Infographic The Mineral Exploration Roadmap

Discoveries can come in many forms – they can be physical, scientific, personal, or even philosophical in nature. But while there are different types of discoveries that can be made, perhaps the most tactile kind of discovery is in the field of mineral exploration. The discovery of a mineral deposit can transform a piece of “moose pasture” into a new economic asset, and it may enable millions or billions of dollars worth of metals and minerals to be used for human purposes. These minerals get used all around us – they go into our houses, cars, infrastructure, jewelry, electronics, and they can even be used to power the green revolution.

From Prospecting to Production

Making an economic mineral discovery is the goal of many teams around the world, but these efforts can also be extremely difficult, costly, and time-consuming, and most companies engaged in exploration end up walking away empty-handed. Today’s infographic comes to us from Orix Geoscience and it shows the steps of mineral exploration, and how teams can maximize their odds of success by using data to add value throughout the process.

Steps of the Mineral Exploration Process

1. Exploration Strategy Where do you choose to explore? There are two basic strategies: (a) Working from the known Deposits tend to form in clusters in prolific belts, and exploration occurs outward from known mineralization. (b) Working from the unknown If you review all available information, prospective areas with potential for discoveries can be identified.
2. Prospecting In this stage, boots are now on the ground – and it’s time to explore the backwoods for showings. Prospectors will stake claims, map outcrops and showings, and search for indicator minerals. The goal of the prospecting stage is to find the earliest piece of the exploration puzzle: the clue that there is something much bigger beneath.
3. Early-Stage Exploration Congrats, you’ve found something interesting – and now it’s time to ramp up exploration efforts! This is where the amount of data and sophistication picks up. In this stage, companies are using existing maps and historical data, geophysics, ground truthing, geochemistry, and trenching to try and identify drill targets.
4. The “Truth Machine” Geologists don’t call the drill a “truth machine” for nothing. If you’re target hits, you’re in business. If your target misses, it’s time to go back a step and find new ones.
5. Discovery Eureka! You’ve found something. Now it’s time to see how far the mineralization goes! Once you have enough information, you can get an official resource estimate. This data is another puzzle piece that will be crucial as you advance your discovery.
6. De-risking Even at the best of times, mining can be expensive, risky, and tricky. That’s why your investors and backers will want you to source even more data – it’ll allow you to see a clearer picture of the deposit, and help your team see how it could take shape as a mine. At this stage, drilling, metallurgical tests, environmental assessments, 3d models, and mine designs are used to increase confidence in the project. Data starts to get very granular. Your company may do a Preliminary Economic Assessment (PEA) to assess the potential economic outcomes of a mine. Then after, they may conduct an in-depth Feasibility Study to help make a production decision. Final Steps By this point, you may have all the puzzle pieces – a clear vision of the deposit and its potential – to make a decision! If the puzzle looks good, it’s time to make a production decision, construct the mine, and start commercial production. But the data doesn’t stop there – at these later stages, even more data gets created and it can help you make better decisions. on Did you know that nearly one-fifth of all the gold ever mined is held by central banks? Besides investors and jewelry consumers, central banks are a major source of gold demand. In fact, in 2022, central banks snapped up gold at the fastest pace since 1967. However, the record gold purchases of 2022 are in stark contrast to the 1990s and early 2000s, when central banks were net sellers of gold. The above infographic uses data from the World Gold Council to show 30 years of central bank gold demand, highlighting how official attitudes toward gold have changed in the last 30 years.

Why Do Central Banks Buy Gold?

Gold plays an important role in the financial reserves of numerous nations. Here are three of the reasons why central banks hold gold:

