Prospection and exploration are the first steps in the life cycle of a greenfield mine. These are overlapping stages which take years, and if successful, gradually evolve into development. A typical process takes 2 to 8 years, but sometimes, the process is halted, e.g. for lack of finance, a change in political climate or a market cycle, to be resumed later.
For greenfield exploration, one seldom sets out to discover copper specifically. Prospectors search for valuable minerals. However, striking copper is never bad news, especially if it comes with some of copper's typical byproducts such as Ag, Au or Mo.
Exploration takes place in both existing and new locations. For new locations, particularly in remote areas, the licencing process is somewhat easier, but exploration and development are more expensive. Once an asset moves from development into production, (brownfield) exploration remains a continual process to find new areas to extract within a deposit.
Prospection starts with an idea, a theory, followed up by satellite imaging, drone photography or Landrover exploration. It may be followed by geophysical and geochemical analysis, then by a drilling programme. Exploration creates vast amounts of data put in 3D maps to identify areas of interest.
Prospection is highly risky business. Less than one in a hundred geochemical explorations eventually develops into a mine. When starting from Landrover exploration, the ratio is probably closer to 1/1000. Throughout the process, investment decisions are made to proceed or not.
ICA members have their own prospection/exploration departments, but they also partner with junior miners who develop prospection portfolios. In many cases, a junior miner will sell its project to a mining company for development. Sometimes junior miners further develop the project themselves, sometimes, they enter into joint-ventures with partners to cover capital and expertise needs.
The goal of exploration is to determine the size and value of a deposit, and what it will cost to mine it. Exploration requires a licence which is time-limited ("use it or loose it"). Exploration involves a drilling programme to take multiple samples in different places at different depths to classify the mineral resource from inferred to indicated and measured. The part of the resource that can be mined economically is the ore reserve.
Investment levels increase significantly as exploration proceeds. The whole exploration cycle can cost 0.5 ... 15 M$. The economics are 0.5 … 2 $ return to the dollar invested. Drilling a borehole in the Arctic or the Atacama desert costs around 100,000 $. Drilling programmes in sedimentary rock (e.g. Lubin) are substantially more expensive (up to 1 M$/hole). The number of holes depends on the geometric form, spread and size of a deposit. Soft rock leads to open pit mining, hard rock to underground mining. Depth is another factor - open pit is used for shallower deposits up to a few hundred meters. Below one km depth, mining will be underground. Demand for a mineral in 2, 5 and 10 years is a key factor for the investment decision. Considering the risk, junior explorers pursue a portfolio approach.
There are daily online reports on exploration results which vary from a general idea to an investment-grade report on the results of a drilling programme. Considering the high risks and the amounts of capital involved, the reporting of exploration results is highly regulated through standards or codes of conduct. The JORC code is used in the Eastern hemisphere (Australia, Asia), whereas the Canadian Institute of Mining publishes National Instrument 43-101. Additional codes are available in mining countries such as South Africa, Russia and Poland.
The final outcome of exploration is a feasibility report. Development of a project typically requires 10 to 20 k$ investment per tonne of annual copper production leading quickly to multi-billion $ investments. The feasibility report includes an environmental and community impact assessment.
- Superfund Research Center: Copper Mining and Processing (checked January 21, 2022)
- E-learning course: the business of mining (checked November 24, 2021)
- Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 edition (checked December 22, 2021)
- National Instrument 43-101 Standards of Disclosure for Mineral Projects, 2016 edition (checked December 22, 2021)
Last udate: January 21, 2022