Articles tagged with: Mining

Junior Miners – Get Your Own Independent Consultant

Date: May 12, 2015 Author: Ken Kuchling Comments: 1 Reply
PEA consultants
Over the past few decades I have worked in different consulting roles; as an independent consultant; as a member of a large consulting team; and as owner’s representative managing consultants. I have worked on projects where the mining company has their own external consultants that they have worked with for years (decades), learning that there are roles for both the independent consultant and larger consulting firms.
A previous blog (“9. Large Consulting Firms or Small Firms – Any Difference?”) discusses where 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 where multiple skills sets are needed.

Independent Consultants

Independent consultants offer a unique service.  They are well suited for assisting a project Owner directly, either independently or as part of an overall corporate advisory team. They may work on a part time basis, so don’t bring the fixed financial liability of a salaried employee.  Furthermore, non-technical junior mining management should always have easy access to internal technical skills for brainstorming ideas or receiving technical direction.
Even if some of the management are technically oriented, having independent thought is valuable. The question is whether the consultant should be a cheerleader or be a true independent observer.
Independent consultants part of the management team will differentiate themselves from large engineering firms in several ways.
  • They don’t bring a lot of extra personnel onto a job.  They focus  on their niche experience and on what is needed.  One can always pull in other expertise when needed.
  • They can provide unbiased advice.  Larger firm sometimes have business development conflicts. The independent consultant does not have the motivation to win a feasibility study or EPCM contract.   They motivation is to stay employed, so they want to deliver quality input and feedback.
  • A company can develop long term working relationships with their independent consultants.  Everyone gets familiar with each other’s objectives and goals.  Large engineering firms can be revolving doors with people continually moving on to other roles or even other firms.
  • Independents can work efficiently at a pace of their own choosing.  This can result in lower costs and faster deliverables.  I have worked with many independent consultants that work extra time to meet their client targets.
  • Independents can provide long term stability since they generally won’t have any employee turnover.  Personally I was involved for over 15 years with a bauxite mining operating in Suriname.  The expat technical staff at the mine site had regular turnover.  Ultimately I ended up being the only constant for the mine operator, knowing the history and why things were done they way they were.  I even had copies of old reports they could no longer find in their archives.  We avoided re-inventing the wheel each time a new technical manager was brought in.

Consultants and Stocks Options

A point of conversation is whether the independent consultants should receive stock option compensation.  I have worked under both situations.
Awarding stock options might eliminate the “independent” nature of the relationship and hence negate the ability to sign off as an independent QP. However in some circumstances, the company may not require the consultant to be a QP since they mainly act in an advisory role. A question to ask is whether the company wants “independent” advice from someone who may be a shareholder or option holder?
One advantage of awarding stock options is that the consultant may become more beholden to the project.  They feel it is their project too, rather than simply acting as a paid adviser.  They may have a longer term interest in being involved with the project and the company, and are less likely to move on.
Conversely the company may prefer the consultant doesn’t have any direct ownership so that their advice can be viewed as being unbiased. Having a contrarian viewpoint on corporate plans may be a good thing.
Overall I feel that awarding stock options is a good way to foster long term commitment from the consultant. It can be easier for them to walk away without such an inducement to stay, but there are no guarantees.

Conclusion

The bottom line is that independent consultants have a role to play and should be part of all owner’s teams, whether be on the Board or on an Advisory Panel.   The independent consultants can be selected based on their specific 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 also seen instances where some advisors actually gave poor advice.  Perhaps they weren’t that technically capable, or maybe were simply friends of  management.
Lastly, decide whether the consultant should be an honest advisor or a cheerleader.  Companies should want to hear the truth.  If a future 3rd party due diligence team comes in, they will be looking for flaws in the project.  It would be in a company’s self interest to already know what those flaws are before the due diligence team.
One of the things an advisor can help do is help decide the study path the company should take.  To learn more about the possible mining study paths, you can check out this blog post “4 Mining Study Types (Concept to Feasibility)“.
Note: You can sign up for the KJK mailing list to get notified when new blogs are posted. Follow me on Twitter at @KJKLtd for updates and other mining posts.   The entire blog post library can be found at https://kuchling.com/library/
For some free mining calculator apps, including project timelines and a simplified cashflow modeller, check out this website https://sites.google.com/view/drillingdown
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Pit Wall Angles and Bench Widths – How Do They Relate?

