Hronsky - Session 4 - Mineral Exploration Tactics

Module 3:
Exploration Management and Targeting
Session 4:
Mineral Exploration Tactics
Jon Hronsky
21-25 March 2011
KIGAM International School for Geoscience Resources March 2011 1
Introduction
Traditionally most discussion about effective

exploration program design focuses on
application of particular search technologies
These are context sensitive
Very dependent on target type and local

environment
Objective of this training module is instead to

provide a generic set of principles that are
applicable to any context
1
Prospecting vs.
Systematic Exploration
Important starting point is recognizing

fundamental difference between prospecting-
style exploration and systematic exploration
Historically, mineral exploration activities were

dominated by the prospecting approach
The systematic approach however represents a

more efficient path to discovery and is
absolutely essential under cover
Prospecting-Style Exploration
Prospecting-style exploration is basically a search

f surface
for f (or
( near-surface)
f ) iindications
di ti off
mineralization
This search continues until an indication of
mineralization is found that is sufficiently interesting
to focus detailed follow-up work
The sampling methodologies employed include float-
sampling, rock
rock-chip
chip sampling and follow-up
follow up
trenching.
Prospecting-style exploration by its very nature has a
very high sampling bias when we are prospecting
we want to be biased to the relatively rare occurrence
of mineralization
2
Source: Oriental Minerals Website 5
Prospecting-Style Exploration
P
Prospecting-style
ti t l exploration
l ti can beb very effective
ff ti ini
the initial stages of exploration of a particular area;
most critically it can provide the first positive
identification of potentially-economic mineralization
However, the high sampling-bias of prospecting-style

exploration makes it ineffective for the systematic
evaluation of large areas that we know to be
mineralized, and for prioritization between
mineralized target areas
3
Systematic exploration methodologies have the goal of not

j t fi
just finding
di mineralization
i li ti but
b t finding
fi di large,
l potentially-
t ti ll
economic accumulations of mineralization
Systematic project-scale exploration requires the
application of sampling methodologies (both geochemical
and geophysical) that are:
Collected on a systematic spacing
Integrate the response (e.g. Au content) from a broad
rock volume
Targets generated by a systematic exploration process are
much more likely to be associated with economic
mineralization
Examples of systematic exploration methodologies include
stream sediment sampling, grid geochemical sampling and
airborne geophysical surveys
The Role of Geological Mapping in

It is common in many modern exploration programs not to carry out

detailed geological mapping of the project area
In many areas this decision is justified by the presence of insufficient

outcrop (although even small exposures can help provide context)
However, in many other cases this decision is instead justified on the

basis that the results of the systematic sampling alone should be
sufficient to determine if follow up is required.
This is only true if the results of the program are completely

unambiguous (either negative or positive)
In many cases, geological mapping (including supporting rock chip and

trench sampling) can have a very important role to play in providing a
context for the interpretation of the results from the systematic
exploration methodologies
4
Jigsaw Puzzle or Assembly Line?
Good vs. Successful Exploration
It is the nature of exploration that the majority of

activities fail to yield a positive outcome, particularly at
the more advanced stages
It is important to distinguish between successful

exploration (i.e. that which produces an economically
successful result) from good exploration (i.e. that
which is an effective investment of exploration
expenditure)
The definition of good exploration is an exploration

activity that significantly changes the residual
prospectivity of the project; either up or down
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5
The Exploration Stage Concept
The practice of exploration is a series of progressive

area reduction steps
In most cases, these steps are quite consistent in

general terms between different projects as they
reflect the basic set of technologies available to our
industry
The term Exploration Stage is used to describe

each of these general steps
Example of an Exploration Stage Framework

(Source: WMC Resources)
12
6
The Basic Structure of
Exploration Activity
Exploration Projects are like Sharks
They either keep moving forward or they die!

