Feasibility Study Checklist

Guideline

Function: Study Management Process owner: Peter Hrstich

Version: 1 Date: 8 September 2014

Table of Contents
1 Introduction 1
2 General Project Background 1
2.1 Project Scope 1
2.2 Project Background 1
2.3 Project Constraints 2
2.4 Orebody Location 2
3 Site Conditions 4
3.1 Climatic 4
3.2 Geography 5
3.3 Seismology 5
3.4 Hydrology 6
3.5 Oceanography 6
3.6 Access and Transport 7
3.7 Power Supply 8
3.8 Water Supply 8
3.9 Utilities 9
3.10 Construction Materials 9
3.11 Buildings 10
3.12 Availability and Capability of Regional Services 10
3.13 Availability and Capability of Regional Equipment Suppliers 11
3.14 Concurrent Projects 11
4 Exploration and Geology 12
4.1 Background 12
4.2 Exploration 12
4.3 Sampling 13
4.4 Calculation Method 14
4.5 Geological Description 14
4.6 Mineralisation 15
5 Beneficiation 15
5.1 General Background 15
5.2 Sampling 16
5.3 Assaying 17
5.4 Process Development 17
5.5 Evaluation 18
6 Personnel 19
6.1 Local Labour 19
6.2 Expatriate Labour 20
6.3 General Labour Relations and Conditions 20
7 Governmental Policy and Regulations 21
7.1 Government Legislation 21
7.2 Political Situation 22
7.3 Local Government 23
8 Conservation 23
8.1 Governmental Regulations 23
8.2 Water Pollution 24
8.3 Air Pollution 24
8.4 Land 24
8.5 Other Considerations 25
8.6 Environmental Aspects of the Operation 25
8.7 Environmental Aspects of Beneficiation 26
8.8 Aspects of Process Waste Disposal 26
9 Marketing 27
9.1 Market Characteristics for all Products Derived from Mining Operation 28
10 Financial Evaluation 31
10.1 Capital Costs 31
10.2 Operating Costs 32
10.3 Market and Revenue Data 33
10.4 Production Data 34
10.5 Taxes and Royalties 35
10.6 Investment Grants and Subsidies 35
10.7 Company Data 35
10.8 Other Considerations 36
10.9 Financing and Capital Structure 36
10.10 Dependent and Subsidiary Information 37
10.11 Evaluation Criteria 37
11 Revisions 38
1 Introduction
The contained Checklist indicates the factors which should be considered when undertaking a
Feasibility Study.

The information gathered aims to:

 Set the background to the Project.

 Assess the extent and reliability of any test work performed.
 Appraise the site under consideration for its amenability to further development.

The Checklist is divided into a number of different topics, under which points for consideration
are itemised. Essentially the Checklists deal with the collection of new data and the examples
given in the Notes provide for the type of information generally required.

Since each Project stands alone, the Checklist should be considered as a guide only, being
adapted to the particular scope of an individual Project.

2 General Project Background

Checklist

 Company Name
 Ownership
 Project Scope
 Project Background
 Orebody Location.

Notes

2.1 Project Scope

2.1.1 Responsibilities and terms of reference:

 Ausenco specific responsibility
 Client involvement
 other organisations and their involvement
 identity of key personnel
 critical dates and Project timetable
 organisation and liaison with Client and other firms involved on Project.

2.2 Project Background

2.2.1 Literature search for similar orebodies (mining/processing)

 any information having a bearing on the Project from previous Consultants/Engineers
 summaries of field investigation already completed

Study Management © Ausenco 2014. All rights reserved. 1 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  possible mining plans
 process route alternatives
 final product alternatives
 current ore reserve estimates.

2.3 Project Constraints

2.3.1 Corporate (preliminary conceptual plan):

 proven in-situ reserves
 Project life required
 annual ore production desired
 contained value of in-situ reserves
 mineral values
 discount rate for financial evaluation
 Client preference for mining and process methods.

2.3.2 Governmental policies and regulations:

 mining regulations
 environmental regulations
 labour restrictions (local/expatriate)
 mining/process equipment import restrictions
 safety and health regulations
 royalties, taxes and other financial controls
 regulations controlling use of local services and facilities
 mining agreements previously negotiated
 history of re-negotiation of agreements
 general political climate regarding mine operations
 governmental participation.

2.3.3 Geographical:
 site location
 climatic effects
 topography
 access
 water supply
 area available for establishment of mine and infrastructure.

2.4 Orebody Location

2.4.1 The description of the site location should be precise and include:
 country, province

Study Management © Ausenco 2014. All rights reserved. 2 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  geographical coordinates
 position in relation to an easily defined regional landmark
 place-fix map.