Date: May 10, 2015 Author: Ken Kuchling Comments: 3 Replies
open pit slopes
An open pit wall will consist of a series of stacked benches.  Geotechnical engineers will normally provide the pit slope design criteria based on the inter-ramp angle (“IRA”) for various sectors around the pit.  The IRA represents the toe-to-toe slope angle, as shown in the diagram below.
The inter-ramp angle can be created in many ways, depending on the bench height (“BH”), bench face angle, and the catch bench or berm width.  Different combinations of these can be used to develop the same inter-ramp angle.

Pit wall schematic

Typically the bench face angle (“BFA”) will be dictated by the rock strength, the structural fabric, and whether controlled blasting is used (minimizing damage to the walls).   The BFA may vary around the pit or in different rock types, but it typically is in the range of 60° to 75°.
The catch bench (“CB”) or berm is used to catch spalling rock and prevent it from rolling down the pit wall,  creating a safety hazard.
A rule of thumb is that the catch bench width should be according to the formula 4.5m + 0.2H, where H is the height of the bench.   This means the recommended catch bench width for a 5m high bench should be about 5.5m; for a 10m high bench it should be 6.5m; and for 15m high bench it should be 7.5 metres.
Double benching (or triple benching) is used where the inter-ramp slopes angles are steep enough that single benching would result in an overly flatten slope.
For example if the inter-ramp slope is 50° and the BFA is 70°, then the corresponding calculated catch bench width for a 5m high bench would be 2.4 metres.  However such a small catch bench would be ineffective in catching spalliing rock.
If one double benched (i.e. left a catch bench every 10m instead of every 5m), then the calculated catch bench width would be 4.8 metres.  If one triple benched (i.e. left a catch bench every 15m), then the recommended width would be 7.1 metres.  Hence triple benching would be suggested in this case, assuming the rock mass is of sufficient strength to sustain a 15m high face.

Pit Slope Designer App

A simple interactive app (Pit Slope Designer App) is available to show the relationship between all of these factors.  A screenshot of the calculator is shown below.  It allows one either to calculate the IRA given a set of bench height, BFA, and catch bench criteria; or calculate the catch bench width given the height, BFA, and IRA criteria.  The four upper cells are the input cells.
Single Bench Height (BH):  this is the input height of a single operating bench.
No. of Benches between catch benches:   this is the input for single, double, or triple benching.
Bench Face Angle (BFA):  this is the input bench face angle, in degrees
Catch bench (CB):  this is the width of each catch bench, either as an input or a calculated value.
Total Height (TH):  this is the calculated total height (# of benches X single bench height)
Inter-Ramp Angle (IRA): this is the slope angle in degrees, either as a calculated value or an input.

When double or triple benching, sometimes a small 1-2m drill berm may be left between benches due to the inability of the drill to position itself against the pit wall.  The width of the drill berm can possibly be eliminated by drilling the entire double bench or using smaller drills.
Sometimes one may see the term “geotechnical berm”.   In some pit designs a large bench is introduced periodically, e.g. every 120m-180m in continuous wall height, which acts as another measure to catch ravelling rock.

