A lot of investors looking for the opportunity to diversify their portfolio by investments in minerals exploration. This is doing to avoiding the dangers of “putting too many eggs in one basket”. Let’s try to see what does mineral resources exploration investing mean and how to avoid troubles when you investing in mineral resources.
Let’s start from the basic knowledge what is a mineral exploration?
The investigative activities prior to mining are called mineral exploration and development. The prize of successful exploration and development can be huge if a deposit is discovered in commercially viable concentrations, evaluated, and developed into a mine.
This process of search and finding ore or mineral deposits there is, of course, a huge amount of risk involved.
The condition of discovering in commercially viable concentrations is very important because of the high value of the mineral exploration themselves. The exploration for and evaluation of mineral resources has to be as accurate as possible to avoid additional expenses.
There are additional socioeconomic factors which have to be controlled by the government and local communities. It may take a lot of additional budget expenses and must be considered in an investment plan.
Here they are:
• New job opportunities. As usual, the exploration has activated various infrastructure projects and local businesses. This has a beneficial effect on the local budget and tax collection which in turn may lead to the necessity of the salaries rising.
• Appropriate compensation for the locals for any impact on the environment which exploration activity may bring to the properties and livelihood of affected residents;
• Appropriate rehabilitation expenses for the affected locals. The following points should be included:
◦ affordable medical facilities for affected residents;
◦ free courses, training for the affected residents so that they can qualify for jobs in the company;
◦ social infrastructure including schools, kindergartens, community objects, for the children of affected residents.
Characteristics of critical issues of mineral prospecting and exploration of mineral resources
No doubt that mineral exploration and development are quite big investments. These are investments which are spending in the expectation for future revenues which will be sufficient to cover all costs adding minimally acceptable profit.
The critical factors that influence expected revenues, costs, and risks in the geologist exploration of mineral resources are usually grouped into four categories:
- Geological Issues: the difference between expectable mineralization and actual. Does this mineral deposit exist in a given region at all? Are its quality and deposit acceptable?
- Technical Issues: does the technical opportunity to extract mineral resources with given equipment in given region exist?
- Environmental, Social, and Political Issues: does minerals can be mined in methods that do not violate nation’s preferences and policies for environmental protection?
- Economic Issues: are the mining in a given region with given equipment profitable at all?
So, the answer for the question what is a mineral exploration includes the complex of issues solutions, and activities to find the mineral deposits.
Perspective Regions for the Mineral Exploration Investing
Theoretically, almost any region may be the perspective for the mineral prospecting and exploration. But practically, the exploration of minerals is held in hard to reach places. In this regard, it seems to be reasonable to take a look at the opportunity to invest in exploration in Kazakhstan
Kazakhstan has more than 493 deposits of 1225 types of mineral raw materials for now. 99 elements of the periodic table were identified, reserves of 70 each were explored, and more than 60 elements were involved in the production. This is a real treasure chest: ranks first in the world in explored reserves of zinc, tungsten, and barite, the second place for silver, lead and chromite, the third rank for fluorite and copper, the fourth place for molybdenum, the fifth rank for gold.
Investments in this Central Asia country suppose to be successful because of the ready complex solution for most of the issues listed above:
• – the government has passed laws that encourage investment;
• – the availability of experienced, reliable and professional companies.
For example, GC KAZSPECGEOLOGY LTD seems to be right choice. Company has more than 14 years expertise, 18 big successful projects in this business and are able to offer very attractive conditions to investment. Moreover, they are able to provide the solution of issues and exploration of the minerals deposits due to the availability of a complete set of geological survey equipment owned by them.