The Reemergence of Strategic Alliances in Mineral Exploration
The nature and terms of a strategic alliance can vary greatly, depending upon the objectives of the parties. In terms of mineral exploration, strategic alliances are often formed between an exploration company and a more senior mining company, to work collaboratively to explore for and identify mineral projects.
The exploration company will contribute to the alliance its geological and technical expertise, local operational experience, know-how and contacts, and often a geological or proprietary database to draw upon. Canadian exploration companies are very well suited in this role, as arguably they collectively have the greatest depth of mineral exploration expertise and experience in the world. The senior mining company, on the other hand, will typically contribute funding and provide oversight and technical direction in respect of potential projects that are identified.
The scope of an alliance is often focused on certain geographic areas and certain types of metals or minerals, due to the local knowledge and expertise of the exploration company and the strategic objectives of the senior mining company.
From the exploration company’s perspective, a strategic alliance provides a source of funding to allow it to pursue its exploration activities. From the senior mining company’s perspective, a strategic alliance serves as a means by which grassroots exploration and project generation can be outsourced to a skilled and proven exploration team, while at the same time allowing the mining company to participate and take an ownership interest in any projects that are discovered.
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Article reprinted with permission. Originally published in Canadian Mining Magazine, Winter 2013.