A new study from the SNL Metals Economics Group found that the three-year surge in exploration spending in the mining industry will come to a half this year because of weak metal prices and a a sharp fall-off in financing for miners with early stage exploration projects.

The report, released at the opening of the Prospectors and Developers Association of Canada (PDAC) convention in Toronto warned that persistent uncertainty over global economic growth will crimp the spending flow, especially for early-stage, entrepreneurial explorers that are the industry's lifeblood, Reuters reported.

"We expect the pullback in junior budgets to be the main driver of an overall decline in industry spending in 2013," said Jason Goulden, head of metals and mining research for SNL MEG.

Reuters reported that Goulden declined to speculate on the size of the anticipated pullback. Still, he noted that juniors typically account for roughly 40 percent of global exploration spending annually.

This year stagnant metal prices coupled with many multi-billion dollar asset writedowns by some of the world's largest precious and base metal miners have panicked investors. And many are now shunning the sector entirely.

"A lot of investors are just shying completely away from the resource sector and the appetite for risk is almost non-existent at this point," said Daryl Hodges, chief executive of Jennings Capital, an independent Canadian investment dealer.

The study, issued in partnership with PDAC, notes that juniors that own really exceptional projects will be able to finance sizable exploration programs, while those with smaller or earlier-stage assets will struggle to attract investment.

The SNL MEG World Exploration Trends report does not bode very well for companies such as Boart Longyear Ltd and Major Drilling Group International Inc - the world's largest metal and mineral exploration drilling companies. Shares of both companies have fallen roughly 10 percent so far this year.

Goulden told Reuters that he expected the coming decline in exploration spending to result in lower drilling activity for all metals.

"That said, we do expect gold and copper to continue to a account for the largest share of overall exploration spending, so drilling targeting these commodities should hold-up better than some others," he said.

Exploration spending rose steadily between 2002 and 2008, on the back of rising demand from emerging economies and a surge in metal prices. The extended boom came to an abrupt end in late 2008 and early 2009, as the impact of the U.S. housing market collapse and financial crisis rippled across the globe.

Since bottoming in 2009, spending has bounced back strongly, as despite pullbacks in recent months metal prices over the last two years have remained well above historical levels.

The SNL MEG study, which focuses on non-ferrous exploration, found that spending reached an all-time high of $20.5 billion in 2012. Including estimates for budgets it could not obtain, the group estimates that spending jumped to $21.5 billion in the year, up from about $18.2 billion a year ago.

The study pegs iron ore exploration spending in 2012 at $2.9 billion, up from about $1.8 billion, a year earlier. The SNL MEG report is based on information collected from about 3,500 mining and exploration companies worldwide.

Exploration allocations for all regions increased to record highs in 2012, according to the report, led in dollar terms, by the largest increases in Latin America and Africa. Latin America remained the most popular exploration destination, attracting 25 percent of global spending in 2012.