9/6/23
Introduction to
Exploration
Economics
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SAFETY SHARE
Ø 90 seconds
Ø Hero’s journey
Ø Focus on exploration
Ø Find an economic rift and
tie it to your project
https://w w w .flickr.com /photos/m ediaclubsouthafrica/
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LAND ACKNOWLEDGEMENT
Title matters
BRIMM’s offices are on the traditional,
ancestral, and unceded territory of the
Musqueam people
https://w w w .flickr.com /photos/o_0/
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TODAY’S PANEL
Benjamin Cox
Ben Murphy
• Medieval Historian and PhD
Student
• Has worked for hedge funds,
CEO of an Exploration company
and for OEMs
• Would like to change the way
the mining industry looks at
water
You
• Worked in mineral processing
plants in Australia, Indonesia,
Ireland and South Africa
• We appreciate that there is a
wide range of experience and
knowledge in the class
• Has also worked for OEMs in the
mineral processing space
• We want interaction and to
hear your points-of-view as it
adds to the discussion
• Wants to see more consideration
of ‘value’ in decision making in
our industry
• Please join in with stories or
experiences
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CONNECT WITH US
If you have any questions about
what you’ve heard today, please
reach out on LinkedIn with a post
so others can join in the
discussion:
#BRIMM101
• Benjamin Cox | LinkedIn
• Ben Murphy | LinkedIn
https://brimm.ubc.ca
@Benjamin Cox
@Ben Murphy
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Introduction to Exploration Economics
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TALKING POINTS
Talk about Exploration Economics
1. Checklists matter
2. Project size
3. Location
4. Title
5. License to operate
6. Regional Metallurgy
7. Transportation
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DEFINITION
What is ore?
A naturally occurring mineral containing a valuable
constituent, such as metal, for which it is mined and worked.
Merriam-Webster Dictionary
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WHY FOCUS ON EXPLORATION?
Exploration is not lifestyle nor a science project
Ø How many mines are in the booths at the
PDAC vs CEO’s who believe?
Ø Exploration is about economic discovery
https://w w w .flickr.com /photos/som osm ineria/
Ø Not only:
o Science projects
o Stock promotion
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WHAT IS MISSING?
Lack of good new ore bodies
Ø Since 2005, how many material ore
bodies did we discover?
Ø Historically, the massive wins have
been carried by exploration
Ø Today, what makes a winner?
Copper / Gold / Zinc
https://w w w .flickr.com /photos/m ediaclubsouthafrica/
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WHAT COMPETES WITH EXPLORATION?
Near mine brownfield exploration
0.80
Ø Why mine 0.30% new mine?
0.60
0.40
Ø When you have 0.50% in
low grade near mine
“undrilled” resource
0.20
0.00
TSXV average 2011 (ish)
2011
2020
2040
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WHAT IS AN ECONOMIC ORE BODY?
Geology + Metallurgy
( x
Size
=
Everything Else
) x( x
Quality/
metallurgy
Location
mine-ability
x
License to
operate
)
Title
If ANY one item is lacking, then there is not an economic ore body
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SIZE MATTERS (FOUR SCOPING QUESTIONS)
Tonnage
Exploration stage
Grade
Metallurgy
How many
tonnes (or
possible tonnes)
are there?
Envelop
mapping
VS
Drilling?
What is the
grade?
Does the regional
metallurgy
support mines?
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LOCATION (LOOKING FOR A MINE)
Exploration cost
Neighbours
• How many meters
answer the question?
• Mines
• Is it $100 or $1000 to
drill? What does a bet
cost to define?
• Summer cottages
• Helicopter or trucks?
• Trees or tundra?
• Hotel or camp?
• Wildlife
• People
• National parks
• Rivers
Title/License to operate
• Mean time to get
exploration permits
in region?
• How is title held?
• Who owns
derivative interests?
(streams, JV’s,
royalties)
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LOCATION (BUILDING A MINE)
Transportation
(Distance to)
• Road
• Port
• People (locals)
• Power
• Consumables
• Spare parts
Geological
Location
Title/
License to operate
• Underground/open pit?
• Is there space for
tailings?
• Mean time to get mining
permits in region?
• Is there mill space
• Can you imagine a
mine there?
• Workers
• Politics
• Taxes
• Cost of capital
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WHAT IS A WIN?
Size + grade + location
Ø Enough tonnage to support a 20-year
life of mine
Ø Enough recoverable grade to make
money
Ø In a location where the mine can be:
Permitted / Owned / Operated /
Financed
Ø Enough runway to make it
https://w w w .flickr.com /photos/m trienke/
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Assignment
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ASSIGNMENT
Session 2, Knowledge Check
Please respond to the Knowledge Check Test
before the beginning of next class.
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ASSIGNMENT
Session 2, Discussion
Please respond to one of the following topic prompts. Then, respond to two original
posts made by your classmates. You will see posts made by other people after you post
your own original response.
Topic 1: Does a mineralized zone have to be “workable” to be ore? Why or why not?
Topic 2: Do brownfield discoveries and expansions compete with greenfield
exploration? Why or why not?
Topic 3: Do you want Angelina Joe Lee or another famous person with a summer
cottage near your mine site? Why or why not?
Topic 4: Does this class fit inside the Ontario securities commission or other regulators'
ideas of how junior projects should be de-risked and disclosed? Why or why not?
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CHECKLIST
Ask questions, stay organized
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Thank you for listening
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