7
Decision Point Planning
Introduction
Decision Point Planning is a planning process where

resources are only
y committed to a pproject
j up
p to the point
p
where the project reaches a major go-no go decision point
Sometimes also referred to as budgeting to milestones
Best practice for any situation where:
the probability of reaching the ultimate desired
outcome of the project is low, and
a number of key intermediate milestones must be
reached on the path to the ultimate outcome
Particularly relevant to mineral exploration but also applied
generically in industrial R&D
Remember the greatest option value with a highly
uncertain early stage project is the option to stop!
8
Advantages of Decision Point
Planning
Clarifies short-term goals by focusing planning

on the projects next key milestones
Drives a discipline of focusing on the most
efficient pathway to discovery
Optimizes allocation of exploration budget
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Budgeting to Milestones
The probability of failure is high for any given

exploration project
Funding a project beyond the next milestone
unnecessarily constrains funding a larger portfolio of
projects
Funding a project from one milestone to the next allows
more efficient use of corporate funds because it permits
more projects to be funded at any one time
Not all projects will advance to the next milestone so
funds will be available for those projects that do
advance
Without this, contingency funding is always included,
which will either not be spent, or be spent in a sub-
optimal fashion
9
Budgeting to Milestones
The greatest option value at the start of an exploration

project is the option not to proceed if discouraging
results are obtained
For this reason, it is critical to employ decision point
planning and only commit resources to a decision point
A decision point may be the completion of an

exploration stage but it may also be some intermediate
technical step
This process is also referred to as stage gating
Implementing Decision-Point
Planning
Requires development of a mental model for how the

project will be explored to discovery
Technologies employed; their cost and time-frame
Sequencing of activities
Expected outcomes of each major phase of work
Two end-member approaches:
Replication of an exploration program applied
elsewhere on the assumption that it is optimum for
the project
Consideration of range of possible pathways to
discovery and conscious selection of optimum path
The latter process can be significantly assisted by the
use of Decision Trees
10
Decision Trees
A decision tree is a decision support tool that

graphically depicts a model of decisions and
their possible consequences, including chance
event outcomes, resource costs, and value of
outcomes
Used to identify the strategy most likely (or the

cheapest way) to reach a goal
They can be also used to estimate the expected

value of an early-stage exploration project
Decision Tree:
A Petroleum Example
Oil
.85
+$35M
Drill
-$0.5M No oil
Test favourable .15
.60 Dont drill
Oil
Seismic test .10
Test unfavourable +$35M
-$1M .40 Drill
-$0.5M No oil
.90
Dont drill
Dont run seismic

.35Oil
Decision point
+$35M
Drill
Chance event
-$0.5M No oil
$1M Cash flow .65
Dont
KIGAM International School for Geoscience Resources March 2011drill 22
11
Benefits of Decision Trees
Help
H l clarify
l if decisions
d i i
Produce better quality decisions by
encouraging us to look at how the parts
relate to the whole, rather than only looking
at the whole and attempting to make a
decision at that level
As visual representations of decisions, they
provide a good overview as the decisions
are captured on one page
Benefits of Decision Trees (cont.)
Maximize consistency in decision making
The act of constructing decision trees forces us

to think ahead
If some parts of the decision-making process

change, we can simply re-work that part of the
existing tree and develop a new strategy from
that point. This also applies if we want to
experiment with different probabilities on the
branches generated by a chance node
12
Expected Monetary Value
(EMV)
Ps
$ NPV
EMV ?
Pf $ Costs
EMV = {Ps * (Reward NPV-cost)} - {Pf * Failure

Costs}
Ps = probability of discovery
NPV = net present value of discovery
Pf = probability of failure = (1-Ps)
Failure costs include present exploration +/- divestment costs
Drawing a Decision Tree (1)
A Decision Tree consists of 3 types of nodes:
1. Decision nodes - commonly represented by squares

1
2. Chance nodes - represented by circles
3. End nodes - represented by triangles. These include the
ultimate objective Pay-Off Node(s)
Drawn from left to right, a decision tree has only burst

nodes (splitting paths) but no sink nodes (converging
paths).
Source: Wikipedia
13
Step 1
Gather information that is relevant to the
decisions to be made
Step 2
Identify the decisions that need to be made,
and the chance events that may occur
Step 3
Build the information from Steps 1 & 2 into a
decision tree. The structure of the tree will
reflect the order in which decisions need to
be made and chance events occur
Decision nodes:
Generate branches, each of which reflects a possible
decision we could make
Chance nodes:
Generate branches, each of which relates to an
outcome
Each branch has a probability which we must estimate
These probabilities must add to 1
Calculate an EMV at each chance node; probability
weighted average of all outcomes
Terminal nodes:
End points of decision tree
Each has a monetary value (positive, zero or negative)
14
Decision Tree:
A Petroleum Example
Oil
.85
+$35M
Drill
-$0.5M No oil
Test favourable .15
.60 Dont drill
Oil
Seismic test .10
-$1M .40 Drill
-$0.5M No oil
.90
Dont drill
Dont run seismic

