A lack of direct experience has seldom, if ever, prevented academics from espousing their sage-like expertise on selected topics. So it is this week for Strictly Boardroom.
Despite many years of social experience in pubs and clubs, your scribe cannot boast similarly direct hands-on knowledge of the internet dating world. So it is time to ask your permission to just “trust me – I’m an academic” (albeit a part-timer).
Where your scribe can perhaps lay claim to a greater depth of knowledge, however, is in the world of mineral exploration company announcements – with MiningNews.net and the explorers themselves bringing you the latest hot information direct online every day.
Some browsing this week tied these two seemingly disparate subjects together. On reading the revised edition of the left-field economics book Freakonomics*, the text revealed some vital statistics from the internet dating world.
Any current and would-be internet daters and exploration company directors among readers should read on.
The parallels between those seeking to source and maintain online relationships via dating sites, and those seeking to source and maintain shareholder support from exploration reporting, become obvious as one takes a more detailed look.
How exactly? First consider some hard data. Here are some facts from Freakonomics’ statistical analyses of the self-assessed attributes of internet daters (based on a sample of 20,000 active users in the US).
The success rates in terms of received emails by internet users from potential partners show a clear pay-off from systemic exaggeration – so users have an incentive to stretch the truth. And they do:
72% of women claim “above average looks”, including 24% who claim “very good looks”.
Online men, too, are gorgeous. Some 68% call themselves “above average” in appearance, including 19% with “very good looks”.
The above statistics leave only some 30% of the internet dating population with “average looks” – and a paltry 1% with “less than average” looks.
More than 4% of online daters claimed to earn more than $US200,000 a year, whereas control statistics show that less than 1 per cent of typical internet users earn that much, suggesting that three out of every four online “big earners” were exaggerating.
Male and female users typically reported that they are about an inch taller than the respective male and female national height averages.
As for weight, the men were in line with the national average, but the women weighed-in about 20 pounds less than the national average.
28% of the internet dating women said they were blond, a number far beyond the national average – indicating a lot of dyeing, lying or both.
Now to exploration company announcements. Those readers who are geologists will know the chances of success in exploration are very slim.
Compared to the 56% of internet dating men who fail to get a single response, mineral explorers do far worse when it comes to hit rates in exploration (drill hits being only a few per cent in minerals).
Oil and gas companies fare somewhat better for the record – with hit rates now around 20-40%.
But investors who read exploration announcements could be forgiven for thinking that junior minerals companies are doing far better than the above hit-rate suggests. Reading exploration reports, juniors hardly ever miss.
Announcements speak routinely of “high-grade drill hits” (akin perhaps to the better-than-average looks of the internet populace), of “in-ground metal values” into the billions of dollars (akin to exaggerated earnings among internet daters), of “simple process metallurgy” (one suspects perhaps using blonde dye?) and of “discovery costs below industry average” (akin to weighing-in below the national average no doubt).
So when it comes to the reporting of exploration results, junior minerals companies should heed a lesson from the parallels of the biased personal information provided by internet daters: mineral explorers should beware of premature extrapolation.
Good hunting.
Allan Trench is Adjunct Professor of Mine Management & Mineral Economics, Western Australian School of Mines and a Non-Executive Director of several resources sector companies. He is the Perth representative for CRU Strategies, the consulting division of independent metals & mining advisory CRU group (allan.trench@crugroup.com).
*Freakonomics – A Rogue Economist Explores the Hidden Side of Everything. Levitt & Dubner Penguin Books, 320pp.
