BHP to mine new technology for ‘golden age’ of discovery

The global mining sector is on the cusp of a new ‘golden era’ of discovery, BHP’s new exploration boss says.

BHP exploration boss Laura Tyler believes harnessing new technology will lead to a new ‘golden age of discovery’.

The global mining sector is on the cusp of a new “golden era” of discovery, BHP’s new exploration boss says, as figures show Australia’s junior resource companies raised more than $2.2bn on capital markets in the December quarter, the best result since the height of the boom.

Accounting firm BDO will release its quarterly cash flow financing report on Australia’s junior explorers on Thursday, showing the capital markets delivered their biggest haul to junior explorers since 2013 after raising $2.21bn in the last three months of 2020.

The BDO report notes that the sector’s financing cash inflows this quarter were 72 per cent higher than the six-year average of $1.28bn.

The December quarter cash rush was partly fuelled by the 20 resources floats that got away in the period, and came after junior resources plays raised $2bn in the September period, leaving them in the best financial position since the boom.

The new figures from BDO come as BHP exploration boss Laura Tyler signals the top end of town is getting back into the exploration game in a serious way, with BHP set to expand its exploration footprint across the world, and base exploration teams on the ground in new offices in Toronto, where BHP will base about 50 people to lead its global exploration efforts.

Speaking to delegates at Canada’s Prospectors & Developers Association of Canada annual conference on Thursday, Ms Tyler said BHP was in the process of refocusing its global exploration efforts by merging the expertise of its minerals explorers with that of its own petroleum division.

“Technology will be key to enabling this, and provides a path into a far more optimistic part of my talk,” she said.

“The majority of the exploration industry thinks that the golden age of discovery is behind us. That industry belief was based on using technology geared to at-or-near surface discovery. However it is my belief that the golden age of discovery is ahead of us.

“Why? Because by harnessing technology we can make the Earth at 400 metres depth as transparent to exploration as the surface of the Earth is today.”

Ms Tyler pointed to BHP’s emerging Oak Dam discovery in South Australia, discovered by analysing data gathered on the similar mineral system at its nearby Olympic Dam mine, as the template for the company’s approach to finding new discoveries.

But the BHP exploration boss told delegates even exploration activities were now likely to be seen through the light of growing investor pressure over climate change, the need to take more care around Indigenous heritage issues, and a renewed focus on water management.

“High-quality copper is becoming harder to find and extract,” she said. “As grades decrease, strip ratios rise and deposits get deeper, more water and energy is required for the same amount of copper output.

“In order to fully seize the opportunity to be part of a sustainable future we need to minimise our material and environmental footprints. Our focus must be on high-quality resources defined by more extractable metal per kilowatt hour and ton of water. This must now be a key consideration in the exploration and evaluation phase: we must find resources that can become mines, and operate feasibly under higher sustainability standards.”

Ms Tyler said BHP was “open for business” with exploration juniors, flagging an increased focus on partnering with both smaller explorers and technology companies to increase the pace of discovery.

And those potential partners in Australia are well cashed up, according to BDO’s latest research, with the 78 per cent of the 656 companies that lodged quarterly cash flow reports on the ASX carrying a cash balance above $1m, and average cash balance across the group of $8.28m, 29 per cent above the two-year average of $6.44m.

BDO global head of natural resources, Sherif Andrawes, said the latest analysis delivered positive signals for Australia’s exploration sector, with the strong uptick in financing for explorers in 2020 finally flowing into spending on the ground.

“Net investing cash outflows increased by 325 per cent from the September 2020 quarter to a two-year high of $536m. Exploration spending followed suit with a 36 per cent increase to $587m,” he said. “We had anticipated a strong December quarter after observing that a number of explorers in the September quarterly activities reports had stated that drilling and exploration programs were planned for the December 2020 quarter. It is positive news that these planned activities went ahead.”

Originally published as BHP to mine new technology for ‘golden age’ of discovery