OUR SERVICES:
DUE DILIGENCE
CHEMECH'S CREDENTIALS
Clients looking to purchase or fund mining assets need to assemble high quality due diligence teams to reliably assess the risks and opportunities that the asset may present. Data rooms for these assets contain a large amount of information, and only those with substantial experience in the right areas can sift through the data and provide reliable assessments in the short time frame made available.
Chemech’s long and successful careers and their deep understanding of metallurgy and mineral processing through all stages of a project’s life cycle, means that they can add significant value to these due diligence teams.
With decades of real operational and project experience, Chemech don’t just review the data, they uncover the hidden technical risks that can make or break your investment decision.
OUR EXPERTISE
While conducting due diligence for a number of mining asset purchases, Chemech has uncovered some common issues that result in either overstated asset value, or unacceptably high risks:
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The orebody is not suitably represented by the metallurgical testwork samples. It is common to see insufficient sample density, limited or no variability samples, poor spatial representation, and insufficient lithological and grade representivity.
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The metallurgical testwork program does not suitably characterise the ore and its metallurgical response.
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The process design does not reflect the metallurgical testwork program outcomes.
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The financial model inputs do not reflect the metallurgical testwork results and/or the process design.
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Capital and operating cost assumptions are often overly optimistic, not reflective of the testwork or process design, and not supported by appropriate benchmarking.
OUR DUE DILIGENCE OFFERING
Detailed assessment of the metallurgical testwork to determine whether:
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the samples tested appropriately represent the orebody
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the testwork appropriately characterises the metallurgical response of the ore types
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the testwork results have been appropriately interpreted
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the process design reflects the correct testwork interpretation
Process design review including whether the optimal flowsheet been selected and whether the selected flowsheet and process design criteria appropriately reflect the optionality and design margins required by the variability in metallurgical response.
Plant layout and design risks and opportunities.
Capital cost review including: Does the estimating method and inputs meet the prescribed accuracy? Is the design maturity sufficient for the level of estimate? What is missing from the estimate? What are the key risks regarding capital cost escalation as the project develops?
Operating cost reviews including: the suitability of estimating method with regard to stage of study; detailed review of the key inputs driving the majority of the opex; identification of the risks in opex escalation; how well does opex benchmark with similar operations?
Other technical risks related to ore processing, including tailings transport and deposition, environmental risks, potential water balance issues, etc.
OUR DUE DILIGENCE IN PRACTICE
In 2021, Chemech joined the due diligence team of a major international gold company assessing asset purchases to expand their mining portfolio. Chemech completed the metallurgical and mineral processing components for 16 due diligence assessments on potential precious and base metal asset purchases. Chemech added significant value to the multi-disciplinary due diligence team, and the company ultimately purchased a significant copper deposit in 2022.