The most common questions I get about mineral exploration have to do with interpreting drill results. People ask: “What is high grade?” But with metals prices rising and a lot of money going into new projects, earlier-stage exploration is producing different questions, regarding surface sampling.
So, let’s talk about surface work, what it can tell us, and what it can’t.
Bottom line up front: No amount of surface exploration proves the existence of a deposit worth mining—so even the highest-grade surface samples do not justify higher share prices.
This doesn’t mean surface work is a waste of time, of course. You have to start somewhere. And surface work is much cheaper than prospecting with a drill rig.
I consider it a negative when a company starts drilling before doing thorough surface work.
Drilling into targets deep underground generally is so expensive and difficult, I want to see everything possible done on surface first. This increases the odds of success with the Truth Machine.
Consider why geologists call drill rigs Truth Machines… It’s because until you drill off a volume of mineralized rock in 3D, you have nothing. Well, you have theories and hopes, but nothing of material value. As above, no amount of surface work proves there’s a deposit with measurable value present. It takes the Truth Machine to put those hopes and theories to the only test that matters.
Truth be told, drilling kills more hopes than it makes significant discoveries.
That’s all the more reason to do the highest-quality surface work possible to define the best drill targets.
What’s quality surface work?
There are many tools available to geologist. Some are better for some things than others—and some are controversial. Here are some broad strokes on surface exploration techniques:
- Geological mapping. This isn’t just making a map of a project area, but specifically mapping geological occurrences. That includes rock types visible on surface, as well as faults, veins, or other features. Seeing where sedimentary layers of bedrock have been tipped to some angle by subsequent geological action, for instance, or covered with younger volcanic rocks, can help geologists project what rocks there might be underground, and where. Some rock types are known to be better hosts than others for different types of deposits. Knowing which rock types are on hand and where they are is a key starting point.
- Grab Samples. This is literally what you get when a geologist hikes around a property, kicking rocks and grabbing ones that look interesting. The sample could be chipped off obvious vein material sticking right out of the ground or just a rock taken from a pile left by old-timers outside an abandoned tunnel. But it can also be transported many kilometers by a long-gone glacier, or even dropped by some animal. The most a grab sample can tell us is that there might be some interesting geology nearby, and perhaps something valuable. How nearby is often difficult to determine. The key thing to remember is that because the geologist grabs whatever looks interesting, grab samples are not systematic—and they tend to skew toward high grades, not representative grades.
- Ridge Line Sampling. When prospecting in mountainous terrain, an obvious, but important point is that rocks tumble downhill as mountains erode. If a geologist finds some interesting rocks, they’re likely to have come from a source somewhere uphill. But if we sample along the tops of mountain ridges, those rocks are can’t have come from any higher up. So, if we find potentially economic mineralization in ridge-top sampling, we don’t have to figure out where it came from. We don’t know how much mineralization there is, but we know where it is.
- Stream Sediment Sampling. Water flows downhill, often carrying metal particles long distances. That’s a good thing. If we find gold, for example, in river silt, we know it came from somewhere upstream. This means the river is bringing us samples from its entire catchment, saving us the trouble of searching that whole area. We can follow the river upstream, sampling as we go, to find the source. Where the river forks, we can sample to see which fork carries the gold. We keep doing this until there’s no more gold in the stream, which tells us where the metal entered the water. We’ll still need to use other surface sampling techniques here to find the source, but we’ve now got a much smaller search area.
- Soil Grids. This is exactly what it sounds like: geochemical soil samples taken at regular intervals over an area being explored. Often, even after using some of the earlier-stage techniques above, there’s still nothing like an obvious vein sticking out of the ground. So geologists pick a target area they think is most likely to contain what they’re looking for and sample it, say, every 100 meters. If that grid turns up some areas of elevated sample grades, they might do a tighter grid, say, on 50-meter spacings, or even 25. That’s close enough that a consistently higher-grade zone makes for a potential drill target. This is how Kaminak Gold made its famous Coffee Gold discovery, which Goldcorp bought for C$520 million.
- Trenching. This too is exactly what it sounds like: trenches excavated along target areas to better define where to drill. Often, the source of the copper, or whatever we’re looking for, isn’t exposed on surface, but it’s close. Trenches can expose it and let us sample it directly. Other times, there’s a vein somewhere in a target area, but the dirt above it has been smeared around, so it’s hard to say exactly where. Trenching can either expose it or better define where it is.
