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  • pms-2015-1 Paper Pah Nov2000

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    esto es dja doi9nef jd9jjeje9sn js8dj8jdhan

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    1 views4 pages

    pms-2015-1 Paper Pah Nov2000

    Uploaded by

    JoseMiguelVargasRojas
    esto es dja doi9nef jd9jjeje9sn js8dj8jdhan

    Copyright:

    © All Rights Reserved
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    PAH NEWS PIX 1#PAN AMERKAN SLVER CORP HAS RESOLUTION AT DUKAT I=KVAERNER AWARDED FEASIBLITY STUDY ON [MINDORO NICKEL PROJECT [2 ALCAN MERGER CREATES ‘GLOBAL PARTNERSHP FOR ALUMINIUM BASED ‘RODUCTS '*SKORPION ZINC MINE TO BE DEVELOPED IN NAMIBIA CALENDAR Global Mining Opportunities 2000 November 13-15, 2000 Vancouver BC, Canada fandol at Vancouver e-ma: hansvon@atiglobalnet PAH Booth #77 ‘aWestern Investment Conference, 2000 November 26-27, 2000 San Francisco, California Intemational investment Conferences Tel. 1-305-669-1963 ‘aNorthwest Mining Asso 106th Annual Meeting December 48, 2000 Spotane, Washington emai: numa@noma.org PAH Booth #108 1872001 - A Mining Odyssey” SME Annual Meeting February 26:28, 2001 Coloredo Convention Center Denver, Colorado emai. meetings@smenet oro PAH Booth #516 martes Solution PINCOCK ISSUE NO. 12 — November 2000 Project Development Costs— Estimates Vs. Reality Summary How complete are mining project capital cost estimates? What is the level of accuracy of the estimate? What is an appropriate contingency to apply to capital estimates? Who should prepare + the cost estimate? ‘These questions are all very important in developing capital estimates that are accurate and achievable in a project analysis. Of course, the accuracy of the estimate will vary depending on the information available for the project and the intended use of the estimate. The accuracy of capital estimates becomes more important as projects move from the conceptual analysis stage through the pre-feasibility and feasibility stady stages, and on to the definitive estimate phase. ‘A review of estimated and actual capital costs for 21 precious and base metals projects reveals some conclusions that may be unexpected and that illustrate the importance of performing sensitivity analyses on key project parameters, such as capital costs. Some of the most striking conclusions are: @ Itis rare, not the norm, for the actual project capital cost to be within 10 percent of the feasibility study capital estimate, Rarely does the feasibility study overestimate the capital cost (only 3 projects). Ieis common for the owner's costs to be underestimated or even neglected in capital cost estimates. Project financing costs are often neglected or underestimated. Working capita is often underestimated. Site earthworks are often underestimated. Environmental/ permitting costs are often underestimated. Location specific considerations must be adequately addressed due to their large impact on project development costs, Feasibility study cost estimates appear to be more accurately estimated for larger projects than for smaller projects, on a percentage basis. Continued Tabsripion salable one year (7 Wve) 05515000, Fr multiple copies adres changes, oF emai subiciptons cal 303986-6580 or ena PANEpincodk con “PAN AMERICAN SKVER CORP.MAS ‘RESOLUTION ATDUKAT Pan American iver Corp, has announced that it has formed an agreement withthe -uslon ming company Poymeta to form a new company that wil combine the ining teense and assets ofthe Dukat ject cated inthe Magadan Region The agreement wil rsohe the project suspension that began in December 1998, ‘when Russian company Kasto won by auction the mi and related infasructue that Pan American had planned use fr production of the Duta ore. In Apel 72000, Kaskol transfered these assets 0 Pobmetal. Pan Amerikan wil hold 3 ‘ated 20-percent interest nthe new company with no future capita or ‘management obligations. [|KVAERNER AWARDED FEASIBUITY ‘STUDY OW MINDORO NICKEL PROJECT ‘Kvaerner £8 Chas Been awarded the contact provide a bankablefasbity study over the next 18 months forthe Mindoro nickel project inthe Phitppines. The projet owned by Crew Development Corporation, has a curent resouce base timated 372.6 millon tonnes of 094 percent nickel and 0.05 percent cobalt The study wil examine the nickel laterite project for procesing using high-pressure ‘20t each technalogy. & processing acy with capac of 40,000 tonnes per ‘years enysaged, and wil include mine processing, ur pipeline transportation, ratinery and tiings daposa fates Kvaerner wil as develop min plans and production schedules that wil meet fture upgrading of the resource base 1 ALCAN MERGER CREATES GLOBAL ‘PARTNERSHIP FOR ALUMINIUM-BASED ‘The competion ofthe merger on October 18,2000 of Akan Alumni nite wth Alusuisse Group Ld (Alroup) has created 2 powerful new pane for automotive manufactures wortwide. The new Aon 1 2 global ade inthe aluminium and packaging industries, and is now 2 USS124billon global company. The new ‘Aca has solidified its psion asthe wo’ acing supplier of aluminium: based automotive products and services, snd hos cnated 9 new strategie unit called Akan Global Automotive Solutions wich wil provide gloat dstrbution to automatersseking alminiam’s performance enhance, high strength savantages. ‘The cost analysis performed in this review is based on data that are not always directly comparable on a project-to-project basis. Therefore, the conclusions drawn are general and the ranges of costs compared are approximate. Even though the ‘costs are not always directly ‘comparable, the magnitude of the differences illustrates the difficulties in accurate project cost estimation. All costs provided in this review are in United States dollars. Project Capital