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The purpose of this paper is to outline the current status of financing in the Australian Gold Mining industry and to discuss a number of developments that have occurred during 1983/84.Recognising the importance of equity financing various equity issues, including project valuation, will be discussed against the backdrop of an industry experiencing both rapid growth and a changing structure.Nothwithstanding the current tax exempt status of the industry there is a trend towards more debt financing. A number of financing issues will be covered and it will be shown howvalue can be created through astute financing planning.

Jan 1, 1984

In-stope long hole drilling (face parallel drilling) is a new technology currently being applied to shallow dipping (

Jan 1, 2003

By S G. Gemell

"The financial model is an integral component of any project evaluation based on mineral resources, ore reserves and (at least internally) exploration targets. Given the unity of purpose for preparing financial models for project evaluation purposes, the diversity of both format and content of the finalised models is surprising. Many models are prepared by staff or consultants who are comfortable with a particular format that may be used for other purposes, such as budget preparation or financial reporting. It is natural in these situations that the practitioner will take these models and adapt them to the purpose. The end result may or may not succeed in providing a clear, accurate and sufficiently detailed view of the project’s economic viability.When preparing a model, the practitioner should be cognisant of the interpretation and review, or audit, process. The auditor may be a consultant or employee of a bank, potential equity provider or of the project sponsor itself. Depending upon the scale of the project and the level of participation of the entity that the auditor represents, the financial model will be interrogated more or less rigorously. In any event, the end user will require the model to permit easy change of inputs and will wish to confirm that such change is appropriately and thoroughly transmitted throughout.Accordingly, there are some ‘dos and don’ts’ that can be readily applied in the creation of the financial model that will greatly assist the end user, not just in the change of inputs, but also in reviewing the model’s integrity. The less time and effort required by an auditor in this regard is reflected directly in the cost of the review process.CITATION:Gemell, S G, 2016. Financial modelling with the auditor in mind, in Proceedings Project Evaluation 2016, pp 172–180 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By Cole NH

Substantial savings in terms of project time, cost, and financial viability can result through the expert involvement of independent financial advisors in the early stages of any mining project's preparation. This role is not confined to project financing, financial modelling, valuations and corporate finance advice, but may in the early stages be much more strategic in nature, covering a wide group of subject areas. A number of separate examples and case studies are outlined, which show the manner in which financial advisors can be effectively used. The benefits arising from involving an additional professional team with the project group must be offset against the separate and additional cost factors involved.

Jan 1, 1986

By Blom W. M

Shareholders, creditors, government agencies and auditors all have a different perspective of financial reports which is determined by the uses to which they put the information disclosed in the report.Shareholders today are better informed than previously and are more aware of the market in which they are investing. This is the result of the increasing role of institutional investors and the increasing reliance being placed on analysts to interpret financial information.

Jan 1, 1990

By Warren M

Many Australian tunnelling and mining companies regularly investigate different methods or equipment in an attempt to keep ahead of their competition. Sometimes the result is a new approach or process which wins a tender or provides an advanced solution to a problem.The Australian Government has a policy of encouraging forward thinking among Australian companies and provides a range of incentives. One of these incentives is currently available retrospectively to 1985 - 86, and the registration process is relatively simple with only one form to be completed. Companies who investigate methods of raising productivity could be reimbursed for the costs of the investigation.

Jan 1, 1993

By Barnett DW

Financial risk analysis provides the tools to examine the uncertainty of capital decisions in new mining ventures. This paper explores the methodology by which financial risks can be studied and quantified. The most commonly used risk evaluation methods, such as sensitivity analysis and discount rate adjustment, are presented as an introduction to a more comprehensive discussion of stochastic methods of discounted cash flow analysis using Monte Carlo sampling. The discussion is illustrated with examples of a stochastic discounted cash flow. The advantages of Monte Carlo sampling in risk analysis are discussed together with its problems, particularly those originating from the correlation amongst the variables that determine the economic output of a mining venture, and the difficulties created by insufficient data, imperfect knowledge and complexity. The paper also surveys the most commonly used software used in risk analysis.

Jan 1, 1994

Regional problems, such as political risk and debt reschedulings, in Pacific Rim nations coupled with the price volatility of gold mean that multi-faceted financing packages are needed to offset the many risks inherent in a new gold mine development. The cross-border risks of getting money back out of a producing mine may require the involvement of export credit agencies, multilateral government banks, or political risk insurance. Variations on forward gold sales, gold loans, or offset structures can also enhance the flexibility and safety for the providers of both the debt and equity. The region will become as large a gold producer as South Africa by 1990. The large dollar amounts for both investment and revenues realised are of great significance to the economies of many of the Pacific Rim countries especially as a means to increase foreign exchange earnings.

Jan 1, 1987

Exploration requires a lot of skill, technical knowhow, and money; the money is usually less painfully available when provided by a profitable cash flow of an existing organisation that has income against which exploration cost is deductible. Planning the financing for development of a proven resource should begin at the earliest stages even while the mining plan is being formed up. The character of the participants has a bearing on the nature of the financing "package" and the structure that is to be selected for the venture. The security for borrowers in a remote mining resource is no better than the capacity of the participants to bring that resource to profitability in line with the findings of a thorough feasibility study. Taxation considerations related to the structure selected and the timing of the cash flow are of vital importance. Sales contracts have generally been a basic requirement of institutions financing mineral mining projects. Clauses relating to price, price escalation, and currency var- iations, are key factors in those contracts. Initial contracts have generally been required to cover initial overall costs.

