Case Study

Mining Market Valuation & Geological Due Diligence (AUS)

The majority of Australia’s massive offshore reserves servicing its LNG projects are found in the North West Shelf area (Pilbara region).  In the past two years alone, over $150Bn has been committed to a series of mega projects like Chevron’s massive (US)$43Bn Gorgon project and the Inpex-Total (US)$34Bn Ichthys project.  These projects will create an unprecedented demand for project resources, including the construction materials required for massive onshore support facilities such as accommodation villages (housing thousands of support staff), major  transportation links, associated processing and production plants, even new airports.

Date:

2012 - 2013

Location:

Pilbara Region, Western Australia

Client:

Rocla Quarry Products

Sector:

Mining & Minerals

Project Objectives:

ROCLA, one of Australia’s major quarry companies, has been carrying out due diligence on the Western Australia Mining Tenements (leases, exploration licenses, etc) held by various parties with a view to determine if these resources can meet the forecast demand and specification for construction aggregates required by the Major Development Projects in the Pilbara region.  SLR was engaged by ROCLA to determine a Market Value for these tenements for potential acquisition.

Our Role

SLR undertook the following works:

  •  Valuation Methodology:-SLR’s employed established (global industry) valuation methodologies for this project: a value of the in-situ resources as an asset based on a traditional capitalisation model and a valuation of the potential quarrying operations as a going concern using a discounted cash flow model. The valuations were based on a robust appraisal of current and forecast demand from identified Major Development Projects which in turn was supported by analysis of current market data.
  • Supporting Geological Appraisal: The mining tenements involved in the study were spread over a 150 square kilometre area, in one of the most remote regions of Western Australia.  To support the valuation exercise, SLR completed a geological appraisal of the quantity and quality of the subject resource and their suitability for the identified construction materials. The resource types included a range of hard rock resource in addition to river sand & shingles.