Gvm Exploration Limited Case Study Summery and Solution

This report provides a case study analysis of Gvm Exploration Limited, a small mining and exploration company facing operational management, financial investment, and corporate social barriers. The report includes industry analysis, company's SWAT analysis, and financial analysis. Recommendations are provided to overcome the barriers.

Running head: CASE STUDY SUMMERY AND SOLUTION
Gvm Exploration Limited Case Study Summery and Solution
Name of the Student
Name of the University
Author note

1CASE STUDY SUMMERY AND SOLUTION
Table of Content
Introduction:...............................................................................................................................2
Gvm Exploration Limited case study summery.........................................................................3
Industry analysis.........................................................................................................................4
Company’s SWAT Analysis......................................................................................................5
Strengths.................................................................................................................................6
Weaknesses............................................................................................................................7
Opportunities..........................................................................................................................8
Threats....................................................................................................................................9
Financial Analysis....................................................................................................................10
Recommendations....................................................................................................................11
References:...............................................................................................................................13

2CASE STUDY SUMMERY AND SOLUTION
Introduction:
The strategic business management is core part of any organisational approach, which
includes the analysis of current situation as well as finding out the strategy to mitigate the
crisis while making some innovative improvement plan. Every business needs to execute
some projects that are also associated with planning, preparing, risk assessment, funding and
other crucial activities. Apart from that, the correlated factors such as corporate social
responsibility and business sustainability are some of the major contributor in business
progress that can ether lead either to profitability or to complete disaster depending on the
strategic actions undertaken by the business organisation. Business like mining and
exploration needs critical evaluation of all these aspects where the specific project plan
assessment can become the chief essential activity to execute.
Oil and mineral mining industry is one of the most powerful pillars of the Canadian
economy, where the increasing number of start-up and small businesses are making the
industry highly competitive as well as profitable in terms of global trades. This report is
based on a case study analysis. In the chosen case study, the company is Gvm Exploration
Limited, which is a small mining and exploration company. The company is current facing
many issues in terms of operational management, financial investment in projects and
corporate social barriers. The purpose of this paper is to critically examine the case study of
Gvm Exploration Limited in order to provide recommendations to overcome their existing
barriers. For strategic environmental analysis of this company the SWOT (Strength,
Weakness, Opportunity, Threat) analysis will be executed. The financial analysis will be also
done through considering their previous ‘CONSOLIDATE BALANCE SHEETS’. Finally,
this report will present some recommendations to overcome their operational management,
financial investment in projects and corporate social barriers.

3CASE STUDY SUMMERY AND SOLUTION
Gvm Exploration Limited case study summery
Based in Toronto, Ontario, GVM Exploration was a junior mining company listed on
the Toronto Stock Exchange with interests in seven mineral deposits and a number of
exploration projects in Canada. GVM had five full-time employees and one part-time
bookkeeper. GVM Exploration's principal assets were the “world class” Grizzly Valley
anthracite coal deposits in southeast British Columbia, and the Dovik Creek gold-cobalt-
bismuth deposit in northern Quebec. These two major projects were undergoing various
technical, environmental and feasibility assessments by hired contractors and consultants.
Commercial production had not begun at either the Grizzly Valley or Dovik Creek projects
and GVM was making the transition from an exploration company to a producer. Grizzly
Valley was scheduled to begin production in 2008 and Dovik Creek in 2009. GVM
completed a $20 million equity financing in December 2004 (see Exhibit 1). Its market value
was approximately $119 million at the end of June 2005, with 34 million shares outstanding
and no debt.
GVM Exploration’s 90 per cent-owned Dovik Creek project in northern Quebec was a
significant deposit of cobalt, containing approximately one million ounces of by-product gold
and it was one of the largest known resources of bismuth in the world. GVM had recently
entered into an agreement to purchase a used mill from another Canadian mining company.
The mill was well-suited for use at Dovik Creek and would significantly reduce projected
capital costs for the development. GVM owned a 100 per cent interest in the Grizzly Valley
anthracite coal project in southeast British Columbia. The Grizzly Valley site included four
major deposits which collectively contained coal resources of 108 million tonnes classified as
Measured, 123 million tonnes classified as Indicated, 2.57 billion tonnes in the Inferred and

