Exploration plays tend to be heavily focused on
geological theory, specialized valuation techniques, and map studies.
First we need to understand the basic geological
theory that has revolutionized the Cortez Trend. Exploration is
about playing Sherlock Holmes with geological clues to make an
intelligent bet about the size of potential deposits and the probability
that they will become economic. In order to intelligently put
the clues together, one must begin to grasp geological system
concepts and the analytical processes utilized by competent geologists
to identify exploration targets.
Secondly, we need to acquaint ourselves with some
basic valuation methods. On the quantitative side, this includes
basic "expected value analysis." On the qualitative
side, I provide examples of evaluation methods used by sources
such as Kaiser
In regard to map studies, I provide color-coded
Intierra Resource Intelligence hot
play maps of the Cortez Trend area in Part
Five that you can minimize on your computer screen and refer
to as you follow my discussion of particular companies elsewhere
in this series.
NEVADA EXPLORATION GEOLOGY
As I mention in my article "The
Dual Nature of Gold and a Mystery," gold remains one
of the most difficult and costly metals to find and extract. Compared
to iron, which must be concentrated in geological anomalies five
times more than it is randomly found in the earth’s crust
to be economically mined, gold must be at least 1,000
times more concentrated than its random natural occurrence.
Only about one in five thousand gold mining claims results in
a profitable mine. Most rich surface anomalies quickly fade out
rather than form economic trends.
The gold mined in Nevada is microscopic, dispersed,
and typically found in sedimentary rock. It is a true statement
that gold can be found virtually everywhere in California, Nevada,
and elsewhere along the Pacific Rim, except that it is normally
extremely sub-microscopic and extremely dispersed.
The question is where is it concentrated enough to be economic
to separate it out from its surroundings.
For some reason gold tends to be much more concentrated
in the earth's crust in northern Nevada than in certain adjoining
Western states, such as Arizona which tends to be rich in copper
but far less endowed with gold. Eastern Oregon may have gold-bearing
structures running north from northern Nevada, but they have far
more strata covering over them. This makes gold deposit both more
expensive to mine and less likely to provide seepage clues regarding
their whereabouts. Also, Oregon law prohibits the use of cyanide
to leach the gold out of ore.
The best way I can simplify a lot of complex geological
theory is to point out that gold tends to concentrate into economic
deposits where nature performs mechanical actions somewhat analogous
to what a prospector does when he pans for gold.
Gold is a heavy metal, so by swirling ore mixed
with water in a pan, the prospector gradually washes away the
lighter raw earth elements, while skillfully keeping reserved
in the base corner of his pan a place to "trap" increasing
concentrations of the heavier residual gold particles within the
"black dirt" (or "pay dirt") that tends to
For the forces of nature to separate out gold from
hot magma, it helps to have swirling magma and pools of underground
swirling water working together. To trap and build up the gold
deposits, we need to have gold-bearing fluids that rise off the
magma seep into cracks and fissures in the earth. This is somewhat
analogous to the way a miner sloshes increasing concentrations
of "black dirt" carrying gold towards the bottom corner
of a pan. It also helps to have types of rock whose molecular
structures tend to grip and hold gold particles, which are typically
sedimentary rocks. Lastly, it helps to have nice long channels
of seepage where under various temperature and pressure conditions,
the different elements within the gold bearing fluids start to
condense (mineralize) and sort themselves out and form distinct
deposits at different intervals. As an example, as gold bearing
fluids simultaneously push up diagonal crevices and cool down,
the base metals start to precipitate out first, starting with
cobalt, and then followed by lead, zinc, and copper. Further up
the crevice, we get arsenic, mercury, antimony, and gold. This
is one reason why elevated arsenic, mercury, and antimony concentrations
in soil can be a clue regarding nearby gold.
To be economically mineable, it helps greatly if
the types of earth strata that are relatively good at trapping
gold get thrust up close enough to the earth's surface to be highly
accessible to miners. In order to find the gold deposits in the
first place, it helps if surface soil conditions can provide various
forms of "seepage" from major underlying deposits, such
as through very tiny little veins or from geological surface upheavals.