Jan 1, 1974

By Miskelly N

Construction of the Ranger uranium project located 230 kiss east of Darwin in the Northern Territory commenced in January 1979. Energy Resources of Australia Ltd (ERA) was incorporated in February 1980 to acquire all the rights in the project. The total cost to ERA of these rights was $407 million, made up of $125 million in cash to the Federal Govern- ment and the issue of 125 million $1.00 shares at par, plus a payment of $16 million in cash to each of Peko-Wallsend Ltd (Peko) and EZ Industries Ltd (EZ).

Jan 1, 1983

By Parker GJ

The financing of smaller resource projects has proven to be a difficult problem for promoters and financiers alike as very often such projects have not met the requirements of available financing methods and promoters have equally found it difficult to establish credibility, management and technical ability with potential financing sources. Solutions to the dilemma in which many of these projects find themselves are not readily apparent but will need to be found if the full potential of Australia's resources is to be realised. INTRODUCTION The growth of so called project financing in its present form is normally considered to be a phenomenon of very recent times, however, paradoxically there are references to what could be called financing in the old testament. To confuse the issue further financing small resource projects may not, and very often are not undertaken on a project financing basis. It is therefore quite apparent that one should be completely clear on:

Jan 1, 1982

By Parker JB

The Channar Iron Ore Mining Project (the Project) is a joint venture involving the Hamersley Holdings group (Hamersley) and the China Metallurgical Import and Export Corporation (CMIEC). The Project represents the first new iron ore mine development in Australia since 1971/72 and is the first major overseas mining investment by the People's Republic of China (PRC). The Channar mine is being constructed in the Pilbara region of Western Australia and will operate for more than 20 years supplying the PRC with 200 M tonne of high grade iron ore. The Project is configured to take advantage of Hamersley's existing production and support facilities. The Joint Venturers will invest A$280 million to achieve an initial production rate of 3 M tonne/yr and an additional A$120 million over the next 8 years to achieve full capacity of 10 M tonne/yr. Financing the Project to meet the requirements of both Hamersley and CMIEC, with the dependance of the Project on Hamersley's infrastructure, and in a depressed iron ore market, required an innovative financial structure to be arranged in a limited period. This paper describes both the financial structure and its implementation, and draws a number of conclusions regarding the financing of resource projects.

Jan 1, 1989

The smaller mining company with full ownership of, or participation in, a mining project is generally unable to obtain funding as easily as the major mining house. While the equity market remains the main funding source for small projects, debt fund- ing options are becoming more available. Many international banks possess in-house mine fin- ancing expertise which can assist the smaller company in financing its share of project development. A clear understanding is necessary of both the benefits and limitations of bank funding, to ensure that all potential sources of funds are properly considered and integ- rated into the financial plans of the smaller mining companies.

Jan 1, 1984

By M D. Rosengren, G Gregor, M F. Young

Over the last 15 years the silver/lead/zinc ore treated at Mount Isa became increasingly complex and lower grade. Metal recoveries dropped dramatically, causing a serious decline in profitability. The ætraditionalÆ response of increasing tonnage to reduce unit cost was unsuccessful, since the additional tonnage was even lower quality ore. A major technical and capital program in the 1990s restored metallurgical performance, but business return was still too low and ore quality continued to decline. In 1996 a new, holistic approach integrated the steps of geology, mining, concentrating, smelting, and refining. Previous assumptions about æfixedÆ and æmarginalÆ costs in mining and processing were shown to be wrong. Detailed analysis showed that some ore sources were reducing profit. This led to a fundamental redesign and downsizing of both Mount Isa and Hilton mines. The result was dramatic increases in head grades, metallurgical performance and plant stability without any capital expenditure. The business is now smaller, but more profitable.

Jan 1, 1998

By A Murphy, I Samsonova, N Eastwood, D Whittle

Part XI of the United Nations Convention on the Law of the Sea (UNCLOS or the Convention) (United Nations (UN) Division for Ocean Affairs and the Law of the Sea, 1982) establishes a comprehensive regulatory framework for the conduct of deep seabed mining (DSM) activities of mineral resources in the Area (defined in Article 1(1) of UNCLOS as ‘the seabed and ocean floor and subsoil thereof, beyond the limits of national jurisdiction’). Under that framework, DSM activities can only take place in the Area pursuant to an approved Plan of Work in the form of a contract with the International Seabed Authority (ISA) (the Authority), a 168-member international body created under UNCLOS to administer the Area. Private contractors can undertake DSM activities if they are sponsored by Member States of UNCLOS, providing a dual system of international and domestic regulatory control and oversight for activities in the Area.

