The Mining Valuation Handbook: Mining and Energy Valuation for Investors and Management, 4th Edition

Chapter 3: Feasibility studies

The Oxford English Dictionary defines feasible as ‘practicable and possible’. For feasibility studies in resource projects, the practicable and possible relate not only to the physical aspects of resource exploitation (technical) but also to the economics of the project (financial). From the very start, when consideration is given to exploration for a mineral resource, money will have to be spent. At each stage, from discovery through development to production, increasing amounts of finance will have to be committed, and at each stage will have to be justified.

In the very early stages of exploration, the decision to proceed will be based more on a qualitative assessment of the risk of failure versus the financial ...