Articles tagged with: Project Manager

48. Online Collaboration and Management Tools (Part 2)

networking
This blog is the Part 2 continuation of a prior post regarding collaboration software tools that mining teams should consider.   Here are a few more ideas I’d like to share, having found that these are great to have in your toolbox.
G-suite and miningG-Suite: is the family of Google Drive, Docs, Sheets, and Slides online services.
Group collaboration can be frustrating using spreadsheets or text documents.  We typically end up with different versions of the same document floating around.  No one is sure whether they are editing the most recent version or which version they should be editing.
With G-Suite (Google Sheets and Google Docs) you can create online spreadsheets and documents and allow multiple team members to review and edit them in real-time online at the same time.
Writing reports gets simpler since there is only one working version of the document. A “track changes” option is there (called “Suggesting”) and everyone can see the edits as they are being made. No more asking “who has the most current version?”  This type of collaborative editing is also great for Design Criteria Documents that are regularly being updated by different team members.
I have used both DropBox and Google Drive, but my preference is using Google Drive since it integrates well with G-Suite.

Foxit Reader:  This is an alternative to Adobe Reader and can be used for reviewing PDF documents, whether text documents or drawings.
Foxit provides great editing and commenting tools like highlighting text, adding comments, drawing lines and boxes, adding comment balloons, cut & pasting images into the PDF file, and then saving the commented version.
For the most part I have stopped using Adobe Reader and have now switched over to Foxit due to commenting capability that it provides.
Google Hangouts:  This is an online and mobile application for team conference calling.  It allows screen sharing, online group video conversations, sends out meeting reminders, and it will call participants at the require time.
While Hangouts has many of the same features as Skype, it integrates with Google Calendar and Gmail.   Most of the tech world uses Hangouts instead of Skype, but I’m not sure if the mining industry is ready to move away from Skype.
An honorable mention for video-conferencing goes to Zoom. Some tech developers have been switching to Zoom, they feel it has more capabilities than Hangouts and better video resolution. I have never used it however.

Other Software

Those are a few of the software tools that I have found useful and so now you’re probably wondering “what else is out there for me?” The website The Freelance Stack lists many of different tools that exist. Check them out and some of the others may be of value to you. :

Geology & Mining Software

One of the standard marketing approaches used by tech software is to provide a fully functional product for free and then charge money to access the enhanced features. The goal is to get future users familiarized and trained on the product.  They hope that they will get hooked on the product and decide to upgrade their plan for the full product suite.
I’m not sure whether any geology or mining software  is available for free in a fully functional format with optional upgrading. By functional, I don’t mean simply providing a “viewer” to view the work of others or a 30-day free trial period.  I mean actual software that provides some useful capability for free in order to get you hooked. Please let us know if this software marketing approach exists in the mining industry.

Conclusion

The bottom line is that there is a lot of interesting collaboration software out there.  Its readily available, much of it is free, and can make managing your remote project teams easier. Just because the software is used by the tech industry and millennials, don’t assume it won’t have a benefit to the mining industry.
The downside is the need to train and learn the new software, and the mining industry may not be so receptive to that.
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47. Online Collaboration and Management Tools (Part 1)

networking
Update:  This blog was originally published March 2016.   However like all things, the online world keeps evolving. So I have updated Part 1 and Part 2 of the blog (Dec 2018).  I added new software suggestions and removed some.
As part of a side business, I have been working alongside a team of software developers. It has been a good learning experience for me to see how the tech world does things compared to how the mining industry likes to work. We see a lot of private equity flowing into tech and less into mining, so they must be doing something right.
The tech start-up industry has developed its own set of jargon.  Common terms are agile management, lean start-ups, disruption, minimum viable products, pings, fail fast, and sprints.
Some of their work approaches do not make sense for the mining industry where one doesn’t have the luxury of using trial-and-error and customer feedback to help complete a project.
For software, the attitude is get it out the door fast and your customers will then tell you what fixes are needed. In mining you want to get it right the first time.  Having said that, some mining people will say they have seen 43-101 technical reports that follow the “wait for customer feedback” model.
Now where the tech industry can provide us with some guidance is in the implementation of collaboration tools. It is becoming more common for software developers to work remotely.  To collaborate they use the technology available or they develop new technology to meet their needs.  Mining teams are also working more and more from remote offices these days.