.35Oil
Decision point
+$35M
Drill
Chance event
-$0.5M No oil
$1M Cash flow .65
KIGAM International School for Geoscience Resources March Dont
2011 drill 29
Mineral Exploration Example
Kreuzer et al (2008)
15
Solving a Decision Tree
Assume branch of decision tree that has highest EMV

is optimal
p
Solve a decision tree by working backwards
Start at the terminal nodes and work from right to left.
At each decision node (only) prune the least attractive

branch
The final result is the remaining continuous branch

when the pruning has been completed back to the
initial point of the tree
This is our optimum decision-point plan
Solving a Decision Tree:

A Petroleum Example
Oil
EMV= .85
(0.85 x 34.5) (0.15 x 0.5)
= $29.25M +$35M
Drill
-$0.5M No oil
Test favourable .15
.60 Dont drill
Oil
Seismic test .10
-$1M .40 Drill
EMV=
(0.6 x 28.25) + (0.4 x 2.0) -$0.5M No oil
= $16.15M
$16 15M .90
EMV=
Dont
(0.1 x 34.5) (0.9 drill
x 0.5)
= $3.0M
Dont run seismic
Oil
.35
Decision point
+$35M
Drill
Chance event EMV=
(0.35 x 34.5) (0.65 x 0.5) -$0.5M No oil
$1M Cash flow = $11.75M .65
KIGAM International School for Geoscience Resources March Dont
2011 drill 32
16
The Exploration Review Process
Why do we need Exploration Reviews?
A systematic
systematic, regular review process is vital in
any exploration group
It ensures that the best expertise in the group is

used to make key investment decisions
It ensures that any decisions to proceed with

particular projects are made in the context of
the overall portfolio
Relate learning to formal review process
17
Requirements for Successful
Reviews
Review process delivers better results if success criteria

and e
expected
pected timing of milestones of projects are clearl
clearly
defined at inception
Allows advanced planning of time, place and participants of
review
Not reactive, ad hoc process
Need team, peer, management, and sometimes, corporate
participation
Involvement
In ol ement of those without
itho t emotional commitment to
project essential!
May require different type of review for the different context
of each group (e.g. commercial, logistical) but only if
technical objectives are met
Beware of mission creep!
Types of Reviews
Peer reviews
re ie s vs.
s Management reviews
re ie s
Actually two separate and non-competing reviews
Each has a distinct focus and intent
What is a Peer review?
Review of project results with the project team and
other g
geoscientists and internal stakeholders
Needs to be led and managed
Careful and thorough documentation of results
Needs to be timely
18
Types of Reviews
What is a Management review?

Not a technical review
Determine if results are consistent with corporate
financial objectives
Determine if the project has any newly identified
commercial
i l risks
i k that
th t impact
i t its
it value
l
Consider if the project has more value to another
company
Milestones
A milestone occurs when the outcome of a chance event (i.e.

phase of exploration work) is known. It is a point in time when
a decision must be made to continue with or exit the project
Oil
.85
Drill +$35M
No oil
MILESTONE
MILESTONE
-$0.5M
Test favourable .15
.60
Dont drill
Oil
Seismic test .10
Test unfavourable Drill +$35M
-$1M .40
40
-$0.5M No oil
.90
Dont drill
Dont run seismic Oil
Decision point .35
Drill +$35M
Chance event -$0.5M No oil
.65
Dont drill
19
Milestone Review
Decision Tree
Milestone Reviews
Successful implementation of decision point planning

d
depends
d critically
iti ll on a supporting
ti Mil
Milestone
t review
i process
A critical review of the project is essential after results of an
exploration test are received
Requires faith on the part of the project manager that funding
will be provided if the milestone is passed
Requires diligence on the part of management that funds will
b available
be il bl for
f projects
j t that
th t pass their
th i milestones
il t (i.e.
(i do d nott
fund too many projects at once)
In some cases, may be obvious whether milestones have
been achieved or not but in other cases results may be more
ambiguous
20
Generic Framework for
Effective Program Design
Introduction
There is no single recipe in terms of which

exploration technologies should be used
Instead, the approach chosen is to define a small