It also helps if faulting causes rocks to rub against each other,
creating layers of rock fragments (referred to as brecciation)
that make good traps to induce gold precipitation out of gold-bearing
Over the last five hundred million years, Nevada
has experienced an unusual confluence of all the aforementioned
factors. As mentioned earlier in this paper, some parts of the
earth's crust just happen to be richer in gold particles than
others, and the northern Nevada crust just happens to be lucky
that way. You need deep cracks in the earth's crust to help bring
magma closer to the surface. Interestingly enough, a geologist
told me that the earth's continental
crust is about half as thick in Nevada compared to elsewhere
in the US. The Cortez Fault system may go down all the way through
the crust. Most of its mountain ranges (which tend to run North
to South, NE to SW, or NW to SE) are flanked by faults. You need
continued agitation, and Nevada remains the third most seismically
active state after California and Alaska. You need the swirling
water, and Nevada is very active with underwater geothermal activity
throughout the state. In fact, some geologists speculate that
the "hot spot" that now produces the geysers in Yellowstone
National Park once existed under north-central Nevada and helped
concentrate gold. Lastly, for Carlin-style deposits, one needs
sedimentary rock to trap the gold in its fissures.
Nevada actually has two layers of sedimentary rock.
One is near the surface, and is so-so in hosting gold, but can
do a reasonably good job of trapping gold-bearing fluids beneath
it. There is a second layer much deeper down called the Lower
Plate which has been much better at hosting gold deposits and
has been correlated with the major gold deposits of the Carlin
Trend. You need enough surface erosion and subterranean cracking,
faulting, crustal stretching, and geological instability over
tens of millions of years to allow blocks (called "horst
blocks" in Nevada) of the deeper lower plate gold-bearing
strata to get in range of open pit mining.
In order to become a major gold producer, Nevada
had to have the right geological sequence. Nevada had to first
act as an ancient sea bed to form the sedimentary rock that acts
as the "pan" to trap the gold, then later experience
the cracking, magma swirling, and geothermal action that "swirls
the gold in the pan."
At the January 2005 Vancouver Resource Investment
Conference, Joe Kizis, President of Bravo Venture Group, summarized
for me the three major variables that create economically mineable
1) Source of fluid. Some kind
of magma-related event creates gold-rich fluids that get pushed
up through the earth's crust. One typically needs hydrogen and
sulfur in solution to carry the gold.
2) Structure. The gold bearing fluids have
to find cracks or permeable strata to rise towards the earth's
surface. Sometimes gold-bearing fluids can pass through rock
formations without precipitating out the gold. Sometimes the
gold fluids will rise vertically through a crack, and then hit
a horizontal strata of brecciated
rocks ground into pebbles by faulting action and then fan out
3) Host environment. Something has to precipitate
out the highly dispersed gold in the gold-bearing fluids rapidly
enough to create economic gold concentrations. The precipitation
process is influenced by such variables as temperature, pressure,
chemistry, and fluid mixing. The precipitated gold also has
to precipitate against some kind of host rock that does a reasonably
good job of acting like a gold particle "sponge."
Chemistry is relevant...
It helps to know something about chemistry to understand
the clues geologists look for to find the deposits that can send
your junior gold mining stocks skyward.
One type of chemical separation involves rocks that
are rich in iron. The iron may bond with the sulfur in the gold-bearing
fluids, forming pyrite ("fool's gold"), which in turn
may strip away the sulfur as a carrier for gold in solution and
cause the gold to precipitate out. The Roberts Mountain formation
in the Cortez Trend consists of a "platy" silty limestone
rich in a certain type of iron that tends to react with gold bearing
fluids and fix the gold to itself and create deposits over a "platy"
stratum rather than allow it to pass by.
Another chemical example involves the presence of
water. It can also precipitate gold by changing the acidity, temperature,
and salinity of the gold bearing fluids. The presence of hot water
can suggest a heat pump system that helps circulate water and
enhance the gold separation process. Hot water is found in deep
drill holes throughout the Cortez Trend.
Finally, a third example may involve oil and natural
gas, in which the same hosting structures that trap oil and gas
can also trap gold-bearing fluids. Carbon molecules in the methane
interact with the gold bearing fluids to separate out what becomes
graphite, gold, and water. Most Carlin deposits have "carbon
front" features, to include those found along the Cortez
Macro earth science is
also very relevant...
