Developing a Mining Business Case for Investment: Methods
In the current business environment only a strong mining business case will be able to access raised capital. The mining business case, from orebody to market, is fundamental to the success of raising capital for mining project and operations. When the mining business case is strong, large returns can be made for investors, and when it is flawed, large sums of money are lost.
This chapter covers the process of developing a mine, from exploration, feasibility to production and closure, the structure of the business case which is driven by the market and the orebody, the team as an integral part of the success of the business case, legal structuring of the mining business, the financial analysis of the mining business case, valuation methods to enable successful negotiation between the mine developer and the investor, the identification and management of risks in mining, the importance of environmental and social sustainability to attract mining capital against the poor track record of many mining project of the past, the plan and realty of implementing mining projects and importance of questioning and defending the business case to investors.
The business case is summarised in a mining project matrix, which will highlight the strengths to focus on and weaknesses to be addressed, enabling the mine developer to approach the market for capital with confidence.
- 5.Mining Journal. The Global Mining Finance Guide 2014.Google Scholar
- 7.Sanderson, H. (2018, August). Coal industry between a rock and a hard place. Financial Times. Google Scholar
- 44.Seeger, M. (2007). Development of a strategic and tactical game plan for junior mining companies. PhD thesis, University of the Witwatersrand, South Africa.Google Scholar
- 46.Course Notes. (2005, August). Wits CEE course: Financing of mining projects. Course held at the University of the Witwatersrand.Google Scholar
- 50.Cooper, D., & Chapman, C. (1987). Risk analysis for large projects – Models, methods and cases. Chichester: Wiley.Google Scholar
- 51.Seeger, M. (1999). MSc Eng project report: Identification, quantification and simulation of risks facing Greenfields mining projects in sub-Saharan Africa. Johannesburg, South Africa: University of the Witwatersrand.Google Scholar