1. Mining investment out of Ireland Christian Schaffalitzky Job Langbroek Finex 2008 Christian Schaffalitzky Job Langbroek Finex 2008

2. What is exploration?  Commodity prices  Good legislative framework  Good people  Good projects  Geology  Frontier activity  Enough money  Good luck  Commodity prices  Good legislative framework  Good people  Good projects  Geology  Frontier activity  Enough money  Good luck

3. Early Irish Exploration  Legal/fiscal framework from1956  “Promotion” by geological survey of Ireland  Irish-Canadian explorers - Entrepreneurs  Canadian venture capital  Legal/fiscal framework from1956  “Promotion” by geological survey of Ireland  Irish-Canadian explorers - Entrepreneurs  Canadian venture capital

4. 1958 - 1970  ‘Use it or lose it’ licence system  Discovery and development of Tynagh, Silvermines, Gortdrum, Magcobar 1958-1965  1967 Finance act  Growth of Northgate Group  1970 - 4 mines represent 4% of Irish GDP  ‘Use it or lose it’ licence system  Discovery and development of Tynagh, Silvermines, Gortdrum, Magcobar 1958-1965  1967 Finance act  Growth of Northgate Group  1970 - 4 mines represent 4% of Irish GDP

5. 1970 - 1985  Discovery of Navan - 5th largest in the world  New ‘left leaning’ government  1974 Finance Act  “limits to growth”  Arrival of ‘oil’ Majors  Discovery of Navan - 5th largest in the world  New ‘left leaning’ government  1974 Finance Act  “limits to growth”  Arrival of ‘oil’ Majors

6. 1986 - 1997  New discoveries at Galmoy and Lisheen  Modern environmental legislation and structures  New Mines ‘State of the Art’  Start of gold exploration  Maturing of base metals exploration - deeper targets  Open file data release  New discoveries at Galmoy and Lisheen  Modern environmental legislation and structures  New Mines ‘State of the Art’  Start of gold exploration  Maturing of base metals exploration - deeper targets  Open file data release

7. 1959 TYNAGH 1959 TYNAGH TSX TSX & Majors USM AIM 1963 SILVERMINES MAGCOBAR GORTDRUM 1963 SILVERMINES MAGCOBAR GORTDRUM 1970 NAVAN 1970 NAVAN 1986 GALMOY 1986 GALMOY 1990 LISHEEN 1990 LISHEEN

8. Good People  In 1958, 2 Irish economic geologists, one in GSI  By 1980 - 150 geologists employed in exploration at all levels of management  Also 5,000 employees in the minerals sector 1975 to date  Industry 100% private sector and ‘entrepreneurial’  In 1958, 2 Irish economic geologists, one in GSI  By 1980 - 150 geologists employed in exploration at all levels of management  Also 5,000 employees in the minerals sector 1975 to date  Industry 100% private sector and ‘entrepreneurial’

9. Good Projects  Carboniferous limestones of Ireland - major base metal province  Gold found in PreCambrian and Lower Palaeozoic rocks  These two themes account for 80% of geology of Ireland  Carboniferous limestones of Ireland - major base metal province  Gold found in PreCambrian and Lower Palaeozoic rocks  These two themes account for 80% of geology of Ireland

10. Enough Money  Early phase venture capital from Canada - largest mining capital base in the world  Later Irish ‘grub stake’ money  London next door  USM and AIM (OFEX/PLUS)  Experienced promoters  Early phase venture capital from Canada - largest mining capital base in the world  Later Irish ‘grub stake’ money  London next door  USM and AIM (OFEX/PLUS)  Experienced promoters

11. Data from IMEG, EMD

12. Irish Entrepreneurs  Irish based promoters active since early 1980s  Initially worked in Ireland but also overseas  Initially tended to concentrate on gold and base metals, based on local experience  Activity continues to present  Irish based promoters active since early 1980s  Initially worked in Ireland but also overseas  Initially tended to concentrate on gold and base metals, based on local experience  Activity continues to present

13. SUCCESS RATE? Total61 Private27 Listed34 Dead22 (2) Mining10 Irish Companies 1962 - 2008

14. Irish Minerals Companies 2006 Million Euros

15. Traditional Model Is it finished?  Too many companies fishing in small pond  Scale Problem - successful exploration requires project finance  Poor liquidity  Big increase in costs 80-120% since 2002  What size the grubstake?  Too many companies fishing in small pond  Scale Problem - successful exploration requires project finance  Poor liquidity  Big increase in costs 80-120% since 2002  What size the grubstake?

16. Exploration Cycles  Commodity price Cycle Junior activity - risk taking Equity finance ‘saturation’ Consolidation/Joint ventures/sales with majors Reduction in frontier activity Junior activity - risk taking  Commodity price Cycle Junior activity - risk taking Equity finance ‘saturation’ Consolidation/Joint ventures/sales with majors Reduction in frontier activity Junior activity - risk taking

17. Data from IMEG, EMD

18. Success in Exploration  Geo-entrepreneurial skills  Legal framework  Fiscal environment  Infrastructure  Modern science  Trained professionals  Geo-entrepreneurial skills  Legal framework  Fiscal environment  Infrastructure  Modern science  Trained professionals

19. Model for elsewhere?  Irish experience a clear case study for non-state involvement in exploration  Requirements are a benign legal/fiscal environment  Good geological database  Very efficient use of capital due to highly competitive structure  Constraints are the supply and demand cycles in commodities  Irish experience a clear case study for non-state involvement in exploration  Requirements are a benign legal/fiscal environment  Good geological database  Very efficient use of capital due to highly competitive structure  Constraints are the supply and demand cycles in commodities

20. Acknowledgements  Sean Beary (IMEG)  Sean Finlay  Eamonn Grennan  Ralph Horne  Hugh McCullough  John Pyne (EMD)  Katy Lutley  Sean Beary (IMEG)  Sean Finlay  Eamonn Grennan  Ralph Horne  Hugh McCullough  John Pyne (EMD)  Katy Lutley