Resource evaluation from metals and minerals to coal - Deutsche ...

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Resource evaluation from metals and minerals to coal - Deutsche ...

Serving the World’s Resource Industries

Resource Evaluation from Metals and

Minerals to Coal and Oil Sands

Bernd Teigler-DMT GmbH & Co. KG

Keith M c Candlish-Associated Geosciences Ltd.

PDAC March 7 th , 2012


Resource Project Evaluation

• Technical disclosure for mining projects is subject to

increasing regulatory scrutiny.

• Canada’s NI 43-101 updated July 2011.

• JORC Code being reviewed under pressure from the ASX

• Sign off by experts (“Qualified” or “Competent” Persons)

required.

• Result is an increasing complexity of technical disclosure

making resource project evaluation more difficult.

www.associatedgeosciences.ca


Grass Roots

20.03.2012 | Rohstoffe | Folie 3

Rehabilitation

Resource Cycle

Brownfields

Mining

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Advanced

Evaluation - Feasibility

Construction


Project Risk

High

Low

Resource Project Value Chain

Grass Roots-Early Stage Exploration

Advanced Exploration-Resource Delineation

Preliminary Economic Assessment (Scoping Study)

Feasibility Stage

Investment/Construction Decision

www.associatedgeosciences.ca

Low

High

Investment Required


Grass Roots

Resource Evaluation Costs

Advanced

Evaluation - Feasibility Construction

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Investment Timing & Risk

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Rare Earth Elements-Case Study

• Rare earth elements (REE) are very much of interest as

resource projects.

• 15 lanthanide elements plus scandium & yttrium.

• PRC controls 97% of production despite having less than 40%

of the resources.

• Actually very common in the earth’s crust (cerium is as

common as copper).

• Elements are very mobile and concentrations or

accumulations are very rare.

www.associatedgeosciences.ca


Carbonatite

REE Occurrences

Pegmatite

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Heavy Mineral Sands


REE Mineralogy

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Source: BGS: REE - 2010


Status of REE Projects in Canada

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CIM Valuation Methodologies at Various Project Stages

Valuation Exploration Mineral Development

Resource

Production

Approach Properties Properties Properties Properties

Income

Market

Cost

No

Yes

Yes

In some

cases

Yes

In some

cases

www.associatedgeosciences.ca

Yes

Yes

No

Yes

Yes

No


• Lots of companies

• Lots of projects

REE in Canada-Summary

• Difficult corporate structures (JV, option agreements,

royalties)

• Projects are multinational

• Mostly hard-rock deposits with:

– Complicated geometries/ore grade distribution

– Complex mineralogy

– Relatively small

www.associatedgeosciences.ca


Valuation of REE Properties

• Majority of properties are relatively advanced.

• Requires a multi-disciplinary team to evaluate (geologists, mining

engineers, process engineers, financial specialists).

• An income approach-discounted cash flow models (DCFROI) the

most likely methodology to be used.

• DMT and its’ subsidiaries have the necessary expertise to provide

full project life cycle evaluation world-wide

www.associatedgeosciences.ca


THANK YOU FOR YOUR

ATTENTION!

www.associatedgeosciences.ca

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