IM March 2022 – Exploration index holds steady

Introduction

S&P Global Market Intelligence's Pipeline Activity Index held steady at 137 in February as increases in significant drill results, significant financings and positive project milestones were offset by a sharp decline in initial resources. Base/other metals rose to 92 from 89, while gold fell to 188 from 194.

The index, or PAI, measures the level and direction of overall activity in the commodity supply pipeline by incorporating significant drill results, initial resource announcements, significant financings and positive project development milestones into a single comparable index.

Number of financings increases by almost half, with total raisings up 21%

After free-falling in January, the number of financings by junior and intermediate companies rebounded in February, rising 47% to 157 from 107 in January, and the US$1.05 billion raised was up 21% from the US$865 million garnered in the previous month.

In line with the overall increase in financings, the number of significant gold and base metals financings, used to calculate the PAI, recovered in February, rising to 58 from just 40 in January. Significant gold financings increased by seven, to 32 from 25, while base/other metals financings rose by 11, to 26 from 15.

Vancouver, British Columbia-based Sabina Gold & Silver Corp. had February's largest gold financing with a C$76.1 million (US$60 million) private placement, the first tranche of a US$95 million placement of common shares to fund the development of the Goose mine at the company's Back River gold project in Nunavut.

In the month's largest base/other metals financing and the largest raising overall, China-based Jinhui Mining Co. Ltd. completed a 1.06 billion Chinese yuan (US$167 million) IPO on the Shanghai Stock Exchange, the proceeds of which it will use to explore and upgrade the company's zinc-lead mines.

Financings for specialty commodities posted the largest percentage increase among the commodity groups, jumping to US$154 million from US$55 million in January. Victoria, Australia-based Syrah Resources Ltd. topped the list with a A$68.1 million (US$48.6 million) placement and A$57 million (US$41.4 million) in entitlement offers. Syrah plans to apply the proceeds toward expansion efforts at its Vidalia plant in Louisiana and Balama mine in Mozambique, both of which are dedicated to graphite.

Drilling activity increases for 2nd month to reach new record

Global drilling activity increased for a second consecutive month in February, with the total number of distinct projects reporting drill results rising to a record 404 projects, up from 384 in January and eclipsing a previous high of 401 projects in October 2021.

Reported drilling increased for gold, silver, copper, zinc-lead and minor base metals projects. Drilling decreased for platinum group metals, or PGM, nickel and specialty commodities projects.

Confirming the increase in projects reported, the number of reported drillholes also rose in February, to 6,106 from 5,886 in January, but was still off from an all-time high of 6,572 in November 2021.

Kinross Gold Corp. reported the most drill results with 331 assays from seven of its gold operations in the U.S., Ghana and Russia. ASX-listed Red Five Ltd. was second with 187 drillholes at its Darlot gold mine in Western Australia.

By country, Australia reclaimed the lead with 119 projects reporting drilling, up from 102 in January, followed by Canada with 93. The U.S. was a distant third with 48 projects, up from 33 in January.

In line with the increase in the number of projects reporting drilling, the number of significant drill intersections, used to calculate the PAI, also increased in February, to 252 from 245 in the previous month, with the increase split between gold and base/other metals projects.

New resources decrease sharply

The number of initial resource announcements decreased sharply in February, to four from 10; three resources were for gold projects and one was for base/other metals.

February's largest new resource by far was announced by Johannesburg-based AngloGold Ashanti Ltd. at its Silicon gold project in Nevada, where inferred resources at the Central-Silicon zone totaled 120.4 million metric tonnes grading 0.87 gram per tonne gold (containing 3.4 million ounces of gold). AngloGold's plans for Silicon in 2022 include more drilling and a pre-feasibility study to upgrade mineral resources to reserves. A concept study at the Merlin zone will proceed in parallel. Sulfide processing and underground mining will be evaluated in the longer term.

The month's second-largest new resource was at Vancouver, British Columbia-based Vizsla Silver Corp.'s Panuco silver-gold project in Mexico's Sinaloa state, where indicated and inferred resources totaled 9.1 Mt grading 189 g/t Ag, 1.94 g/t Au, 0.4% Zn and 0.2% Pb (containing 55.2 Moz of silver, 567,000 oz of gold, 37,000 tonnes of zinc and 18,000 tonnes of lead). To date, Vizsla has incurred about US$24.5 million in exploration expenditures, equating to a discovery cost of about 23 U.S. cents per ounce of silver-equivalent for the resources defined in the estimate.

February's third-largest new resource was at Toronto-based Amarillo Gold Corp.'s Lavras do Sul gold project in Brazil, where measured, indicated and inferred resources at the Butia deposit totaled 16.6 Mt grading 0.92 g/t Au (containing 492,000 oz of gold). Butia is one of 23 known gold prospects on the Lavras do Sul property. Mineralization begins at surface and extends to a depth of up to 300 meters; widths of the gold mineralized zones typically vary from 15 meters to 20 meters.