2.4.2 The description of the site location should include accessible support facilities and
regional infrastructure:
 power generating stations
 electrical grid network
 gas reticulation
 water reticulation and supply
 fuel depots and sources
 ports
 road network
 rail network
 air terminals
 construction services
 engineering services (heavy, light)
 industrial sites
 communities
 other mining operations
 commercial outlets
 communications network.

2.4.3 Site ownership:

 mining rights
 surface rights
 access
 water rights (surface/underground)
 timber rights
 agricultural rights
 grazing rights
 recreation
 National reserves.

2.4.4 Authority controlling site access and use:

 Federal
 State
 Municipal
 Private.

Study Management © Ausenco 2014. All rights reserved. 3 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
2.4.5 Conditions for acquisition:
 outright purchase
 lease
 royalty
 compensation for use loss by others
 multiple land use requirements.

3 Site Conditions
Checklist

 Climatic
 Geographical
 Political
 Regional Infrastructure
 Access and Transport
 Buildings
 Storage.

Notes

3.1 Climatic

3.1.1 The general climate description of the region:

 tropical
 temperate
 arid
 arctic.

3.1.2 The daily and seasonal statistics, including variation for:

 temperature (wet and dry bulb)
 rainfall
 humidity
 winds (force and direction)
 average daily hours of sunshine
 evaporation.

3.1.3 Special climatic conditions experienced in the region, including the average duration or
the frequency of occurrence, of the condition:
 cyclones
 monsoonal rain
 flooding
 drought

Study Management © Ausenco 2014. All rights reserved. 4 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  dust storms
 snow
 ice
 winter freeze
 rain shadow effects.

3.2 Geography

3.2.1 The topographical description should cover the:

 general region
 Project site
 access routes to Project site
 possible facility locations.

3.2.2 Topographical features:

 mountainous
 desert
 plateau
 coastal plain
 rivers
 swamps
 reefs
 vegetation
 soil characteristics.

3.2.3 Detailed-site topography:

 site surveys and contour mapping
 soil bearing pressure
 regional aerial maps
 seismic surveys
 test excavations
 shallow drilling.

3.3 Seismology

3.3.1 General information, where applicable, on seismic activity in the region:

 frequency
 magnitude
 construction codes already in force
 recorded effects of past activity
 location of epi-centres of past activity
 source of data.

Study Management © Ausenco 2014. All rights reserved. 5 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
3.4 Hydrology

3.4.1 Hydrological monitoring and data for:

 water supply (process and potable)
 flood protection
 hydro-electric power
 drainage
 effluent disposal
 location studies.

3.4.2 Relevant hydrological data:

 source of most current data
 location of monitor stations
 site rainfall statistics
 site flood statistics
 river stream-flow (peak, normal and minimum)
 flood run-off rates
 water analysis
 depth of water table.

3.5 Oceanography

3.5.1 Relevant data required for examination of:

 existing ports
 potential port locations
 wharf design
 navigation
 ship size and handling capability
 shore based facilities
 dredging.

3.5.2 Oceanographic data:

 source of information
 waves and swell conditions
 tides
 currents
 harbour surveys
 water depth
 tsunami protection.

Study Management © Ausenco 2014. All rights reserved. 6 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
3.6 Access and Transport

3.6.1 Ports
 General information:
o location and distance from site
o access between ports and site
o present utilisation of port facilities
o port authority regulations and control
o responsibility for new port establishment.
 Port capability:
o maximum ship size
o loading/unloading capability
o storage facilities
o available land.
 Handling facilities for:
o heavy plant items
o imported construction items
o process materials
o operational supplies
o exporting products.

3.6.2 Roads
 General road network in the region:
o in relation to site
o access from ports, cities and services.
 Road details:
o surface
o width
o load capacity
o gradients
o bends
o responsibility for new road construction
o road taxes, levies.

3.6.3 Railway
 General railway network:
o in relation to site
o within the region
o location of nearest rail heads
o loading/unloading facilities

Study Management © Ausenco 2014. All rights reserved. 7 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
 o loading limits
o freight rates
o responsibility for new rail construction
o responsibility for railway operation and control
o utilisation of existing facilities.

3.6.4 Air Terminals

 General:
o location of major air terminals
o aircraft capability at terminals
o access to terminals from site
o responsibility for terminal operation and control
o customs control and regulations
o responsibility for new airfield construction.

3.6.5 Inland Waterways

 Details of navigable inland waterways:
o rivers
o lakes
o estuaries.
 General information:
o location and access to site
o maximum ship or barge size handled
o location of wharves
o extent and capability of loading and unloading facilities
o responsibility for waterway operation and control.

3.7 Power Supply

3.7.1 Availability of power:

 location of power generating stations in the region
 capacity and utilisation of above stations
 power distribution grid system in relation to site
 responsibility for operation and control of power generation and distribution
 frequency and voltage of power grid system
 current cost per power unit.

