Mine Feasibility Studies

A mine feasibility study is a report that describes a potential mining project, summarizes the
investigations and the evaluation work completed for the study and outlines the potential project
financial returns and associated risk.

A project feasibility investigation is carried out in stages, where each stage requires increased
engineering design to improve confidence in the technical and economic viability and to minimize
the project investment risk.

The time taken to complete a mining project investigation will depend on the deposit, the complexity
of mining and processing and the confidence and risk management required. From first exploration
to final project approval could take at best 18 months or up to 5 years or more.

Typically a project will go through the following stages, with iterations at each step to test
alternatives:

• Scoping study. This study might take typically 1 to 6 man-months and investigates wide
ranging project or extreme project design options and recommends whether any further
project investment is justified.
• Pre-feasibility study. This more detailed study requires typically 6 to 24 man-months of work
and requires more investigative test-work and geological drilling. The objective being to
confirm project viability and to optimize project methodologies, identify possible fatal flaws
and areas of project risk/uncertainty. Initial estimates of project capital and operating costs
will be included, with recommendations for further investigations. The principal strategic
decisions such as production rate, mining and processing, site general arrangement are
normally defined by this study, and the costing estimates would be +/- 25%.
• Feasibility Study. By now, effort is focused on the detailed engineering design and costing,
environmental studies and gaining the necessary development permits. The feasibility study
presents the blueprint for construction, and should describe all engineering aspects for the
proposed mine, plant, equipment, waste disposal and infrastructure and should include
relevant plans and engineering drawings together with the mine closure plan. The level of
engineering should provide all capital and operating costs to a confidence of between 10%
and 15%.
• 'Bankable' Feasibility Study. For a project where the feasibility study demonstrates that the
project is viable, will generate the projected returns with acceptable risk to the investor /
lender, the study is said to be 'bankable'. By now, tendered prices for major items would
have been received and sales and supply contracts agreed, at least in principle. An
Engineering and Project Construction Management (EPC or EPCM) team may be
appointed to manage the preparation of final tenders, adjudication and award of contracts
and the project construction itself.

Approach

The aspects that typically comprise a feasibility study are as follows:

• mineral rights and title

• geology, resources and reserves
• mining engineering, geotechnics and mine planning
• mineral processing, beneficiation and recovery
• water management and tailings design
• mine closure planning
• infrastructure, power, water, and access
• project construction and development schedule
• environmental impact, management and permitting
• social impact
• human resources, training and development
• materials, supplies, services and logistics
• marketing, sales product contracts, tolls
• capital costs and operating costs; fiscal and royalties, and
• technical / economic evaluation and risk assessment