Milestone activity up slightly

As the graph below indicates, positive project milestone activity was up slightly in February, to four announcements from three in January. There were no negative milestones.

February's positive milestones included two projects entering preproduction and two production startups. Three milestones were for gold projects and one was for base/other metals.

In the month's largest milestone, Vancouver, British Columbia-based Ivanhoe Mines Ltd. announced the start of construction at its Platreef PGM project in South Africa's Limpopo province. The first phase of production, due to begin in 2024, will comprise a 700,000-tonnes-per-year underground mine targeting high-grade mining areas close to the project's recently completed Shaft 1. Phase two will feature a 5.2-Mt/y steady-state operation producing more than 590,000 ounces of palladium, platinum, rhodium and gold, plus more than 40 million pounds of nickel and copper, ranking it as the world's fifth-largest primary PGM mine on a palladium-equivalent basis.

February's second-largest milestone was the ramping up of commercial production at Vancouver, British Columbia-based Orla Mining Ltd.'s Camino Rojo gold mine in Mexico's Zacatecas state. The US$134 million open-pit operation is expected to produce 94,000 oz/y of gold and 597,000 oz/y of silver over a 10-year mine life.

In the month's third-largest milestone, Vancouver-based Gold Mountain Mining Corp. announced the first shipment of ore from its Elk gold mine in British Columbia to New Gold Inc.'s New Afton mine 133 kilometers away.

Exploration Price Index reaches record high

Metals prices increased for a second consecutive month in February, raising S&P Global Market Intelligence's Exploration Price Index to 176 from 173, reaching an all-time high. The indexed price rose for seven — gold, silver, platinum, copper, nickel, zinc and cobalt — of the eight constituents of the index and was unchanged for molybdenum.

The index measures the relative change in precious and base metals prices, weighted by the percentage of overall exploration spending for each metal as a proxy of its relative importance to the industry at a given time.

Equities hit nearly 10-year high

After retreating slightly in January, mining equities were up in February, marking an almost 10-year high, as Market Intelligence's aggregate market value of the industry's listed companies, based on 2,362 firms, increased 9% month over month to US$2.34 trillion. The aggregate market cap of the industry's top 100 companies was up 10% in February at US$1.92 trillion.

^{S&P Global Commodity Insights and S&P Global Market Intelligence are owned by S&P Global Inc.}

^{This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.}

S&P Global Market Intelligence's Pipeline Activity Index held steady at 137 in February as increases in significant drill results, significant financings and positive project milestones were offset by a sharp decline in initial resources. Base/other metals rose to 92 from 89, while gold fell to 188 from 194.

The index, or PAI, measures the level and direction of overall activity in the commodity supply pipeline by incorporating significant drill results, initial resource announcements, significant financings and positive project development milestones into a single comparable index.

Detailed data on the PAI metrics is available in the accompanying Excel spreadsheet.

Number of financings increases by almost half, with total raisings up 21%

After free-falling in January, the number of financings by junior and intermediate companies rebounded in February, rising 47% to 157 from 107 in January, and the US$1.05 billion raised was up 21% from the US$865 million garnered in the previous month.

In line with the overall increase in financings, the number of significant gold and base metals financings, used to calculate the PAI, recovered in February, rising to 58 from just 40 in January. Significant gold financings increased by seven, to 32 from 25, while base/other metals financings rose by 11, to 26 from 15.

Vancouver, British Columbia-based Sabina Gold & Silver Corp. had February's largest gold financing with a C$76.1 million (US$60 million) private placement, the first tranche of a US$95 million placement of common shares to fund the development of the Goose mine at the company's Back River gold project in Nunavut.

In the month's largest base/other metals financing and the largest raising overall, China-based Jinhui Mining Co. Ltd. completed a 1.06 billion Chinese yuan (US$167 million) IPO on the Shanghai Stock Exchange, the proceeds of which it will use to explore and upgrade the company's zinc-lead mines.

Financings for specialty commodities posted the largest percentage increase among the commodity groups, jumping to US$154 million from US$55 million in January. Victoria, Australia-based Syrah Resources Ltd. topped the list with a A$68.1 million (US$48.6 million) placement and A$57 million (US$41.4 million) in entitlement offers. Syrah plans to apply the proceeds toward expansion efforts at its Vidalia plant in Louisiana and Balama mine in Mozambique, both of which are dedicated to graphite.

Detailed information on junior and intermediate financings completed in February is available in the Financings article in this series.

Drilling activity increases for 2nd month to reach new record

Global drilling activity increased for a second consecutive month in February, with the total number of distinct projects reporting drill results rising to a record 404 projects, up from 384 in January and eclipsing a previous high of 401 projects in October 2021.

Reported drilling increased for gold, silver, copper, zinc-lead and minor base metals projects. Drilling decreased for platinum group metals, or PGM, nickel and specialty commodities projects.

