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| Capital optimisation Latin America |
Context / Scope of project
Close to end of a Prefeasibility Study of a Latin American hard rock mine, the project financials did not meet the internal company hurdles (including NPV, IRR and Capital Intensity) to proceed to Feasibility Study. Client engaged PIP initially for a 2-week ROCX diagnostic to identify value enhancing opportunities and determine if internal hurdle rates could be met.
Client achieved:
- Significant improvement across all major financial KPIs including an 71% uplift in NPV, 25% uplift in IRR and 15% reduction in Capital Intensity
- Clearance of all internal company hurdles to proceed to Feasibility Study
- More than $500 million dollars of ideas which were generated, reviewed, prioritised and documented including CAPEX and OPEX reduction, as well as, a reduction in the project timescale
- Understanding of optimal mill configuration for the different throughput scenarios and value- and risk-based decision to select optimal throughput scenario generating up to $340 million in marginal value
- Clear visibility on what ideas to pursue in Feasibility Study or to keep as backup ideas for additional value generation.
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What we did:
- Ran structured workshops to identify specific value enhancing opportunities around CAPEX, OPEX and project timescale reduction and rightsizing the operation
- Drove documentation, prioritisation and valuation of the generated ideas
- Analysed several complex ideas to assess viability and value (e.g. mine plan optimisation)
- Drove structured approach in deriving optimal plant configuration and optimal throughput scenario to support fact-based decision making
- Reviewed critical constraints which limited the annual throughput of mine production (e.g. tailings). Through Value Driver Tree analysis identified ideas to relax or eliminate constraints to increase annual throughput by up to 30%
- In follow-on work:
- Synthesised results and recommendations into a final presentation for company Board
- Provided an idea tracking tool to ensure visibility of ideas from generation to realisation during the Feasibility Study.
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