number of generic critical parameters that influence
optimum program design
The particular quantitative values of these

parameters for any project will be context sensitive:
Target
g ore type
yp
Local Geology
Logistical considerations
Generic Decision Matrices have been developed

based on qualitative values of these critical
parameters
21
Systematic Sampling vs.
Contextual Data
The data collected and interpreted in any exploration

program design
d i will ill fall
f ll into
i t one off two
t categories:
t i
Systematic sampling data
Geochemistry, geophysics, drilling
Contextual data
Mapping, rock-chip sampling, geochronology
Generally
y the majority
j y of the p
program
g expenditure
p will
be incurred in systematic sampling
The key role of contextual data is to enhance the

interpretation of the significance of results derived from
systematic sampling
The First Decision Point:

Stratigraphic Drilling?
In some specific situations it may be very cost-effective to
g p
drill a stratigraphic hole at the beginning
g g of an exploration
p
program
The main value created by stratigraphic drilling is the

opportunity-cost saving by evaluating a key target
parameter early (i.e. ability to stop project early)
Stratigraphic holes seek to establish either:

The presence of a favourable lithological unit
The absence of prohibitive depths of post-mineral cover
They are justified when there is significant doubt about the

presence of a favourable unit, or that cover depths are
within explorable limits
22
Conditions for Stratigraphic Drilling
If testing for the presence of a favourable unit, all of

th
these th
three conditions
diti mustt be
b satisfied:
ti fi d
The validity of the target depends on a particular

critical lithological unit being present (or at the
least, the quality of the target is strongly
dependent on its presence)
The base-rate probability of this critical unit

occurring in the target area is low
The presence or absence of the critical unit can

be unambiguously verified from a single (or very
few) drill hole(s)
Critical Generic Parameters
DEPENDENT ON
1. Resolution of primary targeting CONTEXTUAL
FACTORS:
2. Drill test area of Influence (AOI)
Target ore type
Local geology
3. Cost of pre-drill survey(s)
Logistical constraints
4. False positive rate of pre-drill survey(s)

y( ) Cost of commercial
risk management
(Note that pre-drill survey includes reconnaissance geochemical pattern drilling)
23
Resolution of Primary Targeting
The starting point for any exploration project will be a box

on a map
map that has been defined through the application of
geological concepts to the pre-existing geoscientific data
base
The size of this box (i.e. the resolution of the primary

targeting) is an important parameter
In some cases, the resolution may be high; e.g. if a particular

bulls-eye magnetic anomaly is being targeted
However, it is more likely that the resolution will be relatively

low; e.g. targeting based on regional tectonic architecture
typically delivers a resolution of the order of 103 km2
Resolution of Primary Targeting (cont.)
Targeting resolution is usually a function of:
the resolution and quality of the available data
how well the target ore-environment is known

to manifest itself in these data
24
Drill Test Area of Influence (AOI)
Any drill test of a covered target that fails to intersect

mineralization,, or the recognizable
g signature
g of a major
j
deposit has, in most cases, effectively sterilized an area
of influence around the drill hole
The drill test AOI will depend on:

the mineralization footprint of the target ore-type
the area of its distinctive halo (alteration, metal
anomalism, unusual rock types etc)
the ability to employ off-hole geophysical
techniques
It can range from very low in the case of diamond

exploration to quite large in the case of porphyry
copper exploration
Cost of Pre-Drill Surveys
This is a fairly obvious input parameter
It will depend strongly on the local geography of

the project area and attendant logistical issues
In some cases (e.g. Airborne EM, Airborne Gravity)

these costs can be very large (>US$ 1 M) and as
significant as drilling costs
25
False Positive Rate of Pre-Drill
Surveys
Because we are dealingg with a low base-rate

environment, the false-positive rate is the
overwhelmingly most important parameter which
governs the effectiveness of a particular survey
(assuming the false-negative rate meets an
acceptable threshold)
Two different survey techniques applied to the same

area can result in a dramatically reduced false-
positive rate for coincident anomalies:
But must ensure that the two techniques are sensing
independent properties (e.g. geochemical and geophysical
responses)
Bringing it all Together
Q
Qualitative
lit ti values
l off the
th four
f key
k generic
i
parameters can be integrated to develop decision
matrices to help exploration planning
In this decision model, immediate drill testing is

favoured, if it is a viable option, as it provides the
quickest path to discovery
Note that certain combinations of values for the

key parameters will mean that the project is not
explorable with currently available technology
26
Resolution of Primary Targeting
LOW HIGH
HIGH (ee.g. PCDs)