What are the collaboration software available

The following is a partial list (Part 1) of free software tools that I have used, mainly because I was forced to. With some hesitation at first, I have subsequently found the tools easy to use.  Many of them can definitely be applied in the mining industry with remote and diverse study teams.
There are a lot more tech tools out there but my list includes some that I have personally used. Most of these are free to begin with, and enhanced features are available at a minimal cost. However even the free versions are functional and can be used to build a comfort level in the team. Most of them provide both web based access and mobile access so even when you’re on the road you can still use them and contribute.

Trello

Trello: If you want to create a “to-do list” or task list for your team, this is the software to use. Imagine a bunch of  post-it notes that you can place under different categories, assign persons to each note, attached a file to the note if you wish, and then have back and forth discussions within each note.   Once a task is done, just drag the note to another category (e.g. “In Progress”, “Completed”). Anyone on the team can be invited to the Trello Board and can collaborate. See the image below for an example Trello screenshot.   This is a great tool for helping to manage tasks in a mining study.

 

Trello screenshot

Slack

Slack: If you want to maintain a running dialogue of group discussions that invited team members can follow and join in on, then Slack (a Canadian company) is for you. It can replace the long confusing back-and-forth emails that we commonly see.  If someone forgets to “reply all” the rest of the team is out of the loop. See the image below for an example Slack screenshot. It’s great for discussions among the team.  You can also have private one-on-one discussions or wide open team discussions.  You can attach files too and you can get pinged when something new is added. It provides permanent record of conversations and decisions.

Slack Screenshot

Mural

Mural:  Mural is a recent innovation to solve the issue that remote teams have of not sitting in the same room and writing ideas down on a whiteboard.   For that last while, there was no good white boarding software out there but I understand that Mural fills the gap.  i have not used it so cannot vouch for its simplicity, however it seems to be catching with the tech developers.  The screenshot below shows the type of inter-actions possble.  Each person has access to write on the whiteboard.
Basecamp: is similar program to Slack that incorporates features from both the above and some people swear by this tool. I have not personally used it so cannot vouch for it, but some say it is very good.

Conclusion

The bottom line is that there is a lot of good stuff out there, readily available, much of it free, and can facilitate collaboration among your teams. Just because its tech industry related, don’t assume it wouldn’t have an application in the mining world.  As millennials enter the mining workforce, these tools may gain a foothold.
To read about even more collaborative tools, take a look at Part 2 of this blog.  Comments on any of the discussions or software are appreciated.
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31. Meetups and Mining Millennials

mining millenials
Over the last year I have had many encounters with the Toronto tech start-up community.  I have noticed some similarities with the junior mining industry but some differences also.
The tech start-up model is similar to the junior mining business model as it relates to early stage funding followed by additional financing rounds.  One obvious difference is that mining mainly uses the public financing route (IPO’s) while the tech industry relies on private equity venture capital (VC’s).
There are also some less obvious differences.
Generally the tech industry is young, vibrant, technology-savvy, and applies the latest in social technology to collaborate.  The mining industry seems to be lagging behind on many of these aspects.
The following article will describe a few of my observations. As you read through this, ask yourself “Should the mining industry be doing these things?”

Tech Meetups and Networking

My first experience with the tech industry was associated with the many after-hours networking meetings called “meetups”.  They are held weeknights from 6 to 9 pm  and consist of guest speakers, expert panels, and for general networking purposes.   Often guest speakers will describe their learnings in starting new companies and failures they had along the way.
The meetups may also provide “how-to” advice for techniques like Google Analytics, Facebook advertising, Google Adwords, email marketing, etc.).
Attending these meetups is usually free.  They are typically held after hours at different tech company offices and they often provide free beer and pizza. One can see the entire industry working together for the betterment of the industry.

