Your All-in-One AI-Powered Toolkit for Academic Success.

+13062052269

info@desklib.com

Available 24*7 on WhatsApp / Email

Company

Tools

Support

Santana Minerals Limited: A Comprehensive Business Model Analysis

Verified

Added on 2024/07/03

AI Summary

This report provides a comprehensive analysis of Santana Minerals Limited's business model, utilizing the Business Model Canvas framework. It examines the company's customer segments, value propositions, key activities, resources, partnerships, channels, revenue streams, cost structure, and customer relationships. The report also explores the interrelationships between these elements, identifies critical success factors, and analyzes potential downside risks. Finally, it offers recommendations for improving Santana Minerals Limited's business model and achieving sustainable growth.

Contribute Materials

Your contribution can guide someone’s learning journey. Share your documents today.

Think Big Assessment 1

Secure Best Marks with AI Grader

Need help grading? Try our AI Grader for instant feedback on your assignments.

💎 Get Pro

Contents
Executive Summary................................................................................................................. 2
1. Introduction....................................................................................................................... 3
2. Company’s Background....................................................................................................3
3. Business Model................................................................................................................. 3
A. Building Block.............................................................................................................. 3
i. Customer Segment..................................................................................................... 3
ii. Key Partners.............................................................................................................. 4
iii. Value Proposition.......................................................................................................4
iv Key Activities:..........................................................................................................4
v. Channels.................................................................................................................... 5
vi. Revenue Streams.......................................................................................................5
vii. Cost Structure...........................................................................................................5
viii. Key Resources.........................................................................................................6
ix. Customer Relationships...........................................................................................6
B. Interrelationships........................................................................................................... 6
C. Critical Success Factors.................................................................................................6
D. Downside risks..............................................................................................................7
E. Business Model Changes...............................................................................................7
4. Conclusion........................................................................................................................8
5. Recommendations............................................................................................................. 8
Appendix 1 – Santana Minerals Limited Business Model Canvas...........................................9
Appendix 2- Santana Minerals Limited Income Statement....................................................10
Appendix 3- Santana Minerals Limited Balance Sheet..........................................................10

Executive Summary
The following report is a reflection of the Santana Minerals Limited. The business model of
the company was analysed and comprehended by making use of nine building blocks. These
blocks can help in understanding the business canvas and provide a fast and comprehensive
overview of the business model. The customer segment was discussed that comprises
electrical appliances, dentistry, water filtration, medicinal uses, and solar panels. In addition
to this, the key business partners and value propositions were also elaborated. Furthermore,
the revenue generations and cash flow statement were discussed in the context of the given
organisation.
Once the discussion on the business model was over, the report discussed the
interrelationships of Santana and their effects on the business operation. In the later section,
the changes in the business model along with some recommendations were enlisted. The
recommendations are as follow:-
 Research and Development (R&D) should be carried out across the company through
internal and external vendors and partners and also by forming mergers and joint
ventures.
 Suppliers, stockholders, partners, and customers should collaborate to curb the risk
factors and common issues.
 Technological advancements should be brought in managing the operations. The firm
should employ techniques, such as GPS, RFIDs, etc. to detect and avoid any
catastrophes.
 Technological advancements should be brought in managing the operations. The firm
should employ techniques, such as GPS, RFIDs, etc. to detect and avoid any
catastrophes.

1. Introduction
This report is on Santana Materials Limited and uses the data collected from ASX. The
business aspects, model, financial and economic conditions, customer base, key values,
objectives of the company will be analysed and elaborate in here. Furthermore, the revenue
generations and cash flow statement will also be discussed in the context of the given
organisation. The report will be discussing the interrelationships of Santana and their effects
on the business operation along with the changes in the business model. It concluded with
some recommendation in the business model.
2. Company’s Background
Santana Minerals Limited is a mining industry based in Mexico. It deals in the extraction of
silver and gold. Currently, the company has its exploration site at Cuitaboca Project in
Sinaloa state. This area is well-known for its large silver potential in the central and southern
sectors. Later on, the company pursued the potential for high-grade gold in the northern part.
The organisation is characterised by its strong mining culture and stable political dominion.
With an efficient team management and highly advanced technical support, the Santana is the
world's number 1 producer of silver. In addition to this, the company is enlisted on the
Australian Securities Exchange (ASX).
3. Business Model
The Santana Minerals Limited is focusing on Latin America, especially in Mexico and Chile.
The organisation has a right to earn with an interest of 80% in the Cuitaboca Silver-Gold
project, whereas in Chile, it acquires 85% interest in Becker Gold project.
A. Building Block
There are nine building blocks to business canvas (Rytkönen & Nenonen, 2014). These
provide a fast and comprehensive overview of the business model (see Appendix 1- SML
Business Model Canvas).
i. Customer Segment
The company has contracts with a wide range of industries, such as electrical appliances,
dentistry, water filtration, medicinal uses, solar panels, etc. In addition to this, the major
section of the client base comprises the jewellery industry.

