Saturday, May 3, 2014

Want to Sell a Mining Property? - CONSULTANTS' ROLES


Want to Sell a Mining Property? - CONSULTANTS' ROLES

We continue with outline of activities that the mining assets owner is bound to do before the sales efforts.
ONE NOTE. I do not pretend to be the Guru - but the reason is to provide some guidance...
Let us assume that you have a very early stage of development mining asset. Therefore, natural steps in this business shall be:
1.  Further exploration effort: drilling and taking assays and all other associated geologic works. Depending on the situation, this may take 1-2 years and consume USD$ 3-6 M
2. Deposit valuation – according to JORC. This may take from 5 to 7 months and consume USD$ 150,000-500,000
3. Arrangements for fund raising or sale – may take for 9 to 12 months

As a rule mining companies are able do themselves all routine mining business: getting necessary permits and licenses, setting up relevant business procedures, forming a quality team (managers, engineers, geologists, accountants). However, at a certain stage there is a necessity of engaging of a quality financial and M&A consultant – either a person or a company. Why is it so important? It is only natural, that the owners of any mining business would think sometime about attracting financing and/or sale of their business. Being mining professionals, as a rule, they have a little of experience in investment banking and M&A. However, there is a whole set of rules in these two industries; and once a variety of parts is not in the picture – it becomes extremely problematic to speak with financial community. Therefore, it is particularly essential to attract experience consultant as early as possible – in this way there is nice opportunity to save a lot of time and effort in future.
At the early stage, financial and M&A consultant may assist with the following:

However, at the follow-up stages of buying and selling financial consultants are the major players:

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