Drilling for Failure
This discussion is part of a series of posts about mineral exploration strategy and how I perceive the industry often displays a lack of strategy and thereby results in poor returns. This article will discuss a failure of companies to recognise when to walk away, and the results of plowing money in for no reasonable return.
When investors list a company on the exchange, one of the things that is done is to state the objectives of the company. This basic mission statement is usually a couple of sentences and underpins the fundamental company strategy and reason for existence. Or it should, at least.
The foundational aspirations of companies are revealing about what the Board of the day (or the brokers and investors behind the Board) considers to be the objectives of embarking upon a venture. Some recent ones are presented below;
The Company is an exploration company which will own a prospective Western Australian project with a focus on nickel and gold mineralisation. The Company’s primary aim is to become the owner of sufficient nickel Mineral Resources, via discovery and development, to be a key player in the resurgence of the nickel sector in the medium term.
[COMPANY NAME] is a mineral exploration company focused on the discovery and potential development of large-scale rare earth element (REE) deposits.
Our vision is to be “sustaining tomorrow” by identifying value accretive base metals projects to fill demand driven by the sustainable energies industry. Our mission is to generate earning accretive value for our Shareholders through application of technical processing expertise and new technologies, as we develop our targets.
Exploring and developing critical and industrial mineral deposits including feedstock for HPA
These are all reasonable foundational statements, and one thing that mineral businesses have in common in their foundational statements is to explore, develop, produce minerals and metals, and so on.
Stating a strategy is the easy part, isn't it? Execution (or luck) is 99% of the battle in turning a $5M IPO with a $10M listing market capitalization into the next big thing, or indeed, the next small thing that actually returns money to the investors via generating cash flow.
To explore for minerals, inevitably, one must drill. Not only must one drill, but one must drill mineralisation. To drill actual mineralisation, one must have indications formed from geochemical, geophysical, mapping or other data - or absolute unmitigated luck.
Drilling mineralisation therefore is a process of forming 'targets' based on information, and taking a weighted risk that there exists mineralisation to be drilled, and further, that the hole (if successful) may return an economic result. We are not here to explore for science's sakes.
In the greenfields context, there is often no information on deposit size, configuration, dip, and strike, or indeed grades (and sometimes, not even what metal is contained within the target). This makes drilling and ensuring a commercial return on drilling very risky indeed.
In a brownfields context, one is working from a known quantity of mineralisation, some of which may have been mined or produced from previously, or may not have been put into production yet for a variety of reasons. The exploration process here is extrapolation from the known into the unknown, and includes methodologies such as of just drilling off the end of an existing deposit, drilling down plunge, and drilling for 'repetitions'.
However, the act of drilling and these processes are not the problem which is afoot; no solutions or advice on how to do any of this is discussed here. We will assume that the process of selecting a target to drill, and resolving the geometries and hole trajectories are carried out competently. What we must ask is not will an individual drill program strike mineralisation, but will it actually result in a material change to anything?
Exploration Systems
Where the explorer is a corporation, exploration is a process of corporate systems, and therefore a manifestation of corporate culture and management process.
We often ignore discussion about these factors in the exploration industry and focus strongly on scientific widgets, methods of interrogating data, and rote methodology. This are all tools we use, but it's like arguing about the best brands of hammers when constructing a house: if you don't have a plan, you'll never build a house, you'll just have a fancy hammer and a mess of wood and nails.
The manner in which a company undertakes exploration is a manifestation of the internal workings of that company. It starts with the vision statement, the strategy of the company, and then devolves into the business plans (mid-level strategies about where, how, etc), then down into finer and finer detail down to things like mechanistic processes (the assay schema, QAQC, safety systems, etcetera) and resourcing and talent.
These are all part of an emergent system which is the corporation, big and small. Emergent behaviors occur due to the processes within the company (the rules, JHA's, SOP's etc) that, in their operation, result in actions and outcomes both expected and unexpected. We regularly consider this in safety systems. The same happens in other areas, such as poor QAQC rules resulting in sloppy behaviours, resulting in added cost, lost ore, and so on.
However, we tend to not discuss failures and certainly not in the sense that failure is the actual corporate strategy of many companies - at least from the outside looking in - because it is the result of the company's internal system (its exploration program) running according to design and delivering exactly what it was designed to do.
Companies systems are often designed to actually produce bad results, and they are provided the funding by investors and deliver exactly what was advertised on the tin. Yet we pretend it isn't the case.
