Due Diligence & Audits

SRK Consulting provides independent assessment of projects. These assessments range from mergers involving major mining houses to independent experts' reports for junior resource companies. We have extensive experience in carrying out reviews, audits, due diligence studies, technical reports and valuations.

Financing of mining projects requires independent, credible technical input from many separate sources. Essential to this input process is sensitivity to the financier's requirements as well as to the economic and environmental constraints imposed on the project. Experience and flexibility are the key. Consulting advice to the financial community requires both a broad understanding and specific expertise in mining properties and projects. Advice must be provided which carefully weighs both proven and probable ore reserves along with the risks of existing and future liabilities. Independence and integrity is of utmost importance.

SRK is employee-owned and therefore entirely independent of outside influences. The international banking and investment community regards our studies as the best available. That's why one of our clients remarked "We are somewhat disappointed to see SRK's name on a feasibility study - it means we can't useSRK as the bank's independent engineer to do the due diligence". Our world-class expertise spans the full spectrum of mineral commodities including coal, diamonds, precious and base metals, and industrial minerals.

A technical due diligence involves the review of the following aspects:
 

• title and conditions
• geology/ resources and reserves
• mine engineering and planning
• metallurgical testwork and processing
• waste disposal, environmental impact studies (EIS) and management plan (EMP)
• surface and groundwater management
• infrastructure and services
• construction program
• management and organization
• capital and operating costs
• technical and economic models
• risk analysis and mitigation actions

SRK provides a full range of services in this arena, from independent auditing of appraisal/feasibility study documents prepared by the sponsor, to undertaking the entire appraisal and due diligence on the sponsor's or lender's behalf.

Typically the result of SRK's due diligence would be an independent economic cash flow model reflecting the mining program and the expected revenues and costs. This enables the effect of alternative inputs to be evaluated which assists in assessing the viability of the project which can then be expressed in terms of net present value, discounted cash flow and sensitivity analyses and a thorough risk reward assessment. The model is usually developed to correspond with the structure and level of detail required of the financial model developed by the client.

Services:
 

• Mining finance projects
• Independent reporting
• Privatization studies
• Mergers and acquisitions
• Risk assessments
• Competent persons reports
• Technical assessments and valuations