Mining Exploration: Australia and Gold Lead The Way
By Joe Foster, Portfolio Manager and Strategist, VanEck
The Mining Journal reported S&P Global Markets estimates for 2019 exploration spending. Australia is now the top country in the world for exploration, followed by Canada and the U.S.
Gold remains the leading metal with $4.29 billion allocated towards exploration—down 12% from last year despite the jump in the gold price. As well, this is actually the first year that mine-site, or “brownfields”, budgets have accounted for the largest share of exploration spending, with past spending results typically dominated by new, or “greenfields,” exploration.
We believe that this reflects the current strategy of many producers to focus on getting more from their existing assets to create value organically, rather than building in new areas. While this strategy is working quite well, we believe that it has its limits and that, eventually, companies will need to increase their greenfields efforts or engage in mergers and acquisitions (M&A).
About the Author:
Joe Foster has been Portfolio Manager for the VanEck International Investors Gold Fund since 1998 and the VanEck – Global Gold UCITS Fund since 2012. Mr. Foster, an acknowledged authority on gold, has over 10 years of dedicated experience in geology and mining including as a gold geologist in Nevada. He has appeared in The Wall Street Journal, Financial Times, Barron's, and on Reuters, CNBC and Bloomberg TV. Mr. Foster has also published articles in a number of mining journals, including Mining Engineering and Geological Society of Nevada.
The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.