RE: On the connection between mine feasibility studies, valuation, and impairment analysis

In November 2021, I posted a blog post about the connection between feasibility studies, valuation, and impairment analysis. I recently came across a comment letter by SEC staff that, I believe illustrates this connection. In this post, I wanted to quickly point out how this comment letter illustrates this connection and the fact that the SEC staff are on watch for issues such as these.

Continue reading “RE: On the connection between mine feasibility studies, valuation, and impairment analysis”

On the connection between mine feasibility studies, valuation, and impairment analysis

Most mining engineers are taught how to do mine feasibility studies in school but not all are familiar with property valuation and impairment tests. However, valuation and impairment analysis are also key aspects of the mining business that mining engineers should familiarize themselves with as they develop in their careers. In this post, I’m going to try to explain these terms, show the relationships between them, and discuss the role of mining engineers (and mine engineering work) in these.

Continue reading “On the connection between mine feasibility studies, valuation, and impairment analysis”

Implications of mining project cost overruns for QP liability

Cost overruns are not new to engineering projects. It is a problem when the scale and frequency is high. Unfortunately, the mining industry has a reputation for cost overruns during project construction. Different people have estimated mining cost overruns to nearly 40%. This is significant because all the CRIRSCO standards require capital and operating cost accuracy of ±25% and ±15% for prefeasibility and final feasibility studies, respectively. The US Securities and Exchange Commission’s (SEC’s) Regulation S-K 1300, in addition to this, asks qualified persons (QPs) to state the accuracy of their cost estimates in technical report summaries filed with the Commission. In this post, I am going to share my thoughts on the causes of these cost overruns and the implications for QP liability in public reports.

Continue reading “Implications of mining project cost overruns for QP liability”

Bull/Bear Markets and Mine Plans

Gold bullion

This week, I read several articles on gold’s bear run on the markets (you can find my favorite here). Several news outlets noted that gold dipped below $1,500/oz., which takes it below 20% of its peak price (the official definition of a bear market). This made me wonder how this trend, if it were to continue (not that I think it will), affects the current mine plans at gold mines. If the trend continues, those of you in long-range mine planning are going to be getting calls from your boss (or the corporate office) asking for revisions to the current plan using different gold prices. In this post, I intend to share my thoughts on how mine engineers account for market volatility in long-range mine plans.

Continue reading “Bull/Bear Markets and Mine Plans”