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By Varun Persaud
In the mining industry, comprehensive project review and due diligence are essential for navigating the complexities of mining projects and ensuring their success. This involves various services, including leadership alignment, data review, executing due diligence assessments, basis of estimate validation, and constructability reviews. Each of these elements plays a crucial role in addressing the inherent risks and uncertainties associated with mining projects, thus creating the potential to de-risk them from the perspective of potential financiers.
Leadership alignment is critical for ensuring all stakeholders agree regarding project development and financing strategies. This involves enhancing communication, strengthening positive connections, and boosting operational efficiency through workshops and other collaborative efforts. These efforts help address frustrations among project personnel by aligning their goals and expectations with the overall project strategy, thus mitigating stagnation in project sanctions.
Thorough development of engineering deliverables and associated data review are essential for identifying and mitigating budget risks. Progression of engineering discipline scopes before making an entire construction decision helps avoid potential schedule delays by ensuring that all technical aspects of the project are thoroughly evaluated and clarified. This proactive approach helps secure financial institutions’ confidence, making them more likely to extend capital for new ventures.
Execution due diligence assessments are vital for ensuring that all aspects of a mining project are ready for implementation. This includes validating the basis of estimates and conducting comprehensive data reviews to ensure that budgets are accurate and realistic. By addressing potential risks and uncertainties early in the project lifecycle, mining projects can instill greater confidence among investors and increase their chances of securing capital.
Constructability reviews and construction readiness assessments help streamline project execution by identifying and addressing potential issues and site needs before construction begins. This reduces costs and schedules, ensuring the project stays on course and budget. These reviews also demonstrate a project’s readiness to proceed with all critical procurement and contracting commitments in place, helping to overcome financial institutions’ reluctance to provide the necessary funding.
Most financial institutions want to see project developers have all the requisite systems and tools before proceeding with a loan to ensure that project oversight and governance are maintained throughout execution. While vital to the success of on-budget and on-time project delivery, these systems and tools can be very costly, especially for junior mining companies. The ability to track, drill into, and ultimately address deviations from control budgets and baseline schedules is mandatory in today’s project management environment, and traditional lenders have also identified their value.
By focusing on leadership alignment, data review, execution due diligence assessments, and constructability reviews, mining projects can address the inherent risks and uncertainties associated with mining projects. This proactive approach helps secure financial institutions’ confidence, making them more likely to extend capital for new ventures. Ultimately, a thorough approach to project review and due diligence is crucial for ensuring the success of mining projects and overcoming the capital challenges they face.
TMG specializes in executive and operational consulting for the mining and oil and gas sectors. It offers tailored oversight and strategic guidance across all project stages to ensure optimal outcomes from conception to execution.
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