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”

Regulation S-K 1300 and Limited QP Liability

When I teach my short course on the basics of Regulation S-K 1300 one of the discussion points that takes the most time is how S-K 1300 handles qualified person (QP) liability. Under S-K 1300, as with all the CRIRSCO standards, the QP is liable for misstating or omitting material facts. The Canadian National Instrument (NI) 43-101, section 6.4(2) and Item 3 of Form 43-101F1, allows QPs to disclaim certain items of the disclosure in the technical report if the QP is “relying on a report, opinion, or statement of another expert
who is not a qualified person, or on information provided by the issuer, concerning legal, political, environmental, or tax matters relevant to the technical report” so long as the QP provides certain disclosures. S-K 1300, on the other hand, only provides that the QP can disclaim certain items of disclosure that he/she received from the registrant.

Continue reading “Regulation S-K 1300 and Limited QP Liability”

What We Know About ESG Disclosures from Mine Safety Disclosures

Mining companies are under pressure from stakeholders to provide more relevant environmental, safety and governance (ESG) disclosures. Since 2010, the US Securities & Exchange Commission (SEC) has required a range of mine safety disclosures in an effort to elicit more ESG disclosures for companies with mining operations. After over a decade of this disclosure regime, I believe there are lessons we can learn from this subset of ESG disclosures. This post will summarize my thoughts on this.

Continue reading “What We Know About ESG Disclosures from Mine Safety Disclosures”

Free OEM training courses: How free are they?

Yours truly training at Tinaja Hills in 2007

I have attended my share of “free” training courses offered by original equipment manufacturers (OEMs) and/or their vendors. Most of them have been very good. But the one that stands out the most was the training portion of Caterpillar’s Quarry Days in 2006 at their Tinaja Hills facility near Tucson, Arizona. I attended sessions on fleet management using FPC and ground engaging tools, among others. And I remember thinking how much all this is costing CAT to provide these “free” courses.

Continue reading “Free OEM training courses: How free are they?”