Review Results PAH analyzed the estimated capital ‘cost for 21 projects located worldwide and compared the feasibility capital cost estimates against the constructed costs. The projects selected ranged in capital cost from less than $10 million to over $1.5 billion. In analyzing the costs, they were segregated by size and location'to see if any trends could be. observed. A definite trend was found by project size; smaller projects tended to overrun more severely, on a percentage basis, than larger projects. Somewhat of a trend was seen by broad geographic area, but this may also be due to project size, as North American projects tended to have larger capital overruns but generally also had lower capital costs. Within the 21 projects, only three came in under the feasibility study cost estimate. ‘The following tables compare the constructed cost with the feasibility study capital cost estimate escalated at 3.5 percent per year to the time of construction. This adjustment was made since the time between feasibility study estimates to construction of a project varied significantly (0 to 4 years) between projects Ieshould be noted that the feasibility study is typically the document that is used to make a project investment decision and is the supporting basis for project financing, If the project capital results were compared on an uun-escalated basis, the percentage differences between the feasibility study estimates and the actual costs would be about 5 to 10 percent TABLE 1 - Comparison by Size Number of Projects $0 - $50 Million uw $50 - $100 Million 4 $100 - $1,000 Million 3 (Over $1,000 Million 3 (1), Feasibility study capital estimate was escalated to the construction date in order to reduce timing effects of different projects in the comparison. When the actual costs are compared to the un-escalated feasibility study capital estimate, the average cost overrun typically is about 5 to 10 percent higher than the percentages inthe table. 2) The large variance is due to a project that had substantial overruns because of country specific problems, and a project with very large earthworks overruns. Without those projects, the differenceis only 102 percent. Cost as Percentage of Feasibility Study Estimate (1) 118% 102% 137%) 110% greater than the figures in the tables below. When an independent cost review ‘was made, typically within 1 or 2 years of completion of the feasibility study, the independent estimate was generally found to be closer to the constructed cost than the feasibility study estimate. The independent estimates reviewed were between 5 percent and 20 percent closer to the constructed costs than the feasibility estimates. Comparison by Project Size ‘The projects were broken down by capital size into four groups. The pertinent statistics for each group are shown in Table 1. Since the sample size was limited, it is difficult to make conclusive statements from the data used, although generally the smaller size projects tended to have larger overruns, on a percentage basis, than the larger projects. The smaller projects tend to have the following characteristics that lead to larger underestimation problems. 4 The projects are typically controlled by smaller companies with smaller budgets, which may sesult in cutting costs to prepare the estimates as wel as using low- end project costs. ‘ Smaller companies tend to perform some of the project feasibility study work themselves when they may not have the expertise to do so. + Smaller companies tend to overlook some of the capital requirements that are not direct construction items such as owners’ costs and sufficient working capital Comparison by Project Location To evaluate the accuracy of estimates by project geographic location, the projects were broken down into three geographic groups. The pertinent statistics for each group are shown in Table 2. ‘The large overrun percentage for North American projects is probably due to the fact that most of the projects were smaller and follow the size trend noted in Table 1. General Location North, America 9 Latin America 8 Other 2) 4 Number of Projects TABLE 2 - Comparison by Location Cost as Percentage of Feasibility Study Estimate (1) 124% 113% 108% (1) Feasibility study capital cost estimate escalated to the construction date @ Otherincludes projects in Russia, Australia and Indonesia |" SKORPION ZINC MINE TO BE DEVELOPED WNAMIBA Anglase Namibia Py. Ltd, 2 unit of ‘Anglo American PLC as announced that ft wil develop the Skorpion zinc mine and refinery neat Rosh Pina in Namibia ‘A joint venture Between Bateman Project Holéings Umited and SNC-Lavain bas been awarded the contract to execute base engineering, engineeig, procurement and construction ‘management forthe project which has an estimated capital cost of $454 milion, Operations ae expected 19 commence in ‘the second quarter of 2003, with an average annul rodction of 150,000 Tonnes of zine per year and an expected mie ie of atleast 15 years. The projet wil use new technology in the inc recovery process, with zine being extracted by leaching, sobeat extraction and lectrowinning, making the project one of the lowest cst zinc producers in the worl INDUSTRY UPDATE— The President ofthe Nationa Mining Association in the US, Richard Lawson, recent saved a challenge to those lentes that would fie to negate the value and importance of coal ard other fossl ful, ‘Me Lamson pointed out that in the next 20 years, the world population wil increase to 75 bitlon people causing + paralel increase in the demand for energy of 60 percent. Coal is the ont fue source thats capable of providing fue needs cover along period of time fover 200 year). The increase inthe demond for fecic power places coal asthe essential fow

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