How to Organize Meetups

Scheduling of meetups is done via the online software platforms Meetup or eventbrite.  Both of  these work well for announcing the meeting notice and tracking signups and attendees.
By the way, meetups are not only tech-related; they are also held for interest groups for hiking, theatre, writing, yoga, business marketing, etc.  The platforms provide a good way to manage communities.  Unfortunately here in Toronto there are no geology or mining related meetups so the mining industry may be missing out on a good way to build a more collaborative community.
The mining industry does have some local meetings, as far as I know there are mainly three after-hour mining events.  The CIM has a monthly luncheon with a cost of $50-$65 (not exactly inclusive to everybody).   There is a Toronto Geological Discussion Group that holds monthly meetings and seems to be comprised of the older geologist demographic.  The third event is Mining 4 Beer, which a small group that meets intermittently at a local bar.  These few events limit the amount of buzz for those working in the mining industry.  There are a lot of mining companies here with a lot of mining people but not a lot of vibrancy.

Where to hold an event

Most of the tech meetups are held in local tech offices.  These offices are great. They have an open concept, pool tables, ping pong, video games, fully stocked kitchen. Who wouldn’t want to work there?
The last time I was in the offices of a large engineering firm I felt like a lab rat in a cubical maze.   I’m not saying engineering offices can switch to a tech office layout, but more enjoyment of the office environment might help draw more people to the mining industry.
Perhaps it’s easier to have a positive work attitude when money is being thrown at you (as is happening in the tech world) rather than having to scratch and claw for funds like mining must do right now.   However I suggest if one wants more smart young people to come into the industry then one needs to adapt.  This means more than just buying the latest 3D geological software.  It means creating an environment that people want to work in.
In the late 1990’s I was working in the Diavik  engineering office in Calgary.  They provided a unique office layout whereby everyone had an “office” but no front wall on the office so you couldn’t shut yourself in.  There were numerous map layout tables scattered throughout the office to purposely foster discussion among the team.
A similar type philosophy is used by Apple in their office layout design where even the kitchen placement has a purpose.  People should mingle and run into one another to promote conversation.  Discussion is good. Camping out in an office is not good.

Keep it short and to the point

Another thing I noticed with the tech industry is that when start-up tech companies are given an opportunity to tell their story, typically they only have 5 to 10 minutes to pitch.  No long winded thirty page PowerPoint presentation to explain what they are doing.
The tech industry is also big on the “elevator pitch”, a one minute verbal summary of what they are doing.  The tech people are taught to be concise.  If you can’t explain it in plain language in one minute then it’s too complicated.
For comparison, many mining investor presentations can be long, highly technical, and tailored to other technical people and not the average person.   One must ask who is the real target audience for those presentations?

Communication methods

The tech industry relies a lot on remote workers.   They might be overseas or spread around Canada. For communication and collaboration, they use various online systems such as Slack, Google Hangout, Trello.  No more  long email threads with five people cc’d on each email.   Slack uses a chatting approach, similar to text messaging, which makes it easier to follow the conversation and share files.
Can the mining industry be taught to use something new like Slack?  I don’t see a problem with that as long as one honestly wants to learn it. It’s really not that complicated.
For interest, another blog provides some more discussion on online collaboration software “Online Collaboration and Management Tools“.

Conclusion

The bottom line is that I can see a great difference in the attitude and atmosphere in the tech industry compared to the mining industry.  The junior mining game was the precursor for the tech start-up industry but has not kept pace with evolving work techniques.
As senior personnel retire from mining, the loss of this mining experience will be felt.  However the new ideas that may follow could be a positive outcome.
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27. Independent Consultants Are Growing

I have read quite a few articles indicating that the mining industry is seeing a shortage of experienced people, on both the technical and management side of the business.  Apparently the baby boomer generation is now nearing their retirement or early-retirement stage and there is a gap in the number of experienced people following behind.
Many of these retirees enter the “independent consultant” stage of their careers.
I also hear from recruiters that there is a shortage of engineers willing to take remote or international assignments.  This is particularly difficult when a senior level candidate has a growing family.

Can the independent engineers help out?