- Channel Samples. When potentially mineralized bedrock, vein material, or other structures are exposed, we can collect continuous samples over the entire exposed width and along the exposed strike length (long dimension). That’s usually done with diamond saws and good old hammer and chisel. Sometimes, when vein material is harder than the surrounding rock and sticks out of the ground, we can see how it dips into the ground and get a good idea of its orientation and width. But that can be misleading, and often we don’t even have this much to go on. So it’s best to think of channel samples as being like two-dimensional slices of a possible deposit—if there’s anything left of it at depth. Also note that it’s normal to do channel sampling of the material exposed in trenching.
- Geophysics. Since geophysics seeks to measure telltale properties of rocks in the ground, I can’t call it surface sampling… but it is work done on surface. Further, with the exception of seismic surveys, geophysical techniques are not really imaging techniques. Seismic surveys do send waves down through the earth, which are reflected back by structures and different rock layers encountered. This is expensive and doesn’t reveal the mineral composition of the structures detected. That’s why it’s used mostly in oil and gas exploration (where we’re looking for a “trap” structure in the rock). Geophysical techniques more common in the metals exploration such as induced polarization (IP), magnetic, and radiometric surveys can tell us a lot more about the possible mineral composition of rocks. Unfortunately, they don’t produce actual images. They produce theories that could explain given readings—and there can be more than one explanation that produces the same readings. Those pretty, multicolor diagrams that look like slices of the Earth shown in company presentations of geophysics results are not, strictly speaking, images, but possibilities. There are many things that can generate IP responses, for instance, including pyrite. That’s fool’s gold, which is worthless. Generally, geophysics is better at identifying large targets, like big copper-gold porphyries, rather than narrow targets like veins. Don’t get me wrong; geophysics can be very helpful. I like seeing geophysics done, where appropriate, before drilling. But it’s one of many tools, and it’s best when it identifies a target that has a coincident geochemical target in soil sampling, or other triangulating data.
- Satellite Imagery. This too is not surface sampling, and it’s not even done on surface. But the images are of the surface and the information generated regards the surface. ASTER imaging can help geologists identify areas where specific rock types and minerals are exposed before they even put their boots on to head out into the field. LIDAR generates detailed 3D surface maps. It can “see” through vegetation, which can identify veins and other structures that may not be visible to the unaided eye.
All of these things, and more, are important exploration tools. As above, I want to see as much of this done before we spend—and possibly waste—money on drilling.
But as long as we’re working on or with the surface, we have solid information on only two dimensions.
Okay, with geophysics, we have theories in three dimensions, but no confirmation of the actual minerals we’re looking for.
If you’re thinking that I’m making an academic distinction, don’t kid yourself. It may seem that a giant, high-grade gold anomaly on surface must mean there’s a big deposit underneath. Not so.
It could be that there was a deposit there millions of years ago, but it’s been eroded away, leaving only an enriched stain on the current surface of the Earth to torture geologists.
Or it could be that there was a nice, high-grade vein sticking right up out of the surface where it’s easy to see, but at some point, a (now) flat-lying fault cut the vein off below surface. The missing extension at depth could be near or far, and in any direction.
I’ve even seen cases where initial exploration discovered where there was a deposit far in the past, but after it was formed, fluid moving along the same structure dissolved the valuable metals that had been there and carried them away.
Hence the bottom line I gave at the beginning of this article.
Key Point: It takes actual sampling in three dimensions to define a volume of mineralization that may be worth mining.
Until then, an exploration company has nothing that justifies a valuation above the cash and liquid assets it has on hand.
This is why I’ve said that—as essential as it is to delivering valuable discoveries—exploration itself is worthless in terms of market valuation.
The point here is not to bash the exploration process. I love it. I greatly admire the scientific detective work geologists perform, figuring out what Mother Nature did to hide her treasures.
The point is for investors to be careful about getting too excited about surface work.
As an independent speculator, I never buy a stock based on surface exploration results. More specifically, I’d never chase a stock because of high-grade grab samples or other such very early-stage work. That can be a way to get in early on a great discovery, but it’s extremely high risk—perhaps hundreds to one against.
To each his or her own, but I prefer to speculate on what I call Success In Progress plays.
Caveat emptor,
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