Webinar: 10 Questions to Ask Before You Purchase a Mining Asset

Anna: Hi everyone, and good morning to all of you in the Western Hemisphere - good afternoon to those in the Eastern Hemisphere. I'm super excited to welcome you to our very first stream of 2024. My name is Anna, and I oversee Business Development at K-MINE.

Before we dive into today's content, I'd like to remind you to visit and follow our LinkedIn page - it's the best place to stay updated with all of our latest announcements and upcoming streams. A big shout out to everyone for joining us today, your support means the world to us.

Please meet our geologist Tatiana, who is the creator of this webinar.

Tatiana: Hi, Anna!

Anna: Tatiana will answer your questions at the end of the stream, so please put your questions in the comment section below. We'll be happy to answer them at the end or follow up with replies in the comment section as well.

In today's webinar, we'll be focusing on key moments you need to think about before acquiring a mining asset. For those of you attending PDAC 2024, we're excited to announce that we are hosting a special event dedicated to the broader topic of investment in the mining industry. We'll bring together experts from geology and technology to discuss the risks associated with acquiring mining assets - a topic we'll touch upon briefly today. It's scheduled for Sunday afternoon, March 3rd, and it's free of charge for all PDAC attendees. If you're interested, please scan the QR code on the screen to register.

So, for those of you who don't know anything about our company, let me give you a brief introduction. We've been on the market since 1994, so this year marks 30 years. We started in Ukraine, and since then we've grown quite a bit. Now you'll find us not only in Europe and Asia but also in the United States, Canada, and through partners in places like Chile, Brazil, Australia, and South Africa.

Our team is pretty big - we have developers, surveyors, geologists, and mining engineers on board. Some of our team members also specialize as Qualified Persons for NI 43-101 and JORC technical reports. We work with a diverse range of clients. Our approach is cost-effective, so we can work with small exploration groups and also large corporations.

When it comes to our software, it's like a Swiss Army knife for the mining industry - designed to walk you through every step of your mining project from exploration to reaching full production. It combines everything you need into 12 modules that work for open pit and for underground operations.

You can pick and choose the modules that best fit your workflow, whether you're looking to use just one module or leverage all 12. The software makes it easy since everything operates from one single interface. These modules are also good for tasks like geological data processing, surveying, and developing optimized mining plans for short or long term. You can see all of these processes unfold in real time if you connect our software with IoT devices or dispatch systems, which really helps in making quick and informed decisions.

Our software is a result of our real-world experience, developed to address the challenges we encountered in our consultancy work. It's designed to help with evaluating projects, creating digital twins, and planning the entire life cycle of a mine - making your job easier and more efficient. Our team is always ready to assist with creating 3D models, planning strategies, and estimating resources and reserves. It's not just an add-on - it's a part of our commitment to ensure your success. Whether you're at the stage of exploration, development, or production, we're here to offer that extra layer of support through our consulting services.

Today's meeting will focus on the key aspects crucial for investors in mining projects. Our agenda includes an examination of ten vital areas:

1. Accuracy and dependability of exploration data
2. Creation and interpretation of geological models
3. Assessment of mineral resources
4. Behavior of minerals throughout enrichment processes
5. Financial risks in evaluating project profitability
6. Impact of infrastructure and logistics
7. Production of marketable ore and concentrate
8. Significance of legal documentation
9. Necessity of incorporating all variables in the conversion from resource to reserve
10. Opportunities for ongoing exploration and resource augmentation

Together, these topics are essential for making well-informed investment decisions in the field of geological exploration and mining projects.

Let's start by discussing the NI 43-101 reports. For those of you in Canada, you should be very familiar with this report. Having a high-quality report like NI 43-101 - or a JORC report, which is more popular in Australia and the Eastern Hemisphere - gives you certain advantages. However, it's not a silver bullet for investors.