So what are some of these processes and procedures, the emergent behaviors, of companies which appear designed to fail?
Company Too Publicly Listed
Consider this: how many listed shells start life with a bucket of cash, no tenure, and then go out generating projects and deals, and end up with a discovery? Nil.
Partly this is because to be listed on the ASX you need assets commensurate with listing, to keep out the riffraff, (obvious) scams, boat shoe brigade, and uphold the standards of the place and make the ASX look like the premier destination (outside of Star Casino) for uber drivers, plumbers and old people to gamble. The ASX wants the gambling to be responsible and ethical.
To get listed, a junior exploration company needs several things;
This looks like a recipe for success but it is merely a list of ingredients; a recipe must include steps on how to mix and cook the ingredients to make the meal intended. Listing on the ASX introduces a series of Listing Rules which may not contribute to success and may actually predispose junior explorers to becoming penny dreadfuls and the dreaded lifestyle companies.
One rule is the Expenditure Table, which commits the company to expending certain money on certain activities, and is tracked post-IPO for 2 years. Companies are bound, broadly, to follow and report performance against this, in order to avoid having raised money for purposes contra to the Offer (which is fraud). Effectively, if you raise $5m for 2 years expenditure, you have to broadly follow that plan and spend $5M in two years. Exploration has to be planned around achieving this expenditure, and can be reviewed by the Independent Geologist who could conclude that it is reasonable.
Companies therefore have a kind of program, or throttle position, at least for the first 2 years, which commits them to a trajectory which sees them running out of money after 2 years. This requires that the opportunity upon which they list results in commercial success (or at least results which demand more investment) within 2 years. Complete failure here is not fatal, but this is where clapped out shells come into being.
Companies are also prohibited from drastically changing their offer too soon, via dealing. If the company cannot apply for tenements outright, this can see the company stuck with trashy projects, and having to spend money on them it may not really wish to if the Board and promoters were honest with themselves and shareholders. This can see money and exploration effort wasted, company coffers denuded, and share prices tanking.
These is an emergent phenomenon of the Listing Rules, corporate law, as well as the corporate strategy instilled and programmed in from the start. Companies can be, and many are, set up to fail or struggle by the requirements of getting listed and staying listed.
Target Not Big Enough
Following the vision statement that the company is going to mine minerals (if that is its purpose), then the company must mine. For this section we will assume the company has found a deposit which is Ore, and all that Ore means. Gold equivalence will be used, as it's simplest to understand.
Consider that a listed company will expend $2M p.a. on listing and overheads. If an exploration company progresses to mine, it should expect that these overheads will not decrease, but that the mine should as a bare minimum, pay for the mining activity (Operational Costs) and the corporate overheads, and derive a profit. This is the minimum condition of Ore: that it pays for its extraction and makes a paper (nett) profit (even if it's all eaten up by employees).
The mine must then make nett profit, after paying for all OPEX and CAPEX. If the mine is small and not ultra high-grade, margins are likely thin - lets say 20% of OPEX free cash generation. Thus, in order to make $2M p.a. in nett profit, you need to potentially mine $10M p.a. or more in metal: $8M p.a. for OPEX, $2M p.a. in NPAT. Total production at spot prices is 2,200 ounces.
We can pretty easily work out that this is not an operation which is going to be very large, and it won't be paying off its own CAPEX - one would be toll treating. If we assume 1.5g/t there's 40,000 tonnes per annum going to toll treatment. You're probably not looking at much in the way of mine life, as you don't need much for tolling.
Remember, this mine configuration barely justifies keeping the C-suite in their jobs. If you do one parcel of ore like this, you keep the lights on for 1 year. So why bother?
So you probably need 80ktpa at 1.5g/t to actually generate profit sufficient to keep the lights on for 12 months after mining ceases, and give yourself some chance of exploring for more.
If you've converted to Reserve from a resource at the thumb-suck 30% conversion rate, your Resource needs to be 0.25Mt @ 1.5g/t. This is 100,000 cubic metres, within the near-surface, and given most laterites are found it's probably a relatively thin (2-5m thick), strike-extensive lode. So, 200m long, 5m thick, with 50-100m down dip.
Therefore, if you want your company to simply break even on its investment, the sooner your geologists and Board can reveal to you, the investor (or themselves) a 200m long ore surface, with consistent grade, close to surface, close to a mill, on an existing ML, with good infrastructure...? How many tinpot companies really seem to have even this very modest target?
