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7/13/2017 by mdc
http://investingnews.com/daily/resource-investing/prefeasibility-feasibility-...
Siv Padhy opines that prefeasibility and feasibility studies are inherently linked to each other ... understanding their differences creates a clearer idea of what they mean and how they are used. The key point to understand is that these studies represent milestones for mining and exploration companies.

Prefeasibility studies are an early stage analysis of a potential mining project. They are conducted by a small team and designed to give company stakeholders the basic information they need to green light a project or choose between potential investments. Prefeasibility studies typically give an overview of a mining project logistics, capital requirements, key challenges and other information deemed important to the decision-making process.

Prefeasibility studies act as one of the first stage of potential investment, following a preliminary resource report and the creation of an orebody model. Based on the data procured by various assessments, a prefeasibility study may occur. Companies use these studies to collect information before investing millions of dollars into tasks like acquiring permits or research equipment.

Feasibility studies are in-depth reports on many of the same topics as prefeasibility studies. They are meant to be much more accurate than prefeasibility studies and require more resources to conduct. Feasibility studies should offer estimates that are within 10% to 20% accuracy, whereas prefeasibility studies are allowed to run between 20 and 30%. These studies are intended to evaluate if a mineral reserve can be mined effectively and will be profitable. Detailed feasibility studies are also used as the basis for a project capital estimates.

At this point in the process, organizations already have large sums of money at stake to see their project through to completion. Feasibility studies are all about reducing risks and addressing potential issues that may complicate a project.

Read on ...


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