"Exploration Strategies: what works, what doesn't and why"


David Timms

Golden Cross Resources Ltd, 22 Edgeworth David Avenue, Hornsby, New South Wales, 2077

Key Words: Strategies, exploration, good people, success, more drilling, multi-disciplined teams.


The author gratefully acknowledges the invaluable contributions made by the teams of geologists and staff to the exploration successes enjoyed by Amoco Minerals Australia, Cyprus Minerals Australia, Arimco and Golden Cross Resources. The author is particularly indebted to Chris Torrey, Daven Timms, Kerry McHugh, Lindsay MacAlister and Roy Woodall for their suggestions and vetting this paper.


This paper highlights the differences between working for a Major multinational where money is plentiful but life is often frustrating because of bureaucracy and red tape as opposed to working for a Junior where funds are scarce but there is lots of incentive, interaction, and excitement when small successes are made. Oh! What a feeling!


Amoco Minerals Company was a subsidiary of the world's fifth largest oil company, Amoco, which decided to embark on mineral exploration in the early 1970s. Amoco formed an exploration company with divisions in USA, Canada, Australasia and South America.

The author was privileged to be recruited to manage Amoco Minerals Australian division late in 1972. A Joint Venture with Amax as operator in the Forrestania Nickel belt was the first project to successfully identify mineable desposits of nickel at Digger Rocks, North Ironcap and Cosmic Boy. Amoco's team soon followed with Red Dome, Junction Reefs, Selwyn deposits Starra, Mt Dore and Mt Elliot, Gidgee, Gold Ridge (Sol. Is.), Golden Cross (NZ), Prices Creek and Copper Hill

In the early 1980s Amoco realised that ownership of a minerals company would not make a significant difference to its several billion dollar bottom line, so it decided to sell its mineral assets.

Before this occurred, budgets declined and there was a scramble to find JV partners. Finally, budgets disappeared and fortunately a JB Were company, Arimco, was incorporated to fund exploration on all 30 or more properties in return for a 50% interest in the properties.

Amoco couldn't sell its interests in the mineral properties for a decent price and decided in 1985 to roll all the properties into their largest acquisition, Cyprus Minerals, and give all its shareholders pro rata shares in Cyprus. Consequently Cyprus and Arimco were partners sharing most of Amoco's properties plus some new ones such as Mt McClure, Didipio (Phil.) and Brocks Creek throughout much of 1986 – 1990.

The author was retired from Cyprus in 1990 and with his son Daven formed Timmsco, which became Golden Cross Resources in 1994. Fifteen properties were acquired by 1995 and after visiting over 60 brokers, Golden Cross was finally floated in March 1996. Oh, what a feeling!

Apologies: Most of the following "what works and what doesn’t" are motherhood but nevertheless need to be listed. Many points apply to both majors and juniors such as "cost effective exploration is the best means of adding value to your company" and "good people are the company’s best asset".




Lots of cash


Big Team

Small team with contractors and consultants

Broad area (worldwide)

Focussed area

Require large deposits

Small deposits acceptable and farm-out large mineralised systems




What works?


Cost effective exploration is the best means of adding value to your Company in the long run.

For example, Newcrest's cost per discovery ounce in NSW is A$5 per ounce vs current gold price of A$500.

Good people are a company’s essential best asset

A company cannot succeed in the long run without good people.

Drill more holes into selected targets

Two-year Canadian study on how to be more successful in exploration indicated "drill more holes"

Explore in an ore-permissive area or as Roy Woodall says "the right jungle"

For example the Mt Isa inlier has produced world- class deposits as has the N & S American Cordillera.

Design a long-term (>10 year) programme

The main reason for WMC's success in the 1970s (pers. Roy Woodall) eg Olympic Dam. Also Amoco in identifying Selwyn

Choose mine-finders by elimination

Amoco hired many geologists and kept the mine finders

Allow project mine-finders plenty of discretion

Mine-finding geologists will get frustrated and leave if not given enough discretion, budgets and encouragement.

Devise meaningful incentive schemes for your mine finders

Cash bonuses or shares based on achievements of inherent value of find.

Organise in-house workshops with presentations of own work, mine visits and recreation

Recognition of work, team bonding, exchange of ideas and viewing different deposits.

What doesn't work


Short-term programmes. Concept of "turning over ground" without getting to know it.

Many foreign majors have come and gone several times.