Last, but not least, I would be remiss if I did
not touch on plate tectonics, whose several hundred million year-long
alternating compression-stretch cycles have played a huge role
in Nevada's geological history, and help explain the age, direction,
and magnitude of gold-bearing fracture zones that tend to run
NNW, WNW, and NE. I describe all of this again with some more
details in Part
Roughly 700-900 million years ago the Australian
continent may have rifted away from the western edge of the
North American land mass. By one
interpretation, the continental
margin of North America ran through north central Nevada.
As Australia drifted away, the oceanic area in-between started
piling up marine sediments for several hundred million years which
subsequently formed excellent host rock for gold deposits.
Then about 300-400 million years ago the rifting
apart process changed 180 degrees. A new cycle of oceanic and
continental plate collision began that would last roughly 350
million years. Geologists call these types of mountain-building
.Two Pacific tectonic plates (the Kula
and Farallon plates, to be precise) and the North American
Plate began to converge relative to each other.
This created enormous compressional
forces that started folding up mountain ranges perpendicular to
stress direction. Western North America began to fold like
an accord ian between its west coast all the way to where Denver,
Colorado and the edge of the eastern Rocky Mountains stand today.
Part of the Pacific plates dove underneath the earth's crust ("subduction"),
but another part splayed off and thrust more horizontally into
the earth's crust to create the folding action. Fifty different
exotic terrains were sutured
on to the West Coast during the Mesozoic era (248 to 71 million
years ago), adding 25% to the continental crust of western North
Nevada's geology began to resemble a train wreck
with strata getting cracked, scrunched, and folded up in many
different directions. Parts of the oceanic plates subducted under
the crust melted and formed magma "plutons"
that rose towards the surface and formed intrusive features associated
with gold-bearing structures that I show in diagrams in Part
About 40 million years ago, the extreme compressional
forces subsided as the bulk of the Kula and Farallon tectonic
plates slipped underneath the North American continent for good.
In fact, the relative compression shifted 180 degrees once again,
and a new period of relative rifting began. In the last 20-30
million years, the Basin
and Range area, which includes the mountains of Nevada, has
seen a stretch process that geologists call an "extension."
They claim that when the Farallon
Plate completed its slide under North America about 40 million
years ago (with the exception of a remnant called the Juan de
Fuca Plate that still subducts off the Pacific Northwest to this
very day), this coincided with the beginning of a rebound effect
whereby the western US stretched out about 150 km. This continental
stretching continues to this day, with California moving away
from Colorado at about a centimeter a year. Some day an ocean
will probably develop between the two areas, much like what once
happened when Australia drifted away from North America.
When the tectonic plate rebound process began about
40 million years ago, the Pacific
Plate that supports the Hawaiian islands executed a counterclockwise
rotational shift and changed its thrust direction. The North American
continental plate also changed direction, but not as much. A huge
pulse of gold-bearing fluids surged from very deep in the earth
towards the surface in Nevada, traveling through the myriad cracks
created in the prior geological ages. This created most of the
Carlin-style gold deposits found today.
Western North America's geological formation stabilized enough
40 million years ago so that the general drainage pattern we now
call the Colorado River began
to form. New "fault-block" mountain ranges have
been developing as the continual stretching (or continental "spreading"
-somewhat analogous to "seafloor
spreading" --by another geological interpretation) widens
cracks between mountain ranges.
The mountainous areas of the continental crust continue
to maintain their elevation since they rest on the earth's mantle.
However, the valleys between them include cracks that are steadily
widening. The rate in which valley floors drop depends on the
rate in which they fill with eroded materials compared to the
rate in which the widening cracks create new void to be filled.
California, is an extreme example where a relatively low rate
of erosion from less than 2 inches of rainfall a year compared
to a high rate of valley widening has dropped the valley floor
to 282 feet below sea level.
Amidst all this, exterior oceanic tectonic plate
pressures continue to apply along the Pacific Rim at odd angles,
one good example being the San
Andreas fault. Nevada and California remain unstable, and
still experience periods of volcanism, earthquakes, and rifting.
John Kaiser's commentary below provides some other
interesting details regarding this history. It is contained in
his article about Gateway Gold Corp, which operates NW of the
Key buzzwords associated with Carlin-style
gold deposits in Nevada are "Upper Plate", "Lower
Plate" and "Roberts Mountain Thrust". During
Cambrian to Mississippian
time [345 to 320 million years ago] northeastern Nevada had
been a continental margin that shed sediments into an oceanic
basin. The basin sediments graded westwards from silty carbonates
(today known as Lower Plate) to siliciclastic rocks (Upper Plate).
