1. EXPLORATION: THE NEED AND THE
Quality – Innovation – Future
EXPLORATION: THE NEED AND THE
ADVANCES IN TECHNOLOGY
The need for exploration
Best practice - Exploration performance benchmarking
Value creation from exploration
Testing new play concepts and/or exploration models
Reducing exploration risk by developing and/or applying new techniques
Appropriate Mining Technology for Sub Sahara Geology Formation

2. ….an important instrument for mining project financing
“Feasibility study" means a comprehensive study of a deposit in which all geological, engineering, operating, economic and other relevant factors are
considered in sufficient detail that it could reasonably serve as the basis for a
final decision by a financial institution to finance the development of the deposit
for mineral production.*
Feasibility Studies
….an important instrument for mining project financing
* Definition taken from NI (reporting standard for American SXs)

3. MINE LIFE CYCLE
To learn more about feasibility studies you have to look in more detail to the mining project cycle.

4. Mitigate Risk
Source: Modified from Venmyn

5. Mining is a risky business and each stage is impacted by uncertainties
Political
Uncertainty
Political
Uncertainty
Financial &
Economic
Uncertainty
Investor
Uncertainty
Science &
Technology
Uncertainty
Investor
Uncertainty
Mining
Complexity
Geological
Uncertainty
Market &
Commodity
Pricing
Uncertainty
Construction
Uncertainty
Mining
Uncertainty
Metallurgical
Uncertainty
Location
Uncertainty
Exploration
Performance
Development
Performance
Mining
Performance
Processing
Performance
Marketing
Performance
Corporate
Performance
Social &
Environmental
Uncertainty
Social &
Environmental
Uncertainty
Social &
Environmental
Uncertainty
Social &
Environmental
Uncertainty
Social &
Environmental
Uncertainty
Social &
Environmental
Uncertainty
Pervasive,
Largely
Uncontrollable
Risks
Poorly Defined
and somewhat
Controllable
Risks
Direct
Controllable
Risks
Global Financial &
Economic Risks
“Risk Categories”

6. The way to address all the uncertainties and to minimise the risks incurred into a mining project is the dilligent preparation of a Feasibility Study.

7. FEASIBILITY STUDY
Covers the technical, the economic and financial feasibility.
Details the design, including field studies, especially in regard to topographical, geological, geotechnical, hydrogeological.
Details the unit costs of the materials and the various phases of construction close to reality.
Allows exploring the various possibilities / strategies of funding the project.
Includes detailed study of the potential environmental impacts and mitigation plans and the costs the cost to be foreseen in the overall budget.

8. RELATION BETWEEN RESOURCE AND RESERVES

9. KEY TOPICS TO BE ADRESSED WITHIN FEASIBILITY STUDIES
Geology and Resource
Mine Design and Mineable Reserve
Metallurgy and Process Facility
Tailing disposal
Infrastructure, power supply, water supply
Civil and major earthworks
Power supply
Water
Support facilities, maintenance, etc.
Site access, road vs. fly-in fly-out vs. winter road vs. marine etc.

10. KEY TOPICS TO BE ADRESSED WITHIN FEASIBILITY STUDIES (2)
Supply costs and shipping of product and impact on working capital
Project access and transportation
Environmental impacts and mitigation
Labour supply and socio-economic issues
Political stability and conditions
Environmental constraints and permitting
Management capability and experience
Socio-economic impacts
Project schedule and execution plan
Capital and operating cost estimates
Fatal Flaw Analysis

11. COST CALCULATION : ACCURACY VS TYPE OF STUDY

12. Life Cycle of a Mining Investment
VALUE vs RISK
Highest Financial Risk Exposure
VALUE ADDITION
DISCOVERY
Pre-FEASIBILITY
BANKABLE FEASIBILITY
EXPLORATION
PRE-DEV
MINE
CONSTRUCTION
PRODUCTION
5-10%
70-85%
10-20%
Development Investment
Analysis
(Reality Sets In)
Production
Revaluation
Speculation
RISK REDUCTION WITH ADDED INFORMATION AND CONFIDENCE
Source: Modified from U.S. Global Investors and Venmyn

13. COMPLIANCE AND REPORTING
Codes sets out standards and guidelines for Public Reporting of Mineral Asset Valuations e.g. SAMREC;SAMVAL; Ni43-101; JORC etc.
The code is applicable to the reporting of all styles of solid mineralization/mineral assets.
The code is based on best practices of the minerals industry and allows for professional judgment in certain instances.
The objective of the code is that Mineral Asset Valuations should be performed by appropriately qualified persons and all relevant information is fully disclosed.
‘Valuation’ in the code is related to the value or worth of a Mineral Asset as opposed to ‘evaluation’ where the objective is an economic assessment of the economic merit of an Asset.

14. CONCLUSIONS
Feasibility study is the key instrument to determine whether or not a project will be viable.
There are different standards for feasibility studies, but its quality remains paramount.
The bank decides what is bankable.
Mineral resource is the key factor.
No duly proven reserves, no project (modifying factors).
The level of detail in a feasibility study depends basically on implementation route.
Capital costs: accuracy of estimate vary between ± 25% and ± 10%.
The cost of a feasibility study is a very low% of the total investment.
Greater detail in a FS, greater accuracy in calculating the cost of capital.
Compliance is paramount as its provides credibility.

15. The success of a project depends on quality,
time and expected cost and subsequently depends on a professional Feasibility Study
and
the experience of the consultant providing the study ?
Our Services
Geo Engineering & Exploration
Mining Consulting & Engineering
Process Engineering & Plant Engineering
Plant & Product Safety
Exploration Seismic
Measuring systems and products
Training & seminars
Quality – Innovation – Future

16. Civil Engineering & Infrastructure
Markets we serve
Mining
Civil Engineering & Infrastructure
Oil & Gas
Plant Engineering & Process Engineering

17. Geology and Borehole Survey – Exploration
Airborne:gravity, magnetics, EM, radiometrics(?)
Ground: gravity, magnetics, EM, MT, GPR, resistivity, seismics
Indicator minerals: garnet, ilmenite, chromite, diopside, olivine(?), diamond
Geochemistry: Ni, Cr
Remote sensing: hyperspectral(?), satellite, aerial photography

18. Geology and Borehole Survey - Services
Diamond Drill Bit
Radioactive Source
Long Space (20") Density Detector
Ultrasonic Dip Sensor

19. Geology and Borehole Survey - CS3
High-tech core logging DMT CoreScanner
“Full Circumference Mode“
Scanning during rotation of the core

20. DMT KAI BATLA ZIMBABWE EXPERIENCE
2012: Geological exploration, Iron Ore : Geological exploration, Manganese and Gold 2014: Geological exploration, Manganese 2014: Due Diligence - Investigation of potential limestone suppliers : Geological exploration, Rare Earth Elements : Due Diligence - Potential Coal Suppliers to

21. Thank you for your attention
Avinash Bisnath
DMT Kai Batla
Managing Director, Geologist
Mapadi Molepo
DMT Kai Batla
Geologist