Australian spending on mineral exploration has rocketed to its highest amount in almost a decade as activity surges in key mining states like Queensland.
According to the Australian Bureau of Statistics (ABS), total mineral exploration for the 2020 calendar year was $2.8 billion.
With a keen industry tapping into demand for Australia’s resources, state and federal government funding has been offered to boost exploration even further.
Australian exploration for gold and other key minerals has been dominated by brownfields prospecting in recent years, as greenfields discoveries have become increasingly rare.
Queensland is a jurisdiction with potential to hold its position as a supplier of minerals, such as gold and emerging critical minerals, from both greenfields or brownfields sites.
The Queensland Government has specifically targeted the state’s north to meet this demand. The state was the second highest exploration spender behind Western Australia in 2020 with $407.4 million.
In June, the Queensland Government deployed an airborne geophysical survey in north-west Queensland, covering a 6000-square-kilometre area around Kamilaroi, demonstrating its plans for the region.
North Queensland includes the Weipa region, north-west Queensland mineral provinces and Charters Towers region.
New Century Resources’ Century zinc mine in north-west Queensland is one of several examples of the potential that exists in the region.
The company has shipped more than 500,000 tonnes of zinc concentrate from Century since restating operations in August 2018.
North Queensland has been included in the state government budget’s $5 million investment in mineral exploration.
The funding includes $2.5 million for Collaborative Exploration Initiative grants, which encourage exploration in frontier areas and promote new economy mineral discoveries.
More than $2 million was pledged to develop new economy minerals projects.
The Australian Government has extended its support for minerals exploration with a four-year, $100 million extension to its Junior Minerals Exploration Incentive (JMEI).
This ongoing initiative aims to help junior minerals exploration companies conduct greenfields mineral exploration by encouraging investors to back them using tax credits.
Junior miners are also targeting the abundance of brownfields sites in North Queensland to uncover hidden mineral deposits.
ABS data reveals that $488.7 million was spent on existing deposits (brownfields) across Australia from January to March 2021 compared with $246.4 million on new deposits (greenfields).
Junior gold explorer Pacgold listed on the ASX in July, after closing a $6 million initial public offering, to continue work at its Alice River gold project in North Queensland.
Pacgold managing director Tony Schreck says the company has the backing to make a significant discovery at the site.
“In the current gold market, a good story that has potential and scale is something that I think is attractive,” he says.
“Investors in junior explorers are looking for that big discovery and many multiples of return, so what I believe you need for a company to deliver is a big gold system to start with.
“That’s what we can demonstrate now. Once you’ve got a big footprint, then you can find a big deposit and in a strong gold market, that’s what we’re bringing to the table.”
Alice River comprises eight mining leases and a number of exploration permits centred on a historical goldfield in Queensland’s Cape York Region.
Pacgold is one of many junior explorers that values applying new exploration methods to brownfields sites.
The project sites have previously hosted underground mines that produced 3000 ounces of gold at 30 grams per tonne during the early 1900s. Decades later, they hosted open pit mining in the 1980s and colluvial and alluvial ore mining in the late 1990s.
The IPO grants Pacgold with enough capital to deliver a two-year fully funded exploration program.
“Historical exploration in the 80s and the 90s has given us exciting indications along the 30-kilometre gold trend,” Schreck says.
With the company now listed on the ASX, Schreck expects the project to deliver exciting results as the exploration program progresses.
The program will be completed across three targets covering seven kilometres of the project’s gold bearing shear zone.
Pacgold will focus on its most compelling targets in the first phase of drilling, with IP geophysical surveys having already been launched in the middle of the year.
“I think what Pacgold brings to the table is a new perspective – it’s a completely reinvigorated story,” Schreck says.
As mineral demand climbs and is supported by government and investor funding, junior explorers like Pacgold have promising times ahead in a region like North Queensland.