Conclusion

The bottom line is that the inter-ramp angle can be achieved in different ways depending on various components of the slope profile.  Safety is of the utmost importance and therefore the adequate sizing of the catch bench is important, as is the ability to access the benches and clean up the rubble buildup.  Double and triple benching maybe required in some circumstances to achieve the design wall angles yet maintain safety catch bench widths.
For those curious about how mine economics can be impacted by increasing the pit wall angle, a small study we did  indicated that going from 45 deg to 50 deg could reduce waste quantities by 15% This was equivalent to $50 million in savings.  To read more, follow this link.  “Steeper Pit Slopes Can Save Money“.
You can sign up for the KJK mailing list to get notified when new blogs are posted. Follow me on Twitter at @KJKLtd for updates and other mining posts. The entire blog post library can be found at https://kuchling.com/library/
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Financings – It Helps to Have a Credible Path Forward

Date: May 9, 2015 Author: Ken Kuchling Comments: 1 Reply
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.
Note: If you would like to get notified when new blogs are posted, then sign up on the KJK mailing list on the website.  Otherwise I post notices on LinkedIn, so follow me at: https://www.linkedin.com/in/kenkuchling/.
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Ore Value Calculator – What’s My Ore Worth?

Date: May 8, 2015 Author: Ken Kuchling Comments: 4 Replies
rock economic value
In my view, one of the most important things you need to understand about your orebody is the insitu rock value. Hopefully it is economic, i.e. an ore value.  Its the key driver in shaping the economics of any mining project.
The two main nature-driven factors in the economics of a mining project are the ore grade and the ore tonnage.  In simplistic terms, the ore grade will determine how much incremental profit can be generated by each tonne of rock processed.
The ore tonnage will determine whether the cumulative profit generated all the ore will be sufficient to pay back the project’s capital investment plus provide some reasonable profit to the owner.

 

Does the Ore Grade Generate a Profit ?

In order to understand the incremental profit generated by each ore tonne one must first convert the ore grade into a revenue dollar value.   This calculation will obviously depend on metal prices and the amount of metal recovered.  For some deposits with multiple metals, the total revenue per tonne will be based on the summation of value contributed by each metal. Some metals may have different process recoveries and different net smelter payable factors, so several factors come into play.
To help calculate the value of the insitu ore, I have created a simple cloud-based app at this link (Rock Value Calculator App).    Simply enter your own data in the light colored cells and the rock values are calculated on a “$ per tonne” basis. Since the table is pre-populated, one must zero out the grade values for metals of no interest.

 

Price: represents the metal prices, in US dollars for the metals of interest.
Ore Grade: represents that head grades for the metals of interest in the units as shown (g/t and %).
Process Recovery: represents the average % recovery for each of the metals of interest.
Payable Factor: represents the net payable percentage after various treatment, smelting, refining, penalty charges.  This is simply an estimate depending on the specific products produced at site.  For example, concentrates would have an overall lower payable factor than say gold-silver dore production.  For concentrates, 85% is a reasonable number while for dore bars, 95% is a reasonable value.
Insitu Rock Value: this output is the dollar value of the insitu rock (in US dollars), without any process recovery or payable factors being applied.
NSR Rock Value: this output represents the net smelter return dollar value after applying the process recovery and payable factors.  This represents the actual revenue that could be generated and used to pay back operating costs.  One can see the impact that these payables have on the overall value.

Mining Profit = Revenue – Cost

The final profit margin will be determined by subtracting the mine operating cost from the NSR Rock Value.  These operating costs would include mining, processing, G&A, and some offsite costs.  Typically large capacity open pit operations may have total operating costs in the range of $10-15/tonne, while conventional hardrock underground operations would be much higher ($50->$100/t).

Conclusion

The bottom line is that very early on one should understand the net revenue that your project’s head grades may deliver.   How valuable is the rock?   It is a fairly simple calculation to undertake.
You can even start evaluating the rock at the exploration drilling stage.  I have a cloud-based calculator for this at the link “Drill Intercept Analysis“.  This calculator is a bit more complex than the Rock Value Calculation but relies on inputting drill intercept data.
Ore value will give sense for whether its a high margin project or whether the ore grades are marginal and higher metal prices or low operating costs will be required. The earlier one understands the potential economics of the different ore types, the better one will be able to visualize, design, and advance the project.
For gold deposits, I have another blog post that discusses grades, values, and how they related to open pit or underground mining costs.  Low grade narrow intervals like have much less economic potential than wide low grade interval or narrow high grade gold intervals. You can read that post at this link “Gold Exploration Intercepts – Interesting or Not?“

 

Note: If you would like to get notified when new blogs are posted, then sign up on the KJK mailing list on the website.  Otherwise I post notices on LinkedIn, so follow me at: https://www.linkedin.com/in/kenkuchling/.

