The mining life cycle is a long, capital-intensive process, permeated by rising and declining risks at different stages. It is a temporary endeavor, with a clearly defined beginning and end, and can extend over decades. Despite the large number of projects initiated, less than 0.1% of discoveries reach the operational stage and generate revenue, highlighting the complexity of the industry.
The revised infographic, initially published in 2021, provides a comprehensive and structured representation of the various phases that define the life cycle of a mining project. These phases have been synthesized and adapted from previously published studies and outline the necessary technical deliverables for regulatory authorities, essential activities undertaken during each phase, sources of financing, the prevalence of diverse investor profiles, and critical Environmental, Social, and Governance (ESG) factors that influence risk perception and project valuation. This update aims to deliver a coherent overview of a mineral asset’s progression, highlighting pivotal decision points and illustrating the balance between challenges and opportunities throughout the project’s duration.
The Lassonde Curve serves as a key analytical framework for comprehending the evolution of perceived value by investors throughout the exploration cycle. During the initial phases, characterized by high geological and technical uncertainties, the associated risks are considerable, resulting in a limited perception of value. Nevertheless, a phase of intense speculation may emerge upon the discovery of resources, followed by temporary decreases in attractiveness as further studies are conducted. Confidence increases progressively as resources and reserves are delineated, culminating in established classifications: Inferred, Indicated, Measured, Probable, Proved. As technical and economic studies are consolidated and the necessary licensing and financing are secured, risks gradually decrease, allowing the project to advance toward construction and operational phases. At these advanced stages, the generation of cash flow and the realization of returns on invested capital become evident, thereby significantly enhancing the overall value of the project.