Mineral project appraisal and finance
Course details
- Duration: 5 Half days of Live remote sessions
- Time: 13.00 - 17.00 (GMT)
- Fees: £1750
24-26 February 2021
The stages in the development of a mineral project are outlined in in these sessions against the corresponding supporting documentation that is needed. For exploration companies the best approach is to undertake the programme of work with funds being raised through a private placement. This is not uncommon for early stage exploration and, of course, there would be no liquidity as changes in shareholding would be directly between two parties rather than exchange-based trading. As the exploration success allows the project to evolve, the original investors will want to take the company public. This process of bringing a project into production is inherently complex and promoters and investors get hopelessly confused about the interrelationships between the funding options and the stages in the technical evolution of their projects. Advisors add a veneer of mystique over the process to justify large fees. These sessions chapter aims to provide a clear road map for the development of a mineral project.
More information
Schedule - Days 3 - 5
Day 3 Wednesday 24 February
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Time
|
Session
|
Contributors
|
|---|---|---|
|
13:00-14:00 |
9. Value Creation in Mineral Projects The cycle of value creation in mineral projects. Exploration Stage. The pyramid reflecting the evolution of a gold mineral exploration and evaluation programme. Drivers – Commodity Prices. Resource Base and Asset Life – Mineral Resources. Synergies and Portfolio Optimisation. Single project mining company stages of development and funding options. Funding Options for Mineral Projects - Pre-Initial Public Offering, Listing, Joint Venture Agreement and Project Finance. Multiple-partner modelling. |
Dennis Buchanan |
|
14:00-15:00
|
10. Constraints on Mineral Resource Development ESG – Environmental impact, social license and corporate governance. Environmental impact assessment. Sustainable Development and the Moral Case for Mining. Occupational Health and Safety. Cost of Environmental Compliance and Closure Provision. Site Visits and Due Diligence Description |
Dennis Buchanan
|
| 15.00-16.00 |
11. Resource Evaluation Sampling. Diamond drill rig, crowns, core and core storage. Process Mineralogy. Concepts around Geological Continuity. Polygons of Influence and Inverse Distance. |
Dennis Buchanan |
|
16.00- 17.00 |
12. Resource Evaluation Geostatistical Methods Experimental semi-variogram. Variogram showing the relationship ỵ(h) which relates the semi-variance of sample differences to distance between samples. Resource block model. Grade-tonnage relationships. Reserve and Resource Definitions. Drill spacing. Evaluation versus Production. Break-even and cut-off grade. |
Dennis Buchanan |
|
Day 4 |
Thursday 25 February |
|
|
13:00-14:00 |
13. Metals & Energy Project Appraisal & Finance Nomenclature of documentation generated in mineral project development. IPO Prospectus, SEDAR and NI 43-101.Preliminary Feasibility Study (PFS) - Elements and Characteristics. Cost Estimation. Relationship Cost to Capacity. Asset Optimisation. Full Technical Feasibility Study (FTFS)– Elements and Characteristics. Engineering Design Stages . Feasibility Studies and the Information Memorandum. Construction. Construction Monitoring. Production Monitoring. Project Finance Parameters. |
Dennis Buchanan |
| 14.00-15.00 |
14. Heading Case History - Base Metals Open pit nickel mine. Sample of DCF model worksheet. Annual cover ratios. Scenario analysis. Optimisation of gearing. Cost estimates. Different stakeholders. Reserve tail. Convergence of technical and financial risk. |
Dennis Buchanan |
| 15.00-16.00 |
15. Minerals Engineering – Surface Mining Methods. Metal Reconciliation and Mineral Resource Management. Grade control. Dilution. Mass balance. Pit Optimisation. Slope stability. Blast hole patterns, explosives and breaking. Equipment |
Dennis Buchanan |
|
16.00-17.00 |
16. Transition from open pit to underground. Shaft sinking. Production ramp-up and profile in the transition from surface to underground mining. As the pen-pit matures, the number of working faces becomes limited so production drops and this needs to be compensated for in the ramp-up of block caving. Copper projects case histories - Palabora, Chuquicamata and Oyu Tolgoi |
Dennis Buchanan |
|
Day 5 |
Friday 26 February |
|
| 13.00-14.45 |
