Economic Studies
Economic studies in mining are essential for evaluating the feasibility, profitability, and sustainability of mining projects. These studies involve various aspects of economic analysis, risk assessment, and cost-benefit analysis.
Economic studies provide a comprehensive assessment of mining projects, enabling stakeholders to make informed decisions about project development, investment, and optimization strategies. These studies are essential for the successful and sustainable operation of mining ventures.
Scoping Studies / PEA
- Project Overview: Provide a high-level assessment of the mining project, outlining its scope, mine plan, infrastructure concept, logistics strategy, objectives, and potential economic viability.
- Resource Assessment: Initial evaluation of mineral resources, resource classification and reserves estimates.
- Preliminary Economic Assessment: Perform preliminary financial analysis to determine if the project warrants further investigation using benchmarking and preliminary concepts.
Pre-feasibility Studies
- Resource Evaluation: Conduct a detailed assessment of mineral resources and conversion to reserves, including drilling programs and geological modelling.
- Metallurgical Testing: Analyze ore characteristics and conduct metallurgical tests to determine the most suitable processing methods and how it varies through the ore body.
- Infrastructure Planning: Identify infrastructure requirements, including power, water, tailing, roads, and processing and supporting facilities.
- Market Analysis: Assess market demand, pricing trends, and potential customers.
- Cost Estimation: Develop preliminary capital expenditure and operational expenditure estimates for construction, operations, and closure.
- Financial Projections: Prepare initial financial models to assess project economics, including cash flows, NPV (Net Present Value), IRR (Internal Rate of Return), and payback period.
Feasibility Studies
These studies are generally meant to be the basis for final decision for a project to be developed.
- Detailed Engineering: Complete detailed engineering designs for mining, processing, and infrastructure as well as the complete procurement strategy.
- Permitting: With support from the owner's team or consultant, apply for the necessary permits and approvals for the project.
- Risk Analysis: Conduct a thorough risk assessment, including technical, financial, and operational risks.
- Gap Analysis: Conduct a thorough gap assessment, with focus on current status and project expectations.
- Project Financing: Secure financing options and evaluate the financial structure of the project.
- Execution Plan: Create a detailed project execution plan, including construction, commissioning, and operational phases.
- Detailed Financial Modelling: Refine financial models with detailed cost estimates and revenue projections. These estimates are supported by quotes from suppliers, contractors and service providers.
- Sensitivity Analysis: Perform sensitivity analysis to assess the impact of various variables (e.g., commodity prices, operating costs) on project economics.
- Final Investment Decision (FID): Present findings and recommendations for stakeholders to make an informed investment decision.
Optimization Studies at Existing Operations
- Operational Review: Assess existing mining operations for potential improvements in efficiency, productivity, and cost reduction.
- Resource Optimization: Optimize resource extraction and processing methods to maximize recoveries.
- Cost Reduction: Identify opportunities to reduce operating and capital costs.
- Environmental and Safety Improvements: Review and enhance environmental and safety practices.
Preparation of Financial Models and Financial Analysis
- Financial Modelling: Develop sophisticated financial models that consider various scenarios and sensitivities.
- NPV and IRR Analysis: Calculate Net Present Value (NPV) and Internal Rate of Return (IRR) to determine the project's financial viability.
- Cash Flow Analysis: Analyze project cash flows to assess liquidity and capital requirements.
- Payback Period: Determine the time required for the project to recoup its initial investment.
- Investment Attractiveness: Evaluate the attractiveness of the investment relative to other opportunities and industry benchmarks.
