During your prospecting projects, you may reach a certain point where you have the need to complete a feasibility study. If you’ve never been to this stage of the mineral exploration process before, you may be wondering what, exactly, a feasibility study is and why it is important in mining.
WHAT IS A MINING FEASIBILITY STUDY?
A mining feasibility study is a study that determines whether a prospective mining project can be mined economically. If so, the feasibility study will also help to inform the financial strategy of the project, the construction and engineering of the mine, as well as the initial drilling strategy.
Mining feasibility studies may include often follow three general phases. This includes a preliminary order of magnitude study, which compares the prospective project to existing projects to judge whether expected gains outweigh assumed costs. A preliminary feasibility study may later be completed, which creates a more detailed study of unit costs and initial engineering and mine design. Finally, a detailed feasibility study will include information to inform the final determination of whether to proceed with the project and will include detailed information to develop budgets, engineering plans, drilling programs, and more.
WHY IS A FEASIBILITY STUDY IMPORTANT IN MINING?
Feasibility studies are important in mining because they help to reduce the financial risk of owners, operators, and investors of a mining project. For project owners, feasibility studies help to secure funding by informing investors about the likelihood of success within a reasonable margin of probability. These studies help owners and operators determine whether to proceed on a project and help with determining the most effective financial strategy, budget, engineering design and construction planning, drilling program, and more for the project.
There are several goals of a mining feasibility study:
- To prove—or disprove—that a mining project can be constructed and operated in a cost-effective and profitable way.
- To provide information for designing and constructing the mining operation.
- To help inform financiers on the project to enable the raising of funds to finance the project.
WHAT TAKES PLACE DURING A FEASIBILITY STUDY FOR MINING?
A feasibility study will typically include estimating the size and quality of the ore body, producing geotechnical information, researching metallurgic or mineral processing information, as well as researching similar projects, waste disposal, environmental factors, and potential risks. The goal of a feasibility study is to identify costs, potential profits, reduce unknown factors, and present relevant information to plan for and execute the project.
WHEN SHOULD YOU GET A FEASIBILITY STUDY DURING MINERAL EXPLORATION?
A feasibility study is usually one of the last steps before mineral exploration turns into a production decision. Before this happens, the following will likely happen:
- Potential deposit is located
- Claim is staked and permitted
- Surface exploration deems further exploration is merited
- Geophysical studies increase level of confidence and informs core drilling
- If core drilling results are positive, 3D modeling may be used to estimate resources
After the above steps are completed, a feasibility study is usually included as part of a de-risking strategy, helping to inform whether the project has the potential for viable and economical production.
