Beatiful urn

Jon Stanton was appointed Chief Executive in October 2016. He originally joined the Board in 2010 as the Group’s Finance Director. Before Weir, Jon was a partner with EY, one of the world’s largest professional services companies, where he led global board-level relationships with a number of FTSE-100 multi-national companies. Jon is a Chartered Accountant and a member of the Institute of Chartered Accountants in England and Wales.

Types of Mining Industry Assets

Mining assets can be divided into two main categories: projects and operating mines.

1. Projects

Projects in the mining industry can be broken down into the exploration and feasibility stage, and the planning and construction phase.

Exploration and Feasibility

The purpose of exploration is to find ores that are economically viable to mine. It begins with locating mineral anomalies, after which discovering and sampling confirms or denies that there is a find. It can be further proven through drilling programs and resource definition.

2. Operating Mines

Once the operation is ready to begin, the asset officially becomes an operating mine. During this phase, the ore is extracted, processed, and refined to produce metal. This section forms the bulk of the focus of the financial model for an operating mine. Once all the ore has been extracted, the mine closure process begins, which can last for several years. The process includes clean-up, reclamation, and environmental monitoring.

Mining Industry Reserves and Resources

A mining company’s main assets are its reserves and resources, which are the ores that contain economic materials that are viable to mine. It is important to be able to read a reserve and resource statement and understand what information needs to be pulled from it to make the financial model. The table below contains information used to produce the annual cash flow that we build up in the financial model.

Mining Industry Reserves and Resources

A mining company’s main assets are its reserves and resources, which are the ores that contain economic materials that are viable to mine. It is important to be able to read a reserve and resource statement and understand what information needs to be pulled from it to make the financial model. The table below contains information used to produce the annual cash flow that we build up in the financial model.

Mining Life Cycle

If you look at the table from right to left, you are moving in increasing geologic certainty, meaning that geologists are becoming more confident about the amount of m

aterial that is contained in the ground. Moving from the bottom to top, you are increasing the economic viability, meaning that the ore at the top is more economically attractive to mine than the ore at the bottom.

In conclusion, the inferred resource is the least geologically certain and the least economically viable to mine, while the proven resource is the most geologically certain and the most economically viable to mine.

As we build a financial model, it is important to think about which part of the table we are pulling information from. We should risk-adjust the different components of the table to reflect the risks associated with them. Typically, an inferred resource will be excluded from the economic model due to the high degree of uncertainty associated with it.

The summation of the entire table is referred to as the company’s total resources.