Exploration Methods And Requirements

2.1-1. The Exploration Function in the Mineral Industry. With regard to a new mine, exploration can be technologically defined as all the activities and evaluations necessary before an intelligent decision can be made establishing size, initial flowsheet, and annual output of the new extractive operation based on a certain mineral deposit. The activities that follow such a decision are called first development, then operation (90). Thus, in the U.S.A., exploration may continue in the technological sense after a mineral property has entered the "development stage" as defined for tax purposes. Regulations under Sections 1.615.1 and 1.616.1 of the U.S. Internal Revenue Code state that the "development stage" has been reached when "deposits of ore or other minerals are shown to exist in sufficient quantity and quality to reasonably justify commercial exploitation by the taxpayer" (95). There are, of course, many instances where additional later exploration discloses additional reserves which justify a plant much larger, more efficient and more profitable than the minimum feasible commercial operation. After a surface mine is put into operation, additional search generally will increase the reserves and thus warrant expansion of the rate of output and/or extend the life of the operation. The methods and techniques in such search are similar to those used in predevelopment exploration. This activity has produced a major part of new reserves for all mineral commodities but is not considered as exploration in the context of this chapter. The objective of exploration is, briefly stated, to find and acquire a maximum number of new economic mineral deposits with a minimum cost and in minimum time. The search must be so organized as to maximize the overall probability of discovering commercial mineral concentrations within a minimum time with the funds available. As shown by Celasun (27) these statements are neither adequate nor complete from a pragmatic point of view. Each actual exploration venture must define its objectives in terms of a minimum rate of return on investment for any deposit found