Yes, these reports might summarize exploration activities and their quality assurance and quality control (QA/QC) measures. They also present preliminary economic assessments, detail initial exploration results, or outline the findings of feasibility studies on mineral properties. However, sometimes the professionals who create these reports do not think about who the report is for, and overflow their conclusions with details that are not useful for investors.

Investors usually require only a summary of the key outcomes from an exploration program, rather than exhaustive details. Nevertheless, it's not uncommon for an NI 43-101 report to be extensive, filled with text, graphs, calculations, and images - rather than just a concise summary.

Today we'll be focusing on the practice recommended by leading companies: conducting preliminary and feasibility studies and maintaining detailed documentation for internal use. Once these studies are close to completion or finished, the key results are summarized in an NI 43-101 report for regulatory filings. This approach ensures that when seeking financing, a company has all necessary studies and technical data consolidated for due diligence processes.

Engaging in the detailed aspects of a project involves navigating through various fields and considerations. The characteristics of a mineral resource asset can exhibit significant variations, reflecting the dynamic nature of the asset itself.

When we talk about doing your homework before making an investment, it's about looking at a wide range of factors:

• Checking that the person selling the asset really owns it and can sell it without any issues
• Looking into any legal, social, government, and environmental issues that could impact the asset's worth
• Operational details like productivity, potential losses, and operating costs
• Infrastructure - electricity, water supply, and transportation options
• Previous deals about the asset, like royalties and joint venture terms
• Labor terms, including any responsibilities the new owner might take on
• Marketing aspects - existing contracts, how market shifts might affect the asset, and contaminants in the product
• How waste is handled and processed
• Costs involved in shutting down or selling the asset

When you look into a project, there are a bunch of things you need to check out. First of all, think about how resources are turned into reserves, as the JORC 2012 guidelines suggest. Remember - anything from the past or what's happening now could mean extra costs or responsibilities for the buyer.

The JORC Code offers a comprehensive framework for evaluating various project aspects. Its checklist - Table 1 of the Code - serves as a helpful guide, allowing you to acquaint yourself with the crucial project details.

If there's one big thing you can't overlook, it would be mineral resources. Most of the time, when someone is investing, they're essentially betting on the value of these resources or reserves. Getting the full picture on resources, reserves, and exploration potential is super important for making smart choices. Inaccuracies in estimating resources and reserves can really mess up your decision-making process - so that's where we should start.

What you need to focus on can change depending on how far along the project is. Is it brand new drilling in a new area, or picking up where someone left off years ago? You really need to dive into drilling and testing data. If you can go to the site to verify wellhead locations using GPS, you might also need to double-check the data - making sure drill paths don't suddenly veer off in a weird direction and that everything is set up just as the original plan intended. If something seems off, especially where the data is pointing, you might even have to do some extra drilling just to be sure.

Let's talk about what we need to keep an eye on when it comes to drilling and sampling.

First, we need to pay attention to the drilling technology being used - whether it's reverse circulation (RC) drilling or diamond drilling. We've got to watch out for any potential sample contamination during extraction.

When it comes to the actual samples, we need to consider the type of sample collected, including core operation method, access, orientation, and whether geotechnical studies were conducted. In instances where drill core storage is absent or deterioration is evident, you can use available core photographs, which can help in assessing sample quality.

We also need to ensure proper sample safety during preparation, shipping, and storage. It's a good idea to weigh samples before sending and upon arrival.

When sending samples to the lab, there are important questions to ask:

• Is the testing method total or partial, and how does it relate to the type of minerals we're dealing with?
• What are the detection limits, and how accurate are they within those limits?
• How do they dry the samples, and at what temperatures?
• What are their sample reduction procedures?
• Are they keeping the fraction sizes controlled and appropriate during the crushing and grinding process?

It's super important to identify any disparities in sampling and analysis across different drilling campaigns. If multiple companies conducted work on the site over various periods, you have to do a comparative study of the methodologies. Variations in sampling, analytical approaches, and even laboratories used should be considered within the broader assessment of data quality.