3.8 Water Supply

 Source of water supply at site:
o locations
o potable source availability
o industrial source availability

Study Management © Ausenco 2014. All rights reserved. 8 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
 o sustained supply rate (maximum, normal, minimum)
o availability of water analysis
o responsibility for operation and control of water
o supply system
o cost per cubic metre.

N.B.: Refer Hydrology

3.9 Utilities

3.9.1 General range of utility supplies:

 fuel oil
 gas
 compressed air
 steam
 nitrogen
 acetylene
 oxygen
 coal/coke.

3.9.2 Availability of utility supplies:

 at site
 within region
 imported
 cost per unit
 supply capability of local sources.

3.10 Construction Materials

3.10.1 Location relative to site of sources of supply of:

 sand
 aggregate
 cement
 timber
 steel
 asphalt
 fixtures and fittings.

3.10.2 Details required:

 total supply capability
 rate of supply, unit cost.

Study Management © Ausenco 2014. All rights reserved. 9 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
3.11 Buildings

3.11.1 Details of buildings currently at site:

 offices
 laboratories
 workshops
 living quarters
 pilot plant
 warehouses
 hospital/first aid
 canteens.

3.11.2 Availability and suitability of buildings for:

 use during construction
 incorporation within permanent facilities.

3.12 Availability and Capability of Regional Services

3.12.1 Service information required:

 location and distance from site
 conditions of access to site
 facilities available
 workforce
 evidence of service capability
 present/anticipated utilisation of facilities and work force
 potential utilisation for Project
 service costs and contract basis.

3.12.2 Type of service:

 earthmoving
 building construction
 engineering fabrication/erection/installation
 electrical fabrication/erection/installation
 instrument fabrication/installation
 civil engineering
 exploration
 mining evaluation
 metallurgical evaluation and testing
 analytical
 communications
 pollution control
 personnel management.

Study Management © Ausenco 2014. All rights reserved. 10 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
3.13 Availability and Capability of Regional Equipment Suppliers

3.13.1 Supplier information required:

 location and distance from site
 nature of access to site
 type and range of equipment handled
 level of stock held at location
 supply capability
 after sales service
 spares held at location
 unit costs ex-warehouse
 freight costs to site
 delivery time.

3.13.2 Equipment type:

 material handling
 transport
 mining
 processing
 technical engineering
 electrical
 instrumentation
 analytical
 construction
 pollution control
 fuel storage and reticulation
 office equipment.

3.14 Concurrent Projects

3.14.1 Existence of other major Projects:

 location
 nature
 companies involved
 construction schedules.

3.14.2 Level of competition for local sources of:

 labour
 construction materials
 process materials
 transport facilities

Study Management © Ausenco 2014. All rights reserved. 11 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  power
 water
 utilities
 finance
 engineering facilities
 government expenditure
 import/export levies
 general operating supplies.

4 Exploration and Geology

Checklist

 Background
 Exploration
 Geological Description
 Ore Reserves.

Notes

4.1 Background

General information:

 location of orebody
 search of local geological literature
 area of concern
 previous exploration history
 who did exploration/geological interpretation
 geological survey reports
 pictorial representation, plans and sections.

4.2 Exploration

4.2.1 Exploration techniques employed:

 geological surface and underground mapping
 aerial photographs
 geophysical
 geochemical
 exploratory drilling and development
 down-the-hole surveys.

Study Management © Ausenco 2014. All rights reserved. 12 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
4.2.2 Determination of in-situ reserves:
 measured
 indicated
 inferred
 definition of terms-employed.

4.3 Sampling

4.3.1 Sample source:

 drill core
 bulk from adit
 bulk from exploratory shaft/development
 bulk from surface workings.

4.3.2 Techniques
 sample logging
 total sample weight
 statistical analysis of sample distribution
 core recovery
 handling and storage
 assay methods
 assay repeatability
 confidence levels of samples
 confidence levels of assays
 frequency of assay data
 Calculation of Reserves.

Data:

 position of drill holes/development

 collar elevations
 drill deflections
 angle of intersection
 cut-off criteria
 relationship between drill/development spacing and areas of influence
 distribution of mineral values
 correlation between mineral values and orebody
 characteristics
 correlation of drill values with bulk samples
 grade trends
 tonnage trends
 rock density.

Study Management © Ausenco 2014. All rights reserved. 13 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
4.4 Calculation Method

Conventional methods:

 weighted volume
 prismoidal volume
 contour volume.

Statistical methods,

 Computer orientated methods

 Limits of error and confidence levels
 External assessment and conclusions.

4.5 Geological Description

4.5.1 General geological description:

 regional geological structure
 geology of orebody
 geology of surrounding rock mass
 mineralisation and genesis of deposit
 responsibility for geological interpretation.
 Physical structure of orebody:
o physical dimensions and attitude
o strike
o true width
o dip
o plunge.