Starting in Late Devonian time [367 to 408 million years ago]
as a result of "compressional tectonics related to the
Orogeny" the western sediments were thrust eastwards
over the silty carbonates, like one plate sliding over another.
The result is two distinct sedimentary sequences, one stacked
on top of the other. The thrust plane, or the interface between
the Upper and Lower Plates, is called the Roberts Mountain Thrust.
The thrusting created highlands which eroded eastward to form
a sequence of clastic
rocks ["fragments of rocks that have been moved individually
from their original place of formation"] called an "overlap
assemblage". This was followed by additional periods of
thrusting, folding and uplift which shoved more Upper Plate
rocks on top and injected a high degree of complexity. Magmatism
centred on the crustal zones of weakness today known as "Trends"
in Nevada began in the Late Triassic (208+ million years ago)
and continued periodically into the Late Tertiary (2 million
The extensional activity that created the familiar
north-south trending "basin and range" topography
began about 20 million years ago. The problem in Nevada is that
the ideal Lower Plate host rocks are buried beneath thick layers
of less favorable Upper Plate rocks, but thanks to extensive
faulting and folding this spatial relationship is not uniform.
An important regional exploration goal is the identification
of Lower Plate "windows" within the gold trends. Lower
Plate windows developed when giant blocks of rock bounded by
faults, also known as horsts, underwent uplift. [Actually by
another geological interpretation, the horsts stood still and
valley areas adjacent to them drop]. Subsequent erosion of the
uplifted horst would have shaved the topographically elevated
Upper Plate rocks down, leaving the Lower Plate rocks exposed
or much closer to the surface than the Lower Plate rocks outside
the "window". The presence of Lower Plate rocks does
not, of course, guarantee the presence of a major gold deposit;
it merely offers better host rock conditions for the development
of a major deposit. A plumbing system and structural preparation
of the rock also need to be present, along with gold bearing
solutions. Gold mineralization can occur in Upper Plate rocks,
but generally does not form large gold deposits because the
Upper Plate sediments lack the gold "sponge" characteristics
of Lower Plate rocks. Upper Plate gold mineralization, however,
can be viewed as leakage from a deeper plumbing system which
may have caused big gold deposits to form in deeper Lower Plate
Below is a sample cross section illustration created
by White Knight Resources regarding one of its current drilling
projects in its Slaven Canyon project that illustrates some of
the structures just described by John Kaiser.
For another more detailed overview of Nevada geology,
I would refer the reader to the article "Geology
of Nevada" (Price, Henry, Castor, et al) that appeared
in Nov 1999 Rocks and Minerals. The article states, "Most,
but not all, ore deposits in Nevada are associated with igneous
[volcanic] activity. In some cases, metals came from the magmas
themselves, and in other cases, the magmas provided heat for circulation
of hot water that deposited metals in veins and fractured sedimentary
rocks. Some spectacular mineral specimens occur in ore deposits
that formed when magmas intruded and metamorphosed sedimentary
rocks. Even today, driven locally by deep circulation along faults
and locally by igneous activity, hot water shows up in numerous
As far as other references, Nevada Pacific Gold
provides a good glossary of geological
terms. I would also point the reader's attention to various
age charts easily "Googleable" on the Internet.
In a very paradoxical way, finding gold seems to
be both incredibly complicated and simple at the same time. Gold
exploration may be a very uncertain science (in a statistical
sense) if one tries to build a predictive model from scattered
clues. As mentioned earlier, gold is so rare, and so many disparate
geological variables have to interactively align themselves to
produce economic gold deposits, that to really get this down to
a science one would probably need a combination of a supercomputer
with several thousand times more processing power than the Earth
Simulator combined with a huge army of robotic devices that
can systematically canvass vast geographic areas of interest and
very cheaply perform both deep drilling and core sample analyses.
Conversely, using comparative logic, the process
of finding gold might be incredibly simple. Because gold deposits
are so anomalous and freakish, if one finds a rich gold deposit
somewhere, it becomes intuitively obvious that the most likely
areas that also bear rich gold deposits are the ones that are
geographically the closest and are geologically the most similar.
Hence, geologists typically model the factors behind economically
successful deposits in order to make reasonable analogies in piecing
together emerging evidence from new exploration areas.
