NEWS
MINERALS  

Top 3 reasons to avoid running project cost estimates in-house

Cost estimating is a niche practice in any industry; however the mining business brings unique challenges. Cost estimating must be considered at nearly every stage of a project’s development to inform investors and to de-risk decisions.

Investors need the comfort of knowing that project decisions are as unbiased as possible, from the first resource definition through to development.  Exploration and mining companies need the ability to make go/no-go decisions based on a sound combination of technical merit and economic understanding.

Given these needs, it is in the best interests of companies to select third party entities to conduct their cost estimates. 

Here are three key reasons to avoid conducting in-house mine cost estimates.

Independence

Independence is, by far, the number one reason to use third parties for cost estimating. Governments and investors alike often require the independent, unbiased approach offered by a third party.

Cost of Cost Estimates

There are real costs associated with conducting project cost estimates in-house. These costs are directly related to the time required for gathering cost data and the subsequent process of developing a spreadsheet-based model for reasonable estimates.

An individual dedicated 100% to the task of gathering costs and developing estimates may require months to complete the job, especially if the evaluator has not estimated costs for a project before. What is this cost to the company? It may very well exceed the cost to have an outside group perform the cost estimate, as well as critical time lost.

Expertise

Most mining engineers and many geologists and investment professionals are capable of conducting mine cost estimating tasks; however, it should be considered that unless these professionals are routinely involved in the process, aspects of the project may be missed in the estimate or the time involved with completing the task only serves to exacerbate the cost of cost estimates.

Cost estimators that are well versed in the niche will be more thorough and less likely to make costly mistakes or omissions. They are also more likely to be efficient and expedient.

Superior third-party consultants have mining industry experience and are comprised of a team of experts with practical knowledge in geology, engineering, mine development, mineral processing, cost estimating, and economic analysis. They also have an inherent understanding of the broader implications for quality cost estimates in the early stages of project development.

News No: 3163
Date: 2019/01/05 - 06:44
News Source: MINING.COM

industry  mining  geology  engineering 

Comments:

Leave a Comment:

   
   
   
 

Don’t give up on the diamond industry just yet

If diamond miner equities are a proxy, the sentiment surrounding the diamond industry is currently at historic low levels. Just in the last two years, a basket of diamond producer stocks was down 28.9% in 2018, following a decline of 17.3% in 2017 (see Figure 1 below).
 

Record $93B private capital flows into natural resources

Private capital tracker Preqin says in an update that contrary to expectations, 2018 was another bumper year for the industry, particularly for natural resources investments.
 

Vietnam’s Steel Imports Fall, Exports Surge in 2018

Vietnam’s steel import-export numbers are out and according to country’s customs data, Vietnam’s steel imports have registered a fall of 9.6% y-o-y basis in 2018 and is recorded at 13.6 MnT whereas in terms of value the same has increased by 9% in 2018 against previous year and is recorded at USD 9.9 billion.
 

Is China going to Ban Expansion of New Steel Projects in 2019?

According to the latest reports, China’s industry minister in an interview said that the country “will strictly prohibit” the expansion of new iron and steel projects in 2019.
 

Monster gold-mining deals pile pressure on those left behind

Mark Bristow’s tenure as boss of the world’s biggest gold miner might have been short-lived, but his message for smaller rivals just got even more pointed.
 

7 Things to Watch Out for in 2019

Iran: Sanctions to Eat into Exports?
Upcoming Events
Publications
 Mines & Metals

Mine & Business Today

 Scrap & Recycling

Ahangan

Our partners