4.5.2 Geological structure of orebody:

 nature and spatial distribution of overburden
 nature and spatial distribution of oxide zones
 nature and spatial distribution of alteration zones
 secondary enrichment
 replacement
 permeability
 ground water
 faulting
 fracture
 jointing
 parting
 bedding

Study Management © Ausenco 2014. All rights reserved. 14 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  field stress conditions
 definition of rock types
 relationship between mineralisation and fault, fracture and shear zones.

4.6 Mineralisation

4.6.1 General mineralisation as orebody average, and by rock type or zonal distribution:
 mineral suite
 modal analysis
 elemental analysis
 physical and chemical mineral properties
 mineral association and texture
 liberation characteristics
 relationship between rock types and mineralisation
 relationship between hydrothermal alteration and mineralisation.

4.6.2 Techniques employed in Mineralogical Study:

 sample source
 sample weight
 chemical
 petrographic
 mineralogic
 x-ray diffraction
 electron probe micro-analysis
 assessment of valuation techniques
 acceptability of techniques
 assessment of confidence levels of sample weight and quantifiable results.

5 Beneficiation
Checklist

 General Background
 Sampling
 Assaying
 Process Development
 Evaluation.

5.1 General Background

 project scope for beneficiation phase
 literature search for beneficiation of similar orebodies

Study Management © Ausenco 2014. All rights reserved. 15 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  preliminary conceptual plan:
o life of mine
o mineable ore reserves
o annual plant throughput
o annual product tonnage
 process route alternatives
 final product alternatives
 broad market specifications for similar products (refer Section 9)
 market demand for alternative products (refer Section 9)
 project constraints (refer Section 2).

5.2 Sampling

5.2.1 Source of samples employed for testing

 borehole core
 drill cuttings
 drill sludge
 bulk from adit
 bulk from exploration shaft/underground development
 bulk from surface workings.

5.2.2 Sampling procedures:

 sample logging and identification
 method of sample selection
 method of compositing
 sampling equipment used
 preparation of test samples
 standardised sample weights
 preparation of assay samples
 responsibility for sampling.

5.2.3 Sample storage and handling:

 open stockpile
 sealed container
 open container
 sample deterioration
 chemical changes
 physical changes
 time interval between sample selection and testing
 assessment of sample storage on test response.

Study Management © Ausenco 2014. All rights reserved. 16 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
5.2.4 Sampling accuracy:
 distribution of text samples through orebody
 frequency of samples
 confidence level of unit sample weights used for testing relative to total sample weight
 statistical treatment of sampling errors.

5.3 Assaying

5.3.1 Analytical procedures:

 assay sample preparation
 analytical methods and techniques used
 analytical equipment used
 responsibility for assaying and reporting.

5.3.2 Assaying accuracy:

 repeatability of assay methods
 external checking of results and methods
 assaying errors
 confidence levels for assay error limits
 frequency of assays.

5.4 Process Development

5.4.1 Scale of testing:

 laboratory bench scale
 pilot plant
 operational plant
 batch/continuous.

5.4.2 Type of test:

 comminution
 sizing/screening
 classification
 flotation
 gravity separation
 magnetic separation
 electrostatic separation
 leaching
 thickening
 filtering.

Study Management © Ausenco 2014. All rights reserved. 17 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
5.4.3 Test procedures:
 source of test samples
 total sample weight tested
 unit test sample weights used
 testing flow-sheet
 test parameters and variables
 reagents used
 product examination
 assaying of test products.

5.4.4 Test equipment:

 type
 manufacturer
 size
 capacity
 fixed operating parameters
 reliability
 suitability of equipment in deriving realistic design parameters.

5.5 Evaluation

Assessment:

 availability of results
 reproducibility of test procedures and results
 external confirmation of methods and results
 accuracy of material balances and handling of weight losses
 suitability of test methods in simulating unit processes
 assumptions made in test program
 distribution of test samples through orebody
 frequency of test samples
 examination of metallurgical response of different rock/zonal
 types present in orebody
 examination of broad metallurgical response of orebody by composite testing
 correlation between drill core response and bulk sample response.

Study Management © Ausenco 2014. All rights reserved. 18 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
6 Personnel
Checklist

 Local Labour Sources

 Expatriate Labour Requirements
 Labour Relations and Conditions.

Notes

6.1 Local Labour

6.1.1 Availability of local labour for:

 construction
 mining
 processing
 engineering services
 administration.

6.1.2 Skill levels available for above:

 professional
 skilled, artisan
 semi-skilled
 unskilled.

6.1.3 Sources of local labour:

 educational institutes
 established mining industries
 heavy industry
 public works
 commerce
 agriculture.

6.1.4 Possible utilisation of local labour:

 current levels of employment
 state of local economy
 desirability of site location
 needs for employment incentives
 governmental policies on employment
 training requirements
 level of competition for similar labour skills.

