From Mining News - at least their BFS will be realistic!
Knowing what's feasible
Mark Story
Monday, October 17, 2005 WHEN is a feasibility study not a feasibility study? When it's a scoping study, and too many explorers, according to Mark Noppé, general manager of Snowden Mining, still confuse the two. He said it's misleading to use the term feasibility study when explorers are simply looking at a scoping.
He also warned delegates at today's Excellence in Exploration and Mining Conference in Sydney to be especially wary of the term "bankable feasibility study".
"At the end of the day, banks will decide what is bankable – so be wary of using this term," Noppé said.
He told delegates that feasibility studies (in the truest sense of the term) should always strive to bring much greater clarity to project cost estimates.
Scoping studies by comparison, explained Noppé, are typically little more than a preliminary economic assessment. The main problem, said Noppé, is one of classification and terminology. He claimed that the interactive process (inherent within ny feasibility study) should be aimed at A) Getting a mining project's economic fundamentals right, and B) identifying and quantifying (technical and reserve) risk.
According to Noppé what makes feasibility studies essential is their ability to provide:
* Broad agreement to proceed * The funding to do so * Independent (engineer) reports to support that study * Due diligence * Audit trail (and reviews) of the work done.
"Often what explorers don't get right is the consistency between industry experts. At the end of the day, feasibility studies need a cash flow model that's updated at the mining project goes along," Noppé said.
He also reminded delegates that a mining project's work does not stop at the feasibility study. He said there's always an additional batch of technical studies once a project goes into production. No matter how much a resource has been drilled it must, claimed Noppé, still pass an economic benchmark of ongoing testing.
That's why he said a key aim of ongoing feasibility studies (through the lifecycle of a mining project) is to reduce risk before committing additional expenditure.
"The accuracy of a technical report should reflect the accuracy of its contents – it's all about measured resources."
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(20min delay)