Conceptual, Pre-feasibility and Feasibility Study

 

The Pre-feasibility Study and Feasibility Study of Mining project in Mongolia must be prepared by an authorized organization holding the appropriate permits or by mining consulting engineer . If the Feasibility Study is prepared by a foreign organization it also must be translated by an authorized organization holding the appropriate permits or by mining consulting engineer.

According to the regulations, assessing the feasibility of a mining project has three different stages : 

·         Preliminary evaluation of project – Conceptual Study. This prepares a basic evaluation of the economic feasibility of the mining project development based on mineral reserves discovered during the exploration. 

·         Technical economic evaluation – Prefeasibility Study. This document analyzes the economic evaluation of various scenarios prepared for the state resources registration of mineral deposits measured during the exploration. The ecological impact should be assessed according to the mining methodology.  

·         Technical and economic feasibility – Feasibility Study. This document contains a detailed analysis of deposit geology, engineering decisions, legal, operational, economic, social, environmental and other factors prepared to support mining project finance.

Minerals Law proposed a pre-mining operation period to allow for the preparation of the design package, feasibility study, mine development and commencement of production. Pre-mining operation is the period after exploration is completed and the mineral deposit reserve is registered with State resources and shall be no more than 3 years after expiration of the exploration license. Exploration license holders may apply to MRAM for a pre-mining agreement.

Minerals Law states that the Feasibility Study on the development of the deposit shall be submitted within 60 days of obtaining a mining license. MRAM Director Order No 415 from 2009 sets the requirements and procedure to approve feasibility studies, which must include the following:

Parameters	Preliminary evaluation of project	Prefeasibility study	Feasibility study
Research level	Evaluation of possible factors	Based on engineering research	Based on detailed engineering research
Mineral resource, reserve	Resources revealed during the exploration	Reserves are determined accord  to requirements for registration and approval by Mineral Resources committee	Reserves are registered and approved by Mineral resources committee
Mining and processing capacity	Tentative research	Forecasted capacity required for reserves registration	Detailed capacity study
Requirements for environmental protection, permits need by law	Research and expected list	Yes	Yes
Mine construction period and life of mine	Estimation	Yes	Yes
Metal recovery (valuable content)	Based on basic research	Yes	Yes
Investment	Tentative research	Yes	Yes
NPV, IRR, ROI	Tentative research	Yes	Yes
Introduction
Copy and list of licenses	Yes	Yes	Yes
Map with coordinates of licensed area	Yes	Yes	Yes
Topographic map	Yes	Yes	Yes
Detailed topographic map of licensed area	Should be done during the exploration	Yes	Yes
Climatic conditions	Should be determined during the exploration	Yes	Yes
Mineral deposit research history	Yes	Yes	Yes
If deposit was exploited reserves extraction calculations research	Yes	Yes	Yes
Geological research
Geological maps	Yes	Yes	Yes
Geological sections	Yes	Yes	Yes
Map of location of drill holes	Yes	Yes	Yes
Sampling deep	Yes	Yes	Yes
Deep of control sampling	Yes	Yes	Yes
Map of resource estimation	Yes	Yes	Yes
Sampling summary and grade variation	Yes	Yes	Yes
Resource estimation and methodology	Yes	Conduct according to internationally accepted standards	Conduct according to internationally accepted standards
Mining
Quality factors of resources to be mined	Exploration results	Sample laboratory results	Sample laboratory results
Cut off grade optimization, formula	Estimated research	Yes	Yes
Estimation of reserves to be mined	Inferred estimation	Conduct according to internationally accepted standards	Conduct according to internationally accepted standards
Mine general plan	Planned map	Yes	Yes
Mine final design	Planned map	Yes	Yes
Annual mining contour, wall map	Planned map	Yes	Yes
Annual mining capacity, overburden removal	Deposit divided in estimated plan	Yes	Yes
Investment and exploration cost estimation	General estimation	30% accuracy	20 % accuracy
Sample taken, sample analysis	Estimated results	Yes	Detailed results
Processing, concentration parameters	Basic engineering level	Yes	Yes
Equipment list	Yes	Yes	Yes
Materials and consumables list	Basic research	Yes	Yes
Technological scheme	Simple scheme	Yes	Yes
Employment list	Inferred list	Yes	Yes
General arrangement plan	Simple scheme	Yes	Yes
Capital and operation cost	Basic estimation	30% accuracy	20 % accuracy
Smelting and purification, final processing cost	Basic research	Yes	Yes
Infrastructure and management
Infrastructure and construction list	Tentative	Yes	Yes
Power and water supply parameters	Tentative	Yes	Yes
Maintenance management scheme	Tentative	Yes	Yes
Production units chart	Tentative scheme	Yes	Yes
Infrastructure capital and administration cost (including operation cost and cost before before production)	General estimation	Yes	Yes
Environment
Environmental protection management system	Basic scheme	Yes	Yes
Permits and procedures list to be used	Yes	Yes	Yes
Mitigation plan of environmental impact	Basic plan	Yes	Yes
Production tailings management	Basic plan	Yes	Yes
Storekeeping and neutralization of dangerous and toxic chemicals	Basic plan	Yes	Yes
Prevention of toxic penetration to soil
Emergency response system
Environmental protection cost estimation	Basic plan	Yes	Yes
Mining closure plan, cost estimation, control after closure	Basic plan	Yes	Yes
Project implementation plan
Project Implementation schedule	Basic plan	Yes	Yes
Economical and financial evaluation
Economical parameters		Yes	Yes
Royalty and other tax income		Yes	Yes
Cash flow prediction		Yes	Yes
Sensitivity analysis		Yes	Yes