Immediate
drill testing
Immediate
may be viable
drill testing
but evaluate
Drill Test AOI cost-benefit
Diamonds))
of pre-drill survey
Immediate
Pre-drill survey drill testing
may be viable
LOW (e.g. D
D
essential
but evaluate
cost-benefit
of pre-drill survey
Decision Matrix One

Immediate Drill Testing
If the qualitative analysis in Decision Matrix 1

suggests that immediate drill testing may be a
viable exploration strategy, it will be necessary
to plan the possible drilling program to assess
its cost compared to other options
g
There are long-established methodologies
g (to
( be
discussed later) for planning the optimum drill
spacing given a knowledge of the drill test AOI
27
Cost of Pre Drill Survey
LOW HIGH
Pre-drill survey
Pre-
Pre-drill survey
Pre-
GH
se Positive Ratte
ey
probably still
HIG
Pre Drill Surve
worth doing not viable
(unexplorable
unexplorable?)?)
Pre-drill survey
Pre-
Pre--drill survey
Pre
LOW
W
of P
probably still
Fals
very attractive worth doing
Decision Matrix Two

Unexplorable Projects
It is possible that this analysis will indicate that some

projects are effectively impossible to explore in an
economic way with current technology
These will be projects that have:

Low resolution of the primary targeting
Low AOI of drill holes
Available pre
pre-drill
drill survey technology has a high
false-positive rate and a high cost
All of the above can be improved via scientific and

technological innovation
28
Exploration Technology:
General Comments
Successful periods of exploration are generally
characterized by the opening up of a new search space
and the development and application of an integrated
technology package
These technology packages are a combination of
targeting concepts and technologies that are organized
in an effective way across scales and are well-suited to
the particular exploration situation
Examples include:
NiS exploration in WA 1966-72
Au exploration in Australia in the 1980s-1990s
Developing these integrated packages is far more
important than any single targeting concept or
technology (there are no silver bullets!)
The 1980s-1990s
Gold Exploration Technology Package
29
Summary
Understanding at least the qualitative values for four key

input parameters can provide a short-cut qualitative
assessment of the most attractive way to explore a project
(or in some cases help make the decision that the project
area cannot be explored)
The value of this structured approach to planning the

program is that all options are considered in a rigorous
framework, including going to immediate drill-testing
The application of this framework will also encourage us

to explicitly think about these key variables in the context
of our particular exploration project
Optimizing Sampling Density
30
Introduction
The most significant cost-input parameter at any stage of
exploration is the selected sampling density
Sampling is used here in a generic sense to include all of surface
geochemical sampling, geophysical surveys and drilling
In any systematic sampling methodology, the number of samples,
and therefore cost, increases exponentially as sampling density is
increased
Despite this, it is uncommon for sampling density to be rigorously
optimized in program design
In the absence of such optimization, the default seems to be a
tendency to over-kill, resulting in greater project expenditure
than is really required to test for the desired size of target
Cultural Issues
Surprisingly, despite the obvious cost implications, it is

uncommon forf sampling
li density
d i to be
b rigorously
i l evaluated
l d
during exploration program design
The reason for this may be cultural; the cultural idea of the
strongly individualistic lone prospector has been very
strong in Western mineral exploration
In contrast, in the Soviet system (arguably as successful in
its heyday) there was a strong culture of highly-planned,
highly planned,
systematic deployment of resources in all areas of life
Not surprisingly, the first work on systematic evaluation of
sampling densities in mineral exploration came from the
Soviet system
31
The key reference in the western literature is:
Igor D. Savinskii (1965): Probability Tables for Locating Elliptical
Underground Masses with a Rectangular Grid, explanatory text translated
from Russian, Consultants Bureau Enterprises Inc., New York
63
Key Parameters in Sampling

Density Optimization
Quantitative sampling density optimization requires the

adoption of values for the following key parameters:
What probability of detection is acceptable?
What is the expected response area (i.e. the 2D area of

anomalous response distinct from background noise)?
What is the expected geometry (L, W and range of angles

between strike and survey orientations) of the response area?
What degree of overlap between the target response area and

the survey line is considered a positive result? (e.g. in the case
of a gravity survey, is one anomalous station enough or would
two be required for confidence?)
32
(Dentith & Galybin, 2008)
65

