Terrible, horrible, amateur, scams!

What's a lie?

The truth, Winston Churchill definitely said, is armoured in lies.

But what are lies in the context of the professions of geology, mining and metallurgy?

Lies can be untruths, but they can be obfuscations, omissions. They can be actual falsehoods, connivances or the like, or they can be simple mistakes made and not corrected.

Making an honest mistake, or an honest omission, is not a lie. I'm not sure how much mistakes armour the truth, however, they can make the truth difficult to interpret, or see. It is also, from the outside, harder to determine the honesty of the mistake. More likely, it will come across as incompetence.

Omissions are the more usual type of lie we see on the regular. It is, after all, more likely that someone may be tempted to ignore some data that is inconsistent with their preconceptions or interpretation, or which would cause their model or exploration thesis to fall apart. If you just, you know, smudge out a few things or don't notice something, it's not really as bad as straight up lying, right?

Dishonesty Abounds...allegedly.

I think to start we need to discuss Australia's draconian defamation laws, where something as innocuous as a bad Google review of a business can land you in court, and cost you hundreds of thousands of dollars. Or being an accused war criminal doesn't disqualify you from wielding the law as a cudgel to protect your crimes at the expense of journalism, truth and the public interest.

Confronted with something one considers at least disingenuous being put about on the internet (which is how I refer to the ASX, for we access stock information in a time-compressed social media atmosphere) by a company, or something that is based in terrible science, or literally impossible mischaracterisation of reality, or that one may reasonably believe to be a deliberate omission of something, a commentator often has to pause and carefully weigh their words, and consider who to complain to as much as whether a complaint should be made, in order to not be sued out of existence by use of the defamation laws.

Therefore, it is clear that reputation and wealth provide a significant degree of protection, because Directors are organs of their Company, and they are protected by their interests in their personal reputation because it is often intrinsically the same interests as the Company's reputation. The losses from bad press, in terms of short term share price performance, can be sizeable, especially if an alleged pump and dump has successfully inflated the share price and market capitalisation of a company to heady heights.

For example, if you lie and get your company to a $1B market capitalisation, and some uppity HotCopper commentator accuses you of that very lie you did in order to get your share price up, if your market capitalisation evaporates to zero, the loss is $1B. This makes it worth suing to protect your reputation and quash criticism in public. If no one criticises you, then clearly everyone has accepted the lie, or is too afraid to criticise you.

Science In Industry

The threat of defamation proceedings carrying on from a critique of a public company, or its' officers and employees, is penurious to the furtherance of a profession.

Professions run on the idea that there are standards, that members are held to them, and that the public can be assured that members espouse the standards.

Without the ability to call into question the adherence of members to standards, and do this publicly, how can the public be assured that a business or undertaking is being managed, well....professionally? More on this later.

For example, in a scientific endeavour such as geology or engineering, a professional is hired ostensibly as a scientist in order to do science, which has a commercial benefit. In geology, depending on specialisation, this could be exploration (using multidisciplinary science to discover new mineralisation and ore), mining (using statistics to count rocks and metal and occasionally something geological), geotechnics (use of science to prevent rock failures and keep mines and miners safe) etcetera.

Science, ideally, involves debate, so that a consensus can be reached. Sadly, there is little avenue for debate. Certainly not in public, although it is good to see that in some limited way, internet discussion sites can allow people who have worked on projects or commodities in the past, to provide some valuable context. There is also no real peer review, just outsourcing to Competent Persons who provide specialist services, and whose review of the data is limited.

It is an interesting conundrum, then, for a trained scientist to be employed for their skills and then, by and large, not use their skills very often.

The danger comes not from the grind of day to day work in industry, but when we all forget that there is a scientific method, and part of the edifice of science, which makes the whole thing trusted, is the peer review and debate. Sadly, in the modern ASX and junior end of the spectrum, there is no room for this.

This is where we would hope the professional societies would step in, but it is not the case. There is little that can be done below a formal complaint to address shortcomings in disclosure, or clear errors in science or workmanship. There is a lot of bad work being done amongst the good work, and only fellow professionals can pick it from a distance; but it's not unethical to do bad work, and one can meet the ethical and behavioural standards of their profession and do bad but honest work.

The Atrocities of Anonymity

As discussed previously, if a company makes an announcement and the ASX and JORC requires a Competent Person to sign off on and take responsibility for the content of the public disclosure, then by definition one would think, the person is vouching for the contents of the announcement.

One would expect, or should expect, that the CP is robust enough in their personal and professional opinions to accept criticism, in public, if someone disagrees with their work. Sadly, I think the last time most people in the industry seem to have had harsh criticism was when they handed in an assignment at university or defended a thesis at university.

As a prospective complainant, it is clear that there is little to be gained complaining to AusIMM or AIG about someone's work if it's just bad.