Study Management © Ausenco 2014. All rights reserved. 19 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
6.2 Expatriate Labour

6.2.1 Need for expatriate labour for:

 construction
 mining
 processing
 engineering
 administration.

6.2.2 Expatriate skill levels required:

 professional
 skilled, artisan
 semi-skilled
 unskilled.

6.2.3 Conditions for expatriate labour:

 governmental policies on imported labour
 site allowances
 remittance of earnings
 standard of living requirements
 personal taxation
 other employment incentives
 existing conditions for expatriate labour force (if any).

6.3 General Labour Relations and Conditions

6.3.1 Pay scales:

 rates in other mining operations
 rates in primary industry
 rates in commercial fields
 rates in heavy industry
 rates in construction industry
 legal minimum wage rates
 relevant allowances and penalties for unsociable hours and public holidays.

6.3.2 Training requirements:

 for local labour
 for expatriate labour
 government policies/regulations
 facilities required for on-site training
 possibilities of training with operating mines in the region

Study Management © Ausenco 2014. All rights reserved. 20 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  trade apprenticeship schemes
 requirements for external training.

6.3.3 Industrial relations:

 industrial relations legislation
 in regional mining operations
 in engineering heavy industry
 general regional situation.

6.3.4 Unionisation:
 number and type of unions
 compulsory membership
 voluntary membership
 government policies
 job demarcation
 history of union negotiation within the mining industry or similar industries
 history of strike action
 likely difficulties.

6.3.5 Ethnic relations:

 religious differences likely to affect employment policy
 ethnic differences likely to affect employment policy
 work restrictions
 religious/public holidays.

7 Governmental Policy and Regulations

Checklist

 Government Legislation
 Political Situation
 Local Government

Notes

7.1 Government Legislation

7.1.1 Proposed or legislated national governmental regulations controlling:

 exploration
 mining
 extraction
 financing

Study Management © Ausenco 2014. All rights reserved. 21 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  local participation
 labour/employment
 environmental protection/ conservation
 transport
 distribution of utilities
 immigration
 social welfare
 import-export regulations.

7.1.2 Use of local facilities and services:

 commitment to use local industry
 commitment to utilise local equipment
 encouragement of local development of agriculture to supply foodstuffs
 commitment to utilise existing industrial/social infrastructure within site locale.

7.1.3 Compensation:
 to persons displaced or upset by mine activities
 for property damage
 for crop damage.

7.1.4 Safety requirements:

 containment of hazardous operations
 protective equipment, clothing and general enforceable standards
 employee medical checks
 sanitation.

7.2 Political Situation

7.2.1 Political situation as regards:

 the national situation
 the local situation
 political consequences of previous mining operations
 future trends in the political climate.

7.2.2 Mining agreements:

 details of past mining regulations
 history of re-negotiation of mining agreements
 current trends in negotiations for mining operations
 outcome of preliminary liaison between Client and national government.

Study Management © Ausenco 2014. All rights reserved. 22 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
7.3 Local Government

7.3.1 Proposed or legislated policy which diverges from the national legislation for:
 state government
 municipal government
 local governmental attitudes to mining operations
 outcome of any preliminary liaison between Client and government
 use of local labour
 use of local services and industry
 use of accessible industrial/social infrastructure.

8 Conservation
Checklist

 Governmental Regulations
 Company Policy and Practices
 Environmental Aspects of Operation
 Aspects of Process Waste Disposal.

Notes

8.1 Governmental Regulations

8.1.1 Existing and proposed environmental protection legislation applicable to the region:
 Federal
 State
 Municipal.

8.1.2 Implementation and control of legislated requirements applicable to the mining

operation:
 enforcement agencies
 monitoring and control
 delineation of environmental control zones
 criteria for specific mine pollutants
 community attitudes and involvement.

8.1.3 Regulations enforceable and applicable to mine site location including:

 water pollution
 air pollution and noise
 land and general ecology
 other considerations.

Study Management © Ausenco 2014. All rights reserved. 23 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
8.2 Water Pollution

8.2.1 Physical Pollutants:

 solid particulate matter
 minerals and other chemical substances
 organics
 radio-active substances
 heated effluents.

8.2.2 Chemical Pollutants

 acid mine drainage
 process waste by-products
 heavy media reagents
 other process reagents
 domestic sewage
 infectious agents
 plant nutrients.

8.3 Air Pollution

8.3.1 Particulates:
 dust
 fog
 soot.

8.3.2 Gases:
 hydro-carbons
 carbon monoxide
 sulphur oxides
 nitrogen oxides
 ozone.

8.3.3 Noise:
 blasting
 earthmoving equipment operation
 process equipment operation
 power generation
 vehicles.

8.4 Land

Regulations applicable to:

 open cast mining

Study Management © Ausenco 2014. All rights reserved. 24 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  underground mining
 solution mining
 alluvial mining
 ground stability
 erosion
 destruction of flora and fauna
 disfigurement and aesthetic considerations
 effluent disposal,
 coal refuse fires.

