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FEASIBILITY STUDIES

Developing a deposit into a mine requires a great amount of knowledge, investments and, not least, detailed analysis ahead of each step to ensure the future potential and profitability of the project. Studies of a mining project are typically conducted in three stages: preliminary economic assessment (PEA) / scoping studies, pre-feasibility studies and feasibility studies. Each of these stages is followed by a decision whether or not to proceed.

Quality of preparations is essential 

Scoping and feasibility studies will decide whether or not a project has a potential to be developed into a profitable mine. They analyse all aspects of a project; including the estimated amount of mineral, costs for exploiting it (type of mine and mining methods required to extract the mineral) and marketing potential. The quality and detail of analysis increase from scoping to feasibility studies, continuously increasing the accuracy of forecasting. If they confirm expectations, the feasibility study will lead to permitting, equipment procurement, construction and production. Some feasibility studies are also called “bankable” if they also address a number of issues,
to which banks and credit lending institutes require an answer to before they finance a project. Many types of detailed geological data are required to begin the evaluation of a mineral deposit. The data must be accurate, detailed, complete and consistent, with each stage being based on more and more detailed information about
the mineralization and lower uncertainty of modelling results. The definition of a scoping study is that it is “a study that includes an economic analysis of the potential viability of mineral resources taken at an early stage of the project prior to the completion of a preliminary feasibility study”. On industry average basis, accuracy of the scoping study calculations is usually about 40 per cent.⁶ 

3D-images used to analyse the deposit

When a successful scoping study has been finalised, it will be followed by the feasibility studies. By the time a decision is made to proceed with a pre-feasibility study, a mineral resource report has been finalised as well as an orebody model, demonstrating its shape, tons and grade. Feasibility studies include technical investigations, ore calculations, processing tests, environmental studies and permissions, assessments of market conditions – as well as an estimation of necessary capital investments and operational costs. They involve the use of metrics and data specific to each project. 3D-images are used to analyse how the holes have been drilled and what they reveal about the structure of the deposit – and what that implies for the future mining of the deposit. Geological data and interpretations form the basis of the entire evaluation process, by de-lineating the mineralization, estimating the resource, and providing essential information for the mine and processing design. The accuracy of the feasibility study calculations is usually about 15 per cent.

Optimising the project

The final feasibility study is usually based on the most attractive alternative for the project development as previously determined. The aim of the study is to remove all significant uncertainties and to present the relevant information with back up material in a concise and accessible way. The final feasibility study has a number of key objectives, including:

• to demonstrate within a reasonable confidence that the project can be constructed and operated in a technically sound and economically viable manner

• to provide a basis for detailed design and construction of the mine

• to enable the raising of finance for the project from banks or other sources

• to optimise the project for best use of the mineral, capital and human resources  

Other aspects to be considered include waste disposal and infrastructure requirements, such power and water supply as
well as internal roads and plant infrastructure.