XXXI International Mineral Processing Congress 2024 Proceedings/Washington, DC/Sep 29–Oct 3 3609
Scenario 2
Scenario 2 considers a stagewise implementation of the
plant, which would see the commissioning of a Jameson
Cell rougher-scavenger flotation circuit (Stage 1) to gener-
ate a saleable concentrate. Upon commissioning Stage 1,
revenue generation would commence whilst the design,
construction and commissioning of Stages 2 (ultrafine
grinding in the IsaMill ™) and Stage 3 (oxidative leahcing
via the Albion Process ™) commence. Present value cal-
culations for this scenario produced the following results
(Table 6).
Table 6. Scenario 2—Financial analysis results summary
Parameter Units Design
Net Present Value (NPV) USD 585,971,004
Internal Rate of Return (IRR) %273
Payback Time (PBT) Months 6
Scenario 3
Scenario 3 considers a semi-stagewise plant implementa-
tion methodology, whereby Stage 1 and combined Stages
2 and 3 commence concurrently. As Stage 1 has a shorter
construction and commissioning time, concentrate gen-
eration and sale would commence first, and would switch
to the production of doré when Stages 2 and 3 are com-
missioned. Present value calculations for this scenario pro-
duced the following results (Table 7).
Table 7. Scenario 3—Financial analysis results summary
Parameter Units Design
Net Present Value (NPV) USD 602,605,736
Internal Rate of Return (IRR) %158
Payback Time (PBT) Months 13
Comparison of Scenarios
Table 8 provides a visual comparison of the financial results
for each scenario.
Table 8. Scenario-based financial result comparison matrix
Scenario 1 Scenario 2 Scenario 3
NPV
IRR
PBT
Favoured result, moderately favourable, least favourable.
Regarding NPV, whole-of-plant implementation pro-
vides the most net positive NPV after 10 years of operation,
followed by semi-stagewise and finally stagewise imple-
mentation. Considering the time-value of money, capital
investments earlier in the life of the project will minimise
loss of value.
For IRR, stagewise implementation provides the
healthiest IRR after 10 years of operation, followed by
semi-stagewise and finally whole-of-plant implementa-
tion. The ability to reduce upfront capital expenditure and
enable early market access ensures that returns are maxi-
mised year-on-year.
Stagewise plant implementation provides the fastest
payback time, followed by semi-stagewise and finally whole-
of-plant, however, there is little difference between the PBT
for each scenario and all are considered comparable.
Benefits can be seen for all implementation approaches
and will ultimately be dependent on client priorities and
circumstances. For junior mining operations who may
find themselves more capital-constrained, a focus on IRR
to expedite revenue and annual returns may be preferred.
Conversely, where upfront capital is not an issue, an opera-
tion would be able to minimise loss over time by investing
capital earlier.
This analysis compares various implementation stages
and approaches, with a focus on their financial aspects and
designated recovery targets. While each approach has its
own merits, project-specific design assessments should be
conducted and supported by high-level financial modeling
to determine the most economically beneficial option.
CONCLUSIONS
As mining operations seek to treat more complex ore bod-
ies and/or extend the life of their operations, a stagewise
approach to implementation provides an opportunity to
expedite revenue and maximise annual rates of return. It
provides an entrance strategy for projects that may be unable
to commit to an upfront lumpsum capital investment.
A whole-of-plant approach to implementation allows
for projects to fast-track full capacity end-product genera-
tion and ensure effective resource utilisation. From a purely
financial perspective, whole-of-plant implementation
(Scenario 1) approach will provide the most net positive
present value of cumulative cash flows at the end of the
project (i.e., provided the highest NPV). An upfront lump
sum investment into all plant infrastructure will see higher
capital expenditure savings. This is due to the minimisa-
tion of the effect of inflation on the cost of equipment, and
therefore future cash flow, by making capital investments up
front rather than staggering investment as would be done
in a stagewise approach. However, as mentioned above, not
all operations are able to commit to lump sum capital up
front, and a stagewise approach to implementation offers
the chance to minimise upfront capital expenditure and
Scenario 2
Scenario 2 considers a stagewise implementation of the
plant, which would see the commissioning of a Jameson
Cell rougher-scavenger flotation circuit (Stage 1) to gener-
ate a saleable concentrate. Upon commissioning Stage 1,
revenue generation would commence whilst the design,
construction and commissioning of Stages 2 (ultrafine
grinding in the IsaMill ™) and Stage 3 (oxidative leahcing
via the Albion Process ™) commence. Present value cal-
culations for this scenario produced the following results
(Table 6).
