MEM 501: Corani Project Feasibility and Design Analysis

This assignment analyzes the Corani Project's feasibility study, focusing on mining methods, risk assessment, and key assumptions. The assignment identifies the open pit mining techniques and equipment used. It recommends a scoping study, pre-feasibility study, and feasibility study to evaluate the project's viability. The analysis also highlights financial risk and delays in environmental approvals as key risks, suggesting mitigation strategies like comprehensive feasibility evaluations. Furthermore, it examines assumptions such as metal prices and ore production, categorizing their controllability by Bear Creek Mining, emphasizing the importance of resource expansion and metallurgical processes.

Feasibility and Design (Corani Project)
Feasibility and Design (Corani Project)
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Feasibility and Design (Corani Project)
What mining method (and equipment) have been selected for the Corani Project? If you
were a project manager working on this project, what tradeoff study (or studies) would you
recommend the team should evaluate?
The selection of the mining technique whether surface or underground is done upon
completion of the deposit’s geological interpretation as well as resource estimate. Such selection
is grounded on the depth of the deposit along with the geometry of the deposit. In the Corani
project, mining was conducted by applying conventional open pit techniques using 135t trucks
alongside 15cubic meters hydraulic shovels together with wheel loaders mining on eight-meter-
high benches. The type of tradeoff studies that need assessment by the project team is the
scoping study also known as preliminary economic assessment, pre-feasibility study, and
feasibility study which involves an updated resource estimation as well as mine design. These
studies have incorporated revision of the resource together with reserve estimates, metallurgical
test work as well as process design. Moreover, the studies have included preliminary
geotechnical investigations plus design for mine management of waste. More information
obtained in these studies involve estimates of capital together with operating costs, open pit
optimization plus pit design, and lastly economic evaluation in developing the project as an open
pit mine (Fairlie et al., 335) plus a processing firm. These studies are important since they offer
information which assist in making decisions for the program manager, discipline engineers
throughout the system life cycle.

Feasibility and Design (Corani Project)
Numerous risks can be identified in the Executive Summary for the Corani Project. List
two risks that you have identified and suggest possible ways of mitigating or reducing the
potential negative impact of the risks
Deficiency in sectors such as resource estimation, construction management plus
estimation of cost unarguably add up in various project downfalls. The main cause of the
downfall of certain projects is the deficiency in the study process itself. Risk factors noted to
have contributed in the Corani project involve; financial risk where there is significant increase
in the long-term financing charges. This could influence the capital cost required for starting up
the operation. The capital cost overruns can be brought by inflation, poor management or
execution, exchange rate fluctuations, insufficient planning or engineering, bad technical
management because of diligence among others. Another risk noticed is delays in approving the
Environmental and Social Impact Assessment (ESIA). From the time of submission, of the
ESIA, it takes about 120 days for it to get approved (Fairlie et al., 345). The ESIA procedures
involves the society consultation procedure which incorporates public hearings, conduction of
societal workshops as well as developing community relations plan. For the agreements to be
achieved it takes time and thus causing delays for the mining activities to begin. In order to
lessen such risks from occurring a full feasibility evaluation need to be conducted, and a
recommended approach should be considered during the evaluation.

Feasibility and Design (Corani Project)
The authors of the 2011 Feasibility study for the Corani project have made many
assumptions. List two assumptions that you think would have significant impact on the
viability of the project and describe if you think they would be controllable, uncontrollable,
or somewhere in between, by Bear Creek Mining.
The Feasibility Study is founded on assumptions obtained from mine planning sequences
fully done by IMC plus the metallurgical test work conducted by SGS laboratories, and finally
reviewed by Blue Coast Metallurgy (Saenz, 560). This mining sequence obtains ore from the
higher-grade starter pits during the initial years and later moves to lower grade regions. Based on
the present reserves, operations take around twenty years. Further, key assumptions used in the
2011 report economic analysis involves; metal prices of eighteen dollars per ounce for silver
along with 0.85 dollars per pound for both zinc and lead all these are for reserves. While for
resources, metal prices of thirty dollars per ounce for silver along with one dollar per pound for
both zinc and lead were employed. This is to represent the 3 year backward together with 2-year
forward costs of metal measured in a ratio of sixty to forty from august 2011 which is uniform
with the standards as well as the policy of the company. Additionally, the yearly production of
ore is around 7,875,000 tones. These assumptions are controllable in that well-defined resources
are free for expansion as well as being converted to reserves. Furthermore, establishing a defined
metallurgical process which can produce extremely marketable, distinct lead plus zinc
concentrates.

Feasibility and Design (Corani Project)
Works cited
Fairlie Reinoso, Alan, and Esthefany Herrera. "Canadian Mining Companies in Peru: Barrick
and Bear Creek." Latin American Policy 7.2 (2016): 333-355.
Saenz, Cesar. "The context in mining projects influences the corporate social responsibility
strategy to earn a social licence to operate: A case study in Peru." Corporate Social
Responsibility and Environmental Management 25.4 (2018): 554-564.