I may be about to anger a bunch of geologists, but I’m going to try to boil all of economic geology down to a few critical points. The goal is to help non-geologists sort through the geo-jargon so they can have a clearer idea of what’s being said.

Even a basic grasp of how deposits are formed can help investors spot… shall we say, unlikely claims. It can also help them see when a story makes sense and the results are genuinely great.

I hope my geologist friends will forgive me for simplifying.


There’s one central idea that helps understand everything else: plumbing.

Mineral deposits are formed by fluids moving through the earth’s crust, driven by a heat source below. These weakly-acidic fluids often dissolve metals and other minerals as they travel through large volumes of rock, adding to the metals they carry as they go. When they meet physical or chemical conditions that cause those minerals to drop out of solution, they form deposits. For that to happen, you need weaknesses in the rock that allow the fluids to move: plumbing.

That can take the form of:

Conditions that cause minerals to drop out of solution can be:

Understanding which combination of these things we’re dealing with helps us understand and predict where to look for (more) pay dirt.

“Pay dirt,” by the way, often takes the form of metal sulfides. Subsequent events often oxidize (rust) these sulfides, resulting in mineralization from which it’s easier and less expensive to extract metals.

No two mineral deposits are completely alike, but they do tend to come in a few broad categories:

Other factors to keep in mind:

  1. Alteration. Hot mineralizing fluids moving up through the earth’s crust are often acidic and they react with the rocks they encounter, altering them. There are characteristic patterns of alteration. These can tell us when we’re getting closer to the plumbing that brought the fluids up from the heat source—and where they may have deposited more minerals.
  2. Zonation. Some minerals tend to drop out of solution before others—those that require higher pressures or temperatures, for example. In many deposits, base metals tend to drop out first, and then precious metals. Thus, in some porphyry-related and epithermal deposits, we often see a zonation of copper, lead, and/or zinc lower down, changing to include more gold and silver higher up, and ending with mostly silver-gold toward the top.
  3. Dilation. The earth’s crust is not a homogenous crystal that cracks in nice straight lines or planes. If the faults formed as perfect planes, the rock on either side would suffer little damage as it moved, and would leave no open spaces. But reality is messy. Faults often kink and change directions. So as the rocks move, the kinks often result in open spaces, called dilation zones. These can run very deep and can be associated with areas of lower pressure and temperature that drop valuable minerals out of solution. In fact, we rarely find deposits in major faults, but in splays and subsidiary faults, where more dilation zones tend to form. These dilation zones give rise to veins that form as minerals are deposited in the open spaces.
  4. Textures. An epithermal boiling zone leaves typical textures in the crystals formed. A porphyry also has typical textures in the rock crystals as they form when the magma cools. These and other rock textures can tell us what kind of mineralized zone we are in, where we are in a mineralized system, and hence where the pay dirt is likely to be.
  5. Plate tectonics. Mineral-bearing fluids generally move up through plumbing in the earth’s crust, migrating from higher pressure zones deeper down to lower pressure areas near surface. But the tectonic plates of Earth’s crust are constantly moving. They rip some rocks apart, crush others together, thrust some up into mountain ranges, push others down into the mantle, accordion others into sawtooth patterns, and even turn whole layers of rock completely upside down. All of this activity is important in that it generates the magma that so often drives the plumbing systems we’re interested in. It’s also important because it impacts the geometry of deposits after they form. I’ve been to places where you can walk along rock exposed on the surface—flat as an ironing board—and see the zonation in the minerals under your feet as you go. There are places where the minerals you would expect at the top of a boiling zone are found beneath those formed lower down. So it’s important to understand not only how minerals were deposited, but what happened to them between deposition and the present.

I don’t have any own cartoon showing all these plumbing systems, but if you’re curious, you can see one on this geology page.

All of this may seem confusing. Truth is, it’s rarely easy to figure out what’s going on in any rocks in the ground. This is true even for the best geologists in the world. That’s why exploration takes years—and often ends in failure. Solving the earth’s jigsaw puzzles requires careful examination of all the clues. Some of the pieces are hundreds of miles long, and others take a microscope to see. Usually, we don’t get all the pieces, and we have to fill in the gaps with guesses.

But if it were easy, there would be no risk. And without risk, there would be nothing to speculate on.

It’s the very difficulty of the task that makes it so profitable when it’s done right.

Add it all up, and that’s why it’s so exciting when the pieces and guesses fall together and a valuable discovery is made.

Well… that and the impact on the share price of the company making then discovery, of course.

Wednesday, August 29, 8:32pm, EDT, 2018