• State of the Market - Exploration
• IntierraRMG data base
Sponsorship of:
• Africa series of maps
• Africa Mines and Deposit map