Confirming the increase in projects reported, the number of reported drillholes also rose in February, to 6,106 from 5,886 in January, but was still off from an all-time high of 6,572 in November 2021.

Kinross Gold Corp. reported the most drill results with 331 assays from seven of its gold operations in the U.S., Ghana and Russia. ASX-listed Red Five Ltd. was second with 187 drillholes at its Darlot gold mine in Western Australia.

By country, Australia reclaimed the lead with 119 projects reporting drilling, up from 102 in January, followed by Canada with 93. The U.S. was a distant third with 48 projects, up from 33 in January.

In line with the increase in the number of projects reporting drilling, the number of significant drill intersections, used to calculate the PAI, also increased in February, to 252 from 245 in the previous month, with the increase split between gold and base/other metals projects.

Detailed information on all drilling activity in February is available in the Drill Results article in this series.

New resources decrease sharply

The number of initial resource announcements decreased sharply in February, to four from 10; three resources were for gold projects and one was for base/other metals.

February's largest new resource by far was announced by Johannesburg-based AngloGold Ashanti Ltd. at its Silicon gold project in Nevada, where inferred resources at the Central-Silicon zone totaled 120.4 million metric tonnes grading 0.87 gram per tonne gold (containing 3.4 million ounces of gold). AngloGold's plans for Silicon in 2022 include more drilling and a pre-feasibility study to upgrade mineral resources to reserves. A concept study at the Merlin zone will proceed in parallel. Sulfide processing and underground mining will be evaluated in the longer term.

The month's second-largest new resource was at Vancouver, British Columbia-based Vizsla Silver Corp.'s Panuco silver-gold project in Mexico's Sinaloa state, where indicated and inferred resources totaled 9.1 Mt grading 189 g/t Ag, 1.94 g/t Au, 0.4% Zn and 0.2% Pb (containing 55.2 Moz of silver, 567,000 oz of gold, 37,000 tonnes of zinc and 18,000 tonnes of lead). To date, Vizsla has incurred about US$24.5 million in exploration expenditures, equating to a discovery cost of about 23 U.S. cents per ounce of silver-equivalent for the resources defined in the estimate.

February's third-largest new resource was at Toronto-based Amarillo Gold Corp.'s Lavras do Sul gold project in Brazil, where measured, indicated and inferred resources at the Butia deposit totaled 16.6 Mt grading 0.92 g/t Au (containing 492,000 oz of gold). Butia is one of 23 known gold prospects on the Lavras do Sul property. Mineralization begins at surface and extends to a depth of up to 300 meters; widths of the gold mineralized zones typically vary from 15 meters to 20 meters.

Milestone activity up slightly

As the graph below indicates, positive project milestone activity was up slightly in February, to four announcements from three in January. There were no negative milestones.

February's positive milestones included two projects entering preproduction and two production startups. Three milestones were for gold projects and one was for base/other metals.

In the month's largest milestone, Vancouver, British Columbia-based Ivanhoe Mines Ltd. announced the start of construction at its Platreef PGM project in South Africa's Limpopo province. The first phase of production, due to begin in 2024, will comprise a 700,000-tonnes-per-year underground mine targeting high-grade mining areas close to the project's recently completed Shaft 1. Phase two will feature a 5.2-Mt/y steady-state operation producing more than 590,000 ounces of palladium, platinum, rhodium and gold, plus more than 40 million pounds of nickel and copper, ranking it as the world's fifth-largest primary PGM mine on a palladium-equivalent basis.

February's second-largest milestone was the ramping up of commercial production at Vancouver, British Columbia-based Orla Mining Ltd.'s Camino Rojo gold mine in Mexico's Zacatecas state. The US$134 million open-pit operation is expected to produce 94,000 oz/y of gold and 597,000 oz/y of silver over a 10-year mine life.

In the month's third-largest milestone, Vancouver-based Gold Mountain Mining Corp. announced the first shipment of ore from its Elk gold mine in British Columbia to New Gold Inc.'s New Afton mine 133 kilometers away.

Exploration Price Index reaches record high

Metals prices increased for a second consecutive month in February, raising S&P Global Market Intelligence's Exploration Price Index to 176 from 173, reaching an all-time high. The indexed price rose for seven — gold, silver, platinum, copper, nickel, zinc and cobalt — of the eight constituents of the index and was unchanged for molybdenum.

The index measures the relative change in precious and base metals prices, weighted by the percentage of overall exploration spending for each metal as a proxy of its relative importance to the industry at a given time.

Equities hit nearly 10-year high

After retreating slightly in January, mining equities were up in February, marking an almost 10-year high, as Market Intelligence's aggregate market value of the industry's listed companies, based on 2,362 firms, increased 9% month over month to US$2.34 trillion. The aggregate market cap of the industry's top 100 companies was up 10% in February at US$1.92 trillion.

S&P Global Commodity Insights and S&P Global Market Intelligence are owned by S&P Global Inc.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.