Mr Paul Tim Whillans (Principal - Whillans Mine Studies Ltd.)
An underground mining study that is done in accordance with NI43-101 or similar reporting code is generally assumed by the public to be representative, independent and impartial. However it has been well documented by academics and professionals in our industry that there is a sharp difference between the forecasts presented in these underground studies and the actual costs, production ramp up time and quality of product when a mine is put into production. There is an interesting opportunity for countries that have a long history of experience with mining to establish improved standards of reporting that can subsequently be adopted elsewhere and will increase confidence in how we do business and ultimately attract investors.For underground mines, the risks associated with obtaining representative information are much greater than for surface mining and the cost of accessing underground ore is also proportionally much greater. An expert can quickly identify the primary sources of discrepancies in an independent review of mining studies and point to ways the accuracy of projections can be improved, reducing risk to mining companies and investors and providing more reliable information to government agencies, the public, and the communities in which the proposed mine will operate.The objective of this article and an article currently being written titled “Mining Dilution and Losses” is to:-Identify some specific points where underground mining studies are generally weak;-Show that a number of the practices currently in use in our industry create an unacceptable level of risk to the investor, resulting in a spiralling loss of confidence in the way we do business;-Describe briefly the effects of overly optimistic studies on the industry and on operating mines;-Provide a roadmap for some specific changes that are necessary to overcome these challenges; and-Stimulate discussion between delegates and regulatory authorities to create better standards that can be pro-actively implemented.