4CASE STUDY SUMMERY AND SOLUTION
Speculative classes. Grizzly Valley contained one of the world’s largest undeveloped
resources of high rank anthracite coal. The Grizzly Valley project straddled a rail right-of-
way and roadbed which provided road access to a provincial highway. A new road was
proposed by GVM to connect the mine site to the closest town along the highway. The
potential mine site was located within the territory of a First Nations group.
In general, the Canadian government provided a strong legislative and political
framework for indigenous rights protection. Claims to land title were ambiguous in many
First Nations areas. Historically, they were a nomadic people, traveling around their area with
the seasons and their food supply. Each spring and summer, they traditionally returned to the
Grizzly Valley area to fish. On Saturday, 25 June the entrances to the road connecting the
Grizzly Valley site and the railway roads were blocked by a group of the elders and First
Nations ' families. The blockade prevented the sending of heavy industrial devices to GVM
and other exploration companies. The business of local tour companies has also been
disrupted. The protesters claimed that when the firm was granted tenure without honorable
consultation with the family in whose traditional territory it was based, GVM's project was
violating Aboriginal Title and Rights (Bodruzic 2015). The issue was the protection from
non-renewable resource extraction of the traditional land, heritage sites and lifestyles. The
GMV exploration project in the region would have a dire impact on their traditional lifestyle,
a lifestyle of which we've kept for tens of thousands of years. Indeed, a few of their campsites
will be inundated with waste dumps.
Industry analysis
The mineral industry was a pivotal part of Canada’s natural resource economy,
representing 3.9 per cent of Canada’s total GDP of $1,045 billion1 in 2004. An improving
global economic environment, especially the rapid growth of China and India, had resulted in

5CASE STUDY SUMMERY AND SOLUTION
a period of high commodity prices since 2003. The strong commodity cycle gave a boost to
the Canadian mining industry. According to Natural Resources Canada, preliminary estimates
for the value of production for all sectors of the Canadian mining industry (excluding crude
oil and natural gas) totaled $24.2 billion in 2004, up from $20.1 billion in 2003 and $19.9
billion in 2002. Of this, metal production increased by 29.6 per cent to $12.5 billion and
nonmetallic production increased by 12.6 per cent to $10.0 billion. The value of coal
increased by 7.1 per cent to $1.6 billion (Buchanan and Marques 2018).
The high cost of oil was making coal-to-oil liquification technologies economically attractive.
World annual production of anthracite was in excess of 350 million tonnes. Prices ranged
between US$50 and US$250/tonne with metallurgical products selling for between US$70
and US$130/tonne, and filter media at US$250/tone (Marques 2016). The global cobalt
market was about 49,500 tonnes per year. Annual growth in the cobalt market had averaged
between five and six per cent for the past two decades. Prices had generally been in the range
of US$15 to US$25/pound for the past two years. Bismuth was replacing lead in a number of
applications due to increasing concern for the environment. Current worldwide consumption
of bismuth was approximately 7,000 tonnes per year and had been growing at approximately
10 per cent per year (O'Faircheallaigh 2017). The market was constrained by supply and,
ironically, most bismuth was sourced as a by-product from lead mining, which suggested that
further decreases in lead consumption would also have an impact on bismuth supply. The
long-term price of bismuth had averaged approximately US$4/pound. According to a 2005
research report the in-ground value of the metal content of Dovik Creek resources totaled
$2.0 billion.

6CASE STUDY SUMMERY AND SOLUTION
Company’s SWAT Analysis
The SWOT analysis offers key insights into internal as well as external factors, which
can affect an organization's performance. It can help the organization's managers optimize
performance, search for new opportunities, manage competition, maximize returns on
resources and reduce the number of businesses and policy risks.
Strengths
Success of new product mix - Gvm Grizzly offers its customers comprehensive product mix
options. It helps the company catering in the strategic and execution sectors for different
customers.
Wide geographic presence - With its extensive dealer network and network of partners,
Gvm Grizzly not only contributes to providing clients with efficient services, but also to
managing competitive challenges in the Strategy & Execution sector.
Talent management at Gvm Grizzly and employee skill building – Human resources are an
integral part of Gvm Grizzly's success in the field of strategy and management.
Brands catering to different customers segments within Ethics, Growth strategy, Social
responsibility, Strategic planning, Sustainability segment - The company has contributed
to Gvm Grizzly's extensive product range penetrating various customer sections in Strategy
& Execution. It also contributed to the diversification of the revenue streams.
Diverse Revenue models - Over the years, GVM Exploration Limited has entered several
companies outside the field of strategy and management. The company therefore has
developed a diversified income stream across the Strategy & Execution sector.