If you change the parameters of the operation, minimum target size begins changing swiftly.
No ML? You need more ounces to pay for pegging that, permitting that, and putting the ore body through a DFS, EIS, and the permitting process.
No DFS? A DFS is $5M, at least. If that's $5M of retained after-tax profit, that's another 80,000t at 1.5g/t you need to find. That's a second 200m strike ore surface you need to find, right there. Two years of listing and overheads to complete the DFS? 40Kt at 1.5g/t. Each kilometre of haul road is 20Kt at 1.5g/t. A flora and fauna survey is 10,000 ounces through the tolling booth.
Very quickly we begin to see that for a company that is listed on the bourse with tenements cobbled together by insiders, directors and brokers, the real minimum target size of a Resource of gold under a toll treatment model swiftly rises to at least 2-3 million tonnes at a reasonable grade, close to roads, on an existing ML, with no heritage or environmental concerns.
This is a volume of rock within the subsurface which should become readily apparent in a short amount of time after listing and drilling. Arguably, it should be apparent prior to listing, and investors need to read prospectuses keenly to determine whether this is even a possibility.
If it becomes apparent that a target capable of sustaining even break-even production targets does not exist (and you have eliminated all reasonable permutations thereof) you should immediately stop exploring any further.
Why, then, do companies list with aspirational statements to find commercial gold orebodies, and spend their investors' money chasing insufficient metal accumulations?
Insufficient Metal Accumulations
Ore often comprises a small subset of a larger sub-grade mineralised system, and is defined by a cut-off grade. Ore is accumulation of sufficient metal into a small enough volume of rock that it renders the deposit economic once the costs of extracting the volume of rock and processing it is taken into account. See above.
In underground mines, which have generally higher costs (and which are becoming the future in Western Australia), a handy rule of thumb is a metal accumulation of ounces per vertical metre (for precious metals) or tonnes per vertical metre (for base metals). Most sophisticated of all is NPV per vertical metre, but maybe you are unable to calculate that early on in a drill-out.
These metrics simplify the complicated process of understanding that it costs $X to drive a decline (or a pit) down a metre, and there must be enough metal in the rock to pay for it. Regardless of what the cost of advancement is perceived to be, if there isn't enough metal, the mine cannot advance. Referring to the preceding section, if your target size is insufficient to bother exploring, then why are similar ore surfaces extended at great length below the deck with deeper and deeper holes?
Here we can look at longitudinal sections along an ore surface and get to grips with the potential of the exploration to ever deliver success.
Consider the below longitudinal section of the Star of Mangaroon gold deposit (Dreadnought Resources Limited, DRE). The strike extent is at best 120m, with a plunge extent of 200m and vertical extent of 150m or so, for a shoot area of 2,400m2. At 20g Au per square metre to be generous (it's probably more like 10g/m), it's 45,000 ounces- assuming the shoot is completely uniform at that grade (it is not). This equates to 370 ounces per vertical metre, which is 30% of what I've been told is sufficient to allow profitable development underground. Would you chase this shoot? Is it worth drilling out at 10m x 10m or 20m x 20m? Or even at all?
Remember the discussion, above, about the target size for a tolling operation to keep the lights on at a junior mining company? That it was tens of thousands, if not hundreds of thousands of ounces, when you could toll? What is the reality for Star of Mangaroon, orphaned by itself in the arse end of the Gascoyne, with no one around? Tolling at Dalgaranga?
Sometimes it's not as clear-cut (this being my opinion) as Star of Mangaroon.
Consider Arika Resources (ASX:ARI) formerly Metalicity (ASX:MCT) at Yundamindera, near Laverton, Western Australia. Here, in a mature and well-drilled belt and well-drilled occurrence, ARI is drilling beneath Pennyweight Point, an oxide gold occurrence which has significant historical drilling. The following section (22nd October 2024) shows a section of 7 modern holes drilled beneath the 28 historical holes. Leaving aside the QAQC issues with older (RAB) holes this work will have resolved, the current drilling has not materially changed the prospect of economic returns.
A 3D isometric view of the same area (below) demonstrates the dimensions of the target a bit better. Whilst one must believe the authors that the shoot is open, the question should rather be: how far do you believe this so-called shoot goes? Note the scale bar, of 50m, encapsulates the entire pod of the isosurface blob. It is therefore, demonstrably, less than 200m strike length, at modest grade, and extends only a little way down plunge. Beer coaster maths, 7,500 ounces at most.
