With each of these individual settings [in a deposit] comes a characteristic mineral and alteration assemblage that changes with distance from the hydrothermal source. This "zoning" reflects and is a result of different chemical, pressure and temperature environments. On top of those primary factors we have to overlay the structural setting and rock type, either of which can be the make-or-break feature for the formation of an economic mineral deposit. An economic mineral deposit results from the unique combination of all of these features, a combination that rarely occurs in nature.Despite a production slump in the face of rising prices, which suggests that the majors are slowly running out of economic deposits, exploration is hard in part because the same difficulties also affect exploration companies.
Although nearly every intrusive magma body (the hatched bodies in the diagram) will have some of the right stuff, I would estimate that 90% of these mineral systems do not contain a geologically economic deposit-they have anomalies; the very same anomalies that keep the exploration industry in business. That "geologically economic" classification doesn't consider the added criterion that takes the mineralization into the truly economic category: it has to be near enough to the surface and recoverable to be economically viable. To those hurdles we can add political, environmental and social obstacles.
Now place the same diagram under thick jungle cover or hundreds of meters of gravel and you begin to get the sense of how hard it actually is to make a real discovery. This is why maybe less than 1% of the exploration projects out there will ever turn into an economic discovery, and nearly all the exploration companies eventually go broke.
Near the end, he mentions four stocks: AuEx Ventures Inc., Lydian International, Mirasol Resources Ltd. and Kaminak Gold Corporation. The last three are at least five times higher than their year lows.