We teach and emphasize to our clients the absolute importance of taking the time, as a mineral exploration group or company, to develop and implement an effective Exploration Strategy.
Our primary message is that strategic effectiveness requires clarity and simplicity. Clear and simple strategies have the best chance of being understood, internalized and used to guide in decision-making.
WMS Terminology
- Exploration Search Space means the parameter-space defined by that set of factors that are relevant to the explorer’s business and that constrain economically-effective outcomes of the explorer’s search process.
- Commercial Risk Management — CRM is a comprehensive term for all aspects of identifying and managing non-technical risk in the exploration process including, critically, those non-technical risks that are a strategic constraint on Exploration Search Space when determined to be unmanageable.
- Exploration Strategy means the documented words that result when then explorer defines their aspirations, objectives and strategic choices — choices made, based on the limitations of their unique Exploration Search Space — in order to manage effectively the allocation of resources (time, people, money) in pursuit of economically-viable exploration opportunities.
Why take the time to develop an Exploration Strategy? Two Reasons:
- Going through the process of developing an Exploration Strategy provides the exploration group a valuable opportunity for introspection — defining who they are in terms of skills, aspirations and business realities.
- Once developed, an effective Exploration Strategy facilitates fast, consistent, informed decision-making as the group generates and tests exploration opportunities.
High-quality decision-making capability is critical in the business of mineral exploration which is characterized by a low base rate (low probability of success), the realities of limited Exploration Search space, significant CRM challenges in any global location and the need to test new ideas/opportunities quickly and efficiently in order to avoid high opportunity costs.
Define Exploration Search Space at the Strategic Scale
Factors such as these customarily define an organization’s Exploration Search Space:
- Community and environmental realities
- Potential for impacts on water resources quality and availability
- Footprint size factors
- Cover conditions
- Management time pressures
Traditionally, these factors are first considered at the project scale — when an approved project is being planned. We encourage our clients and students to consider these factors at the strategic scale:
- If these factors really do define your Exploration Search Space, then “load them in” up front.
- That is consider them as context for your Exploration Strategy — define your unique Exploration Search Space at the strategic scale.
- Doing so will mean that you will have better control of the challenging resource (time, people, money) constraints that are difficult to control in the mineral exploration process.
Strategic Context – Your CRM Realities
Delivery of value in mineral exploration requires seamless integration of effective Commercial Risk Management (CRM) into an organization’s exploration program. That integration necessarily occurs at the project scale, i.e., portfolio and project management. However, we advise our clients and teach our students that CRM integration must also occur at the strategic scale — i.e., integration of the CRM realities that are unique to the exploration group into the definition of that group’s Exploration Search Space. Said another way, your team’s CRM capability, i.e., your capacity for taking on and managing non-technical risk, is a significant component of the context for your Exploration Strategy.
CRM Application — Country Risk Analysis
We apply what we teach about CRM in various ways. One is to help our clients identify and analyze commercial risks and understand the doing business requirements of new regions and countries where they desire to explore.
Our country risk analyses identify the commercial risks in the categories that are important to mineral explorers generally and to the particular client, categories such as personal security and safety, political and economic trends, and security of title and minerals access rights.
Our reports go beyond what is publicly available to include information about local contacts who can be of help to our clients. Learn more.
CRM Application — Deal Making
We provide commercial analysis of growth and investment opportunities and assist with deal evaluation and transaction terms and negotiations, and with development of land access and exit strategies.