Given the investment in the drilling, the fact that these were RC holes is also of note, as no structural information was gleaned with which to project the gold along strike and plunge using a structural model or hypothesis, and thereby materially extend the mineralised surface enough that it could ever hope to form an economic target.
Should Arika drill Pennyweight Point down plunge?
How much more metal can they reasonably be expected to find?
What's the ounces per vertical metre given this is a 50m x 100m plunging shoot at (generously) 1.5g/t?
Do they even know where to drill, or are they hoping to thread the needle through a thicket of drilling and strike it rich?
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Smoke and Mirrors
The adage "where there is smoke there is fire" has its uses, because large mineralised systems often include vastly more sub-grade material than ore grade material. Often we drill within mineralised systems that are of vast scale but sub-grade, and we mine a small fraction of the altered rock volume.
However, smoke doesn't always mean fire in mineralised systems. Often companies do not seem to understand this. If one is exploring a vast sub-grade system drilling that just returns more of the same is - arguably - worthless drilling. If the drilling does not attempt to find economic mineralisation within a sea of sub-grade mineralisation, the sooner drilling stops the better.
An example is a system that has not yet delivered anything that could possibly be ore grade or accumulated enough metal into a small enough volume of rock to result in economic mineralisation. Nevertheless, in boom times and with rosy glasses, we persist in hypothesising that it might, and this allows for financing of ventures to find the elusive ore.
Recognising that sub-grade mineralisation is pervasive but not paydirt is critical to corporate success. I argue, however, failure to deal with mineralised systems that never get there is a failure of corporate strategy and programming.
Being glass half full is valuable for motivating exploration efforts, in that it often does take several attempts to find the ore, and persistance pays off. We cling to the examples of times it has happened, and tend not to talk about the times is has not happened.
Probabilistically, smoke and mirrors mineralised systems will beggar more companies than they enrich simply because if one company is successful after a dozen have failed, we talk of the success and not the preceding failures.
Here I point to an analysis by Niall Tomlinson or SRK Exploration consultancy on sterilised vs prospective terrain in Western Australia. The argument is appropriate for mineralised systems which have been drilled multiple times before: how many times are dog projects drilled and never turn into mines?
The argument is appropriate for mineralised systems which have been drilled multiple times before: how many times are dog projects drilled and never turn into mines? Will drilling more holes really change the economics?
If you are in a pervasively mineralised system and are struggling to find a core of decent grade, how soon would you be able to tell? When do you stop? How do you even know there is no tiger on the end of the tail you have got ahold of?
As investors and analysts, how do you cut through the bullshit PR and get to the truth? It's certainly not being glass half full.
Drilling Troublesome Ground
One other strategic error by companies (read: insiders, Boards) which is perpetuated again and again is to pursue opportunities which are rendered uneconomic by other factors beyond geology.
Rocks are where you find them, as the great Campbell McKay reminded me in a discussion about logistics, and we cannot change that, to some extent. But we can certainly be careful to assess the logistical realities of the project honestly and early, and not drill wasteful holes into logistically impossible rocks.
Logistically Impossible
Consider the below, a logistic cost model developed in MapInfo Discover, which effectively depicts the NPV potential of a tonne of rock and the cost to get it to the coast. It calculated a cost of road haulage to the nearest road (unsealed tracks counted here), thence to either port or the closest railway, and from the railhead to port. Terrain rugosity was factored in to take account of the difficulties in transport in hilly terrain. Ignoring the trans-handling costs of road/rail interface, and loading at port, it demonstrates that a tonne of rock in the dead centre of Western Australia is worth much less than a tonne near the coast.
Socially Impossible
Very rarely do companies peg and explore within national parks, or even Class 1A Nature Reserves, or any form of nature reserve. Legally, the odds are strongly stacked against you no matter what you find.
The same is becoming more and more apparent about Aboriginal culturally significant areas, no matter what you think about the rights or wrongs of recent legislative turbulence. There is little to be gained by Juukaning your way around the state, because fun fact, Aboriginal people talk to one another and have strong lateral connections socially. Many, many seasoned practitioners simply respect their sultural areas and don't explore there.
Metallurgically Impossible
This is always a fun topic, but it is appropriate to mention ahead of the Aprodite Au-As deposits getting dusted off now gold is on the up: why do metallurgically difficult deposits get dusted off again and again, with problems buried or ignored, and some unproven miracle technology solution mooted to solve the problem?