66
33
67
Acceptable Probability of Detection
Standard industry practice is to ensure that the spacing

between lines is less than the expected strike-length of
the minimum acceptable-sized target
Therefore a negative result is considered to have

sterilized the relevant area (although this ignores the
possibility of an unexpected orientation)
Quantitative sampling optimization shows that often a

relatively small reduction in probability of detection
(say from 1.0 to 0.7) can lead to a large cost saving
34
Response Area
This is the expected 2D response area of the target in the

relevant sampling data set
Care must be taken in defining this:
It must be consistent with the size of target being
sought
The relationship between threshold values and
response area must be clearly understood
These are commonly confused in application; if we go to
lower threshold values, the size of the response area
also has to increase to be meaningful
Threshold Anomaly Areas:

Porphyry Cu-Au
Log Sulphide area km2
0.16 0.4 1.0 2.5 6.3 15.8 39.8
8
nnes Cu metal
7
5mt Cu
6
Log Ton
4
Source: Donald Singer
35
(Large et al, 2001)
Subtle Geochemical Haloes associated with

some Zn deposits
71
Recognizing Which Anomalies Are

Valid Drill Targets
36
False Positives
In mineral exploration what we look for

(
(economici mines)
i ) are only
l rarely
l (perhaps
( h 1% off
the time) present in the target areas we test
We have a low base rate
In such a situation, the most important factor

that defines the significance of a particular
exploration technology (e.g. remote sensing) is
the FALSE POSITIVE RATE of that technology
Importantly, most exploration technologies we

use have high False Positive Rates
74
37
An Example from the
War on Terror
From Savage and Wainer (2008), Chance Magazine

Let us assume:
3,000 terrorists hiding in the US population of
about 300 Million
The FBI have a magic bullet technology:
unlimited wiretapping linked to advanced voice
analysis software that can detect terrorists within
a few
f words
d off speech
h on the
th phone
h
This technology is 99% accurate: it only alerts the
FBI to non-terrorists 1% of the time
What is the probability that someone alerted to the
FBI is actually a terrorist?
Savage & Wainer (2008)
Only 1 in a 1000!
76
38
Consider an Exploration Example
We have a number of conceptual targetssay magnetic anomalies

that might be diamond bearing kimberlite pipes
We know that the probability of these anomalies being a diamond
deposit is realistically about 1 in 1000 (0.001)
Now we apply an innovative new geophysical technology say
airborne gravity
We know that we get a gravity anomaly 90% of the time when a
diamond deposit is present
We also know that we get a gravity anomaly associated with a
magnetic anomaly that is not a diamond deposit 10% of the time
What is the probability that when we drill test a coincident gravity
and magnetic anomaly we find a diamond deposit?
The answer is 0.89%!
P anomaly+deposit
P anomaly+ no deposit
0.89% = 0.09% / (0.09% + 9.99%)
Modified from a False Positive Calculator down-loadable from www.flawofaverages.com

39
Source: Freewest website
Real Example of High False Positive Rate

79
Setting Threshold Levels

for Anomaly Significance
In any exploration survey / drill program, we need to

determine what results, short of obvious
mineralization, constitute a significant anomaly
When setting threshold levels of significance for an

exploration technology, we need to understand the
p
impact of dropping
pp g threshold levels on the false-
positive rate
Potentially small reductions in threshold might

substantially increase the false positive rate
40
High Threshold
Orebody Present
True
Probability Positives
Distribution
Orebody
y Absent
Measured Value False

(eg Geochemical Sample Value) Positives
False Positive Ratio = 10%
Low Threshold
Orebody Present
True
Probability Positives
Distribution False
Positives
Orebody Absent
Measured Value
(eg Geochemical Sample Value) False Positive Ratio = 50%
81
Business Implications of the

