PEA consultants
Over the years I have worked in different roles; as an independent consultant; as a member of a large consulting team; and as owner’s representative managing consultants.   I have learned that there is an industry role for both the independent consultant and larger consulting firms.

Large versus small teams

A previous blog (“9. Large Consulting Firms or Small Firms – Any Difference?”) discusses where I feel the large and small consultants fit into the overall picture.   Large technical teams are required where there are broader scopes of work, significant effort levels, and multiple skills sets are needed.
Independent consultants are a different option.  They are best suited for assisting the owner directly, either independently or as part of an advisory team.  On occasion the independent engineer might also be on the Board of Directors.  Either way, non-technical management should have easy access to in-house advisory capability for brainstorming or just to bounce ideas off of.
Where the small independent consultants can differentiate themselves are as follows;
  • They don’t bring a lot of extra personnel onto the job.  They keep focus only on what is needed and can usually pull in other experts for specific tasks.
  • They can provide unbiased advice, without larger firm issues related to both legal and  business development.  The independent consultant does not have the motive to win a feasibility study or EPCM contract.
  • One can develop a long term working relationship with the consultant.  Everyone gets familiar with each other’s objectives and goals.
  • They can work efficiently at a pace of their own choosing.  This possibly results in lower costs and faster timelines.  I know of independent consultants that work nights and weekends to meet deliverable schedules.
  • They can provide long term stability since they won’t have employee turnover.  Personally I was involved on and off with an international operating mine for over 15 years.  The staff at the mine site had significant turnover (partly due to promised corporate transfers).  I ended up being the only constant.  I knew the history and had copies of lost reports.  I knew what was done previously and why, thereby avoiding re-inventing the wheel each time there was a new technical lead at site.

Stocks options to consultants

A point of discussion is whether the independent consultants should receive stock option compensation.  I have been in both situations; i.e. where I have received stock options and where I haven’t.
Awarding stock options could eliminate the “independent” nature of the relationship and hence negated the ability to sign off as an independent QP.  In some circumstances, the company may not require the independent consultant to be an independent QP since they fulfill more of an advisory role for the company.
One advantage of awarding stock options is the consultant may become more beholden to the project.  They feel it is their project too, rather than simply acting as an adviser.
Conversely the company may prefer the consultant doesn’t have any direct ownership so that their advice can be viewed as being unbiased.
I personally feel that awarding stock options is a good way to foster long term commitment from the consultant.  Without any financial inducement, its a lot easier to walk away.

Conclusion

The bottom line is that independent consultants have a role to play and should be part of most owner’s teams, whether on the Board or on an Advisory Panel.   The independent consultants can be selected based on their technical specialization (i.e. exploration, resource modelling, mining, metallurgy, environmental) and provide valuable part time guidance to the company.
The caveat is to ensure that the consultant is technically capable.  I have seen instances where certain members of the advisory panel were giving poor advice.  Others on the panel would see it, but not say anything out of professional courtesy.
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