Junior explorers: who’s more successful Conventionals or Disruptors?

A recent post on G&A/admin costs in the junior exploration sector elucidated the above response.?A couple of people commented that costs don’t really matter as long as you're successful which seems to be a more common attitude than what we expected. So we dug a little deeper…

Just to refresh your memory here are the categories of explorers that were previously defined:

Again, ASX quarterly reports were reviewed with particular focus on the quarter/quarters just before the “Success” was announced.?Year to date and full year expenditure was also reviewed in order to ascertain whether the expenditure associated with the success was an anomaly.

“Success” or “Discovery” is defined here as a significant intersection, ore grade if you like, that has a material impact on the company – generally resulting in a significant spike in the share price.

The Sub Developers are already successful (“post” exploration) so they have been omitted from this review.?We couldn’t pin a success on any of the Sharers so it’s down to two: Conventional and Disruptors!

A podcast on Scott and Amundsen on their quest to be first to the South Pole (Cautionary Tales: Tim Harford) is a telling lesson for mineral explorers. ?Amundsen landed on Antarctica as close as he could to the pole, he took dogs to pull sleds, he had a small party of five, and his only focus was on the reaching the pole and returning safely.?Scott, in contrast, landed at Ross Island (a UK base) further from the pole; he took dogs, ponies, three motor sledges and sleds to be pulled my men, a large party of men and besides attempting the polar journey, was responsible for a number of scientific experiments prior to the expedition.?Of note, Amundsen’s budget for the entire expedition was less than the cost of one of Scott’s motor sledges. Amundsen was 100% focused on the Pole; Scott wasn't.

The Disruptors were responsible for 20% of the “discoveries” which, at first glance, might appear to be a win for the Conventionals.?However, the Disruptors represent about 10% of junior explorers which indicates they are twice as likely to make a discovery if success was purely random.

The Conventional (or could that be the Comfortable) explorers (>30% admin) were also responsible for 20% of the “discoveries” which given that they account for ~55% of junior explorers indicate they are three times less likely to make a discovery!

So what about the other 60% of discoveries? They all appear to be “Conventional” by the above “Definition” (middle column) in the way they are structured but their “Admin costs” are less than 25%.?In fact, there is a gap between 25 & 30% perhaps defining a gulf between two classes of what might appear to be Conventional explorers. ?

·???????80% of “successful” explorers have admin costs less than 25%

·???????50% of discovers have admin costs less than 20%

These low cost Conventional explorers represent ~15% of the total Conventional explorers and thus given they are responsible for 60% ?of success indicate they are four times more likely to make a discovery! We see them as Disruptive - more like Disruptors than they probably realise!

Maybe structure is not the key to success – some would say it’s more to do with culture.?Sounds like a good topic for further research – a PhD?