7CASE STUDY SUMMERY AND SOLUTION
Market Leadership Position - In the Strategy & Management industry, Gvm Grizzly has a
strong market management position. It has contributed to the success of the company's new
products quickly.
Weaknesses
Case studies weaknesses GVM Exploration Limited can be lack of capabilities or resources
that are needed but currently do not have the organization. Managers must know if the
weakness occurs due to the lack of strategic planning or strategic decision.
- Low investments into Gvm Grizzly's customer oriented services - This can lead to
competitors gaining advantage in near future.
- Gvm Grizzly's declining market share with increasing revenues is growing faster than the
company's strategy & execution industry. Gvm Grizzly has to analyze the different trends in
ethics, growth strategy, social responsibility, strategic planning, the sustainable sector
carefully in such a scenario and figure out what it has to do in order to foster future growth
- Competitors in the industry names industry can easily imitate Gvm Grizzly's business
model. The names of businesses must build a platform model that integrates suppliers,
providers and end users in order to overcome these challenges.
- Niche markets and local monopolies that company’s like GVM Exploration Limited able
to exploit are fast disappearing. The customer network that Gvm Grizzly has promoted is
proving less and less effective.
- Declining per unit revenue for Gvm Grizzly - Industry competitiveness is putting
downward pressure on profitability. Profitability An initial guide to managing this situation is
to objectively evaluate the present value proposals of different products.

8CASE STUDY SUMMERY AND SOLUTION
- Extra cost of building new supply chain and logistics network - In view of the declining
significance of the distributor network Gvm Grizzly has to build up its new, robust supply
chain network, internet and artificial intelligence significantly altered the business model in
ethical, growth, social responsibility, strategic planning, sustainability industries. It could be
very costly.
Opportunities
- Increasing customer base in lower segments - As clients must migrate from unorganized
operators into licensed companies, in Ethics, Growth Strategy, Social Responsibility,
Sustainability (Thorne, Mahoney and Manetti 2014). It will give Gvm Grizzly the chance to
penetrate the market at entry level with a freeze.
- Trend of customers migrating to higher end products - For Gvm Grizzly it is an
excellent opportunity, because the company is strongly known for its brand in the premium
industry, customers have excellent customer service offered by brands from Gvm Grizzly in
the lower segment. It can be a win - win for the business and a chance to boost profitability.
- Local Collaboration - In international markets, ties with local players can also provide the
Gvm Grizzly with opportunities for growth. Local players are expert on the ground, while
Gvm Grizzly can provide worldwide processes and implementing expertise (Marcelino-
Sádaba et al. 2014).
- Customer preferences are fast changing - Customers are today more willing to
experiment / test new products in the market, driven by increasing disposable incomes, easy
access to information, and fast adoption of technological products.

9CASE STUDY SUMMERY AND SOLUTION
- Rapid Expansion of Economy The improvement of the US economy will give Gvm
Grizzlis an opportunity to expand on the US markets more rapidly than any other developed
economy. Gvm Grizzly has the know-how to enter the competitive American market already.
- Lower inflation rate - The low inflation rate brings more market stability and allows loans
to Gvm Grizzly's customers at a lower interest rate. The consumption of Gvm Grizzly
products will be increased.
Threats
- The shift to the US and China trade war, Brexit affecting the European Union and overall
Middle East instability can have an impact both on local and international markets on the
business of Gvm Grizzly.
- Saturation in urban market and stagnation in the rural markets - This trend is a
continuous challenge for GVM Exploration Limited in the strategic and executive segment.
One reason is that in rural markets the acceptance of products is slow. Secondly, because of
the vast distances and lack of infrastructure, it is more costly for GVM Exploration Limited
to serve rural than urban consumers.
- Commoditization of the product segment - Gvm Grizzly and other industry actors have
the greatest challenge to grow in ethics commoditization, growth strategy, social
responsibility, strategic planning and the sustainable sector (Franks et al. 2014).
Distrust of the institutions and an increasing threat to Gvm Grizzly's legal measures — As
WTO rules and laws in various markets are difficult to implement. Costly and lengthy legal
processes have become (Helwege 2015). Gvm Grizzly can therefore lead to lower
investments in emerging markets and slower growth. .

10CASE STUDY SUMMERY AND SOLUTION
- Competitive pressures - With the new product launch cycles the Ethics, the Growth
Strategy, Social Responsibility, Sustainability industry are reducing. It put further pressure on
players like Gvm Grizzly in competition. Given the large client base, Gvm Grizzly cannot
rapidly meet the needs of the disrupting niche markets.
- Competitors catching up with the product development - Although the Gvm Grizzly is
still a product innovation leader in the field of Strategy & Execution. International and local
competitors face tough challenges.
Financial Analysis
Financial analysis is one of the most effective feasibility analysis for any business
operation or project development and management. In this financial analysis, the projected
cash flow of Gvm Exploration Limited has been analysed through collecting the data from
their ‘CONSOLIDATE BALANCE SHEETS’ of 2003 and 2004. In the following table the
major components of their cash flow has been presented namely Assets, Liabilities and
Shareholder Equity. The dept ratio has been calculated to measure the profitability of the
investment strategy of the project undertaken by GVM Exploration Limited. At the same
time, the Debt to equity ratio has been calculated to analyse the financial risk.
2003 2004
Current assets $4,762,986 $25,376,140
ASSETS (A) $17,663,062 $40,450,651
Total current liabilities $174,857 $759,640
Total liabilities (L) $2,834,857 $4,749,640
SHAREHOLDERS’ EQUITY (E) $14,828,205 $35,691,011