In a previous article (14. Miners – Why Have Your Own Independent Consultant?) I discussed why mining companies (or even consulting firms) should make use of the independent engineers as advisers or Board members.
I understand from colleagues in the mining industry that many of the people nearing retirement are willing to take on consulting assignments or board or directors roles or other management roles.  They are often willing to work part time and independently.  Or they may work as “associates” with engineering firms.
So there likely is a significant network of experienced people out there.  It’s just a matter of being able to tap into that network when someone needs specific expertise.
So how can one do this?
LinkedIn currently seems to be the only global network for technical people.  It is a great way to connect with engineers and geologists industry wide.
LinkedIn members work everywhere, at mine operations, consulting firms, financial houses,  as independents, or even retired. Almost every technical person I know is registered on LinkedIn.
The question is how to find these people when you are looking for a specific independent expertise for a short term or over the longer term.

Networking

Networking with people you already know is the most common approach.  However what if you need someone with particular knowledge?
LinkedIn is a great search mechanism for technical experts.  With a keyword search one can identify a lot of experts with very specific skill sets.  The problem is that many of the experts highlighted by the LinkedIn search may be fully employed at mining operations or with large consulting firms and may not be the person you are looking for.
To my knowledge, there is no searchable online registry solely intended for independent geologists and engineers.  It would be in the interests of the mining industry to have some type of easily searchable independent consultant directory to be able to tap into the expertise that is out there.  I understand that MineLife.org  is attempting to build such an online service but it still appears to be early in the development stage.
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20. Work Breakdown Structures – Don’t Forget About The WBS

mining project WBS
Normally at the start of a mining study, the team members receive a matrix of responsibilities.  This table shows which people or groups are responsible for different aspects of the study, i.e. who is responsible for geology, for mine design, for process design, infrastructure, etc.  This is great tool and a necessity in making sure that everyone knows what they are supposed to do.   However it doesn’t really tell them “how” they need to do it.  How are their deliverables to be structured?

Sometimes the WBS is forgotten

What often gets forgotten in early stage studies is providing the team members a Work Breakdown Structure (“WBS”).   I consider the WBS an equally important component as the responsibility matrix and both should always be provided.
The WBS is a hierarchical breakdown of the project into phases, deliverables, and work packages usually associated with cost estimation. It is a tree based structure, developed by starting with the final objective and then dividing that into manageable components based on size, duration, and responsibility.  Typically this is done for the capital cost estimate, breaking it down into individual cost areas and cost components.  A WBS can also be used for the operating cost estimate.
request for propoalsThe WBS can provide the following information to the team:
  • It assigns the costing responsibility to specific people or group so each know what must be delivered.
  • It provides a consistent format for developing and reporting the capital costs (and operating costs).
  • It helps ensure that no cost components get omitted and no costs get double counted.
  • It provides the cashflow modeler with a clean format to import the capital cost into the cashflow model.

Any study can benefit from a WBS

Typically a WBS is developed for pre-feasibility and feasibility studies but is often ignored at the PEA stage.  Some feel it is too detailed for that level of study.  I don’t feel this is the case.  The WBS is a communication tool to confirm responsibilities.  Thus even a simplified WBS is still useful at the PEA stage.
I ave seen some instances where a WBS has been created but does not get wide distribution to the entire team.  The WBS should be provided to everyone and ideally a team session be held to walk through the WBS structure.  The idea is not make everyone a costing expert, but rather to ensure all understand how the project cost estimate will be structured.

Conclusion

The bottom line is that regardless of the level of study, a WBS should always be created.
Some will say the WBS is not required for early stage studies but I have found benefits in having one, at least for the capital cost estimate.   Obviously the level of detail in the WBS should be appropriate to the level of the study.
A competent Study Manager can easily create an initial WBS, thereby mitigating some headaches when the final study is being assembled.
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18. Importance of a Study Manager – That’s the Key

project manager
Over my career I have worked as an engineering team member on numerous projects and studies.  Some studies went better than others.  Unfortunately some dragged on, ran over budget, and ended up delivering a less than optimal product once all was said and done.
There are numerous factors that will have influence on the successful completion of a study.   They are related to the quality of the technical team, the allowable budget, the time window, and the direction from the Owner.  However the key factor that I observed is the competency of the Study Manager (or Project Manager).

Study Managers must wear many hats

They are responsible for being the main liaison with the Owner. They must herd a team of geologist and engineers in the same direction. They must ensure that technical quality and consistency is maintained by the entire team.  They are responsible for ensuring that budgets and timelines are being met.  The combination of all of these responsibilities can be an onerous mission,  more so depending on the quality of the Owner’s team.
Every technical team has those team members that will deliver quality within timelines consistently.  There are also team members that have difficulty meeting targets.  The Study Manager, early on, needs to figure out who fits into which category and then must be able to work with each.

