A corporate colleague who recently returned from an investor roadshow was pleased to report a good hearing and feedback from all brokers.

The key message was that broking firms were interested in the company on behalf of their clients and that the company was travelling very well indeed.

The brokers all thanked management for the briefings and were pleased the company was not seeking to raise further capital in the near future.

That’s a good result right? In this market it is.

Taking a broader perspective, however, further granularity would help the company all the more to determine just which future actions in coming months would likely have more shareholder impact than others.

The old saying in marketing springs to mind here: marketing professionals are often quick to admit that around half their marketing budget is wasted annually but the problem is that they are never quite sure just which half is wasted!

A similar rationale can apply to broker dialogue with exploration companies.

Sometimes the key messages are lost in the superlatives that the company is doing a good job in very difficult times.

Exploration companies would do well to seek answers to some simple questions whilst on the road.

A five-minute real-time survey would provide structured data as input to company strategy.

Below are some suggestions questions to ask brokers on your next visit, along with just how much stock in the company their clients hold, that is.

If the answers to these questions hold no surprises for the company then that’s fine – but if the answers do contain surprises perhaps that is an even outcome?

Here are three simple questions to ask:

Company X is a diversified explorer: what is your main interest in the company’s assets commodity-wise? Tick one only:

1. Commodity A is our main interest
2. Commodity B is our main interest
3. That Company X has more than one commodity in its exploration portfolio is why we like it
4. We would prefer if Company X made a choice between commodities A and B rather than continue exploration for both.

What are the key attraction factors of Company X? Please rank the following from 1-3:

1. 100% or majority control of its principal exploration projects?
2. Company X has a tight geographic focus in ?
3. The fact that Company X uses the majority of its funds on exploration not administration.

What would you like the management and board of Company X to be doing that they are not doing already? Pick one only:

1. Cutting costs further?
2. More drilling?
3. Talking to you about capital raisings?
4. Other – please indicate a preference (for example, share consolidation, management/directors buying more stock, a deal into an advanced exploration asset or other commodity)?

Experienced heads in the exploration space will know that company strategy is not quite this simple but knowing the answers to the simple questions nevertheless helps.

Good hunting.

Allan Trench is a professor at Curtin Graduate School of Business and Research 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 Consulting, a division of independent metals and mining advisory CRU Group (allan.trench@crugroup.com).