Has anyone ever done a study of the total, all-in costs of mining? We all know about the low success ratio of genuine exploration projects, not to mention the many scams and frauds in this space. I'm just wondering if you add up ALL the money invested in EVERY exploration project, successful and failed, do you come out with a net gain, or a net loss? Obviously Big Mining benefits when they buy a project that's proven up, but what about the also rans? What about all those projects that never made the cut, or that weren't even in the running? How much money got burned up there relative to those projects that did succeed, and did the long-run profits of those operations cover those losses? Money changes hands quickly in this business, but is it actually making a profit?
I don't know the answer, it's just a nagging question I've had ever since I got into this game. Another way of looking at it: suppose there were no junior investors and mining co's had to do all their own exploration and development. What would a lb of copper or an oz of gold cost to produce under those conditions?
Compared to the other main areas of speculative investment, Technology and Biotech, mining comes up short for a couple of reasons. First, a fixed location can leave you captive to political, or economic forces beyond your control. More importantly though, there's no multipier effect. Compare the effect of discovering a cure for cancer, or the effect of personal computing, networking and wireless communication on the total economy. Immeasurable, right? So, how does increasing the production of copper add to the net economic gain, other than to lower the price?
Is it because the business is simpler to understand that it attracts investors? Using the logic of junior mining, wouldn't I be better off to buy say 10 or 15 junior bio or tech stocks on the notion that one or two will pay off, at least to the degree that I can keep going until I hit the next Apple or Intel?
Just musing on a Thurs. afternoon, wondering what the hell I'm doing here when I could be lying on the beach.
ebear
