9 Lessons in Mineral Exploration from Legendary Mine Finder J. David Lowell

Mineral exploration is a tough business and it makes and breaks companies all the time. So, finding insights from previous explorers is critical.

J. David Lowell is known for the Lowell-Guilbert Model, a guide to large, low-grade porphyry copper deposits. Throughout his career, Lowell used this model to discover some of the most profitable mineral finds in the history of mining, such as the 1981 discovery of the Escondida deposit in Chile.    Worth hundreds of billions of dollars, Lowell and his colleagues found it at the cost of $2.5 million.

In 2014, he published "Intrepid Explorer: The Autobiography of the World's Best Mine Finder", which outlines his career and many insights. However, it was on page 192 and 193, that he outlined some lessons that are valuable for any investor.

Here they are in order and in his own words, Lowell's 9 Lessons on Mineral Exploration:

"1) Ore is a rock which can be mined at a profit. Low grade is sometimes mineable, and high grade sometimes not.

2) Mines are found in the field, not in the office.

3) Mines are now almost always found by drilling holes, so if no part of the budget is spent on drilling there is almost no chance of success.

4) Exploration is a cost/benefit business. Expensive high precision-core drilling is often used when low-precision low-cost rotary drilling would suffice.  In the Atacama Project, we spent $3 million on wide-spaced rotary drill holes. If we had used core holes our budget would have run out when less than half the holes were drilling including those that found Escondida and Zaldivar ore bodies.  The same logic applies to all other exploration costs.

5) High-tech devices and geophysical surveys are very rarely of value in mine discovery.  There should be an almost metaphysical communication between the rocks and the successful explorationist in which the rocks talk to the explorationist.  If he turns part of this job of geological mapping over to a high-tech gadget, he may look good to uninformed management, but he is less likely to find a mine.

6) It is important for the explorationist to have a good understanding of the target he is looking for, including understanding some mining engineering, metallurgy, mine finance, and mineral economics.  He is not looking for a scientific curiosity; he is looking for a mass of rock which can be made into a mine.  I believe my mining engineering and mine production work has been very important in my exploration success.

7) Mineral exploration, like inventing new blockbuster drugs, has a very low probability of success.  Only one out of three hundred to five hundred attractive targets become a mine. You have to accept the fact that you will usually be wrong.  I'd guess that only one out of thirty well-trained exploration geologists ever actually finds a mine.  However, if an explorer has found one, he is statistically likely to find others.

8) Finding mines is a high-risk business. In addition to geological risk are the political risk, the metal price risk, the mine financing risk and the timid, incompetent, management risk.  Success is the summation of a list of well-evaluated risks.

9) My last factor, which you don't find in training manuals or classrooms or mining articles, is the freedom to plan your own exploration project without interference of company rules or traditions or interference by supervisors who are not as good a prospector as you."