SRK conducted a Due Diligence and Corporate Advisory study regarding strategic decisions involving a minority partnership stake in a confidential intrusion-related gold project in Alaska.
SRK performed a high-level desktop Due Diligence review of data available to the minority partner and reported on the exploration potential, mineral resource to reserve conversion, operational cost structure and multiple economic models evaluating several scenarios. Due to the majority owner’s potential option to sell, the Client required a detailed project review with a tactical framework of possibly selling, buying additional, or holding their current ownership interest. The study was completed under strict confidentially controls in ten business days from Client request, without direct access to the operating team, site personnel, or detailed internal data.
SRK’s scope of work included a preliminary review of supporting data, (e.g. geotechnical, metallurgical, hydrological, infrastructure, closure) and full evaluation of the following critical aspects outlined by the Client management team:
- Assessment of exploration potential, geological context, probability of locating additional significant resources in mine, near mine, and regional target areas, and ranking of targets with respect to test results reported and relative prospectivity;
- Review of reported resources, potential for conversion to recoverable mineral reserves, and reconciliation over time;
- Perception of corporate strategy relating to mineral exploration (e.g. exploration expenditures over time, summary of infill resource definition versus step-out expansion drilling, relative maturity of exploration potential by target area, methodology of anomaly generation, recommendations for future exploration spending);
- Summary of historical operational cost structure, mining methods, specific challenges with orebody, alternative extraction methods and mine planning scenarios, and advice regarding potential mining cost improvements; and
- Economic valuation with multiple discounted cashflow models evaluating conservative base case versus upside cases involving discovery of additional mineral reserves and associated expansion cost projections, including conceptual incremental closure cost assumptions.
Technical reporting focused on a compilation of the identified risks and opportunities with continued investment versus divestment in the confidential gold mining asset. SRK rapidly provided detailed information and an overview analysis to assist the Client with internal investment decisions.