8.5 Other Considerations

8.5.1 Containment of hazardous operations

8.5.2 Disposal of mine waste products:

 handling
 storage
 disposal
 control and monitoring.

8.5.3 Delineation of environmental control zones:

 urban
 agricultural/rural
 industrial
 flora and fauna reserves
 specific regulations applicable to each zone.

8.5.4 Financial and technical support facilities available in the region:

 governmental agencies
 company/group establishment
 private specialist organisations
 educational institutions.

8.6 Environmental Aspects of the Operation

Likely environmental impact of mine operation on surrounding regions.

8.6.1 The effect of the mine operation on local values

 cultural
 recreational
 scenic
 historic
 ecological.

Study Management © Ausenco 2014. All rights reserved. 25 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
8.6.2 Specific aspects of the operation which might effect/contravene pollution control
regulations:
 air and noise pollution
 hazards to public health and safety
 water pollution
 land stabilisation
 land rehabilitation and restoration
 hazards to local flora and fauna
 hazards to local agriculture.

8.6.3 Impact of environmental regulations on:

 mine operational locations
 mining methods and equipment selection
 process equipment and process route adopted
 construction and external appearance of surface buildings
 waste disposal
 site appearance and upkeep
 material and product handling
 overall commercial feasibility
 overall technical feasibility.

8.7 Environmental Aspects of Beneficiation

Effect of environmental aspects on process engineering and design:

 location of process facilities

 layout of process facilities
 construction and external appearance of process buildings
 process route employed
 flow-sheet complexity
 selection of process equipment
 selection of material handling equipment
 nature of final products and product specifications
 selection of process waste disposal methods and equipment
 aesthetic compatibility
 worker environment and health.

8.8 Aspects of Process Waste Disposal

8.8.1 Solids:
 size segregation
 chemical and physical properties

Study Management © Ausenco 2014. All rights reserved. 26 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  utilisation of waste solids
 disposal
 transportation
 stabilisation
 covering and re-vegetation.

8.8.2 Liquid or liquid borne waste:

 liquid-solid separation
 chemical and physical properties
 chemical treatment employed
 physical treatment employed
 by-product recovery
 liquid sludge waste disposal methods
 waste dilution methods.

8.8.3 Gaseous or airborne waste:

 particulate material collection
 gas adsorption
 condensation
 collector-product treatment
 activated carbon absorption
 radio-active dusts.
 Noise level control:
o special plant construction and layout
o noise attenuation
o worker protection
o neighbourhood relations.

9 Marketing
Checklist

 Market Size
 Market Structure
 Market Trends
 Market Demand
 Overseas Markets
 Governmental Factors.

Study Management © Ausenco 2014. All rights reserved. 27 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
9.1 Market Characteristics for all Products Derived from Mining Operation

9.1.1 Market Size

 size of total market for products
 volume/value of domestic market consumption
 proportion of domestic consumption met by domestic production
 proportion of domestic consumption met by imported sources
 export market met by domestic production/re-exported imports
 factors which limit the size of the total market
 export possibilities
 governmental regulations controlling import/export trade in products
 existence of reciprocal trade practices.

9.1.2 Market Structure

 main domestic suppliers to the market
 main import sources - countries
 main import sources - firms
 export performance of major competitors
 main markets for competitors
 geographical variations in domestic markets
 seasonal/cyclical variations in domestic markets
 factors effecting emergence of new competitors
 main user industries
 subsidiary user industries.

9.1.3 Market Trends

 Current size of market compared with:
o ten years ago
o five years ago
o one year ago.
 Current demand for product compared with:
o one year ago
o five years ago
o ten years ago.
 Trends indicating a shift in demand over:
o one year
o five years
o ten years.
 Changes in ways in which market trends above manifest themselves.
 Changes occurring to the user industries likely to induce a change in demand.

Study Management © Ausenco 2014. All rights reserved. 28 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  Changes occurring in non-user industries likely to induce a new demand.
 Changes occurring in mine products/processes likely to induce a change in demand.
 Changes occurring in the economy likely to affect demand.
 Factors likely to affect the number of competitors.
 Factors likely to attract new entrants into the industry.

9.1.4 Market Demand

 Demand history for the products over:
o last ten years
o last five years
o last year.
 Level to which demand is met by current producers over above three (3) periods.
 Variation in demand by:
o industry
o geographical areas
o size of firm
o end use.
 Limitations to demand:
o technical characteristics
o availability of products
o availability of purchasing power
o substitution
o obsolescence
o seasonal and physical factors
o price.
 Acceptance of mine product specification in the market.
 Average rate of consumption by:
o industry
o geographical area
o firms
o processes
o season
o specific uses.
 Factors which affect consumption in the above areas.
 Identifying characteristics of the major customers.

