In the resource sector generally, and mining specifically, a great deal of emphasis is put on getting a project started on the right foot. Preparatory work for greenfield mine development can take a full decade, as a project moves from scoping studies, into pre-feasibility and feasibility studies, through engineering, and finally into execution. As the business of mining is fraught with many economic and technical risks, taking a careful and thoughtful approach is necessary.
In the sometimes lengthy process from scoping to execution, the feasibility study is a critical step to proceeding with engineering and development for any mining project. Following the pre-feasibility study, it aims to determine the costs and schedule of a project. In large scale, capital-intensive projects, the feasibility study establishes a rationale for further investment and eventual mobilization.
At DMC, our engineering teams are very competent with feasibility studies, having conducted them for a number of projects we have executed. Experience with a wide variety of feasibility studies throughout our history allows us to deliver accurate and comprehensive reports. Recently, companies such as DeBeers and Andra have sought our expertise to conduct studies on their behalf.
The feasibility study follows the prefeasibility study and establishes an accurate estimate of costs and scheduling, typically to within a range from -15% to +15% of actual values. When the study is conducted, an optimum approach will have been selected and all what-if scenarios and variables will be settled. Therefore the feasibility study primarily answers whether a project will be too financially inefficient to be put into action, which requires insight.
The study takes place after a significant, but before serious capital is invested into a project. Therefore the accuracy of this report is of paramount importance, as it will be delivered to the decision makers who will either go ahead with the project or cancel it. In junior companies, the client may go to market or begin mining once in possession of a favorable feasibility study. Major mining companies will take the study and deliver it to the board for approval.
Without a good understanding of costs and schedule, mine operators can’t forecast profits and achievement of milestones. Without good forecasts, investment may suffer and public relations can also become problematic, forces that can snowball and sink promising projects before ground is broken. Experienced investors also take a keen interest in feasibility studies, which can make them highly important for funding as well.
Nearly all the companies which specialize in feasibility studies are pure engineering firms. Developing mastery in generating and delivering these studies is the core focus of their business and earns them the majority of their compensation. Once delivered, their involvement in a project may cease, and the study may need to be amended afterwards.
When DMC conducts a feasibility study, we bring to bear decades of experience in addition to our well-developed engineering capabilities. That we are also a mining construction company introduces many benefits, not the least of which is that our focus is retaining clients and working with them long term to solve problems as the project progresses. When the studies are delivered, our investment in a project may not cease, as we can carry out further engineering and operations to complete it.
Our hands-on experience means that we approach feasibility studies as a mining company might, not as a pure engineering firm. Closer involvement is not the only advantage we offer: we can also introduce a different, more active perspective. Since we have conducted many feasibility studies and executed on many of them, we have a vast repository of data, experiences. and statistics to call upon to ensure our estimates are more accurate.
Real world execution experience can count for a lot in feasibility. In costing, our closer relationships with suppliers means we can cost out more accurately and find efficiencies that other companies may not be aware of. In terms of scheduling, our experiences with operations and logistics allow us to evaluate timetables realistically.
Feasibility studies come with the business and are necessary for it. While our core expertise remains in operations and safety, our engineering capabilities are wide, and our history includes a solid track record of delivering highly accurate studies that inform clients and establish concrete frameworks for projects. Our proximity to the realities of mining help us deliver a high level of precision and accuracy when we conduct a study. Since so much in mining counts on doing things right, we take care to ensure all our services and capabilities match that need.