Conversely again, modeling can become complicated
when geologists seek to understand how all the key geological
formations in their area of interest were formed over time, as
well as reconstruct a "mental movie" regarding how gold-bearing
fluids went about their way forming economic deposits.
Finally, in the real world, what can make exploration
geology extremely easy again is when a preponderance of evidence
from drilling results and geological modeling makes the magnitude
of a discover fairly obvious, yet such factors as market emotion,
market manipulation, corporate bureaucratic politics, government
intervention, and insider conflicts of interest work together
to create distortions in free market pricing mechanisms and cause
exploration properties to become grossly undervalued.
'EXPECTED VALUE" ANALYSIS
AND THE KAISER BOTTOM FISH METHOD
"Expected value" analysis is a very handy
tool for business and investment decision-making. One determines
the "expected value" of an outcome by multiplying the
expected payoff by the probability of the payoff, and then by
As an example regarding how we can calculate expected
value, suppose you have to choose between two bets, "A"
and "B". For Bet "A" you have a 10% chance
of making $100. You have a 90% chance of making zero. Your "expected
value" of this bet is $10. For Bet "B" you have
a 5% chance of making $500. You have a 95% chance of making zero.
Your "expected value" of this bet is $25.
If you are not risk averse, and can spread your
risks across over enough bets so that you tend to reap the expected
value of all the bets, then a rational speculator would prefer
bet "B" to bet "A" even though the odds of
winning bet "B" are half of those for "A."
Of course in the real world most sane individuals
shy away from playing purely by expected value calculations. The
big difference between the individual of average means and an
insurance company, is that the individual simply can not afford
the catastrophic outcome of losing a particular bet, whereas the
insurance company can spread its risks across enough bets so that
it can reasonably rely on achieving the expected value of all
of its gambles combined in order to make money.
If we are going try to make some kind of simplified,
back of the envelope, cash on cash analysis regarding a junior
mining company operating along the Cortez Trend, we need to know
at least three things. First, what is a likely payoff. Secondly,
what are likely odds of achieving such a payoff. Third, is the
exploration company that we use as a vehicle to place our bet
OUR LUCKY BINGO CHART
Let us imagine that discovering a five million ounce
deposit along the Cortez Trend is entirely plausible for a hypothetical
junior mining company given Placer Dome's discovery of 15 million
ounces in proven and probable reserves in the Cortez Joint Venture
area. Let us imagine we have ten really good drilling projects
in different areas based on very competent geophysical studies.
Suppose we assume the probability is 25% that at least one of
these projects will hit a 5 million ounce target, even if it means
drilling thousands of drill holes over a period of several years.
Imagine that the price of gold will likely be above
$450 an ounce by the time our deposit gets mined, and that our
junior mining can send its ore to a major gold mining company's
production and processing facility in the area. Now we need
figure costs per ounce to determine net profit. This can get
tricky, because our junior exploration company might strike
a deal with
a major to do the production rather than go into production itself,
so the cost analysis may actually be done from the perspective
of a low cost producer such as Placer Dome.
Regarding production cost comparables, in Part
Three, I note that Placer Dome's reported cash and total costs
at its Cortez Joint Venture facilities are $200 an ounce. BacTech,
with a bio-leaching facility located close by within the Cortez
Trend, claims low to mid-$200's. Newmont's total expected 2004
cash costs in Nevada are $250 an ounce. Queenstake, outside of
the Cortez Trend, weighs in at $270 total per ounce in its 2003
Annual Report. Shall we say then $250 an ounce for mining
and processing costs? Plus add another $75 an ounce as an intuitive
guess for expensed capital investment (depreciation, depletion,
and amortization) general and administration, and non-deferrable
tax liabilities. That might bring us to $325 an ounce total. Incidentally,
gold dipped to a low
of $252.90 in June 1999, a price that threatened to put roughly
half of all gold mining companies out of business, so if we bring
this break-even number forward five and a half years at a 5% cost
increase a year, we get something close to the $325 estimate.
Imagine that in order to finance continued drilling,
the junior mining company has to continually give away 50% of
its ownership of its various properties to various major gold
mining companies, who earn their 50% interest by putting up all
the capital required for continued drilling until all the properties
eventually look like Swiss cheese.
