A summer of fantastic sport, notably in cricket and tennis, now gives way to the winter sports – including the rugby codes and the AFL.

Australia certainly did well in the cricket: it would be hard to make a case that the England team were up to their straps – or reputation for that matter.

Whatever cricketing metric is used, England bordered on the abysmal – couldn’t bat, bowl or field better than your average pub team second XI.

In mining and exploration, the blowtorch is being applied to measures of success too – most notably of late when it comes to mining cost declarations – and their true meaning.

Key performance indicators, whether in sport or industry – all have common pitfalls – with some far better than others.

The insight is less around the elusive search for that “silver bullet” KPI that doesn’t really exist – and more about knowing when to use which combination of the plethora of KPIs available.

In tennis, for example, one can measure any number of metrics:

• First serve percentage
• Unforced error count
• Propensity to double fault, or
• Conversion rate on break points – perhaps even sponsorship and endorsement potential!

In soccer there are an equally large number of possible KPIs – which apply at different times during a season or even during a single game:

• Number of corners won
• Time in opponent’s half
• Possession time
• Yellow cards
• Pass completion rate
• Total goals scored, goals conceded and goal difference – perhaps even propensity towards “sexy” entertaining football.

In cricket, aside the above-mentioned generic prowess at batting, bowling and fielding, one can look at specific areas within each discipline of the game:

• Batting average
• Runs per hundred balls
• Over-rate
• Number of dropped catches
• Run outs.

The same holds true for rugby – taking league as an example – perhaps:

• Total metres gained
• Completed set of six tackles.

Finally in AFL there is kicking accuracy – both in the field of play and when targeting the goal-posts – so a high number of goals to behinds is a good thing.

Back to mining and exploration, one can measure costs – with the market focused on that area: profit and loss and share price performance, which are as close as it gets in mining to the sporting equivalent of “scoreboard pressure” – and any number of internal metrics.

In exploration that can be process measures such as time in the field (and not in West Perth), amount of budget spent “in the ground” on drilling and assaying (and not on administration).

Then there are impact measures, such as number of high priority geochemical anomalies, number of high-grade drill intersections and resource/reserve growth.

Where companies – and investors – need to be wary of course is that no single metric or combination of metrics is perfect.

Share price is certainly not perfect – and can even be misleading, which financial economists would term market inefficiency.

When it boils down to it, sporting teams have it easy.

The final score is the ultimate measure – leading ultimately to ladder position.

For explorers and miners it is not that simple.

The market, as umpire, can be demonstrably wrong – for long periods of time too – with no cricket-style decision review system either.

The answer? One clear insight is that “process precedes impact” – so aim to get the process-linked KPIs right first.

So explorers should worry less initially about their share price, an impact measure.

Focus more instead on elements of exploration process – meaning to “bowl at the stumps” (read drill) and also about “scoring runs quickly” (read testing new prospects).

Eventually that way you win the game – success will come, as it did for the Australian cricket team this summer.

Good hunting.

Allan Trench is a professor of mineral economics at Curtin Graduate School of Business and professor (value & 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).