If it is a metallurgical problem, then you do that before drilling the pus out of something.
Clay REE
Here I want to focus on the regolith clay hosted REE space in Australia, a place I have done a reasonable amount of work in. Explorers in this space have, to my mind, exemplified wasteful and pointless exploration and their actions speak strongly to failures of corporate strategy, board experience, and rank optimism at the expense of scientific method and reasonable risk taking.
Take Krakatoa Minerals (KTA) up in the Narryer, exploring monazite-enriched laterites. The company drilled out a resource of 100Mt at 840ppm REE in laterite and clay to Indicated confidence, and did metallurgy. The metallurgy showed 50°C at pH 1 for 6 hours to get 50-62% recoveries. These conditions are unfeasible for larg-scale commercial production simply due to the huge hydrochloric acid budget needed. The question is - why did KTA spend >$500K drilling and assaying, when it could have just done the metallurgy first?
Next cab off the rank here is Critica Limited (ASX:CRI) formerly Venture Minerals, at their Brothers REE project near Yalgoo. Their primary project is Jupiter, which at least has some higher grades. The company has drilled 22,000m of air core, Rc and diamond drilling and expended at least $2.5M on the project over 9 months.
Metallurgy results are to be determined, and it will be what it will be, but my point is this. The company could have drilled a fence north-south, and fence of holes east-west and known as much as it knows now, and saved a significant chunk of capital.
Instead of spending a Sydney 4 bedroom house's worth of money on all this drilling, Critica could have spent as little as $8,000 on metallurgy on some sighter tests, and had an initial result within 8 weeks, at any time. I'll give you a fat clue right now, it's a magnetite-apatite high-phos potassic monzogranite, and they don't necessarily leach well because the REE's are in apatite, monazite and refractory. If the accessory minerals don't weather, it's refractory.
The metallurgy is all-important for the commercial outcome. It isn't hard. if the clays do not leach easily at ambient temperature, at pH 3 to 5 in whatever lixivant you wish to utilise, then wild ideas like concentrating the apatite out and shipping it for processing, or nuking the clay in expensive acid, aren't smart.
Besides making a big song and dance and show of the whole thing, why is Critica's strategy to spend money on irrelevancies (drilling 236 more holes than it needed to) that don't answer the fundamental question? That's for shareholders to ask. Or to hold on, gritting their teeth, for a miraculous outcome.
For context, Impact Minerals' Hyperion REE anomaly which looked stonking on surface, we drilled the minimum metreage to get a driller to turn up to drill the holes, assayed the minimum number of samples to define a metallurgical composite from the drilling (one section worth), and did sighter leach tests. it was a nothing burger. In and out, under $50K. Did we look like heroes chasing 0.3-0.5% TREO sugar hits before we knew it was refractory? No. But did we spend $2.4M before we knew it was refractory? Also no.
Which is infinitely more sensible? Spending $2.4M before you know, or spending $50K?
Drilling Failure Burgers
We have developed a set of behaviors that result in poor use of financial resources, and will likely never result in achieving the company's mission statement. These are:
These behaviours are common within junior exploration companies, and are the result of inexperienced Boards, who do not understand the shape of what they must find. However, we must remind ourselves that Boards rarely set out explicitly to undertake exploration in this way (though, being cynical enough, some doubtlessly do).
The critical failures are failures of corporate and exploration strategy, more than exploration process. By 2024, despite some edge cases, geoscientific activities are often professional, technical and honed to achieve what is required to complete the work programs (and which are described in the JORC Table 1 and 2). The methodology is well known and competently executed throughout the industry: we sample well, with reasonable but often not excellent QAQC processes. We drill holes efficiently, get them to target depth more often than not, and survey them precisely. We send samples to assay laboratories, and pXRF is used sparingly though occasionally poorly, so we can broadly rely on the veracity and accuracy of the chemical assays. Geophysical surveys and modelling are well understood (DGPR, MMT and sattelite hydrogen methods aside), so we know where radioactive, magnetic or dense or conductive rocks lie. The methodology is sound - we just do stuff we ought not to, and these days tend to accurately and precisely know that we failed.
