• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 5 mins EU has already lost the Trump vs. EU Trade War
  • 1 day Crazy Stories From Round The World
  • 1 day Science: Only correct if it fits the popular narrative
  • 2 days Iran Burning: Shock Gas Price Hike Triggers Violent Protests After Subsidy Cuts
  • 8 hours Pope Proposes New Sin: Thou Shalt Not Destroy The Harmony Of The Environment
  • 1 day Everything You Need To Know About Trump
  • 15 hours IEA predicts oil demand will grow annually at 1 million barrels a day for the next 5 years
  • 2 days Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 25 mins Water, Trump, and Israel’s National Security
  • 1 day Impeachment Nonsense
  • 18 hours ‘If it saves a life’: Power cut to 1.5 million Californians
  • 2 days What are the odds of 4 U.S. politicians all having children working for Ukraine Gas Companies?
  • 2 days Who writes this stuff? "Crude Prices Swing Between Gains, Losses"
  • 12 hours Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
Alt Text

How To Play A Recovery In Oil Prices?

A realistic correction in the…

Alt Text

The Worst Oil Trades Ever Made

Wall Street is full of…

Alt Text

This Supermajor Is Leading The Energy Sector

This supermajor has been standing…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

Gold Exploration Still Profitable When Done Right

These days, I get asked a lot: "Why would anyone do mining exploration right now?" But news this week suggests one of the world's largest gold miners thinks it's a great time for grassroots work.

The company is Newmont Mining. Which announced it will pay a substantial US$4 million for a package of exploration properties -- and not in a go-to destination like Nevada or Mexico, but rather in the further-afield terrains of Haiti.

The properties consist of six gold and copper exploration properties across Haiti (pictured in the map below). Which the company has been developing since 2008, in partnership with junior exploration firm Eurasian Minerals. Related: North Dakota No Longer Attractive For Drillers Or Refiners

Haiti

Newmont Mining is buying six exploration projects across Haiti (Source: Eurasian Minerals)

Newmont is now buying out Eurasian's minority interest in the projects -- which would have amounted to somewhere between 25 percent and 30 percent ownership under the agreement between the two partners. Related: Why Has Carbon Capture And Storage Not Taken Off Yet?

Those are interesting figures -- suggesting that Newmont is placing an overall value of as much as $16 million on the projects. All of which are grassroots in nature, having seen rock and stream sediment sampling, but no exploration drilling.

This is a hefty valuation at a time when exploration is "dead," especially given that the projects have been on care and maintenance since 2013 as Haiti's government revamps its mining code.

The deal thus shows that good exploration prospects are still in demand from the world's biggest mining companies. And suggests just how profitable exploration can be for developers -- with junior partner Eurasian Minerals likely to make a significant return on the buyout. Related: OPEC Infighting Reaching Critical Levels

Eurasian spent less than $2 million developing the projects during 2006 to 2008, before they were joint-ventured to Newmont -- who then covered all exploration expenses. The $4 million payout thus represents a more than 100 percent return on capital. And Eurasian will retain a 0.5 percent royalty on the projects.

Proving that exploration is still one of the most profitable businesses on the planet, when done right. And still a necessity in the global hunt for the next big source of gold, copper and a host of other metals.

Here's to giving 'em what they want,

Dave Forest

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play