Studies can quickly grind to a halt

An entire study can quickly grind to a halt simply because one key component becomes bogged down. A good Study Manager may occasionally ruffle some feathers but is always appreciated by the team knowing that everyone will be held to account.
The Study Manager also needs to understand the objectives of the Owner and ensure the team is working towards those objectives.
The Study Manager however must also be honest with the Owner, keeping him informed of the actual progress and warn if some target will not be met.
The Study Manager coordinates communication within the team and with the Owner.  Some managers are excellent at this while others fall into the trap of communicating on a “need-to-know” basis or “too late” basis.   Timely and thorough communication is important.  Don’t assume that one is hampering progress by involving the team in frequent communications.

Environmental Assessments need engineering input

Often the Environmental Impact Assessment is being conducted concurrently with an engineering study.  The level of internal and external communication now becomes even more critical due to the large number of technical disciplines involved.
It is not uncommon for EIA’s to make commitments  or agree to operating conditions that have not been signed off by the engineering team.

You should approve the Study Manager

When approving the consultant’s Study Manager, keep in mind that in some instances you may find that different managers within the same organization may have different internal authority.  For example, if technical people are needed on another project, some managers are able to keep their team together.  Other managers may lose team members to the other project if that manager has more authority.  Losing manpower doesn’t help a study progress,  so if possible try to get a sense for the position that Study Manager has in the organization.

Conclusion

The bottom line is that when a project Owner has received proposals for a study and is in the process of awarding that job, the most important consideration is who will be the Study Manager.  If possible meet or chat about how they will manage the study and what their experience is.  Check references if possible.
The voluminous proposals provided by consulting firms contain a lot of information like Gantt charts, organizational charts, cost estimates, team resumes, safety plan, and corporate project experience.  Focus on the Study Manager. Don’t assume they are simply an administrator scheduling meetings and issuing monthly reports. They are the key to success.
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15. Due Diligence Data Rooms – Help!

Mining reviews
The statement “Have a look in the data room, it’s all in there” can bring a cold sweat to many an engineer undertaking a due diligence review.  How many of you, during a due diligence, recall being given FTP access to a data room that is full of highly disorganized folders and sub-folders, files with cryptic names, different updates of the same file in different folders?

It can be like looking for a needle in a haystack.

It can be difficult to determine which files are actually important and still relevant and which files have been simply dumped into the room. There is nothing worse than spending a day reviewing an Excel model only to find out that it wasn’t the latest version and a different un-related folder has the correct version.
Data rooms are generally created for due diligence exercises or during advanced engineering. Regardless of the purpose, it is helpful for all involved  to have some type of a document control person who understands what is in the data room, what is important, and what is non-essential.
Large projects may often have an dedicated document control person to manage the data room.  However smaller companies in a due diligence phase may tend to dump all the electronic files they have into the data room, including email transcripts, and sort them into different folders hopefully.
It’s still up to the user to dig through the files to find what they need.  This can be a time consuming task, costing everyone money in wasted time.

Some type of organization to the data room is key

Comprehensive searchable document management systems such as Ansarada, Aconex, SharePoint, and others are available.  They can be pricey and will require a team mindset to organize and catalog the information put into them.  However a properly implemented system can make it easier to search for files, keywords, and the latest versions of files. “Properly implemented” means that the entire team takes time when putting information in to ensure it is properly tagged. However even such systems can become repositories for hundreds or thousands of files.
When using a cloud-based data room or FTP site, try to select one that allows bulk downloading of documents rather than only allowing one file at a time.
Some data rooms, for security and tracking purposes, require users to be online in order to open a document, even documents downloaded onto your computer.  This makes it difficult to work when one doesn’t have internet access.
Some data rooms limit the cut & pasting ability of the documents.  This can make it difficult to prepare your findings report and you wish to include copied images from the report.