As argued above, the emergent phenomena of corporate strategies are more visible - and tangible - than the professed aims and strategies of the corporate entity. This means, in plain English, investors no longer trust the PR bullshit because what a company says quickly deviates from what it actually does. Looking in from outside the Boardroom, we can only presume that if companies keep drilling dud occurrences, that's the strategy: stay listed, raise money to keep the lights on and the Board in its job, and become a lifestyle company.
If companies spend hundreds of thousands to millions of dollars drilling REE clays and then, at the final tick of the clock, discover they've been drilling refractory clays, then this was the strategy all along. It isn't a failure of methodology or process. The methodology and process flowed from the cockamamie strategy of going for the sugar hits, the big score, and kicking the hard truth behind the desk.
Exploring for Failure
We have outlined a raft of failures built upon a disconnect of optimism and lack of discipline.
Lack of discipline in
So what can we do to change this mindset?
Explore for failure and recognize when you have failed!
This really goes without saying, but the exploration must be designed, executed and completed professionally and to high standards, so that when the drilling is unsuccessful, you actually know it is precisely and accurately so.
Assay properly and with good QAQC so you don't miss something and so you do not potentially leave something behind. Don't leave out assaying weird rocks for weird elements, etc. This could also be ensuring correct assay techniques, low enough detection limits. Ensure the samples are quality so you don't doubt the numbers. Then, listen to the numbers.
Communicate failure fairly, impartially, and completely. This is an important one. If you, as a geologist being paid to do exploration or development, determine that a project is a dud, then say so. Prepare your arguments, make a case, and ensure you have the receipts.
Bring Your Enemies Closer
We all say we want robust debate, but it rarely happens, and we see people waffle and vacillate to management and projects limp along because no one wants to put their neck on the block and end a project, and potentially their job.
We don't want to listen to criticism and the devil's advocate position. We prefer yes-men and yes-women because it validates our egoes and cognitive biases.
Management should actively support staff who save the company many times their salary in wasted effort by calling the project a dog early, instead of threaten their jobs passively-aggressively or by implication. Managers should demand excellence in the logic used to determine the break-point or trigger to exit, and support staff to say it.
And yes, a nice redundancy package is probably a good way to reward someone for telling you to quit, and doing themselves out of a job.
Corporately, to my mind, small company Boards need to get involved with the technical staff more, and understand the rationale for drilling holes better, and query their staff to ensure drilling will:
Corporately, Boards need to understand the negative more than the positive. They need to frame a proper strategy which takes into account common exploration strategems such as:
Communicating this clearly to the staff at the coalface so everyone knows the strategy is vital.
Supporting staff and culture to actively avoid wasting money seems sensible and usual. It unfortunately is not.
Edit: The maths for Star of Mangaroon have been corrected from a previous erroneous calculation. The conclusions remain unchanged.
Contract Geologist
2 周Thanks Roland.
Managing Director at Lunnon Metals Ltd
2 周Thought provoking & insightful Roland Gotthard, especially so when I recognized our Lunnon Metals Ltd mission statement right up front!!! Triple dose of pleased: pleased we achieved our nickel goal (but disappointed the nickel sector crashed around us), pleased we had the foresight to headline gold in back in 2021 (not that hard really given the address) and most of all pleased we didn't then rate a mention throughout the rest of the article!!!! ??
Retired Geologist
2 周Recycled rubbish, gold in dolerites and lack of a good model! But the most important parameters are timing and luck!
Another insightful & informative post. Thanks Roland ??
Retired Principal at Mackay & Schnellmann
1 个月In the 1970s, one could cheaply purchase published South Australian government gravity and magnetic intensity maps. If you had the knowledge, you could use these maps to identify proximal gravity high and total magnetic intensity anomalies. Looking at the Stuart Shelf as an exploration play for mineralisation hosted by Proterozoic volcanoes you could have spotted coincident gravity and magnetic anomalies which later guided drilling that resulted in the discovery of the huge Olympic Dam IOCG deposit. Only problem, the discovery lies several hundred metres below barren sediments. Leaving exploration risks aside, you decide to drill exploratory holes anyway. Most of the drillholes fail to find any mineralisation. But serendipity comes into play. Over a long Easter weekend, geologists in charge of a drilling crew take leave in Adelaide and tell the drillers to keep drilling during their absence. When they return to site after their break, they discover that the hard barren sedimentary cover had been penetrated and easy drilling in mineralised haematitic breccia had been intercepted. The depth of the discovery hole far exceeded its planned target depth. How does this fit into risk averse exploration?