Page 74 - Introduction to Mineral Exploration

4: RECONNAISSANCE EXPLORATION 57

TABLE 4.2 Example of a budget worksheet used to estimate the annual budget requirement for a project.
Project Name:
Project No:
Month Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Salaries
Wages

Drilling
Transport
Office Lease
Administration

Analytical Costs
Field Expenses
Options – New
Options – Renewals

Surveys
Other Contracts
MONTH
TOTALS

calculated on a yearly basis within which worksheet for the calculation of budget costs
projects can be allocated funds on a monthly and Table 4.3 gives an example of a completed
basis. At the desk study stage the main costs budget and typical costs for reconnaissance
are salaries of staff and these can be calculated programs.
from a nominal staff cost per month, the aver-
age of the salaries is usually multiplied by two
to cover pensions, housing costs, and secretarial 4.2 DESK STUDIES AND RECONNAISSANCE
support. Other support costs must be included
such as vehicles and helicopter transport in
remote areas. Direct costs of exploration are 4.2.1 Desk studies
easier to estimate and include geochemistry, Once the exploration organization is in place,
remote sensing, and geophysical costs. These initial finance budgeted, and target deposit
can be easily obtained by asking for quotations type selected, then desk studies can start and
from contractors. Perhaps a more contentious areas can be selected for reconnaissance – but
matter is the allocation of overhead costs to on what basis?
each project; these cover management time The first stage in a totally new program is to
and will include the time of head office staff acquire information about the areas selected.
who review projects for presentation to board Besides background information on geology,
level management. Often these can be frighten- data on the occurrence of currently producing
ingly large, e.g. the costs of keeping a senior mines and prospects and their economic status
geologist in a metropolitan center will be much are essential. This information will normally be
larger than in a small town. Table 4.2 shows a based largely on published material but could