 

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Google Earth – Keep it On Hand

Author: Ken Kuchling Comments: 1 Reply
Mining studies
In a previous blog post “Mine Site Visit – What Is the Purpose?” I briefly discussed the requirements for a mine site visit to be completed by one or more Qualified Persons (“QP”) in a 43-101 compliant study.    Unfortunately normally the entire study team cannot participate in a site visit; however the next best thing may be Google Earth.

See the Mine Site with Google Earth

Gather your team around their computers and fire up screen sharing software like Teams, GoToMeeting, Skype, or Zoom.  Give control of the mouse to someone who knows the site well.  Here are some of the things you can do on your group tour.
  • You can fly-around the project site examining the topography.
  • You can view regional features, regional facilities, land access routes, and existing infrastructure.
  • You can measure distances (or areas), either in a straight line or along a zigzag path.
  • You can view historical aerial photos (if they exist) to show how the area may have changed over time.
  • You can import GPS tracks and survey waypoints.  If a member of the study team has visited the site with a GPS, they can illustrate their route and their observations.
My recommendation, at the start of a study, is to always have a Google Earth session with your technical team to examine the project site and the regional infrastructure.
A group session like this ensures that everyone sees and hears the same thing. It’s like taking a helicopter tour of the site with your entire study team at once.   A “helicopter tour” would be a good agenda item at the very first kickoff meeting.
Another option is to check the aerial photos and Bird’s Eye views on the Bing Maps website (www.bing.com/maps).  Sometimes those images will be different than what you will find in Google Maps or Google Earth.
As mentioned above, for those still interested the  previous blog post is at “Mine Site Visit – What Is the Purpose?“
Note: If you would like to get notified when new blogs are posted, then sign up on the KJK mailing list on the website.  
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Large or Small Mining Consulting Firms – Any Difference?

Date: May 7, 2015 Author: Ken Kuchling Comments: 2 Replies
Mining feasibility pre-feasibility
Some junior mining companies select their mining study consultant based on the assumption that they need a “big name” firm to give credibility to their study.   This creates an interesting dilemma for many smaller mining companies since they the larger firms can cost more.  Its also a dilemma for smaller engineering firms trying to win jobs.  While large consultants may cost more due to higher overheads; their brand name on a study may bring some value.
In my personal experience I find that larger consultants are best suited for managing the large scale feasibility studies.  This isn’t because they necessarily provide better technical expertise.  Its because they generally have the internal project management and costing systems to manage the complexities of such larger studies.
The larger firms are normally able to draw in more management resources; for example, project schedulers, cost estimators, and document control personnel.  Ultimately one will pay for all of these people, albeit they may be a critical part in successfully completing the study.
A feasibility study is more rigorous than a pre-feasibility study, which in turn is more rigorous than a PEA or scoping study.

Sub-contracting Parts

For certain aspects of a feasibility study, one may get better technical expertise by subcontracting to smaller highly specialized engineering firms.  However too much subcontracting may become an onerous task.  Often the larger firms may be better 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 aspects for which they are deemed to be experts.
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”.

What about smaller studies?

