EVOLUTION Mining executive chairman Jake Klein says a drop in the gold price shouldn’t stop exploration efforts.
Klein was speaking at the Denver Gold Forum overnight and emphasised Evolution’s emphasis on exploration and discovery.
“You can’t – just because the gold price is down – stop exploring,” he said.
Klein’s comments come as the gold price sits at 2014 lows of about $US1230 an ounce.
“One of the things I’m amused about and somewhat surprised about is that everyone looks at costs and people are starting to draw lines through discovery and exploration expenditure,” he said.
“But fundamentally, if you thought exploration last year was a good thing to do, you should think it’s an even better thing to do today because it’s about 40% cheaper to drill a metre of drilling today than it was last year.”
Klein said the company was committed to discovery through the use of new technology under the leadership of chief geologist and discovery vice-president Roric Smith.
Evolution has been using 3D seismic surveys at its Cracow and Pajingo mines in Queensland, as well as 4D modelling – with the fourth element being time to get a better understanding of mineralisation.
“We need to think like scientists and act like scientists,” Klein said.
Evolution is planning to spend $18.5 million in the 2015 financial year and drill about 60,000-70,000m.
Klein said the company would also look at upgrading its portfolio via mergers and acquisitions as the gold sector was closer to the bottom than the top.
However, he acknowledged it was a challenging area, with only 17% of M&A deals estimated to add value.
“You’re playing against the odds essentially when you buy something,” Klein said.
But Evolution is actively looking.
“We want to make sure we’re in the 17% minority and they add substantial value to our shareholder base,” Klein said.
Reproduced by permission from:
"Don't stop exploring: Klein"
Mining News Premium, 16 Sep 2014 by Kristie Batten