Conclusion

The bottom line is that data room management is important although I don’t know if there is any single magic solution.
Small mining companies may have tight budgets and a limited management team so organizing data properly isn’t high on their priority list.   I suggest to anyone organizing a data room, please take the time to properly set up the folder structure, develop a single bibliography of what files are in there, and assign a person to be familiar with the general contents of the data room.
Unless its a legal case involving lawyers, don’t just dump in everything. Avoid unnecessary data or “work in progress” files that are not actually required by anyone.
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14. Miners – Why Have Your Own Independent Consultant?

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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12. Financings – It Helps to Have a Credible Path Forward

mine economics
Update: This blog was initially written in May 2015, however not much as changed to the end of 2018.
Let me say the obvious; the state of the junior mining market is not great these days.  The number of financings is down and it seems there are a lot of companies struggling to get their piece of the financing pie.   People mention to me that there actually is a fair bit of private equity funding available but only for the right projects.
I have heard from geologist colleagues that financing grass-roots exploration is still extremely difficult.  That is unless company management has had past successes or is well connected to the money scene.
I’m told that 43-101 resource estimates alone no longer generate much excitement.  For projects to be “on the radar” they need to be advanced to at least the PEA stage.  It seems that investors want some vision of what the project might eventually look like.
I have be made aware of more junior mining companies that are struggling for cash while others seemed to have no problem in getting at least some funding to continue their operations.  To me, the biggest differences between these two situations are;
  • If there is top notch management in place,
  • The type of project they had,
  • If their path forward and development plan made sense.

You don’t want to always change management

Management is what it is.  Companies attempt to bring on experienced people to the executive level or to the Board level.   Experienced management can hopefully establish if their project will have a high probability of success or if the project is going to be a hard sell.  This will provide guidance on whether to continue spending money on the project or look for a new project.
From my experience in undertaking due diligence, when a company is looking for financing it is important that  management have the capability to present an orderly, practical, and realistic path forward.  It is important to demonstrate where they will spend the money.
I have participated in due diligence meetings listening to management teams explain that they will have a resource estimate this year and be in production in two years.  Those around the table glance at one another, knowing that they will be lucky to have a feasibility study completed by that time and even more lucky to have their environmental permits in place.   This makes investors nervous.

Keep plans realistic and achievable

It does not help the perception of a management team (or the project itself) if the path forward is unrealistic and unattainable.  The exception being if the management team have done it before.   Similarly low-balling cost estimates and presenting great NPV’s will usually fool no one that has experience. It ultimately may do more harm to credibility than good.
The bottom line is that in order for a project (and the management team) to get serious attention from potential investors is to make sure there is a realistic view of the project itself and have a realistic path forward.
Even a good property can be tarnished by making the technical aspects look over-promotional rather than real.  Make sure the right technical people are involved in the entire process and that company management are listening to them.
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9. Large Consulting Firms or Small Firms – Any Difference?

Mining feasibility pre-feasibility
I have come across some junior mining companies that have based the selection of their engineering consultant on the assumption that they needed a “big name” firm on the cover page to give credibility to the study.   This is an interesting dilemma that many smaller mining companies run into and also a dilemma for the smaller engineering firms trying to win jobs.  Large consultants may ultimately be higher cost due to their overheads, however their name on the study may bring some intangible value.
Based on my experience I feel that larger consultants are best suited for managing large scope feasibility level studies.  This isn’t because they will necessarily provide a better technical product, but rather they tend to have the management and costing systems in place to undertake the larger studies.  The larger firms will be able to draw in more management resources; for example, project schedulers and document control personnel.  Ultimately one will pay for all of these people, which may help in getting to the endpoint of the final study but it will come at a cost.
For certain aspects of a feasibility study, one may actually get better technical services from smaller specialized engineering firms.  However the overall coordination of a large feasibility study can be an onerous task and the large firms may be well positioned to do this.
In my view, likely the best result will come from a combination of a large firm managing the feasibility study but undertaking only the technical work where they can be deemed to be experts in.  The large lead firm would be supported by smaller firms for the specialized aspects, as per a previous article “Multi-Company Engineering Studies Can Work Well..Or Not”.
For smaller studies, like scoping studies (i.e. PEA’s) which can be based on limited amounts of technical data, I personally don’t see the need for the large engineering firms.  The credibility of such early studies will largely be based on the amount of data used to support the design assumptions; for example how much metallurgical testing has been completed; how much geotechnical investigation been completed; how much inferred resource is being used in the mine plan (see “PEA’s – Not All PEA’s Are Created Equal”).  A large firm’s use of limited data may be no more defensible than a small firm’s use of the same data.
One of the purposes of an early stage study is to see if the project has economic merit and would therefore warrant further expenditures in the future.  An early stage study is generally not used to defend a production decision.  In addition, the objective of an early study is not necessarily to terminate the project outright unless it is obviously highly uneconomic.
I have seen cases where larger firms, in order to protect themselves from limited data, were only willing to use the most conservative design assumptions. This may not be helpful to a small mining company trying to decide what to do with a developing project.
My bottom line is that for early stage studies like a PEA, smaller engineering firms can do as good a job as larger firms.  However one must select the right firm, review some of their more recent 43-101 reports to gauge their quality of work, and don’t hesitate to check their client references.   For the more advanced feasibility level studies, if the small firm indicate they can do the entire study too, one should be wary. Perhaps they can do parts of the feasibility study by sub-contracting to a larger firm but managing such large study may be beyond their internal capabilities.
Whether considering a small or large engineering firm, one needs to be aware of their strengths and weaknesses as regards to the specific study.
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7. Multi-Company Engineering Studies Can Work Well…or Not

