An introduction to Mining
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Transcript
Mining is fundamentally about how to get a resource out of the ground. We'll be looking at the CAPEX and the OPEX associated with it, the complexity or simplicity of the mining operation, the safety aspects, and the timelines to development.
Remember: quite often, an exploration company has had no real experience of doing this.
An exploration company will often take the numbers from the studies that it does, from the PEA, the PFS, even from the feasibility study, and it will use those numbers in valuation cases, which are often very attractive, but actually, because they're not real-world numbers there may be omissions in there.
We look at a lot of benchmarking to ensure that the projected projects coming into development reflect the real world. Quite often, if you look at the chart of the cost of companies which are in production and the cost of future production, it's really interesting to see how all of the new mines coming in will be lower CAPEX, with lower operating costs, and it's going to transform the cost curve of the industry. It will be brilliant and this new company will be great.
In reality, what actually happens is that when the project is really brought into production, the schedule changes or changes of scope to CAPEX- which means that they actually forgot to include the key things in the CAPEX in the first place.
We'll look at that from a mining perspective and also look at it in a separate episode on the mineral processing side of things.