Table 6. Scenario 2—Financial analysis results summary
Parameter Units Design
Net Present Value (NPV) USD 585,971,004
Internal Rate of Return (IRR) %273
Payback Time (PBT) Months 6
Scenario 3
Scenario 3 considers a semi-stagewise plant implementa-
tion methodology, whereby Stage 1 and combined Stages
2 and 3 commence concurrently. As Stage 1 has a shorter
construction and commissioning time, concentrate gen-
eration and sale would commence first, and would switch
to the production of doré when Stages 2 and 3 are com-
missioned. Present value calculations for this scenario pro-
duced the following results (Table 7).
Table 7. Scenario 3—Financial analysis results summary
Parameter Units Design
Net Present Value (NPV) USD 602,605,736
Internal Rate of Return (IRR) %158
Payback Time (PBT) Months 13
Comparison of Scenarios
Table 8 provides a visual comparison of the financial results
for each scenario.
Table 8. Scenario-based financial result comparison matrix
Scenario 1 Scenario 2 Scenario 3
NPV
IRR
PBT
Favoured result, moderately favourable, least favourable.
Regarding NPV, whole-of-plant implementation pro-
vides the most net positive NPV after 10 years of operation,
followed by semi-stagewise and finally stagewise imple-
mentation. Considering the time-value of money, capital
investments earlier in the life of the project will minimise
loss of value.
For IRR, stagewise implementation provides the
healthiest IRR after 10 years of operation, followed by
semi-stagewise and finally whole-of-plant implementa-
tion. The ability to reduce upfront capital expenditure and
enable early market access ensures that returns are maxi-
mised year-on-year.
Stagewise plant implementation provides the fastest
payback time, followed by semi-stagewise and finally whole-
of-plant, however, there is little difference between the PBT
for each scenario and all are considered comparable.
Benefits can be seen for all implementation approaches
and will ultimately be dependent on client priorities and
circumstances. For junior mining operations who may
find themselves more capital-constrained, a focus on IRR
to expedite revenue and annual returns may be preferred.
Conversely, where upfront capital is not an issue, an opera-
tion would be able to minimise loss over time by investing
capital earlier.
This analysis compares various implementation stages
and approaches, with a focus on their financial aspects and
designated recovery targets. While each approach has its
own merits, project-specific design assessments should be
conducted and supported by high-level financial modeling
to determine the most economically beneficial option.
CONCLUSIONS
As mining operations seek to treat more complex ore bod-
ies and/or extend the life of their operations, a stagewise
approach to implementation provides an opportunity to
expedite revenue and maximise annual rates of return. It
provides an entrance strategy for projects that may be unable
to commit to an upfront lumpsum capital investment.
A whole-of-plant approach to implementation allows
for projects to fast-track full capacity end-product genera-
tion and ensure effective resource utilisation. From a purely
financial perspective, whole-of-plant implementation
(Scenario 1) approach will provide the most net positive
present value of cumulative cash flows at the end of the
project (i.e., provided the highest NPV). An upfront lump
sum investment into all plant infrastructure will see higher
capital expenditure savings. This is due to the minimisa-
tion of the effect of inflation on the cost of equipment, and
therefore future cash flow, by making capital investments up
front rather than staggering investment as would be done
in a stagewise approach. However, as mentioned above, not
all operations are able to commit to lump sum capital up
front, and a stagewise approach to implementation offers
the chance to minimise upfront capital expenditure and