We would hope that the ASX and ASIC, with their heavy-handed whipping of disclosures, would promote the furtherance of open debate, and peer review. This is, unfortunately, not the case. As long as the ASX release is not making unfounded claims in terms of forward-looking statements, and the Table 1, 2 and/or 3 is filled out appropriately, and the JORC Code isn't traduced, bad work can be published as if it was good and a complainant can make little headway.

Carrying on from this idea, why is it that every time there is something wrong, mistaken or misapprehended that is exposed in public, that professionals actively act to conceal the identity of those who have publicly made these poor judgements, poor statements and poor disclosures?

Are you not complicit in the derogation of standards if you fail to hold people to account? Is a professional society a robust collegiate membership with disciplinary standards if no one knows anyone who has ever done something wrong? Is it not poor professional standards to not call other members to account for their poor quality work?

I don't mean that we should all write blog posts saying that "Mr X didn't log a basalt correctly in hole Y". But certainly we should be capable of identifying who has made a bad decision that has a measurable negative effect.

One contributor to my survey noted that he was criticised for identifying the authors of previous reports from years ago, in his examples of poor workmanship and poor science. Another person noted that no one is identified as working on a project that fails; the company and the project just goes bust, and no one was at fault, no one was identified as having made a bad interpretation, or a bad decision. The people who caused the loss just leave anonymously and no one ever knows.

Bad Apples

Junior explorers struggle as much as anything with people as with rocks, and often more so. The buck stops with the directors, which is why there's a trope about picking 'proven' teams. However, no one wants to admit that no team is transferred intact from a successful developer into a junior; only fragments move across, resulting in a different team - one that is not the dream team that won before, but a simulacrum of success which can be brought down by lack of quality talent as much as brought up by a few key people.

The same is true of bad professionals (bad apples).

There are some people who are basically floaters and unflushables. They keep floating to the top due to friends and contacts, and end up controlling major exploration or development projects and allow their incompetence to run free. Within companies, these floaters build empires, deploy pathologies of behaviour and politics, and generally ruin from within.

Some examples I have heard or seen include;

• plagiarising consultants reports and passing them off as their own
• burying subordinate's and consultant reports that question their interpretations or models
• altering the contents of a report to the Board
• concealing key data including lengths of core that disprove their particular pet hypothesis
• dirty deleting data in the database that is inconvenient for their empire of lies
• administrative terrorism against enemies within the company via written warnings and disciplinary process to quash dissent and preserve their power structures
• Unethical deals,
• Employing spouses and relatives

In a small tinpot company, this is usually tacitly condoned by a Director, who is a mate of (or is) the perpetrator, and favors their views and opinions due to a long working history with the perpetrator. Of course, nothing of this is news to many people who have worked in this space; the small end of town is a shark pond full of eels and leeches, sucking money out of investors and doing nothing to progress towards discovery.

Businesses, even mid-sized producers, are human endeavours, and there is little that can be gleaned from outside looking in as to what is going on under the hood.

This means that when we come to criticise a shonky report or disclosure, or a bit of bad workmanship, we must consider that there are a lot of people involved in the production, beyond just the CP on the end of the report. Whilst the CP is the one with his chicken on the chopping block, they aren't alone in the fabrication.

Indeed, I know of people who have personal circumstances that prevent them from moving jobs or losing their jobs; these people aren't necessarily shonky, but they are under severe duress. Expecting them to behave according to an ethical guideline at all times and refuse to sign off on spicy stuff at all times, ignores the reality of work as a human endeavor, and the predatory nature of a lot of shonky businessmen who find these vulnerable people and exploit their precariousness.

Preliminary Conclusions

Thus far, it is clear that only experienced practitioners within the industry (and/or within the Professional societies) are well enough placed to detect and understand the difference between good and bad praxis, and from there, decide what is lying, obfuscation, or omission.

It is arguable that formal complaint processes are sparingly used, because we all understand that referring a fellow Member to a disciplinary panel is extraordinary and could impact the Member's professional career permanently. Referring a disclosure to the ASX likewise is the Omega option.

We can also, broadly, consider that the extent of the problem is underappreciated, and the severity is misunderstood. This is caused by the confidential nature of industry work, and the risks of defaming someone in public, which is why we all have Telegram and WhatsApp groups.

What's the harm?

I think in this discussion we need to focus back on why I'm discussing this in the first place. We are beyond Bre-X, and it seems, beyond the Pilbara conglomerate gold furphies and lies (and terrible praxis), and beyond CuDeCo. But there are still a lot of dodgy operators and dodgy companies and dodgy projects, and a LOT of money is flowing into the resources sector.

To some extent, we shouldn't necessarily care if a sophisticated investor gets pantsed for 2% of their nett worth. We shouldn't necessarily care if a company blows $250K on a wildcat drill hole in the desert on some hare-brained get rich quick roll of the dice. But there are costs beyond the proximal, and there are bigger harms than these.