9.1.5 Overseas Markets

 Extent to which earnings can be remitted to the exporting country.
 Economy base and trading conditions for principal exports.

Study Management © Ausenco 2014. All rights reserved. 29 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  Import duty for each of main exporting countries.
 Existence of quotas or licensing arrangements.
 Protection of local producers.
 Preference of specific countries and/or firms in seeking supplying countries
(official/unofficial).
 Local charges:
o dock dues
o landing charges
o clearance charges
o weighing and measuring
o shipping agents
o local transport.
 Production under licence from foreign competitors.
 Development schemes taking place or planned, likely to affect demand for the product
and business conditions in general.

9.1.6 Governmental Factors

 Current tax structure on:
o the products
o the end products.
 The history of taxation on products/end products.
 The effect of tax changes on demand.
 Governmental legislation and attitudes on:
o import duty
o import restriction
o credit terms
o local producer protection
o subsidies
o support prices
o strategic stockpiling
o price agreements
o restrictive practices
o quality control
o weights and measures
o safety
o conservation/environmental protection
o participation in purchasing.

Study Management © Ausenco 2014. All rights reserved. 30 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
10 Financial Evaluation
Checklist

 Capital Costs
 Operating Costs
 Market and Revenue Data
 Production Data
 Taxes and Royalties
 Investment Grants and Subsidies
 Company Data
 Financing and Capital Structure
 Dependent and Subsidiary Information
 Evaluation Criteria.

10.1 Capital Costs

 Capital costs of:
o plant and equipment
o buildings and land
o mineral rights
o roads
o railways
o ports facilities
o mine development
o overburden removal
o cost of providing supplies (water, power), transmission
o costs plus necessary plant costs
o dependent town site
o initial spares.
 Capital expenditure schedules:
o timing of construction and. capital expenditure payments
o short term credit arrangements by suppliers
o capital expenditure creditors.
 Import costs:
o import duties (in under-developed countries U.N. agencies may require these to be
isolated)
o import agency fees
o transport costs of imported items
o insurance of imported items.
 Capital expenditure taxes (some countries e.g. Yugoslavia, tax capital expenditure)

Study Management © Ausenco 2014. All rights reserved. 31 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  Pre-production interest (see Section 7).
 Replacement capital expenditure.
 Design, engineering and construction management.
 Contingency and escalation.
 Administrative overheads before start of Project and during construction.
 Sunk costs differentiating between those attributable and non-attributable to the Project;
resale value of sunk costs (e.g. land).
 Allowances for inflation.
 Special insurance during construction.
 Payments for know-how.
 Site rehabilitation costs at end of mine life.
 Residual value of assets at end of mine life.

10.2 Operating Costs

10.2.1 Cost and consumption of material supplies:

 unit cost delivered to site
 unit cost ex-warehouse
 consumption broken into fixed and variable parts where possible
 variable elements proportioned to production or time dependent factors

10.2.2 Labour costs:

 for local labour classification
 for expatriate labour classifications
 cost of living allowances
 site allowances
 penalty rates.

10.2.3 Cost estimates breakdown by operational/cost centre, for example:

 mining
 beneficiation
 administration and overheads
 indirect charges
 engineering services
 research and development
 waste management
 supply (utilities and materials)
 power generation and reticulation
 water supply
 material handling and transport

Study Management © Ausenco 2014. All rights reserved. 32 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  marketing
 employee welfare.

10.2.4 Cost breakdown for each operational/cost centre e.g. for beneficiation:
 crushing and screening
 ore storage and blending
 milling
 flotation
 dewatering
 product handling and transport
 tailings and waste disposal
 reagent preparation and handling
 water supply
 general yard services
 metallurgical services
 administration.

10.2.5 Cost items for each operational/cost centre elements e.g. flotation:
 supervision
 direct operating labour
 direct maintenance labour
 operating material supply
 maintenance material supply
 reagents
 utilities
 power consumption
 water consumption
 transferred service costs
 fixed overheads.

10.2.6 Process royalties and licence fees

10.2.7 Insurance:
 material damage
 consequential loss
 third party
 employer's liability
 miscellaneous.

10.3 Market and Revenue Data

 Markets for all products.

Study Management © Ausenco 2014. All rights reserved. 33 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  Sales contract:
o sales prices
o discounts
o smelting, refining and treatment charges for concentrates
o discounts for impurities
o premiums for secondary minerals
o terms of sale
o long term contracts.
 Regional differentials in sales prices (e.g. as for nickel).
 Price forecasts, net of inflation.
 Selling agents' fees.
 Export taxes or rebates.
 Transport:
o transport costs
o loading and discharge costs
o insurance in transit
o demurrage
 Import duties.

