Many of us have heard the statement “Have a look in the data room, it’s all in there”. This can bring a cold sweat to even the most experienced engineer who undertaking a due diligence review. How many of you can 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’s like looking for a needle in a haystack.
It can be difficult to impossible to determine which files are important and relevant and which files have been simply dumped into the data room. There is nothing worse than spending a day reviewing an Excel financial model only to find out that it wasn’t the latest version and a different un-related folder had the correct version.
Data rooms are typically created for due diligence exercises, or during advanced an engineering stage. Regardless of the purpose, it is helpful for all involved to have a document control person who understands what is in the data room, what is important, and what is non-essential.
Large projects often have an dedicated document control person to manage the data room. However smaller companies in a due diligence phase may tend to use a team approach. Everyone dumps all their electronic files into the data room, including email transcripts, using some type of sensible folder structure (hopefully).
It’s then up to the user to dig through the files to locate what they need. This can be an onerous task, costing everyone money in wasted time.
Organization of the mining 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 function, organize, and catalog the information. 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 meta-data. Its is not uncommon for such systems to become repositories for hundreds or thousands of different 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 download 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 (like on an airplane).
Some data rooms limit the cut & pasting ability from the documents. This can make it difficult to prepare your own summary report if you want to include pasted images from the documents.
Conclusion
The bottom line is that management of a mining data room is critically 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 the 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 files or “work in progress” files that are not actually required by anyone.
Read More on the Subject
Another aspect of data rooms that can help make a due diligence taxing is the way the spreadsheet models are built. Models can either be made simple and user friendly, or can be complex showing how clever the model creator is. You can read some thoughts on this at the following link “Mine Financial Modelling – Please Think of Others“.
For more discussion on the topic of mining due diligence, another blog post discusses the help that a technical checklist can deliver. There are many aspects of a mining project, from legal, social, to technical and a checklist helps to avoid missing things. You can read more about the checklist on this at “Mining Due Diligence Checklist“. You can even request a free copy of my Excel checklist if interested.
Amen! I see them for due diligence, and a well organized data room is a real time saver.
Awesome viewpoint. I have seen several mining companies that don’t have a dedicated data&file management crew or have some but they weren’t well-trained. This added more difficulties for the finding and using data.
So true. A poor data room can be a sign the company doesn’t care or that they are disorganized and it can make it hard to do a review. However it can also increase curiosity whether they are so unorganized that they missed some positives or upsides about their project the we can realize after acquisition.