Annual Review 1991- Exploration 1991

In 1991, most industrialized countries, except for Germany, were in a recession or a period of reduced growth. The US economy, already in recession, suffered from mounting banking system losses and the uncertainty brought about by the Persian Gulf War. However, US and worldwide minerals exploration did not collapse as it did during the mid-1980s. Even though gold and base metal prices declined, prices were still above cash costs for most operations. This allowed the continuation of established exploration programs but sharply limited new initiatives. Exploration 1990-1991 Planned worldwide 1991 exploration expenditures declined by about 8% from 1990 levels, according to a survey of 153 companies by the Metals Economic Group (MEG). Canada was the leading exploration target with 23% of the total, followed by Australia and the US (19% each), South Africa (13%), Latin America (11%) and the South Pacific (7%). The remaining 8% was split evenly between Europe and the rest of Africa. In Latin America, Mexico and Chile are the most attractive countries for exploration. Recognizing the risks involved, the industry has been cautious about ventures in the former Soviet Union. Survey results also showed that while the majors expected to maintain exploration spending, smaller firms were cutting back or actively seeking farm-outs from the majors (personal communication, M. Wegener, MEG).