Coffee with Samso: The risk-reward myth of mineral exploration - Jon Hronsky

Mineral exploration has always been thought of as highly speculative and hence is a high-risk investment. Jon Hronsky, a geoscientist who has been on the scene for the last 37 years, shares his thoughts on why this is actually not true. I met Jon way back in late 1989 when in the second year of my undergraduate geology studies and I have been following his work since then and value his high-level (regional) targeting strategies. One of the hardest things to research is the myriad of projects that exist in companies on the ASX. Over the years, I have been asked many times what I think of the projects in different companies. What is hard to comment on is the legacy that exists in these projects. If you do not know the history or the content of management, it is extremely difficult to give a ‘correct’ answer. The general consensus is that if there is a historical record of mineralisation, it will be a better project. As many experienced proponents of this sector will tell you, this is not anywhere near sufficient information to make an 'intellectual' comment. There is way too much information required before one can come anywhere near the point of making an 'educated' estimation. Jon Hronsky comes from a breed of mineral explorers who look at the picture and this is what I call the need for the right ingredients. I am talking about greenfield projects where the 'out of the box' thinking has taken the 'risk' to chase the potential. These kinds of projects normally offer the greatest rewards for investors. In this episode, Jon shares with us his thoughts on mineral exploration and why he thinks the Empress Springs project is a great example of the first-mover strategy for Moho Resources Ltd (ASX:MOH). Jon has looked at the work that was initiated in conjunction with Ryan Noble from the CSIRO and made the following comment: This is the biggest coherent anomaly I have seen - Jon Hronsky on the Empress Springs project. This was part of the Coffee with Samso entitled 'Applying Scientific Sampling Methods into Mineral Exploration - CSIRO'. Another interesting point that came up during our chat is that Jon shares very similar thoughts about the level of risk in exploration projects. The risk for investors is realistically less for greenfield exploration as opposed to advanced projects. I have included timestamps for the video below: Chapters: 0:39 Jon Hronsky introduction 2:42 Where is the current market going? 5:50 Renewed funding giving life to projects 6:39 Time to understand project and management quality 7:52 The Empress Springs story: Moho Resources Ltd (ASX:MOH) 13:51 First-mover strategy 14:39 The Olympic Dam discovery analogy 15:00 The bigger deposit is the easiest to find 15:23 The upside-down lightning bolt theory 20:10 Understanding the pathway of source rocks 21:16 The project generator model for exploration company 22:50 The Boddington Gold Mine 24:07 The new exploration region 25:11 The myth of risk-reward ratio 25:38 The beauty of exploration 26:08 Exploration vs brownfields 27:25 The biggest challenge for an investor 28:08 Reasons to be a member of the CET (Centre for Exploration Targeting). PODCAST: This is a good time to download the first Ebook (FREE) from Samso as it is all about VMS (Volcanogenic Massive Sulphides). About Jon Hronsky Jon Hronsky OAM (BAppSci, PhD) Jon Hronsky has more than 35 years of experience in the global mineral exploration industry, primarily focusing on project generation, technical innovation and exploration strategy development. He has worked across a diverse range of commodities and geographies and has particular expertise in targeting nickel sulphide and gold deposits. His targeting work led to the discovery of the West Musgrave nickel sulphide province in Western Australia. His experience includes leadership roles in both major mining and junior mining companies and he has consulted globally for the last 12 years. In January 2019 he was awarded the Order of Australia Medal for services to the mining industry. Jon is currently chairman of the board of the Centre for Exploration Targeting in Western Australia, Chairman of the Australian Geoscience Council (the peak body for geoscience organisations in Australia) and an Adjunct Professor at both the University of WA and Macquarie University. He was the 2009 Society of Economic Geology Distinguished Lecturer. Jon joined WMS in 2007 and prior to that, was manager - Strategy & Generative Services for BHP Billiton Mineral Exploration and Global Geoscience leader for WMC Resources Ltd. About Western Mining Services Western Mining Services (WMS) provides the best in geoscientific and risk management advice and services to mineral explorers globally. WMS offers a range of essential services: Advice on exploration strategy development both brownfield and greenfield Review and critique of mineral exploration strategies, plans and programs Assistance with the organisational structures Metallogenic framework and mineral targeting studies that deliver viable greenfield targets Brownfield and near-mine studies and target generation Support for target validation at all scales Technical due diligence and new opportunity analysis Deal terms review and evaluation Commercial risk analysis WMS' proven track record: Over the last 12 years, WMS helped more than 60 companies pursue exploration programs and opportunities globally. The resulting rewards include the largest gold-copper skarn discovery in the Americas and major nickel and gold discoveries in Australia. More than 600 students attended their popular Senior Exploration Management (SEM) Course which, by many accounts, ranks as “one of the best”. WMS offers the SEM Course annually in Perth WA and Denver CO, and also offers the course in-house for clients who want a course tailored to their strategy and exploration program. WMS developed an on-line Senior Exploration Management (SEM) course that tracks in-person SEM Course and that will make excellent, experienced training services more available to exploration groups worldwide. WMS Team is experienced, focused and eager to help achieve the mineral exploration mission. Please contact us, and let’s discuss how we can help. Please let Samso know your thoughts and send any comments to info@Samso.com.au. Remember to Subscribe to the YouTube Channel, Samso Media and the mail list to stay informed and make comments where appropriate. Other than that, also feel free to provide a Review on Google. For further information about Coffee with Samso and Rooster Talks visit: www.samso.com.au About Samso Samso is a renowned resource among the investment community for keen market analysis and insights into the companies and business trends that matter. Investors seek out Samso for knowledgeable evaluations of current industry developments across a variety of business sectors and considered forecasts of future performances. With a compelling format of relaxed online video interviews, Samso provides clear answers to questions they may not have the opportunity to ask and lays out the big picture to help them complete their investment research. And in doing so, Samso also enables companies featured in interviews to build valuable engagement with their investment communities and customers. Headed by industry veteran Noel Ong and based in Perth, Western Australia, Samso’s Coffee with Samso and Rooster Talk interviews both feature friendly conversations with business figures that give insights into Australian Stock Exchange (ASX) companies, related concepts and industry trends. Noel Ong is a geologist with nearly 30 years of industry experience and a strong background in capital markets, corporate finance and the mineral resource sector. He was founder and managing director of ASX-listed company Siburan Resources Limited from 2009-2017 and has also been involved in several other ASX listings, providing advice, procuring projects and helping to raise capital. He brings all this experience and expertise to the Samso interviews, where his engaging conversation style creates a relaxed dialogue, revealing insights that can pique investor interest. Noel Ong travels across Australia to record the interviews, only requiring a coffee shop environment where they can be set up. The interviews are posted on Samso’s website and podcasts, YouTube and other relevant online environments where they can be shared among investment communities. Samso also has a track record of developing successful business concepts in the Australasia region and provides bespoke research and counsel to businesses seeking to raise capital and procuring projects for ASX listings. Disclaimer The information contained in this article is the writer’s personal opinion and is provided for information only and is not intended to or nor will it create/induce the creation of any binding legal relations. Read full disclaimer.