17. Mineral Processing The central role of mineralogy in effective mineral processing. Comminution. Liberation. Physical and chemical separation processes. Solid-liquid separation. Waste disposal |
Stephen Neethling |
| 14.45-15.30 |
18. Extractive Metallurgy - Copper Illustration of extractive metallurgy through the hydrometallurgy and pyrometallurgy of copper ores. Oxide versus sulphide ores. Flash smelting, converting and electro-refining. Heap, tank and in-situ leaching. Solvent extraction and electro-winning. |
Stephen Neethling |
|
15.30 – 17.00 |
19. Valuing Mining Assets using Real Options. Decision tree at pre-feasibility stage after NPV optimisation. Options. Greenfield gold project ase study. Building a Financial Model and Calculating the WACC. Inputs for the Monte Carlo Simulations. Real Option Analysis – Theory and Application to Mining Projects. Black-Scholes-Merton Formula – Inputs. |
Chris Worcester |
Presenters
Emeritus Professor of Mining Geology & Senior Research Fellow, Imperial College London
Professor Buchanan works jointly between the Department of Earth Science and Engineering and the Business School at Imperial College London and will act as the Course Director.
Professor Buchanan's current research interest lies in addressing the underlying technical principles applying to mineral projects and demonstrating how these influence financial modelling. He has 36 years’ experience teaching mining geology, mineral exploration and mineral project appraisal and is responsible for the MSc in Metals and Energy Finance. This is a joint degree between the Department of Earth Science and Engineering and the Business School at Imperial College. Professor Buchanan has worked as a Mining Geologist in both gold and platinum mines in South Africa and had wide experience as a consultant to industry, as an expert witness and in designing and delivering short courses for industry
Professor Stephen Neethling
Reader in Minerals Processing, Imperial College London
Professor Neethling has been carrying out research in minerals processing for the last 24 years. His main research interest is in the use of fundamental level models of processes occurring within various minerals separation techniques in order to improve both the operation and design of these systems. In particular, he is working on models and simulators for the froth flotation and heap leaching processes. He has carried out both research and consulting work for a number of major international mining companies.
Mr Chris Worcester
Non-Executive Director on the Board of Stratex International
Chris began his City career in 1993 at Barclays de Zoete Wedd, where he worked in the metals and mining project finance team. In 2000, he joined the Royal Bank of Scotland as Director and Head of Financial Modelling and Analysis, leaving in 2002 to join WestLB Capital Markets, the international investment banking division of WestLB, where he established and managed the global metals and mining team until 2007. Since then Chris has been actively involved in securing funding and investment for resource companies through private, specialist corporate finance company Stone Arch Financial and, more recently, Green Road Capital. Chris is an independent non-executive Director of Stratex International plc. He has a BSc in Chemistry and an MBA in Finance.
Course Support:
Mr James Buchanan
IC-MinEval
Use will be made in the workshop sessions of the IC-MinEval software, an Excel -based spreadsheet programme automating all stages required to produce models for a wide range of mineral projects. Participants will be able to retain digital copies of the spreadsheets that they generate during the course. It produces a Balance Sheet and Profit and Loss account from the cash flows, with tax provisions linked to the Profit and Loss account. Output modules include the base case discount cash flows, as well as key financial ratios and performance indicators such as NPV, IRR payback and maximum cash exposure. Sensitivity analysis can be undertaken on key variables.
Delivery of IC-MinEval functionality for delegates will be from the Imperial College Software Hub. Professor Buchanan can navigate IC-MinEval-based modelling by merging the workbook with the Team Meeting. Delegates can access the Software Hub independently, separately and simultaneously on their laptops or PCs.
Delegates will need to have administrative rights and Excel on their laptops will be given access to the functionality of IC-MinEval for one month after the course.