A brief outline will be given of the concept of risk and its implications with regard to investment in exploration. The relationship between risk and decisions under uncertainty will be examined as a prelude to identifying those factors which contribute to exploration risks:
consideration of the effects of corporate objectives (e.g. survival, expansion, diversification) on exploration strategy and ultimately on success or failure, exploration and mining as an investment (the relationship between risk and reward) and the desired return on investment; exploration odds, funding levels, staying power, financial exposure and the concept of gambler's ruin; origins of uncertainty in exploration decision-making—man-made risks and natural hazards; the nature of introduced constraints at each exploration decision stage and their effect on the rate of success;
improving the chances of success and the reduction of risk through sound exploration strategy, effective project generation and efficient target detection capabilities.
Risk management, Mineral economics, Mineral exploration, Exploration strategy, Funding