When there's been quite a time gap between drilling programs, sometimes we see different coordinate systems being used to connect wellheads on the plans. Many people tend to overlook geological mapping as a source of information, even though it sheds light on the main rock types, geological structures, post-formation changes, and areas of mineralization.

Now we need to take a closer look at our site's overall database to catch any mistakes. It could lead to problems if we're missing coordinates for wellheads, or if there's a mix-up linking sampling intervals to the correct drill hole ID or sample number.

As we go through the data, we should keep an eye out for any sampling periods that might overlap or any information that's missing. It's also important to check that all parameter values are within their expected ranges - making sure they're not too high or too low. Pay particular attention to any default or missing values, especially for samples that have values below the detection limit. Plus, we need to be clear about the units used when entering data into the database - whether it's parts per million or percentage.

Today we see more and more relational databases popping up, so it's really important to get a handle on the structure of the database we're working with and to make sense of the abbreviations used in it. Databases commonly include calculated fields - for example, recovery metrics that start off measured in length get turned into percentages. You'll also find calculations like net smelter return or metal equivalent. It's crucial to get familiar with the formulas and logical expressions the database uses. Understanding these is key to assessing how continuous the mineralization is and defining ore bodies as the project moves forward.

As a mineral project evolves from initial discovery through exploration, feasibility studies, and into mine production, the financial investment in drilling and sampling ramps up in line with the stages. Moving from the discovery phase to exploration usually means drilling costs start to climb significantly. In cases where it's tough to make geological links between isolated finds, we might not see an increase in drilling anytime soon, even if metal prices are looking good.

The main goal of drilling sample boreholes during the exploration phase is to figure out how far the mineralization extends. This often means drilling again and again until the drill comes out on the other side of the mineralized zone, hitting the waste rock. While we can get some clues about the size and direction from geological mapping and geophysical studies, it's important to remember that this information is still a guess - it helps us make educated assumptions about where the mineralization starts and stops.

When we hit ore intersections that look good from an economic standpoint, exploration projects can move into the profitability study phase. This step builds confidence for further investments. As we go deeper into exploration, there is a lot more drilling and sampling to broaden our understanding of resources and evaluate mineral resources across different classifications.

Trying to figure out what's underground, we rely on a mix of data from the surface - like aeromagnetic surveys, mapping, and samples - along with what we find from drilling. We also use indirect information from things like borehole geophysics to supplement our direct sampling data. Our initial guesses constantly have to be checked and refined with more drilling, which helps us get a better grip on the geological details.

However, we need to be cautious, especially when leaning on mineral resource reports that use 3D models. Making sure our geological interpretations are solid is key.

You should pay attention to the approach used to create a 3D model - whether it's done implicitly or explicitly.

For implicit modeling, it's really key to think through why certain composite lengths and cutoff grade values were chosen. You also have to consider geological domains, oxidation zones, effects of weathering, secondary mineralization, and structural features like faults and fault-related tectonic movement.

For explicit modeling, it's crucial to dig into the details of existing plans for ore bodies to reach the surface - thickness isolines, geological sections, and plans. This type of modeling leans heavily on 2D geological interpretations. Make sure to check whether the symmetry axes of geological bodies were taken into account, how modeling was approached in areas close to faults, and how the paths of inclined drill holes were projected.

Grasping the concept of geological domains is essential for both types of modeling. Domains represent zones that are statistically and geologically consistent, and identifying these limits is critical for defining the shape of the deposit. Yet not every deposit has clear-cut domain boundaries, which might lead you to rely on very low sample values to separate mineralized from non-mineralized samples.

Domain boundaries can be classified into two types: hard or soft.

In cases like coal seams, where boundaries are hard, there are clear separations between different strata, which simplifies the process of integrating and correlating data. On the other hand, soft boundaries - like those found in certain porphyry copper-gold deposits - might show more gradual transitions between the ore and the surrounding waste rock, making distinctions less clear.

