What place holds the highest probability for a new world-class discovery?
As Aussie investors, we tend to look in our own backyard first, which is the home bias effect.
But the thing is, thanks to decades of a supportive mining environment, well-trained staff, and advanced exploration methods, the prospect of discovering another giant deposit in Australia is fading.
Don’t get me wrong, there could still be potential in remote outback locations, like the Tanami.
But compared to places like West Africa, where high-grade gold can still be found close to surface, Australia’s giant discovery potential is diminishing.
Then there’s Canada…
Like Australia, Canada has been heavily explored thanks to its supportive governance and skilled labour force.
It has also lost its discovery potential.
But like Australia, some remote frontiers, especially in the remote north, still hold discovery potential.
But if you want to stack the odds firmly in your favour and pick a place with the highest potential for a major discovery, look no further than Argentina!
Argentina: land of the giants
Argentina is the best place for mineral explorers and their shareholders.
And there are a few reasons why that’s the case.
To understand the potential here, you must look at its neighbour, Chile and what it has achieved in its mining industry over the last several decades.
Chile is the world’s largest copper-producing nation.
That’s enabled it to remain one of the wealthiest nations in South America.
Its economy feeds off its vast copper exports, thanks to discoveries made thirty, sometimes fifty years ago.
It holds mega-copper projects that have left a legacy of long-term production.
But across the border, Argentina’s copper output has gone from modest to virtually nil:
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So, is there less copper in Argentina or is something else happening here?
The critical thing to realise is that Argentina has the same geological system as Chile.
The system that hosts giant porphyry copper-gold deposits.
To show you what I mean, South America’s ‘copper belt’ straddles the border between Argentina and Chile, as you can see on the map below:
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| Source: Risco Bayo |
Yet only one country has realised this potential over the last several decades… Note that all the mines (green stars) are in Chile, not Argentina.
So, what’s going on?
This has nothing to do with geology and all to do with politics.
Mega-mining projects take up to 20 years to develop and remain in production for decades.
As I mentioned, these mines leave a legacy for the host country and the mining companies that own them.
It’s why political stability is so essential for developing giant copper mines.
And that’s the key element that’s been missing in Argentina.
Thanks to decades of hostile business conditions and economic chaos, the miners haven’t ventured into Argentina.
And that’s why the country holds a vast untapped wilderness of geological potential.
But the political and economic winds are finally changing in Argentina…
This means that this untapped frontier could finally become investable again.
Stay tuned for my next edition, and I’ll explain how you can take advantage.
Regards,
James Cooper,
Mining: Phase One and Diggers and Drillers
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