EXPLORATION ’95 — Exploration: at home or abroad?

How do mining companies decide where to focus their exploration efforts now that a tempting array of geological opportunities has opened up in almost every corner of the globe?

All senior companies are venturing abroad, but those with mines and metallurgical infrastructure in Canada are equally motivated to maintain a strong exploration presence at home.

A case in point is Hemlo Gold Mines (TSE), which has committed half of this year’s $15-million exploration budget to Canada. Much of this will be spent on programs near existing operations — including its key asset, the Golden Giant mine near Marathon, Ont.

“We intend to take a fresh look at the Hemlo camp this year,” says Ian Atkinson, Hemlo’s exploration manager, who adds that the company has increased its land package in the region and is developing targets based on its understanding of the Hemlo model.

The company also intends to look at prospects farther afield, and a recent reorganization is expected to help this initiative. For the first time in its corporate history, Hemlo Gold will have a stand-alone exploration group (replacing Noranda Exploration), focused solely on increasing the company’s reserve base.

“We will have 60 people in five offices across North America,” says Hemlo President Ian Bayer, who expects this exploration effort will lead to a new phase of growth. Foreign opportunities are being investigated, particularly in Mexico, where the company already has an exploration office. About 35% of the budget will be spent in the U.S., including Nevada, where work is focused on the Walker Trend.

Noranda Mining & Exploration, a unit of Noranda (TSE), has also spent time reorganizing and redefining its exploration strategy. This year, the company intends to pursue base metals targets with a budget of $23 million and to increase its international presence. Roughly 25% will be directed to Latin America, particularly Chile, Mexico, Argentina and Peru. However, Canadian exploration still accounts for the largest portion of the total budget. Teck (TSE), by comparison, is taking a more aggressive approach to foreign exploration. William Meyer, vice-president of exploration, expects that this year’s total exploration budget will be the same as last year — roughly $25 million. But only about 32% of this will be directed to Canada and the U.S. This year, Teck expects to be particularly active in Mexico and South America. “We are evaluating opportunities in Argentina and have a gold project in the Para region of Brazil, as well as two large projects in Peru — one gold and the other porphyry copper-gold,” Meyer says. “We also have a large number of properties in Mexico, the most significant of which is the Nukay gold deposit.”

Teck is already well-established in Chile, and is active in Venezuela. A more recent foray into Southeast Asia and China is being managed from an exploration office in Singapore. “We are looking at gold targets, as well as copper and zinc, in those regions,” Meyer says. The company also intends to continue investigating opportunities in the Commonwealth of Independent States.

Canadian exploration will include projects in the Bathurst base metal camp in New Brunswick, the Timmins region of Ontario, and a geological belt encompassing the Cirque base metal deposit in eastern British Columbia. In the U.S., Teck will focus its work on the Great Basin of Nevada and neighboring states.

With an annual production rate of 3 million oz., Toronto-based Barrick Gold (TSE) will be looking for gold, gold and more gold in a few key areas which are known to have potential for hosting substantial deposits. This focused approach has always been a trademark of the company, says Barrick President Robert Smith, who adds that “our most important exploration effort this year will be the El Indio belt in Chile.”

A cornerstone of Barrick’s strategy is to explore near existing major assets. These include El Indio, the Goldstrike-Meikle complex in Nevada and the Bousquet-Doyon gold mines in Quebec. A secondary focus will be South America, particularly Argentina, Bolivia and Peru.

Farther afield, Barrick will be investigating opportunities in Mali, West Africa, and in Indonesia through field offices established in each country. Both are considered to have potential for hosting multi-million-ounce gold deposits.

Barrick plans to pursue advanced gold deposits in China, but progress is described as slow, and no major development plans are expected in the near future.