Lastly, imagine that by the time the gold mining
company either "hits" or has tied up all its properties
with drilling deals, it has diluted its shares out to 75 million.
We might perform the following calculation to derive
an expected value for the stock price. Of course if the current
stock price is well below this expected value, we might have a
5 million ounces * 25% chance of discovery * $125
net profit per oz * 50% retained interest
75 million shares
The expected value = $1.04 a share. Quite a few
of the junior mining companies mentioned in this article are trading
at well under $1.00 a share. Maybe I am being too generous in
my 5 million ounce target assumptions, $125 net profit per ounce,
or 25% chance for a single big hit among all of our ten hypothetical
project areas. But then again, maybe this time it is really different.
This is the Cortez Trend. If we have very good geophysical
data that puts us very close to very promising structures, maybe
this is not too optimistic. Look at the Carlin Trend map in Part
Five. It looks like about 30% of the property frontage along
major fault areas has hit a major gold deposit. We also see gold
along cross fault structures.
Let us try more aggressive assumptions. Imagine
if we really believe that in a few years that gold will
go over $750 an ounce (I am on record for stating my strong belief
that it is going well over $1,000
an ounce in five years). Imagine that our total costs rise
to $375 an ounce (let's add another $50 for extra non-deferrable
taxes and inflationary cost increases) so that we now net $375
an ounce in profit. Also suppose in addition that there is still
a 25% chance our brave little company can discover 15 million
proven and probable ounces just like Placer Dome.
15 million ounces * 25% chance of discovery *
$375 net profit per oz * 50% retained interest
75 million shares
Now we are up to an expected value of $9.37
per share. And this does not include the "growth premium"
investors would likely pay for the company as a going concern
with possible future projects besides our initial ten properties.
Nor does it include the appreciated real estate value of its leasehold
properties in hot play areas.
Of course we can and should tweak all of the aforementioned
assumptions in different ways to perform a sensitivity analysis.
Many of my assumptions were wild guesses for illustrative purposes
and should be questioned in detail by anyone conducting an analysis
for investment purposes. A real full blown financial analysis
would involve a pro forma that scrupulously analyzes and makes
projections of itemized cost elements on a line item by line item
basis in absolute numbers, looking at after tax real cash flows,
and would go beyond simply guesstimating "per ounce"
As another note, I skimmed over performing a standard
net present value and detailed after tax cash flow analysis. This
is because gold mining has some very peculiar characteristics
compared to other businesses.
In a commodities bull market, gold price behavior
mocks inflation rate and historical bond yield assumptions typically
used to help derive discount rates to determine net present value
(NPV). As mentioned in my article "General
Market Characteristics of Gold," gold has historically
always done best in a bond environment with negative real rates
of return, such as what America experienced in the 1970's. During
that "stagflationary" period, America experienced double
digit inflation and continued negative real interest rates. Although
gold had held below $50 an ounce throughout the 1960's until April
soared to $850 by Jan 1980.
As another historical aside, gold was increasingly
suppressed throughout most of the 20th century as a form of money,
but I believe that the cyclic wheel of history is now turning
in the other direction for macro-political reasons that I have
already alluded to in Part
One of this series. Central bankers are increasingly losing
their grip and gold is increasingly resuming its ancient role
as money of last resort. I expect a long period of accelerating
inflation in which we will continue to experience negative real
bond yields under conditions more extreme than those of the 1970's.
In regard to taxes, I agree with the policy of Goldcorp
which currently withholds a third
of its production, awaiting higher prices. Since gold
is money, from a purely cash conservation viewpoint,
I do not see why a gold mining company should ever market any
more of its production than what is required to meet expenses.
A gold mining company may be able to borrow against the gold bars
it accumulates in a vault without selling any of it on the open
market, in this way financing acquisitions in a similar manner
to real estate pyramiding without triggering a taxable even.
Interestingly enough, even though Iamgold has been
forced by one of the African countries where it has some mines
to sell its production to trigger a taxable event, it chose to
buy back gold to hold in a vault as part of its liquid capital
as part of an economic/political statement in favor of gold. If
this approach becomes more widespread within the industry, figuring
effective real tax rates will become even more difficult.
Using expected value analysis
for value-oriented "speculative" investing
John Kaiser's "Rational
Speculation Model" provides a chart that shows generalized
industry odds that a company will "hit," based on its
current phase of exploration.