Hi All,
I'm glad the (real) passing of the millennium has stimulated
Ken to comment on my EMRN article. As usual his insights are
both interesting and valuable. His is not the only feedback
that I have had and I hope you find the following issue as
interesting as I did.
Ken raises the question of finding the right balance between
drilling holes and other exploration activities. This has
been a recurring theme with almost all my correspondents and
I was surprised find that a number suggested that my
analysis overestimated the proportion of the budget spent on
drilling in modern exploration programs.
There could be a number of reasons for this. It could
indicate that the probabilities I used are too low and that
(as Ken suggests) things have changed. However given the
poor performance of the exploration industry over the past
decade it would seem that any changes have been for the
worse implying the probabilities are in fact too high....
Perhaps the poor performance is caused by the industry
spending too much on things like geophysics and drilling too
few holes?
Alternatively because everyone has a different way of
apportioning costs to drilling, accounting differences may
be the cause of much of the confusion. Nevertheless I have
heard tales of exploration programs that spent ALL their
budget without drilling any holes. Unsurprisingly, none of
these programs were described as successful.
However whatever the actual probabilities actually are, the
point of the exercise was to show that because they are
small and we can gain a big leverage by improving our
targeting skills.
But none of this really helped with the big question which
exercises the minds of all exploration managers, "How do I
decide when to stop analysing data and start drilling?". Of
course this is just the same question as "What proportion of
my budget do I spend on drilling?" .
Everone knows that the answer to this very hard question
depends on a whole stack of factors related to the deposit
style and the exploration area but it would be nice to have
a more quantitative way of thinking about this problem. This
train of thought led to a small extension of the simple
model used in my EMRN article. In it I assume that we have a
fixed budget and we wish to maximize our chances of finding
a mine. I also assume that acquiring additional data
improves our targeting but with diminishing returns and ask
where we should stop the data acquisition and analysis.
Those of you interested enough to read this far may also
want to look at the attached file for a very brief
description of these ideas.
Of course, since these is little new under the sun, this
type of analysis has probably been all done before. Clearly
it is related to Brian Mackenzie's work and there is
probably lots of relevant stuff in the oil industry. Having
fallen sideways into this topic from the world of geophysics
technology development I would be keen to have someone more
experienced in this area point me at the relevant
literature.
Andy Green
**************************************************
Andy Green
CSIRO Exploration and Mining
8 Lawley Crescent
Pymble NSW
AUSTRALIA 2073
Telephone (in Australia) (02) 9144 1351
(elsewhere) +61 2 9144 1351
Fax As for the telephone
e-mail [EMAIL PROTECTED]
............................................................
................................................
> Dear All;
>
> With the passing of the millennium soon upon us, chance
would have it I read
> the a piece by Andy Green of the CSIRO regarding the role
of geophysical
> technology and exploration discovery. Andy does a nice job
of summarizing
> the "where we are at" issues from an academic's
perspective.
>
> For those of us who have spent a lot of time in the
discover business,
> nobody can ever cover all the issues, if for no reason
other than what we do
> is still very much evolving and we all make our judgments
thru by and large
> our own finite experiences. I do find the differences are
often ones of
> emphasis as opposed to being on drastically different
pages (i.e. we all see
> more or less the same board and chess pieces but how these
are 'played'
> makes for a world of difference!)
>
> A few points I saw were:
>
> -Andy cites a hit rate of 1:1000 (number of drill holes
needed to find an
> economic deposit). This figure seems like it has been
around for time
> immemorial. A lot of things have changed since that figure
was first offered
> up (I think Norm Paterson and or Duncan Derry came out
with this sort of
> number in the early 1960s), why is this ratio so
tenacious?
>
> -Andy touches on the issue of cheaper drilling as being a
decisive means to
> improve the cost of discovery. While not his main thesis,
we never the less
> seem to see this age old issue still hanging around
(seemingly) unresolved.
> Why has it not been addressed? I think because the
exploration industry has
> not felt this issue to be of primary importance. While not
a comprehensive
> sampling, from my experience I know of companies who had
reputations for
> drilling many more holes than others (for the same $
spent) as well as those
> who did the opposite. Both had a lousy discovery record. I
think the
> exploration community has sensed this over time and feels
things work best
> when a balance is maintained. But how is this balance
defined?
>
> -Discovery thru "bump finding"; I think this is one of the
most poorly
> understood aspects of exploration success and geophysics.
My examination of
> the discovery record in Canada over 50 years using
airborne EM (one of the
> classic bump finding approaches), shows that the earlier
and most often
> successful users, (i.e. the people we'd want to emulate),
had a very good
> grasp of the deposit models they were after. From a
distance, this might
> have seen like 'bump finding' but it was not; it was the
robust linkage of
> geophysics with geology. Those who came after tended to
treat in much more
> as a bump finding exercise and hence time and time again,
these late comers
> spent more and found less than the those who were in early
and understood
> what they were after. Where you want to be on the curve is
at the point that
> a specific deposit style has just been characterized (i.e.
the "spectral"
> content it's bump has been mapped) and you can then screen
for look-a-likes
> very very quickly. Mother Nature of course, still controls
the ground rules
> and there is sometimes simply only a few (or one) of a
deposit to be found
> via any means.
>
> -Geophysical parameters: Andy does not touch on things
like seismoelectic or
> electrochemical (i.e. KSPK) phenomena. While these may not
be 'pure'
> geophysical techniques, they have been given only limited
study and have
> almost no commercial application. I expect we'll see there
will be some
> settings where such hybrid techniques can play an
important role, once their
> potential is better understood. This also applies to
developing closer ties
> between geophysics and geochemistry, this is where I see
the most fertile
> ground for reducing the numbers of sterile drill tests.
>
> Thanks for this piece to Andy and the CSIRO (appeared in
the July 2000
> Exploration & Mining Research News). If you want to
subscribe or view the
> full newsletter, visit:
>
>
http://www.syd.dem.csiro.au/unrestricted/dempublication/ermn
12.pdf
>
> Best regards
>
> Ken Witherly
>
> P.S. For some reason, the CSIRO's PDF scan of their own
document was a bit
> harsh to Andy's two figures. Mine are not great but more
legible than those
> at this site. Otherwise, I would have simply passed on a
pointer to the
> site.
>
>
An Exploration Model.doc
