Probabilities are low regardless. A study in 2005 that Newmont...

Probabilities are low regardless.

A study in 2005 that Newmont did came up with the following statistics: 1 out of 1000 prospects will become a mine. Of those 3 out of 10 will be profitable. Hence to have a profitable mine this study concluded your odds are something in the order of 3 in 100,000 if I remember my maths correctly. Obviously doing a great amount of research and knowing how to recognize what is geologically important trims these odds but they are nevertheless poor.

As an example the best case scenario at RMR's Kimberley ground would be that the magnetic feature identified ends up being due to the ruins dolerite packed full of Ni and Cu. Alternatively its a fold in graphitic sediments, the magnetic anomaly is a barren intrusive and I lose all my money. Nevertheless, the odds of these two scenarios playing out, coupled with the potential gain that would ensue make this an appealing proposition. It needs to be drilled and I am looking forward to an announcement (at the very least the quarterly) to find out why this has not taken place.

The alternative scenario on the other hand in regards to Li can easily be put into force should the nickel not work out.

Its obvious to all what would happen if RMR stared banging the Li-drum. Share price would probably go up five-, six-fold and holders would walk away happy. The new guys would watch it fall and be bitter until the next engineered spike leading to a new lot of people happy to get out and those bitter with their loses. This process slowly robs the exploration sector of credibility and results in investor fatigue where people are beset by a kind of malignant narcissism, the end result of which leads to explorers being starved of funds and in particular those which explore in high risk areas, using new and unproven techniques. The latter are the people who are first movers and find the truly great discoveries. They are easy to list and and there is a part of the investment community that respects and continues to fund these explorers.

As an example SGQ. In all its years exploring for Ni have found nothing, but importantly they have never had an issue raising money because they are driven by hard science and eventually that pays off. At the end of the day a lot of luck is needed.

At this stage I don't have a problem with new Li tenements. The name of the game is making money at the end of the day.

I do content however that the higher probability of success in terms of buying an explorer that grows into a miner is to be found in the firms Ni prospects.

GLTA