Discovery drillingPlatform focus

Discovery drilling

From → to: Discovery hole → Maiden resource
Chance of a mine: 3% → 15%
Money spent so far: ~$3M → ~$10M
Typical duration: 1–3 years

Illustrative mid-range figures for a mid-size project. See the odds curve

What it is

A discovery lifts the odds from about 1 in 1,000 to about 1 in 30, but one good hole is not a deposit. This stage is a series of bets on whether the hits join up. Each round of step-out drilling either grows the story or ends it, and most of the money goes into the ground.

For investors. Here an investor is buying drill results. The best intercepts get the headlines, but the weak and barren holes say as much. Look at hole spacing, true widths and quality control before the grades, and ask how close the project is to having enough holes for a first estimate.

Work done in this stage

Follow-up drilling around the discovery hole
Step-out drilling to test how far the mineralization extends
Downhole surveys and more geophysics to guide drilling
Logging, sampling and assaying of drill core with quality control
A first 3D geological model and cross-sections

Drilling

Metres: Building to about 10,000–50,000 m in total (large porphyry deposits 50,000–100,000 m or more)
Holes: Tens to around 150
Spacing: Closing to about 80–200 m, enough to support Inferred resources
Drill type: Mostly diamond core, with RC for shallower or faster holes

Cost and where the money goes

About $7M in this stage

Drilling: about $6M (80% or more)
Assays and quality control: included in drilling costs
Geological modelling and first resource estimate: about $0.05–0.25M
Licence, permits and community: the rest

Drilling costs about $100–250 per metre for RC and $200–500 per metre for diamond core, all-in. Remote or helicopter-supported sites cost more.

What moves it to the next stage

A first resource estimate is published under a recognised code. The project moves to stage 3.

What it takes:

Enough holes at regular enough spacing to estimate tonnes and grade
Quality-controlled assays and density measurements
A qualified person (QP) or competent person to sign the estimate
Reasonable prospects for eventual economic extraction, usually shown with a pit shell or cut-off grade

Data you should expect to see

Drill logs and assay certificates
Best and weakest intercepts, with true widths
Cross-sections and a first 3D model
Quality-control records: standards, blanks and duplicates

Key risks

A few good holes may not join up into a continuous body
Intercept length is not true width
Good grades over narrow widths may not be mineable
Results can be presented selectively

Typical financing

Who funds it: Junior explorers, retail investors and, in Canada, flow-through investors.

A discovery is the easiest moment to raise equity: strong drill holes attract money and lift the share price, so each raise dilutes less. The risk is that the market moves on if follow-up holes disappoint, so companies raise while results are fresh.

Share placementsMain route
From: Resource funds, retail investors, high-net-worth investors
Placements priced on drill results, usually 5–20% below the market price, often with warrants. Sized to fund the next drill programme.
Option or earn-inMain route
From: Mid-tier and major miners
A larger miner funds step-out drilling to earn a majority. Common when the owner cannot raise enough equity, or wants a technically strong partner.
Strategic stake by a larger minerSometimes used
From: Major and mid-tier miners
A larger miner buys a minority stake, often under 20%, with rights to join future raises. It brings money and a signal of quality, and positions the buyer for a later takeover.
Flow-through and tax-incentive sharesSometimes used
From: Tax-motivated investors, mainly in Canada
Used to fund drilling at a premium to the market price, often 10–40%.
Royalty saleSometimes used
From: Royalty companies and generators
Small royalties, sold early and cheaply. They stay on the project for its whole life.

See the financing path across all six stages

Questions an investor should ask

How many holes, and how do the weak ones compare with the strong ones?
What is the true width, and which cut-off grade was used?
Who sampled and analysed the core, with what quality control?
How much more drilling is needed for a first estimate?

What a listing looks like at this stage

Usually filled

Screening
Location and access
Geological setting
Drilling statistics and quality control

Usually not yet

Resources (until the first estimate)
Engineering and reserves

Current listings at this stage

Stage 2: Discovery drillingIllustrative example
Project Altai-07
Western Mongolia, Mongolia · Porphyry
- Copper
- Gold
- 12 drill holes, 3,400 m
- Copper-gold mineralisation intersected in 9 holes
- Open along strike to the north
- Owner provided
- Verification pending