Redefining The Search Space for Minerals

I've been asked to talk to you today on some of the challenges that I personally see that are facing the mineral exploration industry going forward and I'd like to focus on just a few key points. One is to put the premise out there that I think that there is a misalignment between the current mineral industry practice and the future mineral and resource needs of society. I think that what it is that it is going to drive a change in how the mineral industry does their exploration from looking at longer life but increasingly lower grade and high energy consumption deposits to seeking high quality deposits, basically higher extractable per metal unit of rock, deposits. There are a couple of fundamental shifts that will require the industry to take in how they go about their exploration targeting and I'll focus on one of them and that is trying to detect the largest scale footprints of mineral systems as we move increasingly into challenging areas for exploration that are essentially under some degree of cover, rendering deposits blind to previous exploration technology. So the graph that I have up here, is showing data from Australia, is showing the trend in greenfields versus brownfields exploration, but if you actually look at the slide, you can see that the red line is not just brownfields, it is "on the production lease or on existing deposits" and so that green line which shows the decreasing trend in greenfields exploration, is actually even worse than it is shown because some of that is actually brownfields exploration. In fact a lot of it is actually brownfield exploration. So make no mistake that in this last boom we've had it's been a production boom, not a discovery boom. And essentially it just means that we are running towards the wall faster. Another critical point that I think a lot of the mining industry acknowledges, but doesn't know how to deal with yet, is that society is actually redefining what will be considered ore in the future. If you look at the types of deposits we're moving towards now, a lot of focus on these big long life but lower grade deposits, it is an incredibly energy intensive business. The numbers that you hear bandied around are that between 2 and 6 % of the world's electricity goes into crushing rock. I do know that within Australia, the amount of energy that goes into crushing rock within the mining industry is equivalent to the entire residential sector of a country of over 20 million people. So an energy intensive business and we are moving into an energy-constrained future. So that means that we are going to get a triple whammy really. A) We are going to be using more energy to mine our deposits. B) The energy is going to cost more; I know that my electricity bill is going up. C) We're actually moving to legislation against energy use, in Australia we have a carbon tax coming in. So you're going to have all of these factors that are actually going to redefine what is economic. There will be a need to seek higher quality deposits and a lot of those are going to be found by opening up new mineral districts in areas blind to previous exploration technology. So we want to open up new mineral camps. So I just want to illustrate the challenge by looking at the change that the petroleum industry made because they made this shift decades ago and really it is our turn in the mineral industry to do so. I've got a slide here that shows — this is all from National Geographic — shows the production of oil in the Gulf coast in 1961. Now subsequent to this of course in the early '70s there is the Oil Crisis, the formation of OPEC, big supply risk, driving innovation into how we are going to secure oil reserves into the future. The other slide here shows what happened after 40 years of innovation. In doing this, in making this shift, the petroleum industry didn't just say "oh, we've got to drill offshore", they actually, if you talk to the petroleum geologists, the actual concept that there could be large oil deposits in the deep water basins, never mind the fact that they are some of the largest ones, was a really foreign concept to most of the industry. So there were actually conceptual changes that had to happen that then drove the required technology changes to image these rock volumes underwater to actually drill and test them and then produce from them. And really you could look at that slide and say "that's the challenge for the minerals industry in the future" in going under challenging cover. So if you look at the response of our industry to that challenge, it has generally been around trying to develop a better detection technology. So how do we drill deeper, cheaper, faster, more accurately? How do we get more information out of the hole? And all of that is great stuff, and it really is required, but there is a challenge that we are missing here. That is that if you look at this graph here, I have the relative inputs of predictive technology versus detection technology at the broad regional scale down to the prospect scale. The detection technology that we are employing is very useful in near-mine and brownfields exploration but it is challenged in areas of regional extent. So the reality is that at the Craton-scale or even at the belt-scale there is no detection technology that can tell you where the next mineral camp is. The problem is that the big decision is: where is the camp? Where is the area where I'm going to go, put together a coherent package of land and do systematic but expensive exploration. As we go under cover, that crossover in cost versus flexibility is going to be even more dramatic. So it's this decision that turns the exploration managers into chain-smokers essentially at the camp scale. So we really need to focus on: what we can do to detect the edges of camps that new mineral districts, particularly in challenging environments. And the key thing we have to focus on is we have to redefine what the footprint of exploration is. So exploration is essentially about trying to understand the footprint of the deposit, and continually we have been trying to expand that over the past 40 years with our deposit scale studies. And that's all good, but the challenge is that it is still looking at the tens to hundreds to at most thousands of metres around a deposit. I think our challenge is to really rip ourselves out of that scale, pull up a scale and say we really need to understand the biggest scale footprints of mineral systems. So a couple of slides I have here show that. One is Mississippi valley type deposits, in the continental United States, and they all lie along this dolomite front and really that is the largest scale footprint of this mineral system. So some of these footprints can be continental in scale. So one of the first order decisions is: how do I progressively narrow the volume of rock down? And this is one of the datasets that you'd want. The next slide that I have shows the same type of thinking but in the depth dimension and on this slide you see the seismic reflectors interpreted from seismic, you see the metallurgic image, which is the colour image and the grey shapes are the results of inversions of gravity. This is over the Olympic dam area in Western Australia, which is under 300 metres of cover which is absolutely barren. So a great example of exploration under cover. Yet, is this showing us the footprint of the deposit? So some of these footprints are crustal in scale. So we need these non-traditional datasets to actually see these bigger footprints. Now one of the challenges with geophysics is that geophysics images the earth today so it gives us a snapshot of what the architecture of the earth might be today. However, a lot of the deposits we are looking for formed well into the past and we want to know what the architecture was then. This slide here shows one of the innovative datasets that people are trying to use to image crustal architecture into the past. On the right-hand side of this slide you see a map of neodymium model ages over the Yilgarn Craton in Western Australia. These are all gold and nickel deposits that have formed at around 2.7 to 2.6 billion years ago and the image is made from the neodymium model ages of lay granites. The way to read this diagram is the hot colours are granites that have melted older crust, the hotter the older, the cool colours are granites that have melted crusts just a few tens of millions of years older than the granites themselves. The key thing to notice is the gradient in the middle. That gradient is interpreted as being the paleo-margin of the Yilgarn Craton at around the 2.7 billion year mark. And it is interesting to note that all of the nickel systems and a lot of the gold systems are actually concentrating along that fatal flaw in the lithosphere at that time. So again, just some examples of some of these non-traditional datasets that we can try and look at to see the largest scale footprint of the mineral systems. So in conclusion, as I said I think that our current practice of how we go about exploration targeting is misaligned with the future material and resource needs of society and that the industry will be forced to undergo a revolutionary away from seeking larger, low grade resources to focus on seeking high-quality grassroots discoveries. This will require innovations in discovering the mineral systems rather than the analogue deposit models, looking at the fact that the deposits are the focus of massive energy fluctuations through the lithosphere on a very large scale and leave very large footprints. The development of technology packages to effectively explore for these larger scale footprints and then also, to train the next generation of geoscientists to actually employ these techniques. Thank you very much.