Exploration company boards face very difficult decisions in a market where traditional equity-side funding support has all but dried up.

Holding costs of exploration projects, usually just an annoyance in that those dollars paid out in rents and rates cannot be otherwise directed into the ground, have become far more critical.

Indeed, whether to continue to shell out tenement holding costs for properties can prompt make or break decisions as to whether to retain certain mineral titles or to surrender them.

For those explorers with cash, of course – and for those explorers with a greater risk appetite than their peers – it presents a great opportunity.

Some prospective land that is usually tightly held is now becoming available.

In the world of mineral title, it is still the “fast who eat the slow” in the race to peg opportunities as they become available.

Back to the “hold or fold” property decisions themselves, however, this week your scribe pulled out a pack of cards to help with the decision-making at one explorer.

Exploration “poker” in the boardroom goes like this: first deal a set of four cards to each company director – one card of each suit – hearts, clubs, spades and diamonds. The value on the card is not important, just the suit.

Now when it comes to decisions on each mineral property, each director gets to play their hand. Cards are placed faced down on the boardroom table.

Spades – drill it – then decide.

Hearts – hold onto 100% at the minimum possible cost: it’s back to soil sampling.

Diamonds – seek to joint venture it out.

Clubs – drop it, save the rents and rates.

There is a final card that can be played too – outside of the above standard four alternatives – this is the Joker card.

Playing the Joker means that a novel idea may trump all the above options: experienced exploration directors know the options that sit beneath the Joker card – but that would be telling.

Back to the main game though, where the rules of the game are up to the chairman. Either a unanimous decision is required for certain outcomes, or else the majority decision can prevail.

There are variations of course: one director quipped that his company could not afford to play with a full pack.

“We’d have to take out all the spades,” was his response.

“We just can’t afford to drill – full stop.”

Good hunting.

Allan Trench is a professor of mineral economics at Curtin Graduate School of Business and professor (value and risk) at the Centre for Exploration Targeting, University of Western Australia, a non-executive director of several resource sector companies and the Perth representative for CRU Strategies, a division of independent metals and mining advisory CRU Group (allan.trench@crugroup.com).