Balancing foreign exchange reserves Central banks have long held gold as part of their reserves to manage risk from currency holdings and to promote stability during economic turmoil. Hedging against fiat currencies Gold offers a hedge against the eroding purchasing power of currencies (mainly the U.S. dollar) due to inflation. Diversifying portfolios Gold has an inverse correlation with the U.S. dollar. When the dollar falls in value, gold prices tend to rise, protecting central banks from volatility. The Switch from Selling to Buying In the 1990s and early 2000s, central banks were net sellers of gold. There were several reasons behind the selling, including good macroeconomic conditions and a downward trend in gold prices. Due to strong economic growth, gold’s safe-haven properties were less valuable, and low returns made it unattractive as an investment. Central bank attitudes toward gold started changing following the 1997 Asian financial crisis and then later, the 2007–08 financial crisis. Since 2010, central banks have been net buyers of gold on an annual basis. Here’s a look at the 10 largest official buyers of gold from the end of 1999 to end of 2021: Rank CountryAmount of Gold Bought (tonnes)% of All Buying #1🇷🇺 Russia 1,88828% #2🇨🇳 China 1,55223% #3🇹🇷 Türkiye 5418% #4🇮🇳 India 3956% #5🇰🇿 Kazakhstan 3455% #6🇺🇿 Uzbekistan 3115% #7🇸🇦 Saudi Arabia 1803% #8🇹🇭 Thailand 1682% #9🇵🇱 Poland1282% #10🇲🇽 Mexico 1152% Total5,62384% Source: IMF The top 10 official buyers of gold between end-1999 and end-2021 represent 84% of all the gold bought by central banks during this period. Russia and China—arguably the United States’ top geopolitical rivals—have been the largest gold buyers over the last two decades. Russia, in particular, accelerated its gold purchases after being hit by Western sanctions following its annexation of Crimea in 2014. Interestingly, the majority of nations on the above list are emerging economies. These countries have likely been stockpiling gold to hedge against financial and geopolitical risks affecting currencies, primarily the U.S. dollar. Meanwhile, European nations including Switzerland, France, Netherlands, and the UK were the largest sellers of gold between 1999 and 2021, under the Central Bank Gold Agreement (CBGA) framework. Which Central Banks Bought Gold in 2022? In 2022, central banks bought a record 1,136 tonnes of gold, worth around $70 billion. Country2022 Gold Purchases (tonnes)% of Total 🇹🇷 Türkiye14813% 🇨🇳 China 625% 🇪🇬 Egypt 474% 🇶🇦 Qatar333% 🇮🇶 Iraq 343% 🇮🇳 India 333% 🇦🇪 UAE 252% 🇰🇬 Kyrgyzstan 61% 🇹🇯 Tajikistan 40.4% 🇪🇨 Ecuador 30.3% 🌍 Unreported 74165% Total1,136100% Türkiye, experiencing 86% year-over-year inflation as of October 2022, was the largest buyer, adding 148 tonnes to its reserves. China continued its gold-buying spree with 62 tonnes added in the months of November and December, amid rising geopolitical tensions with the United States. Overall, emerging markets continued the trend that started in the 2000s, accounting for the bulk of gold purchases. Meanwhile, a significant two-thirds, or 741 tonnes of official gold purchases were unreported in 2022. According to analysts, unreported gold purchases are likely to have come from countries like China and Russia, who are looking to de-dollarize global trade to circumvent Western sanctions.

There were several reasons behind the selling, including good macroeconomic conditions and a downward trend in gold prices. Due to strong economic growth, gold’s safe-haven properties were less valuable, and low returns made it unattractive as an investment. Central bank attitudes toward gold started changing following the 1997 Asian financial crisis and then later, the 2007–08 financial crisis. Since 2010, central banks have been net buyers of gold on an annual basis. Here’s a look at the 10 largest official buyers of gold from the end of 1999 to end of 2021: Source: IMF The top 10 official buyers of gold between end-1999 and end-2021 represent 84% of all the gold bought by central banks during this period. Russia and China—arguably the United States’ top geopolitical rivals—have been the largest gold buyers over the last two decades. Russia, in particular, accelerated its gold purchases after being hit by Western sanctions following its annexation of Crimea in 2014. Interestingly, the majority of nations on the above list are emerging economies. These countries have likely been stockpiling gold to hedge against financial and geopolitical risks affecting currencies, primarily the U.S. dollar.
Meanwhile, European nations including Switzerland, France, Netherlands, and the UK were the largest sellers of gold between 1999 and 2021, under the Central Bank Gold Agreement (CBGA) framework.

Which Central Banks Bought Gold in 2022?

In 2022, central banks bought a record 1,136 tonnes of gold, worth around $70 billion. Türkiye, experiencing 86% year-over-year inflation as of October 2022, was the largest buyer, adding 148 tonnes to its reserves. China continued its gold-buying spree with 62 tonnes added in the months of November and December, amid rising geopolitical tensions with the United States. Overall, emerging markets continued the trend that started in the 2000s, accounting for the bulk of gold purchases. Meanwhile, a significant two-thirds, or 741 tonnes of official gold purchases were unreported in 2022. According to analysts, unreported gold purchases are likely to have come from countries like China and Russia, who are looking to de-dollarize global trade to circumvent Western sanctions.