2013 – COM 2013, Montreal, Canada
The primary objectives of an independent mineral processing project technical due diligence review are:
- to identify areas of risk, fatal flaws and, where possible, identify mitigating or ameliorating factors;
- to prepare a comprehensive independent technical report
- to confirm appropriate technical input to the project financial model, and to advise on appropriate sensitivity parameters.
It is an essential part of the technical due diligence review that the independent engineer identifies and reviews the inputs and assumptions that underpin the project financial model.
Following the independent engineer’s assessment, a “signed off” model will be agreed and will form the basis for a lending institution base case model, which will be used by the third party company in its assessment of the project.
The final technical report should be self-contained and reasonably comprehensive so that it can be read without unnecessary recourse to source documents. The report should be internally consistent with regard to the integration of the specific areas of review (geology, mining, processing, infrastructure, environment, etc.).
The executive summary should outline all of the key risks and their materiality in relation to financing this project.
It is very disappointing to see the results of resource project failures where this could have been prevented. We see so often that we worry about why these fundamental technical mistakes are being repeated.
Common issues are-non representative testing, new technology, failure to recognise the mineralogy and variability, skipping stage gate studies, failure to run “what happens if scenarios”, failure to recognise materials handling issues, failure to undertake a reasonableness check, failure to apply lessons learnt, not recognising good ore and bad ore, inability to blend ores, recognising the level of complexity processing ore.