Consistent policy attracts exploration in Mali

Increasing exploration
budgets remains a
challenge for mining
houses with budgets
still under pressure despite a
more bullish approach to the
sector.
According to Paul
Ballantyne, a partner and
portfolio manager at Genesis
Investment Management,
there have been no drastic
increases in exploration
spending.
“Companies are still
very much in a down cycle
mentality,” he said. “Peak
discoveries were made
more than a decade ago and
since then there has been
a decrease in spending on
exploration. Companies are
wary of spending too much
money to find resources that
are hard and costly to get
out of the ground and which
no-one may want.”
Rob Hersov, founder
of Invest Africa, however
maintains that exploration
remains the lifeblood of the
mining industry.
He believes Africa
can expect to see major
investment in exploration
in the coming years as
companies continue to realise
that the risk on the continent
is not as high as possibly
perceived.
Orlee Wertheim, head of
business development at the
Toronto Stock Exchange, said
money was slowly starting
to make its way back to
exploration.
“We have close to 1300
mining companies on our
database and more than 1000
of them are in the exploration
stage somewhere. We are
seeing increased numbers of
companies raising money for
exploration.”
During
a panel
discussion on
investment
into greenfield
projects at the
Investing in
Africa Mining
Indaba in
Cape Town
recently,
experts agreed
that funding
exploration remained
challenging.
“I do think that money goes
where the resources are,” said
John Welborn, managing
director of Resolute Mining.
“We are not involved in
any greenfields projects in
Australia as we just don’t
have a competitive advantage
there, but we are exploring
in Africa.
The reason is
that there are
world class ore
bodies still to
be discovered
on the
continent and
it is where the
opportunities
are.”
He said
exploration
was
increasing, particularly in
those African countries
where governments were
realising the full potential
of mining and had got it
right. This included clear and
consistent mining codes and
stable policies.
“Mali is possibly one of
the best examples. It is a
great country to be mining
in. Not only have they
implemented good policy and
regulations but the approach
is consistent,” he said. “Also
they have ensured success
around enforceability of the
mining code with the legal
system working well to give
clarity when required.”
This was a major coup for
a country that had major
logistical and security
challenges.
Mali, he said, being the
third largest gold producer
in Africa. would continue
to draw explorers to its
shores simply because of the
enabling environment it had
created.
INSERT
Not only have they
implemented good
policy and regulations
but the approach is
consistent.
– John Welborn