The recent spate of interim results from exploration companies have two things in common with their industrial and retailing counterparts. As results from last week show, and coming results, will confirm, they are happy about the historic trading performance and they are optimistic about the future. There is, however, one important difference.

Industrial and retailing companies are reaping the benefits, which are tangible, from a booming economy. Exploration companies tend to put a gloss on results and always appear to be effervescent about the future.

While some exploration companies will produce real benefits for shareholders, others will not. Investors should ponder the rather hackneyed, but appropriate, adage, "all that glitters is not gold". Many investors seem to have forgotten that a large proportion of exploration companies' "assets" are made up of intangible assets. As these consist of previous exploration expenditure, and capitalised interest associated with such developments, these so called assets have no value unless the exploration is a success. Yet many companies tend to put on their rosiest spectacles when viewing the future, despite the high risks involved. Of course exploration companies have to be optimists, otherwise they would not pour money into risky exploration. But investors need to be wary.

High share prices, of course, are in the interests of shareholders. They are also in the interests of the senior managers who tend to have potentially lucrative rewards through option schemes. These schemes, of course, are no good unless the share prices are pointing upwards.

Navan Resource, which has one of the most elaborate annual reports, is a case in point. It shows that Mr Brian Calver, chief executive, received options of over 400,000 shares at an option price of 163p per share, which can be exercised by 2001. They were last priced at 110p, so he will not be in an immediate rush to exercise these. Other directors have options at 100p. (Navan, on Friday, announced losses of $2.2 million in the six months to June 30th, 1997, a reversal on the profits of $66,000 in the first half of 1996.)

Others are doing much better.

Mr Emmet Brown, director of Tuskar Resources, for example, has options over 10 million shares at an exercise price of 1.25p per share. They are being traded at over 5p. Not all the Tuskar directors have such a low option price. Mr Frank Traynor, for example, had to surrender 1.3 million options because the exercise prices were 8.5p to 40p.

Tuskar recorded a loss of £356,000 in the year to March 31st, 1997, down from the previous loss of £1.17 million. Despite the losses, the chairman, Mr Howard Wolf, in an optimistic stance, noted that the company's business had been greatly transformed and spoke of significant potential in one of its concessions.

In Tullow Oil, Mr Graham Martin, a new director, received options over 916,000 shares at 72p each last year. Mr Aidan Heavey, managing director, did better and received options of over 216,000 shares, bringing the total options up to 1.5 million (he also owns 6.9 million shares) at an average price of 48p. The shares are being traded at 117p.

So what sort of a backing has the share price? Tullow Oil last week announced the "successful testing" of the Ranikot zone of the Suri gas well onshore Pakistan. The group is looking for net cash flow of up to $5.8 million which should start coming through in the first quarter of 1998. That looks good but it would be better to see it than hear it.

And what about the trading figures? It also announced last week a rise in pre-tax profit from £1.2 million to £1.5 million for the first half of 1997. At the operating level, however, there was a contraction but this trend is expected to be reversed in the second half. The whiffs of striking gold, zinc, oil, gas, or something more precious, are often sufficient to send exploration shares into a spin. But commerciality, not promises, or hopes, is what counts.