AFRICA — Top ten exploration spenders continue to invest in Africa

African projects were not ignored by the ten largest spenders of exploration dollars in 1997.

A study by Metals Economic Group shows that 10 companies — BHP Minerals, Rio Tinto, Placer Dome (PDG-T), Newmont Gold (NGC-N), Western Mining, Barrick Gold (ABX-T), De Beers Consolidated Mines, Minorco, CVRD (of Brazil) and Avgold — spent a total of $1.05 billion exploring mineral projects worldwide last year. This number is down slightly from the $1.1 billion spent a year earlier.

BHP was the largest spender in 1997, having lavished $177.8 million on exploration programs in 47 countries. In Africa, the company is exploring gold projects in Burkina Faso, Tanzania and Ghana. As part of its 1997 strategic review, the company decided to cease early-stage exploration in eastern Canada, the eastern U.S., the Caribbean, Papua New Guinea and Indonesia. The major’s exploration strategy will continue to focus on copper and gold.

The Rio Tinto group of companies, formed through the merger of RTZ and CRA in late 1995, has the second-largest exploration budget, $138 million, which does not include some of the company’s late-stage feasibility work.

Part of Rio Tinto’s new strategy includes closer monitoring of junior exploration companies, particularly those trading on Canadian and Australian exchanges. These companies are now viewed as an opportunity pool for new projects, and not merely as competitors. The group’s exploration efforts are focused on gold, copper and diamonds.

In 1997, Rio Tinto spent roughly $41 million in Australia, $31 million in Latin America, $24 million in the U.S., $20 million in the Pacific and Southeast Asian region, $9 million in Canada, $8.5 million in Africa and $4.1 million elsewhere, mainly in Europe.

Placer Dome’s African exploration includes work in Niger, Tanzania and Ivory Coast. One of the more advanced projects in which the major has taken an interest in the Samira gold project, a joint-venture with Etruscan Enterprises (EET-V). Placer Dome holds rights to earn a 51% interest in Samira, which, at last report, contained drill-indicated and inferred resources totalling 27.8 million tonnes averaging 2.02 grams gold per tonne.

Newmont, meanwhile, has carried out only minimal exploration in Africa.

Western Mining’s African exploration has focused on gold prospects in Burkina Faso, Ivory Coast and Ethiopia. Barrick Gold has made South America its main exploration focus. However, the major also is exploring in Mali and Niger.

De Beers’ African work is focused on projects in South Africa, Namibia, Botswana, Sierra Leone, Angola, Tanzania, the Democratic Republic of Congo, Zimbabwe and Guinea.

Minorco spent more than half its 1997 exploration budget in Latin America, where work was largely focused on projects in Brazil. CVRD, meanwhile, explores solely in Brazil.

Avgold’s $70.3-million exploration budget in 1997 was more than triple the $22 million spent in 1996, mostly as a result of increased late-stage exploration in the Free State. The budget excludes most of the company’s mine-site exploration, which is funded by the operating units of the listed companies under Avgold’s management.

Most of Avgold’s $62.3-million allocation for late-stage exploration went to the company’s 53%-owned Target and Sun projects, north of the company’s Loraine mine. Most of its grassroots exploration is focused on reconnaissance and project evaluations in non-South African nations.

Avgold intends to achieve growth in the years ahead by forming alliances with junior companies. On its own, the company has started regional reconnaissance work to evaluate gold projects in Burkina Faso, Ghana, Senegal, Tanzania, Ivory Coast and Mali.