Sep 1, 2024

By N Power, A D. Costar

There has been significant growth in mining and energy exploration in South Australia, which has identified new major potential opportunities. This sector generates significant economic value to the state and their support remains a priority for the state government. The delivery of this economic and associated community value to the state is dependent on the mining and energy sector being able to access reliable water supplies.The vast majority of priority areas for the mining and energy sectors are located in areas that have traditionally been of low priority from a water-use perspective and hence, data and knowledge levels are generally low.Recent studies have identified a potential increase in demand for water in the mining and energy sector for potential developments from approximately 40 GL to over 170 GL over the next ten years. The studies found that water and water infrastructure is the second highest proportion of planned infrastructure capital investment by resource companies. The South Australian GovernmentÆs Plan for Accelerating Exploration (PACE) initiative (PACE 2020), also identifies addressing the issues of location, use and management of South AustraliaÆs water resources as a key priority for the growth of the mining and energy sector.The Department of Environment, Water and Natural Resources (DEWNR) has developed the facilitating long-term outback water solution (FLOWS) initiative. DEWNR is currently undertaking a suite of programs to provide groundwater information at the regional scale to better target water supply options for mining and energy developments and community water supplies.The Goyder Institute for Water Research has leveraged significant research investment of $3 M to develop methodologies to interpret airborne geophysics to map groundwater sources.The FLOWS Initiative will provide key content for the PACE Water Program and will also assist in the development of water supplies for remote far north communities by identifying alternate groundwater sources to improve water supply security.This paper will discuss how developing an appropriate science and knowledge base will encourage and secure development where appropriate, enable prudent decision-making and policies regarding water allocation, accounting and licensing, whilst ensuring the protection of environmental assets.CITATION:Power, N and Costar, A D, 2013. Finding long-term outback water solutions, in Proceedings Water in Mining 2013 , pp 191-196 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 26, 2013

The population and the per capila consumption of mineral resources have both grown dramatically during the century past. It is argued that growth will continue through the century ahead but that the magnitudes of undiscovered resources are probably adequate to meet demands. The challenge that the mineral explorer of the future will face is finding deposits beneath several kilometres of barren rock.It is further argued that the principal challenge that society will face in the century ahead is the amelioration of environmental stress.

Jan 1, 1993

By R Lewis

Drill hole magnetometric resistivity (DHMMR) is a relatively recent addition to the explorationistsÆ suite of techniques for finding further resources in the vicinity of a drill hole. The method relies on gathering of an applied current into zones which are less resistive than the country rocks and it was first applied to exploration programs looking for weakly conductive sulphides, such as, for example, carbonate-hosted zinc deposits. More recently, it has been applied to a wider range of deposit styles, including highly conductive nickel sulphides. It has been found that the technique is capable of not only detecting mineralisation not seen by conventional electromagnetic (EM) techniques, but it can detect at a greater distance. Also, whilst EM is superior at defining tabular-shaped conductors, DHMMR may be more effective at finding cigar shaped sulphides. This paper presents a number of examples illustrating these findings.

Jan 1, 2000

By S Arnold

Properties of the soil profile fundamentally control water-limited ecosystems. Soil water availability affects vegetation dynamics of plant communities, but is also affected by these communities in return. Understanding this eco-hydrological interplay and the role of physical soil restoration is crucial for successful rehabilitation and management of post-mining landscapes in semi-arid areas. However, uncertainties exist in both the mathematical description of plant communities within ecological submodels and the predictability of future rainfall events. This study uses information gap decision theory combined with an ecohydrological system model to investigate how both uncertainties impact decision-making in the context of ecosystem rehabilitation. A range of management strategies are investigated to identify the optimal soil thickness for successful rehabilitation of native plant communities in Central Queensland. The results emphasise that thicker soils can counterbalance uncertainty in mathematical description of plant communities by increasing the simulated survival probability of plant communities. However, the influence of thicker soils on the robustness of plant communities against a change in future rainfall amount is rather marginal. By allocating an economic value for restoring a particular thickness of soil layer, these results can be used to evaluate the costs of ecosystem re-establishment with regard to two target measures - the survival probability of the plant community and their robustness against climate change.CITATION:Arnold, S, 2012. Finding optimal soil restoration strategies in the face of uncertain future rainfall amount, in Proceedings Life-of-Mine 2012 , pp 91-96 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jul 10, 2012

Patterns of successful metallic mineral discoveries in Australia are analysed for the last three decades. A trend towards more discoveries of poorly expressed and blind ore- bodies is evident and can be expected to continue. Discoveries using traditional and conceptual geological techniques have proportionally declined but are expected to continue at a significant level for a decade or so. Improvements in the quality and numbers of geological exploration models and in the quality of available basic geoscience data have aided successful discovery in recent years. Although some orebodies for the Year 2001 have already been found maintenance of a strong mineral inventory demands that more and better geological models are applied. Empirical models need to be improved by critical multi- disciplinary integrated studies of mineral occurrence at all scales. New models can and will be developed by various means. If application of these models is made with all the innovation, initiative and unorthodoxy that can be mustered then new discoveries will result. Greater attention to the surface expression of orebodies will also lead to new discoveries. Review and follow-up of old data in the light of new concepts will provide yet another discovery route.

Jan 1, 1981