Exploring from a foreign head office and comparing finds with local model

e.g. Kennecott c.f. Bingham

De Beers c.f. South. African. diamond pipes

Anglo c.f. Witwatersrand

Big teams controlled by head office

Tendency for regional geologists to be stifled by pre-set ideas and foreign Head Office conditions not appropriate to a particular region.

Do not promote your best mine finder to administration

The discovery rate will suffer

Companies limiting geologists to certain size deposits early in exploration

e.g. Cadia was passed over at 200,000 oz gold and now has over 20 million oz potential.

Majors banking on one or two geophysical approaches to finding major deposits

e.g. Canadian and US majors in 1970s flying huge areas with EM and covering large tracts with IP

Majors confining their explorationists to one basic metal while disregarding all other metals and industrial minerals

e.g. Plutonic gold deposit only assessed for nickel in 1970s.



What works


Cost effective exploration is the best means of adding value to your Company.

e.g. Dalrymple’s Thunderbox deposit and Aztec’s Golden Grove deposit.

Acquire properties that have already had many millions spent on them.

Juniors will not have to spend precious funds drilling but can collate and manipulate all previous data using modern methods to develop targets that will attract majors.

Successful exploration can be a numbers game for most Juniors. The more properties of merit a Junior can afford the better chance of success in the long term.

Taken to the extreme; if a Junior only has one property and it fails for whatever reason it then has nothing.

Conserve your cash like the ultimate miser.

Otherwise you will end up disappearing like 70-80% of the new floats.

Take up certain majors' properties when they abandon them, e.g. Kenecott (copper porphyries), CRA, Inco.

Majors looking for world class deposits sometimes overlook smaller high grade deposits.

Adopt a flat management structure

Flatter management structure allows for faster decision-making, e.g. for acquisitions, properties, vacant ground etc.

Use geochemistry as a primary grass roots tool after choosing the best ore-permissive area from a combination of free historical data, and the latest DMR geology magnetics, radiometrics databases

Relatively inexpensive and may lead to important discoveries e.g. Tick Hill.

Develop a multidisciplinary team.

To enable Junior company to provide, collate, manipulate data to develop targets that attract majors to farm in.

Be constantly prepared to raise capital during brief market windows caused by cycles, strikes, wars, US interest rates etc.

Juniors' ever-present worry is having sufficient funds to be effective.

Let the best mine-finders site the critical drill holes.

Some geologists have developed the art of discovery better than the others.

A major consideration in exploration should be structural control.

The vast majority of ore deposits are structurally controlled.

Be constantly alert to opportunities when deposits are abandoned by majors in foreign countries. They may be available for a song.

Corporate head office may make a decision to pull out of a country or region for strategic reasons.

The Juniors' Managing Director should be a servant to the front-line explorers, providing all that is required including delegating authority, direction, inspiration, latitude for individual expression of ideas and approaches, giving credit and praise when warranted.

Explorationists need to feel self-fulfilled by playing a meaningful part in a multidisciplinary team.

Provide a suitable incentive scheme of shares and options with a continuing optional salary sacrifice share acquisition scheme.

To attract and keep the best mine-finders.

Focus on an area e.g. NSW. Use a small, focussed team and specialised contractors/consultants

Focus gives better knowledge with time.

Look for potential high grade "Zone 7s" in large but low grade mineralised systems

Porgera’s narrow but very high grade Zone 7, Cadia’s Ridgeway and (?) GCR’s Copper Hill’s 26g/t gold/2m zone .

Develop and use check lists e.g. for field trips, drilling programmes, agreements, etc.

Consider arriving at a field location after a days travel to find an essential piece of equipment was left behind.




What doesn't work


Paying large amounts of money to vendors.

Funds are precious. Sooner negotiate with shares, participating interest and royalties.

Junior Managing Director must not dictate.

Stifles ownership by and enthusiasm of employees

Do not promote your best mine finder to pure administration.

The whole team will suffer.

Spreading the geographic net too wide

Not cost effective exploration because too much spent on travel, administration and establishment

Do not restrict Junior Company to a single commodity or a few commodities.

Remain open to all opportunities for different commodities including industrial minerals because at some time that commodity will become the market's "flavour of the month" and the Junior can capitalise on that to raise funds in tough times. e.g. currently tantalum and palladium.


PowerPoint Presentation

Golden Cross Resources Ltd