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser

💎 Try AI Paraphraser

ii. Key Partners
Santana Minerals Limited has a unique ownership structure that affects both long and short-
term performance. The SMI’s shareholders details are given below:
Institutional Ownership: These investors can transact in a huge amount that can affect the
stock price for short-term. SMI has 2.30% institutional ownership.
Insider Ownership: This can have a negative effect on the organisation having a low PE
ratio (underperforming). SMI has 35.48% insider ownership.
General Public Ownership: SMI's 49.72% shares are held by the general public.
iii. Value Proposition
 To promote responsible exploration and mining practices.
 To partner with those mining and extraction operators that share common beliefs and
values in responsible mining.
 To take proactive initiatives evaluated and monitored to regularly improve our mining
practices.
iv. Key Activities:
The key activities of Santana Minerals Limited are shown in the industry value chain.
(Figure 1: Industry Value Chain of Santana Minerals Limited)
(Source: Management Review Report, Santana Minerals Limited, 2016)
Prospect Explore Establish
Feasibility
Mine and
Move
Extract
and
process
Market
and Sell

v. Channels
As already discussed that the company is holding the 80% and 85% interest by the right to
earn in its two sites in Mexico and Chile, respectively. Its first-quarter earnings in 2018 from
various channels as given in table 1.
Table 1: First Quarter Earnings of Santana Minerals Limited
Channels Net Cash (in thousands)
Operating Activities $308
Investing Activities $42
Financing Activities $1593
vi. Revenue Streams
The total cash flow from financing activities has increased from $1954946 in 2014 to
$2044505 in 2017. In addition to this, the net income of the company has increased by nearly
$350000 from 2014 to 2016 (See appendix 2). In addition to this, return on Assets (ttm) is -
14.17% and return on Equity (ttm) is -17.43%.
vii. Cost Structure
The cost structure comprises depreciation, investing and financing activities, outstanding loan
interest, etc. The stock price is 4.30 AUD.
(Figure 2: Stock price fluctuation of Santana Minerals Limited)
(Source: Yahoo Finance, 2018)

viii. Key Resources
A unique ownership structure with approximately 49% of ownership with the general public.
Segmented customers and well-established communication system.
ix. Customer Relationships
The company has segmented its customer on grounds of varying needs and domain of
expertise. To attend to their needs, it has classified the gold and silver into different grades
(Wang and Feng, 2012).
B. Interrelationships
The Santana Minerals Limited is focusing on improving productivity by making use of the
potentials of subsidiary industries. It is making the existing assets sweat. There are 20
shareholders in SMI with varying shareholding. In addition to this, the company can allow
100% foreign-owned subsidiary. The company owns 85% and 80% interest in Chile and
Mexico extraction units respectively. Since both sites are located in the remote location, thus
it requires special communication.
The communication system is operated and maintained by Optus Satellite. They have
provided a wide range of digital solutions to keep the different departments and units of the
mining industry in contact. The voice and data solutions assist in the coordination of groups
across sites.
Primero Mining Corp providing technical solutions to Santana Minerals Limited are helping
the organisation to promote innovating methods to perform mining operations. They help the
company to establish a more comprehensive understanding of the equipment flow, optimising
the material and resources.
The interrelationship between different subsidiaries has helped in shifting in the value
capturing in the mining industry and potential safety outcomes (Ediger, et.al, 2015).
C. Critical Success Factors
Being a responsible mining organisation, the company fully take care of Due Diligence
Process (DDP) as directed by the investment principles. This is done before signing any
agreement with other subsidiary businesses. The DDP comprises financial, technical, and

Secure Best Marks with AI Grader

Need help grading? Try our AI Grader for instant feedback on your assignments.