The intricacy of a deposit's structure - especially when faults are involved - plays a big role in how accurately domains can be defined. Identifying and incorporating fading or parallel faults into the model can pose a significant challenge. Geologists turn to a variety of data sources, including measurements from depth gauges, aeromagnetic surveys, satellite imagery, and traditional mapping techniques, to deduce the presence and impact of these faults.

Sometimes there are cases of resource assessment based on the results of implicit modeling that takes into account only mathematical statistics and absolutely does not account for the geological features of the deposit's structure. Conversely, the manual method of creating resource models often mistakenly ignores the bimodal distribution of contents and the need to logarithmize values - erratic values, overestimated or underestimated cutoff grades in samples when delineating ore bodies, and so on.

At times it's important to decluster samples, since a high concentration of data points in specific areas can lead to inaccurate estimations of the average and variability. When the coefficient of variation exceeds one, it points to significant local differences within a domain, potentially affecting the outcomes when applying universal scoring methods.

Examining plots that show the cumulative distribution of data values (or the logarithms) can help determine if the data follows a normal or log-normal distribution. These charts are also handy for evaluating different data sets. Say you spot a sharp turn in the graph highlighting a bunch of values with super high gold grades - which isn't rare in gold mining - sometimes it makes sense to leave those numbers out to keep the coefficient of variation in check and avoid skewing the overall estimate. Nonetheless, there are alternative approaches to incorporate these extreme values into grade estimation.

When dealing with data, you might have multiple elements to consider - like gold and copper, or different kinds of data coming from diamond core or reverse circulation drill holes. Plotting two variables on a scatter plot can really open your eyes to how they play together. It's crucial to recognize the significance of a strong correlation between two variables, like content and density (specific gravity). For instance, if specific gravity is strongly linked to grade in certain types of ore - like nickel sulfide - failing to consider this relationship could lead to an underestimation of the grade.

Geological ideas about the distribution of grades are often confirmed in reports using variography. Variograms give you useful information about the continuity of mineralization in different directions. If you find yourself evaluating resources without the luxury of geostatistical studies, or using the Inverse Distance Weighting (IDW) method without considering variograms, then you'll want to take a closer look at the size of the blocks.

Additionally, consider how many samples were used to estimate the content in each block of the model. When trying to determine how much of something exists and where within the domain, it's critical that blocks are made uniform and at least match up to a quarter of the average distance between data points in every direction.

By checking the number of samples that went into estimating the grades for each block and the average spread, geologists can get a straightforward gauge of how much they can rely on these block estimates. This insight can also help in categorizing parts of the resource as Inferred, Indicated, or Measured.

If you've got a block resource model in your hands, check if sub-blocking was applied along the edges where it meets the wireframe surfaces during volume calculations. It's also a good move to line up the geological sections or plans with a slice of the 3D model and then see how they stack up against the actual data from drill holes or other sources. This kind of cross-referencing is very valuable for making sure everything adds up.

When it comes to mapping where the ore is and isn't, domain boundaries are key to making sure the estimated ore grades don't accidentally end up being counted in areas designated as waste. But with certain types of mineral deposits where geological features are more nuanced or gradually blended, those boundaries can get a bit blurry or "soft" - unlike the clear-cut hard boundaries you would find at the edges of a coal seam. This kind of flexibility allows for including assay results from samples that might be just outside the strict limits of the domain.

Here's another heads up: be extra cautious when calculating how much ore you've got. The big player in figuring out resource tonnage is the ore's bulk density. It's not a one-size-fits-all kind of deal - bulk density can change a lot from one domain to another, and even within a single domain. If you've got plenty of samples, you can model bulk density much like you would with ore content. Yet it's uncommon to stumble upon reports where volumetric gravity is simplified down to one average number per ore type, or sometimes just one number for all types of ore.

There are also other factors to keep in mind that will influence how mining goes down the line - things like geotechnical parameters, trace elements that could affect how well the ore grinds down, and metal recovery rates.

