What is the value of intuition?

Fortitude Mine

This is a story about a young geologist discovering a new, world-class orebody, and it happened because he was able to see things in a different way than those who came before. Thirty years ago, I was a newly hired mine geologist in a historic mining district in Nevada. As a mine geologist, part of my role in the organization was to replace every ton of ore mined with a fresh ton. My job was to find enough ore to keep the mine going. This is somewhat paradoxical, because an orebody is, by definition, bounded by rock that is not profitable to mine. How then, is one to find profitable rock when the limits of profitability are already known?

Find more ore

There are five ways to replace ore:

1. The unit cost of production goes down, making previously uneconomic material profitable;
2. The price obtainable for the product goes up, making previously uneconomic material profitable;
3. Extensions to a known orebody are found;
4. Discover new orebodies; and
5. Buy another mine.

As a mine geologist, my role was to seek extensions to the known orebody, and to make new discoveries. Unfortunately, our known orebody was exceptionally well known, pierced like a pincushion with drill holes, giving us a well-defined view of the distribution of profit-producing ore.

Molly and I explored for gold

For a summer, I walked the hills around the mine with Molly, my Golden Retriever. I reviewed publications relating to the mining district, and there were some seminal works, including a superb compilation by the United States Geological Survey (USGS) of known information. Molly dozed patiently at my feet while I plotted points on maps and tried to picture what was missing on geological maps of the area, and thought about geological factors the people before me had perhaps not considered.

Why put in this effort? As a young geologist, I knew the only way to be successful was to replace every ton of ore with fresh ore. I did not have the preconceptions that other geologists in the company had, because my mind was fresh and agile (and honestly, not as full of data): no idea was too outlandish for me to consider.

I also knew that the long history of this mining area was the result of a significant ore-producing engine. In my gut, I believed the pockets and pods of ore the company had been discovering and mining were not congruent with the size of the energy source that was the engine for these orebodies.

And I simply didn’t believe that the world-class geologists who had come before me had eliminated every possibility. So I pondered and wandered. Molly seemed to enjoy it all, but she enjoyed most the wandering part.

Making lines

In all my reading and research and review of old maps, I had been looking at actual metal concentrations. That data was a rich resource, the result of extensive research by company geologists, the USGS, and universities.

The line between ore and not-ore is very fine, and the not-ore values near one of the old mines extended a significant distance away from the old mine workings. Metal concentrations of hundreds of samples were published by the USGS, and I started drawing contours on a copy of their map. The concept of contouring is to connect points of equal value, and hope a pattern emerges.

Those contours failed to show any distinctive pattern. I contoured gold concentrations. I contoured silver. I contoured copper and zinc and lead and several others. Nothing.

Visualization requires contrast

About this time I was also thinking about Goethe and his theory of colors. He believed it was the contrast between light and dark that created colors. I had a flash of intuition that looking at the actual metal values was masking the contrast between families of metals. Analogy: it is not the elevation of a mountain that makes it stand out, but how high it is compared to the land around it. It is the contrast between the mountain and the landscape that lets us see it as a mountain.

A well-known association of two metals is gold and silver. Another is copper with silver and gold. To create more contrast, I began calculating the ratio of two metals, then contouring the results on the map. Immediately, patterns began to emerge. I calculated more ratios and drew more contours. An area of unusual contrast was evident — a mountain seemed to be visible! — but I did not have enough data points from which to draw a firm conclusion.

We wandered and sampled

So Molly and I went wandering again, with rock pick and doggie treats and sample bags in hand. The USGS had focused on sampling bedrock. I sampled small waste dumps where prospectors of a century earlier had tunneled into the hills, looking to strike it rich. Those waste dumps contained rock that came from inside the outcrops and ridges. Essentially, those old prospectors drilled a whole bunch of holes and left the rock behind for me. After having the samples analyzed, I added their locations to the map, calculated ratios, and drew fresh contours.

The contours looked like a target drawn on the map. The mountain I thought I saw earlier now stood out in stark relief. The message could be no clearer: drill here.

Resistant to change

Armed with my data and maps, I went to my supervisor, the mine engineer. He listened to my explanation and my proposal to drill in a specific location, and as he listened, his face grew more and more scarlet. Finally, he exploded. It was the first time in my life I had heard anyone say these words: “We’ve never done it that way, we don’t do it that way now, and we’re never going to do it that way!”

He took my proposal, stood up, tore it in half, and threw it into his trash can with disdain. I left his office emotionally crushed. After investing hundreds of hours of my personal time and energy, my discovery was simply dismissed. I climbed into my truck and drove back to my office. Molly licked my hand, sensing how upset I was.

The discovery is made

Early the next week, I heard a drill operating up the canyon…where I had proposed the discovery hole. My supervisor had mobilized a drill, targeted the hole exactly where I had proposed, and found a new orebody that ultimately generated tens of millions of dollars of profit for the company and its shareholders.

I got nothing from the company. I think I finally understand part of why this happened. My supervisor was near retirement, and in his view of the world, managers and supervisors were responsible for anything done well or poorly by their subordinates. I was his subordinate, so my work product was really his. Yes, I’m trying to be gracious here, but I think there is some truth in this explanation.

I was also a young buck, which weighed against me as the company finally woke up to the incredible orebody they had been sitting on for decades. Soon there were people with advanced degrees invading my space. I was relegated to mapping the existing mine while the exciting world of a new orebody was taken over by others. Molly didn’t like all the people in her space. Neither did I. Eventually, I went to work for a different mining company, one I hoped would be more appreciative of outside-the-box thinking.

What is the value of intuition?

So what is the value of intuition? In this example, a lot: 1.8 million ounces of gold, to be exact, contained in 12 million short tons of ore grading 0.149 troy ounces per ton.

Had I not had that flash of insight about creating contrast, it is entirely possible this huge orebody would still be unknown, waiting for someone willing to challenge the status quo and seek a new explanation or way of doing things.

I had a simple idea, and with some investment, a new orebody was discovered.

I learned a lot from this experience. This discovery would not have been likely without the extensive work done by geologists who were there before me. And thirty years later, I still miss Molly, who was one of the sweetest dogs I’ve known.

Postscript: I’ve heard some people think the orebody was discovered as the result of dump condemnation drilling. (Before dumping mine waste, the area is drilled and evaluated to make sure the company isn’t going to dump waste on top of an orebody.) As noted above, that belief is not correct. I was there.