Highlighting Project Risk Following Completion of the Feasibility Study

This paper gives some insights into what to look for when reviewing feasibility studies. The review by a third party is an important element of the risk management process and may be the last remaining opportunity to uncover errors, or identify and reduce project risks on paper before they are converted to financial disappointments, steel and concrete monuments to process failures or cost overruns. The mining industry has had a spotty record in the area of estimating initial capital costs and operational performance, even though the standard of feasibility studies is generally acknowledged to have improved in the last decades. Third party reviews rarely have the luxury of enough time and unlimited funds, so where should the reviewers focus their efforts to be most effective? Assuming that the project already apparently meets investment criteria, the authors suggest where and how to look among fundamental project parameters for signs that serious flaws exist that have the potential to become project killers. We also give advice on how to review cost estimates without becoming lost in the details. The paper is supported with numerous actual examples.