Mining studies
Most, if not all, advanced studies these days rely on engineering teams comprised of participants from different consulting firms or from different regional offices of the same company.   This approach gives the opportunity to use  experts for different parts of a study.
My recollection is that years ago larger consulting firms would offer to do an entire study in-house.  That now seems to have changed and the multi-company approach seems to be the norm.
This is partly being driven by the clients who wish to work with  consultants they are familiar with and have existing relationships. It
In some instances, larger firms may still make the argument they can take on all of the project scope themselves.  However reflect on such offers, the danger being a less qualified team seconded from offices that are not busy.  Possibly you won’t get the best team; you  get who is available.
In many joint company studies, often few of the team members will have ever worked together before.  It may be a team building exercise right from the start.
I have had both good and bad experiences with these types of engineering teams.  Some of them work very well while others floundered.  Even when working with different offices of the same firm, things may not go as planned.  Some of those in-house teams may not have previously worked together.

The Study Manager is Key

To have a successful study team, in my experience the two key factors are;
  1. The competency of the Study Manager;
  2. The amount (and style) of team communication.
The Study Manager is vital to keeping everyone working on the same page and making sure timelines are met. (I have another blog discussing the Study Manager role).  A single team member delaying their deliverables will delay others on the team.
Some consulting firms have multiple client projects underway at the same time.  Unexpected delays in one study may cause them to shift personnel onto other clients.  Unfortunately sometimes it is difficult to bring the team back together on your project at a moment’s notice.
The Study Manager must ensure that everyone understands what their deliverables are.   Generally this is done using a “Responsibility Matrix”, but these can sometimes be too general.
Where cost estimation is involved, the Responsibility Matrix should be supported by a Work Breakdown Structure (“WBS”) assigning the costing responsibilities.  Given that the contentious parts of many studies are the capital and operating cost estimates, I personally view the WBS equally as important as the Responsibility Matrix.  (I have another blog on the subject of WBS ).
Team communication is vital and there are different ways to do it.   Weekly or bi-weekly conference calls work well but these need to be carefully managed.  With a large team on a conference call, there is a fine line between getting too much technical detail versus not enough detail.
On some studies I have seen a weekly call restricted to one-hour long and then everyone flees until next week’s call.  At the end of these conference calls, one might have an uneasy feeling of it being incomplete. Perhaps people were not clear on something but hesitated to ask become the one-hour time is up.   In such cases it is important for the relevant parties to continue on or have a separate call.

Make it apparent to everyone that they should speak up if something is not clear to them, regardless of the time remaining.

The bottom line is that multi-company teams will work fine as long as the study manager is capable.  Its not a simple task, and not everyone can do it well.  However everyone (client and the other team members) appreciate working under a really good study manager.
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4. Four Study Stages (Concept to Feasibility) – Which Should We Do?

