With odds of only 1 in 3,000 discoveries leading to mine development, and only 10 percent of the world’s gold deposits containing enough gold to mine, how do explorers choose new targets to explore?
There are two ways of finding sizeable exploration targets in our industry:
1) The Elephant Country Strategy
Your best chance of discovering a ‘jackpot’ deposit is by exploring in an area which is known to have world-class deposits. An example would be the Golden Triangle in British Columbia. This region is home to a number of large gold and copper-gold deposits, including Pretivm’s Brucejack gold-silver mine and Imperial Metal’s Red Chris copper-gold mine.
There are some benefits to adopting the “Elephant Country” strategy:
● The presence of large deposits means the probability of other deposits is high
● There are existing mineral exploration models and regional government data sets to aid exploration
● There is existing infrastructure, which lowers the economic threshold required to make a discovery into a mine
The Elephant Country approach requires a company with regional expertise, ﬁnancial capability and commercial skills to acquire ground in a highly competitive area.
2) First Movers
A first-mover strategy focuses on underexplored areas with few, if any, discoveries but with the right rocks and indicators that a mineral deposit could be there. Exploration risk is much higher, as there is no proof from existing mines or deposits, but initial discoveries often turn out to be the largest deposits in these unexplored or underexplored regions.
This strategy has a different set of benefits, including:
- the opportunity to acquire a “district-scale” (large) land position given the absence of existing mines/deposits and reduced levels of competition
- the development of a proprietary regional exploration data set that can be used to make additional discoveries in the event of an initial one
The key driver for the First Mover (or Fast Follower) strategy is high-calibre conceptual targeting at the global to province scale to recognise the geological opportunity in an immature terrain.
For both approaches, size is crucial. Large mineral deposits generally tend to leave large ‘footprints’ - like altered rocks, or mineral showings, that indicate a large mineral system.
At Evrim we undertake both exploration strategies, depending on the terrane.
For example, we have adopted the “elephant country” strategy in our Ball Creek project in British Columbia. Ball Creek was a timely acquisition in a region with demonstrated mineral endowment and continuing discoveries.
On the other hand, we adopted the “first mover” strategy in our exploration alliance with Newmont Mining (now Newmont Corporation) in the search for Carlin-type gold systems in the Mackenzie Mountains of the Northwest Territories. The generative program led to the discovery of gold skarn and intrusion-related gold mineralization that is now Evrim’s Astro gold project.
Astro Project, Northwest Territories
The ‘Explorability’ Challenge
Most of our partners are mid-tier or major mining companies. When we develop exploration projects, we keep our partner’s exploration objectives and size thresholds in mind. The main challenge is that most of the low hanging fruit is gone, and it is getting harder and harder to find new mineral deposits, let alone large multi-million-ounce ones.
Most producing companies look for at least 1 or 2 million ounces of gold (about 200,000 ounces mined a year, over a decade) or 500,000 tonnes of copper, along with decent grades. Sometimes, small deposits may be considered if the grade is high and the initial capital investment is modest.
The Ermitaño project, which was owned by Evrim and then acquired by First Majestic Silver, is a high-grade gold-silver deposit. The project is located a mere 4 kilometres away from First Majestic’s Santa Elena mine, which means they can use their existing mill and infrastructure to develop Ermitaño. Ermitaño is expected to displace the current feed from the old heap pads which is low grade and currently makes up approximately 40% of the feed to the mill*.
Finding a mineral deposit close to an existing mine is difficult, as most areas of interest around mines are claimed by the mine owners themselves or the minerals may just not be there. Evrim acquired Ermitaño in an area with demonstrated copper and gold endowment during a downturn in the industry, an example of exploring in elephant country.
The partner system: teaming up for exploration
As a mineral explorer, we use tools and technology that are available throughout our sector. Part of the value of partnering with larger companies comes from the sharing of their proprietary technology and the opportunity to work with specialists in the fields of geochemistry, geophysics, and remote sensing to name a few.
For example, working with Newmont Corp. gave Evrim access to the company’s Bulk Leachable Extractable Gold (BLEG) sampling and processing methods to efficiently screen large areas for gold and copper anomalies.
Getting funding from joint venture partners allows Evrim to reduce its cost of exploration and to avoid raising capital as often as other junior companies that choose to explore on their own. Evrim’s prospect-generator business model spreads exploration risk across a portfolio of exploration properties and provides access to unparalleled expertise and proprietary technology through partnerships with mid-tier and major mining companies.
Mexico Country Manager Aaron Huguez at the Sarape Project
J. M. A. Hronsky & D. I. Groves (2008) Science of targeting: definition, strategies, targeting and performance measurement, Australian Journal of Earth Sciences, 55:1, 3-12, DOI: 10.1080/08120090701581356
* Metal prices used by First Majestic for mineral resource estimates were US$18.50/oz silver and US$1,450/oz gold