As commodity prices continue to drop, financing deals in the mining industry are drying up. According to Business Vancouver, money raised in the mining sector in British Columbia alone dropped 40% compared with 2015: from $6.14 billion to $3.69 billion. Companies have to become more competitive in their search for money – but how?
One way to achieve that is through a truly “bankable” feasibility study. Typically, a bankable feasibility study is a comprehensive forward analysis of a project’s economics in the range of +/- 15% precision that seeks to convince investors of the credit-worthiness for project financing. The format prescribed by NI43-101 has largely remained stale for decades and that gives mining companies opportunities to differentiate themselves by preparing feasibility studies that run through many sensitivity tests and identify with objectivity the best-case scenario for profitability. Sensitivity analysis, such as Monte Carlo simulations, performed by an external vendor on the stockpile blending, can determine the optimal tonnage and time to blend the high grade and low grade stockpiles. That can result in savings in smelter terms and improvement in the project financials above and beyond back-of-the envelop calculations.
Magemi Mining Inc has developed Magemi Mine Optimizer with that purpose in mind. With a click of a button, the Optimizer runs through multiple blending strategies and finds the optimal smelter terms that maximize revenue and cash flows. It can also go through different scenarios in the mine plan, CAPEX, OPEX, prices, foreign exchange rate, and discount rate to produce a truly “bankable” solution that puts the competitive edge back in the hands of the miners.
The mining industry is tired of the gloom and doom and is ready to embrace forward-thinking technology solutions and consulting services in the search of competitive advantage and good financing terms.