💎 Get Pro

economic analysis. In addition to this, an in-depth review of potential social, environmental,
and governance (ESG) risks is done. By emphasising on ESG factors in the organisation's
investment decisions, Santana Minerals Limited is managing risks and generating long-term
sustainable values for every stakeholder. The company takes the whole responsibility for its
decisions and actions, thereby promoting accountability for functional excellence. In addition
to this, certain features of upfront capital, such as enhanced IRRs, controlled operations, non-
delusiveness, and tailored structure help in contributing to the growth of the company.
D. Downside risks
For the top tier companies like Santana Minerals Limited that has a significant contribution in
the mining sector, the operational efficiency and market price of the ore that they extract
drive the share price (Ediger, et.al, 2015). Since the mining market is volatile, the
organisation must emphasise on cash generation and preservation. Many a time, especially
when there is a mining boom, cost increases up to 200%. As soon as the prices start falling
down, the company should take sustainable cost reduction measures. In addition to this, it
should extract more value from the limited existing resources to increase management
capability. Another risk is limited capital access. This force the organisation to look for other
alternatives to finance. In 2015, there was a major decline in getting a loan from banks.
Another risk is productivity as the mining sector is struggling with in managing its
productivity. The major issue is rising global criticism of mining activities as they harm the
natural resources and local communities as well.
E. Business Model Changes
If Santana Minerals Limited wants to envision itself as an ideal mining firm and curb the
present and future issues, then it should focus beyond the entire mining business. The ideal
mining company should employ the brightest operations and accept the ideas from the
external industries. For this purpose, it should shift its conventional business model.
Currently, Santana sees its business operations as digging deep into the Earth in order to
extract minerals from it. In addition to this, a strong emphasis is being given by the
management to maximise the capacity and reduce cost at each stage of the supply chain.
It is suggested that the business model should be relationship and value-focused and should
attend to customer demand. In the conventional model, the operations are locally focused and
affected by geography, but the new model should have geography-independent operations. In
addition to this, the supply chain should be optimised as an intrinsic process. According to

the Argentina Mining Market Outlook to 2017, management should be lean and mean along
with a streamlined structure. The company should have centralised governance. Teams
should collaborate and coordinate with other groups downstream and upstream in order to
make the supply chain streamlined.
4. Conclusion
The given analysis report of Santana Materials Limited is based on the data collected from
ASX. The business aspects, model, financial and economic conditions, customer base, key
values, the objectives of the company was analysed and elaborate in here. Furthermore, the
revenue generations and cash flow statement were discussed in the context of the given
organisation. The report discussed the interrelationships of Santana and their effects on the
business operation along with the changes in the business model. It concluded with some
recommendation in the business model.
5. Recommendations
 Research and Development (R&D) should be carried out across the company through
internal and external vendors and partners and also by forming mergers and joint
ventures.
 Suppliers, stockholders, partners, and customers should collaborate to curb the risk
factors and common issues.
 Technological advancements should be brought in managing the operations. The firm
should employ techniques, such as GPS, RFIDs, etc. to detect and avoid any
catastrophes.
 The company should employ advanced business analytics to formulate smarter plans.
 Teams should collaborate and coordinate with other groups downstream and upstream
in order to make the supply chain streamlined.

Appendix 1 – Santana Minerals Limited Business Model Canvas
Key Partners
 Optus
Satellite
 Primero
Mining Corp
Key Activities
 Prospect
 Explore
 Establish
Feasibility
 Mine & Move
 Extract
 Market &
Sales
Value Proposition
To promote
responsible
exploration and
mining practices.
To partner with
those mining and
extraction operators
that share common
beliefs and values in
responsible mining.
Customer Relationships
 Direct Meetings
 Mails
Customer
Segments
electrical
appliances,
dentistry, water
filtration,
medicinal uses,
solar panels
Key Resources
Well-established
Communication
system
Channels
Operating Activities
Investing Activities
Financing Activities
Cost Structure
Operating Cash Flow (ttm) -831.25k AUD
Levered Free Cash Flow (ttm) -2.35M AUD
Revenue Streams
Return on Assets (ttm) is -14.17%
Return on Equity (ttm) is -17.43%.

