Exploration (53a79357-693a-40cb-a52e-abe27593d76b)

"Chairman: Dr DeV. HarrisRapporteur: Mr A.H. MunroPapers:Corporate exploration strategies by MacKenzie, B.W.The Engel Simulator and the search for uranium by Griffiths, J.C. and Singer, D.A.The Chairman opened the session by tracing the changes which have taken place in the exploration field since the days of the lone prospector who relied upon his individual skills and to a large extent on luck. The deposits which now remain to be discovered are better covered and are of lower grade. A much greater team effort, involving geoscientists and engineers, is required. The gamble is thus much greater -not only are the probabilities of failure still significant but the consequences are more severe. A recent Canadian survey indicated that expenditures of between two and nine million dollars on regional exploration programs are required to locate one significant deposit.The Chairman went on to say that these facts have led companies to regard exploration as another form of investment and to treat it accordingly. This had placed exploration in the context of corporate strategics and structures, which was the subject of the first paper of the session.In introducing his paper, Dr B. W. MacKenzie said that the paper suggested a decision framework for exploration planning. Initially the environment is analyzed to define observable and relevant economic characteristics. The terms of reference for exploration planning and the appropriate allocation of capital and skills are then established in the light of corporate objectives and growth alternatives. With the aid of this information and in the light of profit and corporate risk criteria, exploration strategies can be selected.Dr MacKenzie went on to say that the usefulness of the concept and criteria outlined in his paper depended critically upon three characteristics of any particular economic environment, namely, the return resulting from an economic discovery, the unit discovery Cost and the probability of making an economic discovery. He then showed by means of a case history relative to the Canadian Shield and Cordilleran areas that these three characteristics could, in fact, be evaluated for regions with reasonable histories of mineral activity.The first contributor to the discussion of the paper, Mr Alfred Weiss, mentioned that his group had been involved in exploration modelling for some ten years and were thus particularly interested in the paper. He went on to say that they had experienced greatest difficulty with reconnaissance programs and that he sensed that these difficulties were also present with the methodology which had been outlined. Mr Weiss asked Dr MacKenzie how he would deal with such situations when no information was available but where there was the potential for both exploration and discovery. Dr Mackenzie agreed that the lack of information was a very severe limitation and said that at the present time his methodology probably did not provide a basis for breaking down the broad geological regions he considered into areas for further assessment."