For smaller studies, like scoping studies (i.e. PEA’s), which can be based on limited amounts of technical data, I  don’t see the need to award these studies to large engineering firms.  The credibility of such early studies will be linked to the amount of data used to support the study.  For example, there may be limited metallurgical testing, or limited geotechnical investigations; or the resource is largely inferred.
Not all PEA’s are equal (see “PEA’s – Not All PEA’s Are Created Equal”).  A large firm’s application of limited data may be no more accurate or 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 (hopefully) not used to defend a production decision.  The objective of an early stage study is not necessarily to terminate a project (unless it is obviously highly uneconomic).
I have seen instances where larger firms, protecting themselves from  limited data, were only willing to use very conservative design assumptions in early stage mining studies. This may not be helpful to a small mining company trying to decide how to advance such a project.

Conclusion

The 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.  Don’t hesitate to check with previous client references.
For the more advanced feasibility level studies, be wary if a smaller firm indicates they can do the entire study. Perhaps they can be responsible for some parts of the feasibility study as a sub-contractor to a larger firm. Managing these large study may be beyond their experience and internal capabilities.
Whether you are considering a small or large engineering firm, know their strengths and weaknesses as they will relate to the specific’s of your study.
In another blog post I have expanded the discussion about the importance of the study manager role. You can read that post at this link “Importance of a Study Manager – That’s the Key“.
Another blog post discusses undertaking studies using multiple engineering teams and the pitfalls to watch out for.  That blog post is at “Multi-Company Mining Studies Can Work Well…or Not“.
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Early Stage “What-if” Mine Economic Analysis – Its Valuable

Date: April 27, 2015 Author: Ken Kuchling Comments: Leave a reply
Mining study economics
Over my career I have worked with large and small mining companies and seen how they studied projects and potential acquisitions.
Large mining companies have their in-house evaluation teams that will jump on a potential opportunity that comes around and start examining it quickly.  These evaluation teams may consist of a specialized head office group supported by people temporarily pulled in from their mining operations.
They are experienced at what they do and can provide management with solid advice even if working with only limited data.  This help management decide very early on whether to further pursue the opportunity or walk away immediately.
Early stage economics are normally part of this evaluation approach.   Although they are not correct all of the time, more than often they save their company from wasting money on projects unlikely to fly.
However if you are a small mining company, what are your options?
You don’t have an in-house technical team sitting around ready to go.  Management still needs to know if this project has a chance.  If the project is early stage, sometimes management thinks its fine to take a gamble, acquire the project, and then put money into the ground rather than spending on early studies.

It is possible to do both

Management and the exploration team usually have a vision for their projects, even those projects with only limited information.   Each person may have a different opinion on the potential size and scope of what may ultimately exist there.  However the question is whether any of those visions have sufficient accuracy to warrant spending more shareholder money on the project.
Some of the junior mining management teams that I have worked with have found it beneficial early on to have a basic internal cashflow model on hand.   If properly constructed, these are simple to tweak to examine “what-if’s” scenarios.  Input the potential deposit size and mine life, potential head grades, expected metallurgy, and typical costs to see what the economic outcome is.  Does this project have a chance and, if not, what tonnage, head grade, recovery, or metal price is required to make it work?   The simple cashflow model can tell you all of this.

Early stage modelling adds value

The tangible benefits to very early financial modelling are:
  • It helps management to conceptualize and understand their project.  If done honestly, it will reveal both the opportunities and threats to success.
  • It helps management to understand what technical parameters will be most important for them to resolve and what technical factors can be viewed as secondary. This helps guide the on-going exploration and data collection efforts.
  • Periodically refreshing the economic model with new information will reveal if the economic trends are getting better or worse.

