(Mar14 Qtr data)
Australian metres of drilling per $1,000 of exploration expenditure has been declining over the past decade. This has been due to increasing costs of operations (for a range of reasons and input costs). In particular, drilling-per-dollar slowed markedly for ‘new’ deposits during 2009 (GFC-uncertainty), and has been at low levels over the past four quarters.
This most recent period reflects uncertainty from a number of directions, including global markets and domestic political risks.
I would like to say it has bottomed; but I need a bit more convincing.
Matau Advisory’s Commodity Review 20140606 contains expanded details of exploration expenditure from the March Qtr which is customarily the slowest quarter, due to northern wet seasons, and end of year and festive holidays. However spending has now slowed to 2006 levels. However the medium term (2015-16 and beyond) is encouraging, Spending needs to pick up in order to sustain a pipeline of projects capable of meeting new demand and replacing existing production as it runs down.
Refer to Matau Advisory’s 20140606 Commodity Review for more detail. (available by subscription https://www.dropbox.com/s/ztrq3uoh1d6l4eb/Commodity-Review-Subscription-Form-20140302.docx)