THE CUT — Beyond the Model | Mineral Resource Industry Insights
What do we mean by
"The Model"?
The model is more than a block model.
Across the Mineral Resource industry, every project is built on a series of models: interpretations, assumptions, estimates, forecasts and decision frameworks used to understand an opportunity, allocate capital and determine what happens next.
The model begins long before a Mineral Resource is declared and continues throughout development, operation and closure.
The Mineral Resource value chain
TECHNICAL EVIDENCE × COMMERCIAL REALITY × CAPITAL × GOVERNANCE × HUMAN JUDGEMENT
“THE MODEL”
Assess & Evaluate
Jurisdiction, commodity, acquisition opportunities, due diligence, strategic fit and early project potential.
Generate & Test Targets
Mineral systems thinking, geochemistry, geophysics, remote sensing, prospectivity analysis, target ranking, drilling and exploration strategy.
Interpret the Geology
Lithology, structure, alteration, mineralisation, weathering, continuity, geometry and geological domaining.
Define the Mineral Resource
Data quality, estimation methodology, uncertainty, classification, reasonable prospects, technical assurance and public reporting.
Convert Resources to Reserves
Mining, metallurgical, geotechnical, hydrogeological, environmental, legal, social, infrastructure and economic Modifying Factors.
Design & Evaluate the Project
Mine design, scheduling, processing, recovery, infrastructure, waste, water, tailings, approvals, operating strategy and project studies.
Build the Financial Model
Capital and operating costs, production forecasts, commodity prices, recoveries, royalties, taxation, cash flow, NPV, IRR, funding, valuation, sensitivity and investment risk.
Develop, Operate & Reconcile
Construction, commissioning, grade control, production, reconciliation, optimisation, Resource replacement and operational decision-making.
Close & Rehabilitate
Closure planning, rehabilitation, residual liability, social transition, relinquishment and long-term environmental performance.
Beyond the Model
The formal model may describe what is believed to exist, what could be mined and what the project may be worth.
It does not always explain:
- —why one interpretation was accepted over another;
- —why capital was allocated to one project and not another;
- —how management, boards and investors interpreted the same information differently;
- —what professional, commercial or market pressures shaped the decision;
- —what was known, suspected or debated but never entered the formal report;
- —what experienced people would do differently today.
The CUT explores the decisions, judgement, pressures, insights and lessons that sit around the model...and beyond the model, where technical evidence meets commercial reality, capital, governance and human behaviour.
A model can inform a decision.
It cannot make one.
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