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Global gold exploration ‘staggeringly unsuccessful’ – Ernst & Young
By: Martin Creamer
Published on 5th August 2008
Global gold exploration was proving “staggeringly unsuccessful”, Ernst & Young global mining & metals director Dr Tim Williams said on Tuesday.
Williams told Omega’s Mining in Africa Conference in Johannesburg that the world appeared to be “running out” of gold orebodies.
“I think I might say that nearly half of the world’s exploration money is spent on looking for gold, and staggeringly unsuccessful it is, too,” Williams said.
“It’s really the only metal that seems to be running out,” he added.
Because of the global credit crunch, many mining juniors on the Alternative Investment Market (Aim) of the London Stock Exchange were “in trouble”.
They were unable to raise cash by issuing shares because their share prices had behaved so badly.
There were also believed to be some “fairly major sellers” on the Aim, but not many buyers.
“The result of this is that there is going to have to be a lot of consolidation between those Aim juniors,” Williams said.
He expected that the 191 Aim mining companies would be reduced to about 150 this time next year.
He said that there had not been a single initial public offering (IPO) on the Aim in the first quarter of this year.
However, junior mining companies that were already in production were in a different category and were successful with secondary capital raising beyond their IPOs.
He flashed up a table on to an overhead screen that showed that Aim mining companies returning to the market for development capital after firming up their discoveries were continuing to be successful obtaining large amounts of capital and were currently also making lots of money.
“It’s that end of the market which is so strong,” he said.
Vast amounts of money were available in London to those who had moved beyond the exploration stage to the mining stage.
“If you have the right project, you’ll still get the money,” he said.
Williams told Omega’s Mining in Africa Conference in Johannesburg that the world appeared to be “running out” of gold orebodies.
“I think I might say that nearly half of the world’s exploration money is spent on looking for gold, and staggeringly unsuccessful it is, too,” Williams said.
“It’s really the only metal that seems to be running out,” he added.
Because of the global credit crunch, many mining juniors on the Alternative Investment Market (Aim) of the London Stock Exchange were “in trouble”.
They were unable to raise cash by issuing shares because their share prices had behaved so badly.
There were also believed to be some “fairly major sellers” on the Aim, but not many buyers.
“The result of this is that there is going to have to be a lot of consolidation between those Aim juniors,” Williams said.
He expected that the 191 Aim mining companies would be reduced to about 150 this time next year.
He said that there had not been a single initial public offering (IPO) on the Aim in the first quarter of this year.
However, junior mining companies that were already in production were in a different category and were successful with secondary capital raising beyond their IPOs.
He flashed up a table on to an overhead screen that showed that Aim mining companies returning to the market for development capital after firming up their discoveries were continuing to be successful obtaining large amounts of capital and were currently also making lots of money.
“It’s that end of the market which is so strong,” he said.
Vast amounts of money were available in London to those who had moved beyond the exploration stage to the mining stage.
“If you have the right project, you’ll still get the money,” he said.
Editor: Creamer Media Reporter
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