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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Transcript of The Importance of Feasibility Studies for Project Financing FINEX 2012.
The Importance of Feasibility Studies for
Project FinancingFINEX 2012
Tetra Tech –Mining & Minerals
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• Business Focus - extractive industries• Fully integrated consulting service provider• Undertake 100’s of mining studies every year
Tetra Tech – Global reach
340 locations & 22 countries
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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
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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
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$$$
Project Engineering Phases
Revised Source: Noort Adams – 2006
Exploration Scoping Study / PEA
Pre-Feasibility Study
Feasibility Study
Detailed Eng / Construction
Operation
Incr
easi
ng
Val
ue
Level of Resource/Reserve Definition
Ability to Influence/Reduce Risk
Increasing Company Value
Project Value and Influence
5 Critical Determinants
Resources/Reserve
Geometallurgy
TMF
Supportability (Power, Water, etc.)
Permitting (Social and Environmental)
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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
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List not exhaustive
Strategy: Appropriate Engineering and Pragmatism
Resources and reserves (Value/grade continuity)
106
104
102
1
0.01
Estimatio
n Diffi
culty
homogeneity lowhigh
GEOLOGICAL CONTINUITY
StratiformLead, Zinc
IronCoal
PlatinumStratiformGold
PorphyryMolybdenum
CopperVein Tin
VolcanogenicCopper, Lead, Zinc
Vein Gold
AV
ER
AG
E G
RA
DE
(p
pm
)
DisseminatedGold
Placer
Kimberlite
(after King et. al. 1982)
Resource to Reserve ‘Boilerplate’
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Is it there…?Is it the right size, shape, quality and dimension…?Is it exploitable…?Is it exploitable at a profit…?
Source: JORC
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
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Strategy: Variability testwork & process flexibility
Tailings Management Facility (TMF)
Estimation of volumes & ground investigations !!!! For every tonne of ore you will need approx 2m3 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.)
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Strategy: Front-end loading
Supportability
Power
Water !!! For every tonne of ore you will need approx.
1000 litres of water
Human Capital
Supply Chain
Security
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Strategy: Front-end loading
Permitting
Can take 3-5 years
Early assessment necessary!!!! Understanding the country and lending
requirements Understanding the stakeholders
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Strategy: Front-end Loading
Why we should complete these studies
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• 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