Its not 43-101 compliant

I must caution that this type of early stage economic analysis is not 43-101 compliant and hence can not be shared externally, no matter how much one might wish to.
Another caution is that in some cases these early stage un-engineered projections become “cast in stone”, with management treating them as if they are accurate estimates.  Then suddenly all subsequent advanced studies must somehow agree with the original cost guesses, thereby placing unreasonable expectations on the project and the people doing the work.
The early stage economic models can consist of simple one-dimensional tables using life-of-mine tonnages or two-dimensional tables showing assumed annual production by year.  Building simple cashflow models may take only 2-3 days of effort.  That is not an onerous exercise compared to the overall benefit they can provide.
The bottom line is that it is useful to take a few days to develop a simple cashflow model.  “Simple” also means that management themselves can tweak the models and don’t need to be modeling expert on hand at all times.  “Simple” means the model should be well.  In another block post I discuss why to avoid demonstrating one’s Excel skills in building models. Read more on that at this link  Financial Spreadsheet Modelling – Think of Others.
Most companies have a CFO that can easily undertake this type  of modelling, with the help of some technical input.  Be careful though, often CFO’s take the simple cashflow model to an unwarranted level of complexity.
The simplest of all models is the one-dimensional approach.  To learn more about the concept behind a simple 1D financial models, read the blog post “Project Economics – Simple 1D Model” .
The entire blog post library can be found at this LINK with topics ranging from geotechnical, financial modelling, and junior mining investing.
Note: If you would like to get notified when new blogs are posted, then sign up on the KJK mailing list on the website.  Otherwise I post notices on LinkedIn, so follow me at: https://www.linkedin.com/in/kenkuchling/.
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Mine Financial Modelling – Please Think of Others

Author: Ken Kuchling Comments: Leave a reply
Mining Cashflow modeling
In my role as a mining consultant I am often required to review spreadsheet cost models or cashflow models built by others.  Some of these spreadsheets can be monsters, incorporating multiple worksheets, cross-linking between worksheet cells, and having hard wired numbers inside cell formulas.
Some of the models I have reviewed will build the entire operating cost (mining, processing, G&A) in one grand file.  They will build in the capital cost too and finally provide the economic model… all in one spreadsheet!
This makes the model very complex to audit and it becomes difficult to follow the logic.  Sometimes gut feel says there are formula or linkage errors in there somewhere but you just can’t find them.  In these types of models my focus is on trying to figure out the formula logic than actually looking at the validity of the inputs and output.
It seems that only the model developer can really work with these spreadsheets and the rest of us can just hope that they have created everything correctly.

Don’t be too clever

Over the years, I have learned that there is an art to creating a clear, concise, and auditable cashflow model (or cost model). Once in awhile you come across one that is well crafted and isn’t an example of someone trying to show how clever they are.
In building the spreadsheet models I have learned to not do too much within the same model, especially if different people are involved in its foundation.  My other suggestions are:
  • Color coded input cells differently than formula cells.
  • Carry over values rather than linking to other worksheets.
  • Highlight cells that are carried over from other worksheets.
  • Never hardwire numbers into a formula.
  • Use named cells for key fixed inputs (like exchange rate, fuel price, etc.)
  • Use conditional formatting when possible to help identify errors.
  • Put your “Totals” column along the left side of the worksheet so you can add columns if needed.
I won’t go into detail on good spreadsheet practices, but you can check out the instructional presentations prepared by Peter Card at Economic Evaluations (http://economicevaluation.com.au).
He has some excellent practical recommendations that all financial modellers should consider.  It doesn’t take long to review his online courses and it’s worth your time to do it.  His recommendations can generally apply to any Excel modelling exercise, whether its costing, scheduling, or economic analysis.

Try to help by building in clarity.

The bottom line is that you must build your spreadsheet models compatible with the way you think.  However not everyone thinks the same way so try to keep all aspects easily identifiable and traceable.  Be consistent in the model format from worksheet to worksheet. Be consistent in methodologies on all worksheets and with all your models.   Your client, colleagues, and reviewers will thank you.
Another aspect of due diligences that can be taxing is figuring out the structure of a data room.   Simply throwing all of your files into an unstructured data room helps no one.   I have written another blog about this annoyance at “Mining Due Diligence Data Rooms – Help!“

 

Note: If you would like to get notified when new blogs are posted, then sign up on the KJK mailing list on the website.  Otherwise I post notices on LinkedIn, so follow me at: https://www.linkedin.com/in/kenkuchling/.
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