Feasibility

Scoping Study

The first stage of the feasibility process is to determine if the project has any ability to get off the ground, using generalised operating tonnages/grades/recoveries and costs.

If you applied a general percentage accuracy for a Scoping Study it would be 10-25%

Below is a Mindmap to show the basic subjects included in a Scoping Study (SS), this SS pasted Board approval and progressed to a Feasibility Study.

Definitive Feasibility

This is the final study taking the project off the drawing board and into production.

At this point the accuracy level would be 60-90% depending on the company and individuals in that company performing the study.

In conjunction with the study being completed the following would be occurring onsite:

Debt financing near completion
Mining and Environmental licences approved
Mining contracts decided upon
Equity raising near completion (70/30 Debt to Equity ratio)
Mining Fleet optimised
Metallurgical test work completed
Royalties confirmed
Legal documentation completed

Below is a Mindmap of a Definitive Feasibility Study that is currently in Production

Feasibility Study

Once the project passes the basic hurdles of a Scoping Study the next step is to expand upon the subjects included in the study to Feasibility Level.

A Feasibility Study has a much higher level of accuracy ranging from 25-60%.

At this point contracts are being tendered, mining licences are being finalised and capital raising intensifies.

Below is a Mindmap for a Feasibility Study that progressed to Definitive Feasibility:

Banking Review

The Account manager will compile a dossier which will include the following documentation

Summary (raw project facts)
Project overview including Cash flow, Risk, and Debt financing
Risk Analysis (Credit Department)
Independent technical Review (eg Snowdens/SRK)
Financial Analysis, DCF and Debt Repayment (Account Manager)
Legal Review, Board/Company/Shareholders/Government (Legal department)
Compliance Review (Compliance Department)

The dossier will be tabled at the Metals and Mining weekly review meeting. If the Account Managers dossier ticks all the box’s then the project will tabled at the Board of Directors monthly meeting. The Board of Directors will study the Project and request further analysis until they are comfortable with the Project Risk and then Rubber Stamp the project for Debt Finance.

The Treasury Department will be informed of the Debt draw down schedule and the Account Manager will monitor the project making sure the project has met the required milestones before the next tranche of debt draw down occurs.