Estimated world-wide 2011 nonferrous metal exploration spending surged to $18.2 billion, according to the 22nd Edition of Metals Economics Group’s (MEG) Corporate Exploration Strategies—an increase of 50% compared with 2010. The survey includes exploration expenditures related to precious and base metals, diamonds, uranium and some industrial minerals but specifically excludes iron ore, aluminum, coal, and oil and gas.

Most explorers are demonstrating a higher tolerance for risk, despite additional concerns and uncertainty about security, policy, and tenure in many countries, MEG commented. Of the 120 countries covered by the survey, those commonly perceived to be high risk account for 23% of the 2011 aggregate exploration total, up from less than 16% in 2010.

The proportion of overall exploration spending dedicated to early-stage and generative work has been fairly stable over the past three years. However, at just a third of overall allocations, it is historically low. The decline in grassroots’s share of spending over the past decade correlates with an upward trend in late-stage and mine-site budgets, as companies have spent more on late-stage projects to move them toward production or to make them attractive for acquisition. Also, mine-site work is a less expensive and less risky means of replacing and adding reserves.

“However, the number of large-scale assets advancing to development has not risen proportionately with this increased focus on late-stage projects, contributing to constraints on meaningful production increases for most metals. The apparent decline in grassroots efforts relative to late-stage and mine-site exploration over the past cycle and the considerable time needed to advance a new discovery to production mean that the pool of viable, large-scale assets available for actual development is unlikely to grow in the near future,” MEG concluded.