Mineral Exploration and the Discovery of New Deposits

Mineral discoveries are a major outcome defining the success of exploration activities. It has been noticed that exploration decisions are mostly based on both, how mature is a country in terms of geological potential and institutional quality, but little empirical evidence has been made around the main determinants of exploration success. This paper attempts to develop two empirical estimates around exploration and mineral discoveries. First, an analysis of the main determinants driving mineral discoveries using data from gold and copper deposits, building on the empirical R&D and innovation literature. Second, an assessment on how mature a region is for mineral exploration based on the randomness of discoveries. Main results indicate that aggregated grassroots exploration budgets in a country are not a key variable associated with discoveries, but more and larger discoveries are more likely to occur in countries with stronger protection of property rights. In terms geological maturity, the proposed approach indicates that, on average, the world is not in the more mature geological stage for gold and copper, but the average effect differs across regions.