10.4 Production Data

 Statistics:
o mineral in-situ grades
o mill head grades
o concentrate and final product grades.

Note. On a time or ore tonnage basis refer Section 5.

 Factors affecting ore dilution; mill/smelter recovery.

 Production rates, planned and probable.
 Project life.
 Production start-up rates in the commissioning period and during the learning period of
the first few years.
 Stockholding policies for:
o raw materials and supplies
o mined ore
o crushed ore
o ore in processing
o concentrate stocks
o finished product stocks
o finished product in transit

Study Management © Ausenco 2014. All rights reserved. 34 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
 o spares (if. not capitalised).
 Methods of valuing stock.

10.5 Taxes and Royalties

 Details of all taxes:
o state
o federal
o provincial
o local
o payroll.
 Allowances of one tax against another.
 Tax conditions:
o capital allowances for each tax
o method of write down
o percentage allowed
o relationship to investment grants, for each category of capital expenditure.
 Treatment of tax losses:
o offset of losses against other tax paying operations.
 Tax assessment:
o tax holidays
o rates of tax
o basis of assessing taxable income for each tax
o assessment periods
o delays in payment.
 Mineral royalties.
 Capital gains tax.
 Capital assets tax, with particular reference to stripped ore.

10.6 Investment Grants and Subsidies

 Investment grants, allowances and incentives.
 Other subsidies to operating costs, state assistance.

10.7 Company Data

10.7.1 Treatment of inflation in the evaluation:

 capital cost inflation
 operating cost inflation
 inflation of sales revenue.

Study Management © Ausenco 2014. All rights reserved. 35 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
10.7.2 Individual inflation rates:
 labour
 commodity
 equipment
 construction
 power
 if it is the company policy to evaluate these individually.

10.7.3 Aspects concerning inflation accounting

10.7.4 General Company Procedures

 Revaluation of:
o property
o buildings
o other assets.
 Treatment in accounts of investment grants (whether included in fixed assets in balance
sheet).
 Treatment of book depreciation; depreciation rates and method of write down.
 Company policy for treatment of credit periods on accounts receivable and payable.
 Treatment of pre-production interest, this is usually capitalised (and amortised) over the
life of the Project.
 Peculiarities in presenting accounts.
 Currency in which to present the evaluation.

10.8 Other Considerations

Exchange rates:

 currency realignments to take account of high inflation rates

 indexing of loans, wages.

10.9 Financing and Capital Structure

 Company formation taxes.
 Loan structure, loan repayment and drawdown priorities:
o state loans
o IBRD, etc. loans
o long term loans, bond issues, etc.
o bank overdrafts
o convertible loans
o shareholders' loans
o short term bridging finance.
 Equipment credits.
 Working capital loans; loans secured against inventories, debtors, etc.

Study Management © Ausenco 2014. All rights reserved. 36 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  For each loan:
o drawdown arrangements, drawdown period
o repayment method
o annuity
o fixed capital repayment
o residual cash
o secured against assets
o repayment period
o interest rates
o commitment fees
o loan raising fees
o convertibility formulae
o indexing of loans.
 Equity structure and ownership.
 Dividend policy; repayments of shareholders' loans.
 Withholding taxes.
 Repatriation of funds.
 Loans made by the Project.

10.10 Dependent and Subsidiary Information

10.10.1 Relationship to other group ventures:

 joint use of overheads/infrastructure facilities
 apportioning of group overheads.

10.10.2 Dependence of other group ventures on the continuation/existence/cancellation

of the Project:
 profitability of an associated smelter
 income generated by associated facilities (e.g. port or dam)
 marginal cost of production from an under-utilised supply facility (e.g. power plant)
 effect on an associated mine supplying a similar product into a fixed market.

10.10.3 Conventional cost/benefit considerations (where necessary):

 import savings
 effects on regional employment
 indirect environmental factors; necessary expenditure by local authorities, etc.

10.11 Evaluation Criteria

 Whether evaluation is to be carried out in real or money terms.
 The criteria to use in determining that expenditure which is essential for the Project to go
ahead.
 Treatment of sunk costs.

Study Management © Ausenco 2014. All rights reserved. 37 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014
  Company policy on cost of capital or marginal cost of capital.
 Which cash flows are regarded as most important:
o total cash
o equity cash
o repatriated cash.
 Factors regarded as being most important in a sensitivity analysis:
o ore grade
o metal recovery
o plant capacity
o capital costs
o operating costs
o selling price of final products.

11 Revisions

Version No Change

1 Original Issue

Study Management © Ausenco 2014. All rights reserved. 38 of 38

Feasibility Study Checklist Document uncontrolled when downloaded/printed
Version: 1 Issue Date: 8 September 2014