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser

💎 Try AI Paraphraser

Appendix 2- Santana Minerals Limited Income Statement
All Numbers in Thousand
2017 2016 2015 2014
Operating Expenses
Selling General and Administrative 948.421 934.264 858.342 1188.71
Total Operating Expenses 4950.377 1386.715 9009.015 4536.102
Operating Income or Loss -4950.377 -1386.715 -9009.015 -4536.102
Income from Continuing Operations
Total Other Income/Expenses Net 285.244 -1,185.852 -205.396 -146.216
Earnings Before Interest and Taxes 4,950.377 -1,386.715 -9,009.015 -4,536.102
Income Before Tax -4,665.133 -2,572.567 -9,214.411 -4,682.318
Income Tax Expense - -53 -334 387
Net Income From Continuing Ops -4,665.133 -2,519.567 -8,880.411 -5,069.318
Net Income
Net Income -4,665.133 -2,519.567 -8,880.411 -5,074.687
Net Income Applicable To Common Shares -4,665.133 -2,519.567 -8,880.411 -5,074.687
Source: ASX

Appendix 3- Santana Minerals Limited Balance Sheet
2017 2016 2015 2014
Current Assets
Cash And Cash Equivalents 1,215.933 1,321.357 530.006 1,192.233
Net Receivables 93.046 47.95 21.235 13.371
Total Current Assets 1,387.193 1,438.055 616.274 1,255.344
Long-Term Investments - 96.375 1,243.867 2,040
Property Plant and Equipment 3,503.963 5,740.393 6,027.935 11,588.694
Other Assets - - 100.745 475.815
Total Assets 4,891.156 7,274.823 7,988.821 15,359.853
Current Liabilities
Accounts Payable 172.416 464.664 146.592 176.226
Total Current Liabilities 200.114 852.58 156.592 180.996
Other Liabilities - - 53 387
Total Liabilities 200.114 852.58 209.592 567.996
Stockholders' Equity
Common Stock 25,428.387 22,891.133 21,897.205 20,010.005
Retained Earnings -
20,912.545
-
16,422.912
-14,115.72 -5,235.309
Treasury Stock 175.2 -45.978 -2.256 17.161
Other Stockholder Equity 175.2 -45.978 -2.256 17.161
Total Stockholder Equity 4,691.042 6,422.243 7,779.229 14,791.857
Net Tangible Assets 4,691.042 6,422.243 7,779.229 14,791.857
Source: ASX

References
 Argentina Mining Market Outlook to 2017 - Silver Mining Market to Foster the
Future Growth. (Industry overview). (2013, October 01). M2 Communications, p. M2
Communications, Oct 1, 2013.
 Avanti Mining Inc. Updates Kitsault Resource Statement and By-Product Silver
Metallurgical Results. (2012, April 30). Marketwire, p. Marketwire, Apr 30, 2012.
 Ediger, V., Berk, I., & Ersoy, M. (2015). An assessment of mining efficiency in
Turkish lignite industry. Resources Policy, 45, 44.
 Global Mining Equipment Industry Report 2014. (2014, September 19). PR
Newswire, p. 19
 McEwen Mining Q2 2014 Financial & Operating Results. (2014, August
07). Marketwired, p. Marketwired, Aug 7, 2014.
 Miranda, Brandão, & Lazo Lazo. (2017). A dynamic model for valuing flexible
mining exploration projects under uncertainty. Resources Policy, 52, 393-404.
 Rytkönen, E., & Nenonen, S. (2014). The Business Model Canvas in university
campus management. Intelligent Buildings International, 6(3), 138-154.
 Wang, Y., & Feng, H. (2012). Customer relationship management
capabilities. Management Decision, 50(1), 115-129.
 Yahoo Finance. (2018). Santana Minerals Limited (SMI.AX). Retrieved 08 01, 2018,
from Yahoo Finance: https://finance.yahoo.com/quote/SMI.AX/key-statistics?
p=SMI.AX.

1 out of 13

+13062052269

info@desklib.com

Santana Minerals Limited: A Comprehensive Business Model Analysis

Contribute Materials

Secure Best Marks with AI Grader

Paraphrase This Document

Secure Best Marks with AI Grader

Paraphrase This Document

Related Documents

Business Model Canvas Analysis

Business Model Canvas of Nura Headphones

Business Model Canvas of After Pay Report 2022

Analysis of Afterpay Touch Business Model

Analysis of Alt Resources' Business Canvas Model

Business Model Canvas of Foodora