False Positive Issue
Need to understand the large value created by

reducing the false positive rate in our exploration
programs and focus effort on doing this
Need to understand that relying on a single

exploration survey technique to define drill targets
is high-risk
Need to build this concept into the design of all new

exploration technologies up-front:
More effort on specificity rather than just a focus
on sensitivity
41
How do we manage the
False Positive issue?
Prioritise targets with coincident anomalies from

multiple independent sampling strategies
Coincident surveys (e.g. geophysical and geochemical)
Assessment of all first-stage anomalies with a second
independent technology
Prioritise targets on the basis of their context within

the evolving geological picture for the project
Elimination of the obvious False Positives: Often
many false positives are readily explained
geologically remove these from consideration
Means need to study geological context of false positives,
something we are usually reluctant to do
Williams (2010)
84
42
The Characteristics of a High-Quality Drill Target:
The Rule of the Six Cs
Contrast - The anomaly has a good contrast to background levels. This

y more important
is usually p than absolute values
Coherence - The anomaly hangs together; it can be easily contoured.
Coherence commonly distinguishes lithological from ore-related
anomalies
Coincidence - Two independent data sets produce an anomaly at the
same location; as a rough rule of thumb, such anomalies are about an
order of magnitude more significant than those defined on the basis of
one dataset alone
Context The anomaly has a good geological context such as a major
structural intersection
unCommon - Anomalies of that level are rare within the survey data.
Because of the low base rate, if we see a lot of similar anomalies in the
data, this alone tells us they are probably not significant
Cover - Covered anomalies are much less likely to have been previously
tested
Managing Success:
What Happens after the
Discovery Hole?
43
Managing Success
Get good quality, representative diamond drill sections early to

maximize geological understanding
Scope the entire mineralized system after the initial discovery
do not get sucked in too close too early (i.e. to the first
mineralized zone discovered)
Get your drilling spacing right at this scoping stage
implies
p need for knowledge
g of footprints
p and their size
Know when to quit and when to persist
clearly define threshold success criteria
walk away if these are not achieved but persist if they are
44

Hronsky - Session 4 - Mineral Exploration Tactics

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Module 3:

Exploration Management and Targeting

KIGAM International School for Geoscience Resources March 2011 1

Traditionally most discussion about effective

These are context sensitive

Very dependent on target type and local

Objective of this training module is instead to

KIGAM International School for Geoscience Resources March 2011 2

Important starting point is recognizing

Historically, mineral exploration activities were

The systematic approach however represents a

KIGAM International School for Geoscience Resources March 2011 3

Prospecting-style exploration is basically a search

However, the high sampling-bias of prospecting-style

KIGAM International School for Geoscience Resources March 2011 6

Systematic exploration methodologies have the goal of not

The Role of Geological Mapping in

It is common in many modern exploration programs not to carry out

In many areas this decision is justified by the presence of insufficient

However, in many other cases this decision is instead justified on the

This is only true if the results of the program are completely

In many cases, geological mapping (including supporting rock chip and

KIGAM International School for Geoscience Resources March 2011 8

KIGAM International School for Geoscience Resources March 2011 9

Good vs. Successful Exploration

It is the nature of exploration that the majority of

It is important to distinguish between successful

The definition of good exploration is an exploration

The practice of exploration is a series of progressive

In most cases, these steps are quite consistent in

The term Exploration Stage is used to describe

KIGAM International School for Geoscience Resources March 2011 11

Example of an Exploration Stage Framework

KIGAM International School for Geoscience Resources March 2011 13

Exploration Projects are like Sharks

They either keep moving forward or they die!

KIGAM International School for Geoscience Resources March 2011 15

Decision Point Planning is a planning process where

KIGAM International School for Geoscience Resources March 2011 16

Clarifies short-term goals by focusing planning

The probability of failure is high for any given

The greatest option value at the start of an exploration

A decision point may be the completion of an

This process is also referred to as stage gating

KIGAM International School for Geoscience Resources March 2011 19

Requires development of a mental model for how the

KIGAM International School for Geoscience Resources March 2011 20

A decision tree is a decision support tool that

Used to identify the strategy most likely (or the

They can be also used to estimate the expected

KIGAM International School for Geoscience Resources March 2011 21

Dont run seismic

KIGAM International School for Geoscience Resources March 2011 23

Benefits of Decision Trees (cont.)

Maximize consistency in decision making

The act of constructing decision trees forces us

If some parts of the decision-making process

KIGAM International School for Geoscience Resources March 2011 24

EMV = {Ps * (Reward NPV-cost)} - {Pf * Failure

KIGAM International School for Geoscience Resources March 2011 25

Drawing a Decision Tree (1)

A Decision Tree consists of 3 types of nodes:

1. Decision nodes - commonly represented by squares