Understanding Total Risk
Total Risk = Sovereign and Social Risk + Technical Risk + Permitting Risk + Business Risk
We subscribe to the view that risk management is the key to success in mining: the proper understand of, and management of risk is the most important aspect in developing a project.
- We believe in spending as much time assessing real risk as determining valuation.
- Our team has considerable experience in de-risking mining projects in several regions.
Sovereign and Social Risk
- Is the Government open for business and investment?
- How stable is the economy, the government and political infrastructure?
- Each stage is required for a project to become a mine:
- Discovery • Delineation • PEA • Pre-feasibility study • Final feasibility study and Permitting • Project Financing • Construction • Production • Optimization • Normal Operations • Closure
- After every phase of the project’s life, the risks are lower and valuation increases.
- Mining companies must earn a social license to operate and that process must start before the actual permitting process officially begins:
- We believe in partnering and engaging the local community from day one.
- What are their concerns and how can we support their local objectives: Employment, safety, community support and environmental protection.
- We understand that proper communication is one of the most important parts of the permitting process.
- Good companies do this well and assessing this is a key part of our due diligence.
- Are business and government regulations and the political climate appropriate to support business objectives.
- Risk is mitigated by full transparency to build strong relations within governmental bodies.
- Is the company resourced with necessary skills and expertise to execute?