Round 10 of the Exploration Inventive Scheme funding has been granted to 41 drilling and prospecting projects in WA.
The $4.69 million in funding has been described by Association of Mining and Exploration Companies (AMEC) CEO Simon Bennison as"a much needed boost to the exploration and support services sector in Western Australia".
"The co-funded greenfields drilling program was an initiative recommended by AMEC to stimulate the sector and is now in its sixth year," he said.
“It has resulted in millions of dollars being spent directly on innovative greenfields exploration in Western Australia. It has contributed to many successful discoveries including the Nova and Camelwood nickel deposits."
“Programs such as the EIS are essential to stimulate investment in greenfields mineral exploration which has been declining in favour of brownfields for more than a decade."
The funding comes as the ABS reports a new round of negative exploration trends.
Mineral exploration fell 3.6 per cent on the national trend estimates, down by $16.5 million to $446.9m for the quarter.
Queensland fell by $10.9 per cent, down $10.7m, while on seasonally adjusted figures Western Australia fell by 7.7 per cent, or $21.7m.
However in original terms mineral exploration is down 11.7 per cent to $455m for the quarter, a loss of $60m worth of investment in the industry, with greenfields down $15m and brownfields down by $45m.
"In the September 2003 quarter, 46 per cent of total metres drilled were on new deposits. In the September 2014 quarter, just 24 per cent of total metres drilled were on new deposits," Bennison added.
Junior miners and explorers have faced a perfect storm as investment dries up and commodity prices fall.
“We must find a much better balance between capital going offshore, to countries with more attractive economic environments, compared with investment in Australian projects. In 2013, 67 per cent of capital raised on the Australian Securities Exchange went to offshore projects. This reduces the rate of discovery in Australia."
According to Grant Thornton’s latest junior mining and exploration (JUMEX) report, the situation is not likely to change soon.
Grant Thornton Australia’s national head of energy and resources Simon Gray explained: “FY14 was yet another tough year for JUMEX companies, with extremely tight capital markets, volatile commodity prices and tumbling share prices.”
“The duration and extent of these conditions has wide ranging implications for companies and the industry as a whole.
“At the company level, management remains heavily focused on financing considerations, taking their time and attention away from value adding operational and strategic development opportunities. Costs are cut to the bone.
“This is compounded by a lack of investor interest.
“Exploration companies are finding equity finance almost impossible to access as is reflected by the small number of Initial Public Offerings (IPOs) for mining and exploration companies
“At an industry level, the severe decline in exploration activities has far reaching impacts on future discoveries and significantly reduced spending by JUMEX companies which continue to have a major impact on the mining services community,” Gray said.
Bennison went on to say “AMEC is keen to see ongoing long term financial support for the EIS to secure future discoveries that will create jobs and Government revenue streams".