The Importance of Due Diligence for Early-Stage Mining Projects

Author(s): 
Neal Rigby, Ben Parsons
Date: 
Tuesday, May 1, 2018
First presented: 
Current Trends in Mining Finance
Type: 
Presentation
Category: 
Project Evaluation
Geology
 
 
Mineral resources are a foundation of a project’s valuation and, for many junior mining companies, determines the worth of the company. The aim of due diligence is to provide confidence (or lack thereof) in the mineral resource calculations and the fundamental data used in determining classification. 
 
When do you need a due diligence on an early-stage potential mining investment? How important are understanding mineral resources, and what do they mean? How does an investor know what is good, bad, or ugly in the “wild west” of exploration and developing projects?
 
One of the biggest risks to the technical and economic viability of any mining project is a poor understanding of the geology or resource estimation. Experienced geologists with SRK Consulting have been a part of a wide variety of successful mining projects over the years, and assisted hundreds of clients with navigating mining finance through strong, independent technical and corporate advisory through every stage of project development. This panel discussion will focus on the critical stages of review, specific assumptions to question, verification of results, and ways to mitigate risk during the process.
 
The panel team of executives from mining and financial industry will be joined by members of SRK Consulting to discuss case studies and engage in open discussion to demonstrate how obtaining a firm foundation on the mineral resource supports a myriad of downstream mining considerations and is key to timely, effective, and profitable mining operations. In addition, SRK will be available to comment on frequently asked questions during due diligence, common fatal flaws at the early stages of project development, and risks associated with specific types of deposits or projects.
 

Feature Author

Dr. Neal Rigby
Dr. Neal Rigby has over 42 years of experience in the international mining industry. The major focus of his consulting work for the past 25 years has been as the director of various SRK multidisciplinary teams in numerous major due diligence audits, competent person’s reports and other reports supporting the rationalization, merger, disposal, financing and acquisition activities of international mining companies and mining finance institutions. In this role, Neal has been in the position to independently certify to shareholders, stock exchanges and financial institutions the “bankability” i.e. fundamental value and risks and opportunities of mining projects.

 

Independent Project Review Specialist
CEng, PhD, MIMMM
SRK Denver
Ben Parsons

Ben Parsons has over 17 years of broad geological experience, including precious metals, base metals, and more recently niobium. Ben previously worked for AngloGold Ashanti Ltd. Since joining SRK, Ben’s expertise includes generation due diligence and auditing of exploration/mining projects, review of operation performance, geological modeling, the production of independent mineral resource estimates, project evaluation as part of competent person’s/mineral expert reports and stock exchange listings, and technical reviews. Mr. Parsons has experience in technical studies, working with junior exploration companies at grassroots exploration level through to the listing of large multi-national operating companies with multiple assets. International projects include gold, silver, base metals, copper, molybdenum, niobium and phosphate, all reported in accordance with international reporting codes, such as CIM, JORC, SAMREC etc. Ben has also been active in providing training courses in mineral resource estimation.

Mineral Resource Specialist
SRK Denver
SRK North America