The exploration Elephant in the room – by Kip Keen ( – July 3, 2015)

Analysis: We consider a recent report on the issue of exploration by the Boston Consulting Group.

The Boston Consulting Group – one of the so-called Big Three consulting firms – takes on mineral exploration in a recent report. It calls it “Tackling the Crisis in Mineral Exploration” and, as you might guess, it deals with the elephant in the room, which is the lack of elephants in the room. That is: big, important discoveries.

In recent years, despite a massive increase in exploration spending, discoveries have dried up – ground well covered by researchers and analysts. Indeed, the Boston Consulting Group relies heavily on one of the better sources tracking the sector – Mines Consulting run by Richard Schodde – to set the scene.

Schodde shows that over the past decade the rate of deposit discovery has barely budged (even estimating for un-reported discoveries) despite a tenfold increase in exploration spending. What the Boston Consulting Group adds to the issue is a journalistic style endeavour in interviewing six of the industries better-known explorers.

These include Graham Brown, Douglas Kirwin, Jim Lalor, Sig Muessig, Andy Wallace and Dan Wood. This makes for an interesting, and at times, insightful read on industry issues, no doubt there.

But it must be said: The Boston Consulting Group is selling something here with this document. It’s a consulting firm after all, and it wants to attract the business of miners and explorers and sell its services. Indeed, I’d say the conclusions are somewhat self-serving in the report, especially when the BCG emphasizes the importance of leadership and management in the fraught issue of a mineral exploration crisis (which, I agree, is real) over other difficulties the sector faces and has faced – like cost inflation of services and the increasing difficulty of finding deposits.

The opening comes with this conclusion: “The explorers we interviewed were unanimous in their conviction that the discovery of ore bodies is not a mystical art. Nor does it require an investment of vast sums such as those spent by mining companies in recent years. To these legends of exploration, successful discovery is about leadership—in the field and the boardroom.”

Now, of course, there’s some good points to be made on this score, and BCG and its informants make them. Over-reliance on consultants makes for less secure, less invested exploration teams. (Hey, good on them, these consultants.

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