Over my career I have been involved in various types of mine studies, ranging from desktop conceptual to definitive feasibility.    Each type of study has a different purpose and therefore requires a different level of input and effort, and can have hugely different costs.
I have sat in on a few junior mining management discussions regarding whether they should be doing a PEA or a Pre-Feasibility Study, or a Feasibility instead of a Pre-Feasibility Study.    Everyone had their opinion on how to proceed based on their own reasoning.   Ultimately there is no absolute correct answer but there likely is one path that is better than the others.  It depends on the short term and long term objectives of the company, the quality and quantity of data on hand, and the funding available.

Four basic types of studies

In my opinion there are four basic levels of study, which are listed below.  My objective to simply provide an overview of them.  Detailed comparison tables are readily available, and anyone can contact me for an a full copy of the table  shown below).

Four Studies Table

1. Desktop or Conceptual Study
This would likely be an in-house study, non-43-101 compliant, and simply used to test the potential economics of the project.  It lets management know where the project may go (see a previous blog at the link “Early Stage “What-if” Economic Analysis – How Useful Is It?”.    I recommend doing a documented desktop study.  It doesn’t take much time and is not made public so the inputs can be high level or simply guesses.  This type of study helps to frame the project for management and lets one test different scenarios.
2. Preliminary Economic Assessment (“PEA”)
The PEA is 43-101 compliant and presents the first snapshot of the project scope, size, and potential economics to investors.  Generally the resource may still be uncertain (inferred classification), capital and operating costs are approximate (+/- 40%) since not all the operational or environmental issues are known at this time.   Please do not sell the PEA as a feasibility study.

Don’t Announce a PEA Until You Know the Outcome

I recommend not announcing or undertaking a PEA until you are confident in what the outcome of the PEA will be.   A reasonable desktop study done beforehand will let a company know if the economics for the PEA will be favorable.  I have seen situations where companies have announced the timing for a PEA and then during the study, have seen things not working out as well as envisioned.  The economics were poorer than hoped and so a lot of re-scoping of the project was required.  The PEA was delayed, and shareholders and financial analysts negative suspicions were raised in the meantime.
The PEA can be used to evaluate different development scenarios for the project (i.e. open pit, underground, small capacity, large capacity, heap leach, CIL, etc.).  However the accuracy of the PEA is limited and therefore I suggest that the PEA scenario analysis only be used to discard obvious sub-optimal cases.  Scenarios that are economically within a +/-30% range of each other many be too similar to discard at the PEA stage.
3. Pre-Feasibility Study (“PFS”)
The PFS will be developed using only measured and indicated resources (not inferred) so the available ore tonnage may decrease from the PEA study.  The PFS costing accuracy will be better than a PEA.  Therefore the PFS is the right time to evaluate the remaining development scenarios.  Make a decision on the single path forward going into the Feasibility study.

Use the PFS to determine the FS case

More data will be required for the PFS, possibly a comprehensive infill drilling program to upgrade the resource classification from inferred.  Many companies, especially those with smaller projects might skip the PFS stage  and move directly to Feasibility.  I don’t disagree with this approach if the project is fairly simple and had a well defined scope at the PEA stage.
4. Feasibility Study (“FS”)
The Feasibility Study is the final stage study prior to making a production decision.  The feasibility study should preferably be done on a single project scope.  Try to avoid more scenario analysis at this time.
Smaller companies should be careful entering the FS stage since, once the FS is complete, shareholders will be expecting a production decision.  If the company only intends to sell the project with no construction intention, they now hit a wall.  What to do next?

Sometimes management feel that a FS may help sell the  project.

I don’t think a FS is needed to attract buyers and sell a project.  Many potential buyers will do their own in-house due diligence, and possibly some design and economic studies.   Likely information from a PFS would be sufficient to give them what they need.  A well advanced Environmental-Socio Impact Assessment may give as much or more comfort than a completed Feasibility Study would.

Conclusion

executive meetingMy bottom line recommendation is that there is no right answer as to what study is required at any point in time.  Different paths can be followed but consideration must be given to future plans for the company after the study is completed.   Also consider what is the best use of shareholder money?  Company management may see pressure from retail shareholders, major shareholders, financial analysts, and the board of directors.  Management must decide which path is in the best longer term interests of the company.
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