11CASE STUDY SUMMERY AND SOLUTION
Debt ratio (DR) (L/A) 0.160 0.117
Debt to Equity Ratio (DER) (L/E) 0.191 0.133
Table 1: Financial Analysis
Source: (created by author)
From the above financial analysis, it can be clearly seen that apparently all the units of
cash inflow and outflow were significantly increase from 2003 to 2004. This results signifies
that the company is focusing on their investment leverage. From the 2003 to 2004 the
shareholder equity was increased around twice higher. Similarly, the debt ratio as well as the
debt to equity ratio are showing promising future as well. In 2003 the dept ratio was 0.16
where in 2004 the debt ratio became 0.117, which shows that GVM Exploration Limited is
significantly improving their asset level while reducing the relative liabilities. In 2003 the
dept to equity ratio was 0.19 where in 2004 the debt ratio became 0.13, which shows that
GVM Exploration Limited is significantly reducing the risk of having liability driven
bankruptcy. Hence, according to the financial analysis, both of the indicators are suggesting
that investment in this project will be financially beneficial for GVM Exploration Limited.
Recommendations
From the SWOT analysis the strategic recommendation for GVM Exploration
Limited can be formulated. For these consideration of SOWT strategic matrix could be
beneficial that can make the strategic action selection aligned with their strengths,
weaknesses, opportunities and threats.
Opportunities Threats
Strengths Strength Opportunities (SO) Strength Threats (ST) Strategies

12CASE STUDY SUMMERY AND SOLUTION
Strategies
Increasing investment in CSR
activities
Reducing waste to increase the
sustainability of the business
Weaknesses Weakness Opportunities (WO)
Strategies
Investing into locality oriented
services and cultural asocial as well as
local workforce recruitment
Weaknesses Threats (WT) Strategies
Forming information integrity with the
locality while maintain a cohesive
communication
Table 2: Strategic Improvement
Source: (created by author)
Hence considering the strength, weakness, opportunities and threats of GVM Exploration
Limited the most recommended activities to overcome the barriers will be the following:
 GVM Exploration Limited should increase investment in their CSR or corporate
social responsibilities related activities through making charities and building healthy
relationship with elders.
 GVM Exploration Limited should also reduce their waste through various recycling
process to increase the sustainability of the business. It will also make the local
population happy through providing them healthy environment.
 GVM Exploration Limited should invest into locality oriented services and cultural
asocial as well as local workforce recruitment. It will also strengthen the workforce
while making the business more culturally competence.

13CASE STUDY SUMMERY AND SOLUTION
 GVM Exploration Limited should also focus on forming information integrity with
the locality while maintain a cohesive communication. It will help to reduce internal
conflict while developing a beneficial relationship for both the local community and
the business.

14CASE STUDY SUMMERY AND SOLUTION
References:
Bodruzic, D., 2015. Promoting international development through corporate social
responsibility: the Canadian government's partnership with Canadian mining
companies. Canadian Foreign Policy Journal, 21(2), pp.129-145.
Buchanan, S. and Marques, J.C., 2018. How home country industry associations influence
MNE international CSR practices: Evidence from the Canadian mining industry. Journal of
World Business, 53(1), pp.63-74.
Dashwood, H.S., 2014. Sustainable development and industry self-regulation: developments
in the global mining sector. Business & Society, 53(4), pp.551-582.
Franks, D.M., Davis, R., Bebbington, A.J., Ali, S.H., Kemp, D. and Scurrah, M., 2014.
Conflict translates environmental and social risk into business costs. Proceedings of the
National Academy of Sciences, 111(21), pp.7576-7581.
Helwege, A., 2015. Challenges with resolving mining conflicts in Latin America. The
Extractive Industries and Society, 2(1), pp.73-84.
Marcelino-Sádaba, S., Pérez-Ezcurdia, A., Lazcano, A.M.E. and Villanueva, P., 2014. Project
risk management methodology for small firms. International journal of project
management, 32(2), pp.327-340.
Marques, J.C., 2016. Private regulatory fragmentation as public policy: Governing Canada’s
mining industry. Journal of Business Ethics, 135(4), pp.617-630.
O'Faircheallaigh, C., 2017. CSR, the mining industry and indigenous peoples in Australia and
Canada: from cost and risk minimisation to value creation and sustainable development.
In Innovative CSR (pp. 398-418). Routledge.

15CASE STUDY SUMMERY AND SOLUTION
Thorne, L., S. Mahoney, L. and Manetti, G., 2014. Motivations for issuing standalone CSR
reports: A survey of Canadian firms. Accounting, Auditing & Accountability Journal, 27(4),
pp.686-714.