Global exploration challenges persist for mining juniors amid funding decline

S&P Global’s (NYSE:SPGI) latest World Exploration Trends 2024 report paints a pessimistic picture for listed mining juniors. 

With exploration funds raised down 10% year-over-year to $5.38 billion in 2023, the industry continues facing challenging times in a tough financial environment. 

S&P Global says 2024 is expected to be another year of stagnation for drilling activity as the financial outlook for juniors remains uncertain.  

Exhibitors at this year’s Brisbane Mining and Investors Conference, which comprised a suite of junior explorers across a range of commodities, know all too well the difficulties of such a volatile market. 

Speaking to on the sidelines of the conference, Great Boulder Resources (ASX:GBR) Managing Director Andrew Paterson said the company is looking to hang on to its current cash balance to get the “best bang for its buck” amid a lack of confidence in explorers by investors in the gold space. 

We are mainly drilling aircore because it’s cheap and testing all these new targets,” Paterson says.

“What we expect to see from that is a string of new discoveries. And what we would like to see is that sentiment turn around so that money comes back into the exploration space and we can then accelerate our program. We could drill two or three times faster than that if the conditions were right. 

“It’s a compromise between making these new discoveries as soon as we can but also being cautious of where the economy goes.”    

Global exploration funding slipped 3% to $11.62 billion in 2023 after hitting a 9-year high of $12.07 billion in 2022, and a far cry from the $21.65 billion raised in 2021. 

The decline is testament to macroeconomic headwinds and geopolitical tensions, which took their toll on global exploration as metal prices fell from their highs and companies dependent on the capital markets encountered a tougher financing environment. 

In parallel with the fall in global exploration budgets, junior explorers’ budgets declined to $5.36 billion last year, a 5% year-over-year drop.

S&P Global Commodity Insights Research Director Kevin Murphy says it was in Australia and Canada where juniors bore the brunt of this reduction. 

“The junior sector is reliant almost entirely on financing markets to fund their programs. When these underwhelm, they are forced to reduce activity.”

Impact on exploration

A total of 53,582 drillholes were reported at 1,515 projects — marking declines of 23% and 13%, respectively, from 2022 — with primary gold projects continuing to make up the majority of projects reporting. Of the more than 53,000 holes drilled, just over half were generated from primary gold projects. 

However, this represents the third year of gold’s share of total projects decreasing. The total drilled holes in gold projects saw a steep decline, dropping to 30,345 from 47,121 in 2022 — a 36% drop — cutting gold’s share in the number of drilled holes to a record low of 57%.  

On the other hand, special commodity drilling continues to trend higher, thanks mainly to a surge in activity at primary lithium projects. 

In 2023, drilling within lithium projects witnessed a 75% increase to an all-time high of 156 from 89, and more than doubled in holes drilled to 5,202 from 2,420. Special commodities as a whole increased 47% and 50% to 265 projects and 8,200 drillholes, respectively. 

Meanwhile, base metal projects, including nickel and minor base metals, reached record-highs with 131 and 56 projects, respectively. 

On the contrary, copper projects fell 23% to 228, lead-zinc dropped 10% to 107, platinum group metals decreased 55% to 10, and silver fell 34% to 83. 

In terms of holes drilled, lead-zinc recorded an all-time high of 3,099 holes despite a drop in project reporting, and minor base metals increased to 6% to 809 over 2022. 

Although nickel projects peaked in 2023, the number of holes drilled fell 17% to 2,363 while copper dropped 16% to 5,025 and silver dropped 16% to 3,316 and PGM fell 60% to 425. 

Murphy adds it is lithium, as well as an interest in critical minerals, which kept the decrease from being as large as originally expected.

What’s more, although metal prices for lithium, nickel, and copper are expected to be unspectacular in 2024, this interest in critical minerals, particularly battery metals, should insulate them for any significant decreases and make them more likely to increase. 

Top performers

Overall, the top 4 countries to hold their ranks in terms of projects reporting results include Australia with 486 projects, Canada with 426, the US with 179, and Mexico with 52.

In Australia — which has remained the third-most desired exploration region — the amount of projects dropped 12% from 552 and ranks in the top spot, a position it has maintained since 2017. 

Canada, like Australia, has seen a decline in projects, with a 10% decrease. However, thanks to two years of above-average growth prior to 2023, Canada still holds the top country spot and second place in regional ranking. 

The country was also home to the most junior explorers, which ultimately cushioned this blow, coupled with ‘strong’ year-on-year budget growth among the majors with a 9% increase.  

Meanwhile, the US also saw a 9% decrease in its total projects.  

However, it is in the US where S&P Global Commodity Insights Senior Analyst Sean DeCoff says budgets have increased since 2017 and are only $50 million shy of the all-time high of $1.67 billion recorded in 2012. 

In 2023 exploration budgets increased 1% to $1.62 billion. 

Mexico brought up fourth place despite a whopping 29% decline in its projects.

Outside of these 4 countries, S&P notes Latin America continues to attract the largest share of the global exploration budget, as it has done since its CES began. 

The region’s budget was up 2% year-over-year to $3.38 billion, with Chile, Argentina, Colombia, and Guyana contributing the most to the region’s performance, although declines in Peru, Ecuador, and Nicaragua limited the gain.  

Write to Adam Drought at

Images: Epiroc
Author Image
Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.