Bre-X #3: Core and Code

In the aftermath of the Bre-X fraud, quite naturally, there was a great deal of examination of procedures, methods and due diligence.

One of the standard – actually it would be more accurate to say universal – practices in mineral exploration is that diamond drill core is split in half on site. The core is cylindrical and the split is in two half-cylinders. At or near the mine, the retained half is placed in drill boxes, which are like trays, and the trays are placed in special core racks. At various points in the financing of the exploration and development of a mining project, consulting geologists or engineers will visit the project and inspect the core. For ore body evaluation, it is important not just to know the assay grades, but to see the alteration of the rocks in the zone, etc. Even at a remote location like Bre-X, in the back of Indonesia, there would have been visitors to the exploration project.

But visitors to Bre-X were not able to see any split core, because Bre-X said that the metallurgy of the ore was such that they needed the entire core to get an accurate sample. I don’t think that the investing public at large had any idea that there was no drill core at the Bre-X site. I was in the exploration financing business in Toronto, a city where exploration financing is a big activity, and I’d never heard about this before the collapse. I cannot comprehend why the analysts for any of the brokerage houses which did financings for Bre-X would not have run for the exit when there was no drill core at the project site.

But there are many such instances, where people get caught up in the excitement. The analysts probably felt that, if they didn’t do the financing, some one else would; and there were big commissions in the financings. There can be a madness of crowds, which people in stock markets are familiar with.

Now source code in multiproxy climate studies is not the same as drill core and the major concern is mistakes, rather than fraud. But it is incomprehensible to me why the climate science community does not routinely require the archiving of data as used and source code as used, as an elementary means of quality control – just as exploration projects keep drill core.

At one time, when dendrochronologists were writing for the Tree Ring Bulletin with a circulation of (say) 100, maybe it wasn’t necessary; but now there’s real money involved in climate policy. Something equivalent to drill core should be routinely available.

At the present moment, Mann is arguing that the errors identified to date in MBH98 do "not matter" and that he can "get" the similar results using different methods. Obviously I disagree with this. But here I’m pondering the continued unavailability of MBH98 code; despite all the publicity, Mann obdurately refuses to produce his source code. If I were in his shoes, I would have released the code long ago, just to be rid of the issue. I am baffled as to why climate scientists don’t rise up and demand that he produce his source code before considering a single additional claim or argument by Mann et al.


5 Comments

  1. Louis Hissink
    Posted Feb 7, 2005 at 5:39 AM | Permalink

    Hi Steve :-)

    Great Blog, just discovered it and will report on it, where appropriate, on Henry Thornton’s SMERSH Section. I have already done so, by the way.

    You make an important analogy of the Mann et al episode to the Bre-X scam. Most monumental stuff ups occur from human imperfection, including egos and what, not producing acute embarassment which often results in irrational reactions that are mis-interpreted.

    The biggest issue with quantification of data of a geoscientific nature involves understanding the sample-volume-variance phenomeon, dealt at length in Koch and Link, 1972. Subsequent research, mainly in the discipline of geostatistics, (that of Krige, Blais and Carlier, Fritz Achterberg, etc, has not resolved this problem.

    In the diamond mining game random statistical theory is workable for primary diamond deposits but geo-statistics fails (and conventional statistics totally) in dealing with diamond distribtions in alluvial diamond deposits.

    Diamond distribution in hydraulic systems, whether marine or terrestrial, in which turbulence is the dominant physical process, has resisted analysis. Like climate systems, in which coupled, non linear chaotic systems dominate, prediction seems impossible for the moment.

    But considering the amount of money we, in the diamond business, have thrown at the issue, no serious diamond explorer looks at alluvial diamond deposists. Mind you some are profitable, or seem to be, but from experience, it is literally impossible to predict, from a statistical sense, the diamond grade of a block of ore in an alluvial diamond deposit.

  2. Louis Hissink
    Posted Feb 7, 2005 at 5:48 AM | Permalink

    Hi Stephen,

    Great Blog – I suspect Ross also adds in his bit?

    The Bre-X analogy is spot on, though from personal experience I sometimes wonder whether we see too much good in the usual suspects.

    Not to mind, time will show all and our “gut feelings” will be vindicated.

  3. Louis Hissink
    Posted Feb 7, 2005 at 6:09 AM | Permalink

    Hi Stephen,

    Great Blog

  4. Steve McIntyre
    Posted Feb 7, 2005 at 9:32 PM | Permalink

    Hi, Louis. Thanks for saying hello. After Bre-X, I thought it was interesting to reflect about where due diligence failed. It doesn’t seem that there has been any due diligence on MBH98 other than what Ross and I have done – which is surely a lamentable state of affairs. Steve

  5. TCO
    Posted Sep 11, 2005 at 4:10 PM | Permalink

    Failure to show the code is scandalous. And yes, we shouldn’t listent to people who behave like that. nor should journals publish their stuff.

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