4a. Pre-feasibility Studies - Reducing Mining Risks

Summary

The pre-feasibility study (PFS) in mining is a crucial step to evaluate the viability of a mining project. It's the first of the more advanced mining engineering studies, aiming to determine the best mining project option by examining various scenarios and identifying significant risks. The study involves sensitivity analyses to ensure economic robustness and is typically accurate within 20-30%. PFS is essential for public release, IPO listings, and project financing. It relies on calculations from first principles and involves several competent professionals, often including independent consultants, to ensure accuracy and reliability in resource and reserve estimations. This stage involves rigorous evaluations and iterations to optimize the mine's life plan while maintaining control over timelines and costs, highlighting the importance of experienced leadership.

Highlights

• The pre-feasibility study is the first advanced step towards mining project evaluation. 🚀
• Sensitivity analyses during this study help prove the economic robustness of a project. 📈
• The study's accuracy is typically within a 20-30% range, relying heavily on first principles. 📐
• Public release of PFS results is essential, especially for IPO listings and financing. 🏦
• Independent consultants play a key role in verifying data and ensuring project integrity. 👥
• Good leadership is crucial to keeping timelines and costs on track. ⏳

Key Takeaways

• The pre-feasibility study is a pivotal step in mining projects to assess feasibility and identify risks. 🔍
• Accurate to 20-30%, it relies on fundamental calculations and must be thorough. 📊
• Independent consultants often verify resource data to ensure reliability. 💼
• Essential for IPO listings and project financing, making it crucial for public disclosures. 💰
• Strong leadership is necessary to manage timelines and project costs effectively. 🕰️

Overview

A pre-feasibility study is a critical phase in the development of mining projects. It aims to answer the pivotal question: which mining project option is the best choice? During this stage, various project scenarios are explored, and sensitivity analyses are conducted to understand potential economic outcomes and identify high-risk factors. Such diligence ensures the project's economic robustness, an essential factor for stakeholders.

The PFS relies on first principle calculations for accuracy, which generally falls within a 20-30% range. It's this robust, methodical approach that makes a PFS suitable for public release, as well as necessary for IPO listings and project financing. In this stage, multiple competent professionals, often including independent specialists, provide their expertise, ensuring reliable estimation of resources and reserves.

Successfully conducting a pre-feasibility study demands experienced leadership to orchestrate the detailed evaluations and iterative processes involved in devising an optimal mine life plan. This involves balancing changes across various project factors while keeping timelines and costs under control, underscoring the necessity for skilled management.

Chapters

• 00:00 - 00:30: Introduction to Pre-feasibility Study The chapter 'Introduction to Pre-feasibility Study' explains the purpose of a pre-feasibility study in mining engineering. It is described as the first advanced study, aimed at determining the best mining project option. The study includes sensitivity analyses to verify economic robustness and identify significant risk factors.
• 00:30 - 01:00: Mineral Resources and Accuracy The chapter titled 'Mineral Resources and Accuracy' discusses the categorization of mineral resources and reserves according to the draw code. It specifically focuses on pre-feasibility studies, which use first principle calculations. These studies typically have an accuracy range between 20 to 30 percent and are deemed appropriate for public release.
• 01:00 - 01:30: Public Release and IPO Listings This chapter explores the prerequisites and considerations involved in public release and IPO listings. A key focus is on the importance of pre-feasibility studies (PFS) in this process. The JORC (Joint Ore Reserves Committee) definition of a PFS is explained, highlighting that various options must be evaluated and that the process depends on several competent experts. The necessity for a well-experienced study manager to oversee these activities is also emphasized.
• 01:30 - 02:00: Role of Competent Persons and Consultants The chapter discusses the role of competent persons and consultants in the mining industry. It highlights that individuals with a mining engineering background or those from EPCM contractor companies often conduct pre-feasibility studies. However, independent consultants, who are specialists in their fields, commonly undertake many sections of these studies. It is noted that funding parties usually require that data concerning geology, resources, and reserves be authenticated by these independent consultants.
• 02:00 - 02:30: Review and Compliance The chapter titled 'Review and Compliance' discusses the importance of having an independent consultant for providing critical inputs necessary for a study. It mentions the need for competent personnel in a coal project preliminary feasibility study (PFS). The chapter provides headings and subheadings indicating where specific expertise is required, particularly in section 6.3 dealing with reserves.
• 02:30 - 03:00: Reserve Estimation Process The chapter entitled 'Reserve Estimation Process' discusses the protocol for estimating coal reserves in compliance with the draw code. It emphasizes the need for a competent person to thoroughly review all sections of the Pre-Feasibility Study (PFS) and ensure that they are appropriate for reserve estimation. Reserves should be based on findings from a PFS or a feasibility study.
• 03:00 - 03:30: Leadership and Management Several iterations are typically required to obtain the optimal life of mine plan and reserves.

4a. Pre-feasibility Studies - Reducing Mining Risks Transcription

• 00:00 - 00:30 step three is a pre-feasibility study it is the first of the advanced mining engineering studies which attempts to answer the question what will it be by the end of the study we need to know which mining project option is the best choice sensitivity studies are undertaken to prove the robustness of economics and to identify the highest risk factors
• 00:30 - 01:00 by this point we will have all categories of mineral resources and or reserves as per the draw code a pre-feasibility study relies upon first principle calculations and therefore has an accuracy in the 20 to 30 percent range pre-feasibility study is the first study that is suitable for public release
• 01:00 - 01:30 and it is often the minimum minimum requirement for ipo listings and project financing here is the jork definition of a pre-feasibility study the keywords are a range of options are studied a pfs relies upon several competent persons it requires a well-experienced study manager
• 01:30 - 02:00 usually a person with a mining engineering background or an epcm contractor companies may choose to undertake their own pre-feasibility study however in practice many of the sections are undertaken by independent consultants who are specialists in their fields generally funding parties insist that the data geology resources and reserves are signed off
• 02:00 - 02:30 by an independent consultant as these inputs are critical to the entire study in the slide before i showed you a number of competent persons that may be required for a coal project pfs this slide shows the headings and subheadings where each of these people may be needed in section 6.3 reserves
• 02:30 - 03:00 to comply with the draw code the competent person completing the coal reserves must review all sections of the pfs study so all these sections in front of us and deem them to be suitable to estimate reserves reserves must be based on the results of a pfs study or a feasibility study
• 03:00 - 03:30 an all reserve estimate is not usually a single event process typically several iterations may be required to obtain the optimal life of mine plan and reserves changes in one factor will require changes to other factors and will result in extra work hence there is a need for good leadership and guidance from an experienced study manager to ensure that
• 03:30 - 04:00 timelines and costs are kept in control