One cost we fail to consider a lot is, if a dodgy or poorly conceived mine plan is executed, there are financial losses. The JORC Code exists to force proponents to outline their assumptions and modeling inputs, but it isn't very prescriptive, and there is no peak JORC body making economic decisions based on private work, ie; JORC doesn't convene in a secret bunker to decide which mine to start up or whether the mine is de-risked and the mine will be profitable.

Failed mines expose taxpayers to costs for cleaning up an unfinished mine. Even with the arguable benefits of a pay As You Go system such as operates in WA, mines that fail halfway are ultimately the responsibility of taxpayers to clean up.

Secondly, as the future becomes more resource constrained, we must acknowledge that good orebodies are destroyed by shonky operators that fail to extract the minerals from them either via poor metallurgy, via going bust, or even geotechnical failures. Certain companies are repeat geotech offenders (and in the theme of this treatise, I'll name Ramelius for losing 2+ pits to wall failures). Gascoyne nearly extinguished itself at Dalgaranga, partly from lack of production drilling (or so I heard), and poor scheduling of broken stocks. The costs of these SNAFUs were lost profits, lost jobs, burned investors and sterilised metal.

For example, I previously criticised Dacian for their work. They subsequently screwed the pooch and came within a whisker of imploding. What sent them nearly under? Lack of drilling, poor void and stope plans, excess dilution, you name it. Who was to blame? Apparently no one.

A comment I received related to tailings dam design and disclosure of risks. We need only look to the plethora of tails dams in Brazil which have failed or are poorly designed and unstable, and the lives and livelihoods lost, and the environmental damage sustained by spills and collapses. This is not an insignificant risk, and not an insignificant cost to clean up. It is arguable that we should have very, very robust peer review and public scrutiny of tailings dams.

Increased risks should carry increased scrutiny. We should devote more time to perusing EPA submissions and make more comments and conduct better peer review of these reports.

Final Conclusions

I believe I have outlined a significant list of concerns about how we self-administer and self-regulate ourselves as members of whichever professional society we are subscribed to.

We all work in relatively small fields, with a limited pool of talent, and with people we may encounter in several jobs at various other companies throughout our careers.

We need to respect and be polite to one another, but I think that a lot of complaints about the industry are founded in mistakes being made by people who are either out of their depth (eg; people chasing jobs into commodities they have no experience in), out of their league (geologists with 2 years experience now being 'senior'), or unmoored from ethics and morals, acting unilaterally, and not held to account. Mistakes which are not caught can compound, and when we involve investors, directors who are balls-out and full of ego and chutzpah, with millions of dollars on the line, we rapidly get into a scenario where it's easier to double down and hope it goes away, than to retract and fix a problem. If anyone catches you in the lie, you sue first and hope that they didn't compile their argument carefully and aren't brazen enough to double down against you. Very, very few are.

Faced with these factors, I believe we have arrived at the state of the professions and industry today: basically a massive in-group of people making out like bandits, unwilling to rock the boat in any way, and held in check only by the threat of being sued by a theoretical investor who loses everything and somehow can prove a lie that no one else has highlighted.

Indeed, this is why the cone of silence is thickening, I feel. If no one calls out bullshit, if no one identifies bad actors (people or companies), then everyone gets to keep making money, and no one sees their risk increasing.

What should we be doing?

Firstly, name and shame. Or if not shame, then at least name. Only the publisher of a public disclosure or a report can feel shame at being named. If you presuppose their shame, and withhold your censure or criticism in order to avoid, in the words of one of my bosses, "ruining that man's career" then perhaps that man ought to find another career before he ruins a bunch of other people's livelihoods.

Secondly, we should expect public criticism of whatever we put out in public. We should welcome critiques of our work. We should also recognise that our past work does not represent our current level of skill or professionalism, and take criticism on the chin. Indeed, I would be flattered if my past work was used by some of the contributors who got criticised for mentioning the authors of reports, because at least I would know my work was worthy of discussion.

Thirdly, publicly comment on public work. WhatsApp might be fun and a great way to spread gossip, but whining in secret about bad work doesn't get the standard of work up. Anonymity favours bad apples. The best sport at the moment is JORC Table 1's, but not mentioning the company (and by inference the CP) doesn't really provide an impetus to see standards improve, except if you specifically know that the CP is following you (which, at 2500 followers, seems more likely than not for me). Bringing things back into public is what we need to be doing, because the only further remedy is administrative action via ASIC, AusIMM, or AIG. Which seems a bit much for a poorly assembled JORC Table 1.

Finally, remember that being respectful doesn't mean you cannot be harsh. There's a difference between surgically, pointedly destroying a poor interpretation with facts, and calling a company a clown show, a bunch of muppets, or crooks.

THe industry is a broad circus tent, and we have plenty of clowns, with big shoes.