The Importance of Feasibility Studies for Project Financing FINEX 2012

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Transcript of The Importance of Feasibility Studies for Project Financing FINEX 2012

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  • The Importance of Feasibility Studies for Project Financing FINEX 2012
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  • Tetra Tech Mining & Minerals 2 Business Focus - extractive industries Fully integrated consulting service provider Undertake 100s of mining studies every year
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  • Tetra Tech Global reach 340 locations & 22 countries 3
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  • Why are feasibility studies important? Provides project definition scope, quality, cost and schedule Understanding of risk and opportunity Necessary condition Independent evaluation 4
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  • Context: Project Lifecycle 1.Exploration Phase Recce work, geochem, field geology, etc. 2.Project Discovery delineation, drilling, scoping level testwork, etc. 3.Project resource definition and scoping studies open pit vs. underground, PFD, etc. 4.Prefeasibility Studies infill drilling, metallurgical sampling/testwork, TMF studies, etc. 5.Feasibility Study 6.Project Financing 7.Project Execution 8.Project Operations 9.Closure and Reclamation 5 $$$
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  • Project Engineering Phases Revised Source: Noort Adams 2006
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  • ExplorationScoping Study / PEA Pre- Feasibility Study Feasibility Study Detailed Eng / Construction Operation Increasing Value Level of Resource/ Reserve Definition Ability to Influence/Reduce Risk Increasing Company Value Project Value and Influence
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  • 5 Critical Determinants Resources/Reserve Geometallurgy TMF Supportability (Power, Water, etc.) Permitting (Social and Environmental) 8
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  • Resource to Reserve Mineral inventory !!! Geological interpretation Block sizing Geostatistics Mining reconciliation Production factors (availability, utilisation, truck/bucket factors, seasons, etc.) Dilution Grade control reality vs. planned 9 List not exhaustive Strategy: Appropriate Engineering and Pragmatism
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  • Resources and reserves (Value/grade continuity) 10 6 4 2 1 0.01 Estimation Difficulty homogeneitylow high GEOLOGICAL CONTINUITY Stratiform Lead, Zinc Iron Coal Platinum Stratiform Gold Porphyry Molybdenum Copper Vein Tin Volcanogenic Copper, Lead, Zinc Vein Gold AVERAGE GRADE (ppm) Disseminated Gold Placer Kimberlite (after King et. al. 1982)
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  • Resource to Reserve Boilerplate 11 Is it there? Is it the right size, shape, quality and dimension? Is it exploitable? Is it exploitable at a profit? Source: JORC
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  • Geometallurgy process response Understanding the variability of orebodies Orebodies are variable, so is metallurgy Appropriate (representative) sampling !!!!! Grade, recovery and processing cost information relating to each orebody 12 Strategy: Variability testwork & process flexibility
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  • Tailings Management Facility (TMF) Estimation of volumes & ground investigations !!!! For every tonne of ore you will need approx 2m 3 of storage volume For every cu.metre of waste rock you will need approx 1.4X of storage volume Acid mine drainage considerations Suitability and Availability of build materials (clays, sand, rock, etc.) 13 Strategy: Front-end loading
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  • Supportability Power Water !!! For every tonne of ore you will need approx. 1000 litres of water Human Capital Supply Chain Security 14 Strategy: Front-end loading
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  • Permitting Can take 3-5 years Early assessment necessary!!!! Understanding the country and lending requirements Understanding the stakeholders 15 Strategy: Front-end Loading
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  • Why we should complete these studies 16 Logical, tried and tested development process Proven and established path over thousands of man years of engineering experience Omission of one of these phases equates to increased risk and additional costs
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