The Study Sequence: From Discovery to Bankable FS
Scoping Study (Order of Magnitude)
A scoping study is the first formal evaluation of a mineral deposit's economic potential. It is prepared at an accuracy of ±35–50% and uses Inferred and Indicated Mineral Resources as its primary input. The study tests overall viability. is there a reasonable prospect of economic extraction?, and identifies the key value drivers and risk factors that will determine subsequent study work, for East African gold projects, a scoping study typically takes 2–4 months and costs US$50,000–150,000.
Pre-Feasibility Study (PFS)
A Pre-Feasibility Study increases the engineering and design detail sufficiently to evaluate alternative mining methods, processing routes, production rates and capital configurations. It is prepared at ±20–25% accuracy using a combination of Indicated and Measured Mineral Resources. The PFS enables a decision between alternative development scenarios (open pit vs. underground, heap leach vs. CIL, phased vs. full-scale development) and forms the basis for seeking project financing at early stages.
Bankable Feasibility Study (BFS / DFS)
A Definitive Feasibility Study (DFS) or Bankable Feasibility Study is prepared to ±15% accuracy, based substantially on Measured and Indicated Mineral Resources, and must provide sufficient technical and financial detail to support a final investment decision and project financing. A DFS for a mid-size East African mine (100,000 oz/year gold) typically requires 18–24 months and a budget of US$5–15 million.
Mineral Resource Estimation: JORC Code
Mineral Resource and Reserve estimates for listed companies or those seeking institutional finance must comply with a recognised reporting code. most commonly the JORC Code 2012 in East Africa (Australian standard, widely accepted by African exchanges and international financiers), or NI 43-101 (Canadian standard, required for TSX and TSX-V listed companies).
Key components of a JORC-compliant resource estimate include:
- Database validation. collar survey, downhole survey, assay database QAQC review
- Geological modelling. domaining, wireframing, implicit or explicit model construction
- Geostatistical analysis. variography, grade distribution, declustering
- Grade estimation. Ordinary Kriging (preferred), Inverse Distance or Nearest Neighbour
- Resource classification. Measured, Indicated, Inferred based on geological continuity and data density
- Competent Person sign-off. JORC requires a named, qualified CP with five years relevant experience
Mine Design. Open Pit vs: Underground
The choice between open-pit and underground mining is primarily driven by the depth and grade of the orebody relative to the stripping ratio that the project economics can sustain, in East Africa, most early-stage gold projects are first evaluated as open pits to the depth at which the overall stripping ratio (waste:ore) exceeds approximately 6:1–8:1. High-grade underground resources (>5 g/t Au) may justify underground development at shallower depths where the orebody geometry is suitable for long-hole stoping, cut-and-fill or drift-and-fill methods.
Financial Modelling and Sensitivity Analysis
A robust financial model for an East African mining project includes: capital cost estimates (pre-production capital, sustaining capital, closure costs), operating cost estimates by activity (mining, processing, G&A, royalties), revenue projections based on commodity price assumptions, DCF (discounted cash flow) valuation at a range of discount rates, sensitivity analysis against gold price, grade, recovery, capex and opex, and tax modelling (corporate tax, royalty, withholding tax) specific to the host country jurisdiction.