This leads us into the fascinating field of geometallurgy. The geometallurgical model acts as an advanced layer to the conventional mineral resource or reserves model, combining geological, mineralogical, and metallurgical information within a three-dimensional framework. This integration forms a productive tool for understanding how minerals will behave during processing.

Imagine being on the verge of investing in a mineral project, having received a report estimating 1 million tonnes of resources in the Indicated category, rich in a valuable component. Then after investing in advancing exploration - including technological sampling - you discover that actually only half of the identified ore can be efficiently processed. The rest is a different technological type that proves challenging to process and was initially misjudged due to inadequate metallurgical (and more aptly, geometallurgical) testing at early stages.

Let's talk about some key pieces of metallurgical info you might need.

Mineral forms matter. The way certain elements appear can really vary. For example, lithium can show up as lepidolite, petalite, or spodumene - and each form has its own set of technological quirks.

Processing depends on mineral type. Copper is an interesting case because the way you process it can depend a lot on the specific type of copper mineral you're dealing with. Chrysocolla, for example, is something you typically extract through acid leaching, not flotation. Chalcopyrite, on the other hand, is a candidate for flotation, but you wouldn't usually go for acid leaching with it.

Penalty minerals. You also have to watch out for minerals that could throw a wrench into your processing plans - like talc or clays. Siderite in iron ore can be a real headache because it makes it too tough to get ilmenite efficiently.

Rock characteristics. The type of rock, any changes it's gone through, and how much silica is in there can also make a big difference in how minerals behave metallurgically. This means you can end up with varying results on how easily or hard it is to process those minerals. Take quartz-magnetite quartzites as an example - they can present a real challenge due to layers that are difficult to enrich because of the tiny quartz intergrowths mixed in with ore minerals.

Oxidation states. Any changes in oxidation states can significantly alter both metallurgical and physical properties of the ore, making it crucial to monitor. In the case of graphite deposits, it's not enough just to look at the high content of the ore - the degree to which the graphite-bearing rocks have weathered can drastically change how graphite ore behaves during the beneficiation process.

Geometallurgical modeling should begin right from the exploration phase. Having a deep understanding of the lithology, chemistry, and mineralogy of your project early on can help you spot potential issues before they become expensive problems later.

When you create a 3D geometallurgical model, it really brings a lot to the table for decision-makers:

• Risk reduction - It predicts how the ore will behave throughout the mining and processing stages, which is invaluable for the entire lifespan of the mine.
• Resource management - It provides a reliable foundation for statistical calculations and reports, ensuring that resources are optimized in the most realistic way possible.
• Mine design optimization - It plays a crucial role in refining the design of the mine and its mineral processing strategy, so capital gets allocated in the most efficient way.
• Mine planning and scheduling - It brings technical improvements, especially in how blocks are selected and how different ores are mixed together in the short to medium term.

Geometallurgical variables are the characteristics of rocks and minerals that play a critical role in shaping your business model. Antonio Salis, in his article "Benefits of Geometallurgy," categorizes these variables into two main types.

Primary variables are the core properties of rocks that we can measure directly. This includes geochemistry, the grade of metal present, density, grain size, how rock has changed over time (alteration), rock strength, distribution of different chemical zones (where oxides meet sulfides), ore classification based on these properties, the presence of deleterious materials like arsenic, and various geotechnical aspects such as Rock Quality Designation (RQD) and Fracture Index.

Responsive variables are about how rock behaves when it's being mined and processed. Since we can't always measure these behaviors directly, we have to estimate them by analyzing the primary variables. This includes things like throughput (how much ore can pass through the system), recovery rates, grindability, and power consumption.

When should you zoom in on geometallurgy? It's particularly crucial for projects that have a lot of variability or distinct zoning within the deposit, when several deposits are being processed together, for revisiting projects with significant amounts of old drill core under new economic conditions, and for tackling remote and deep deposits where drilling is feasible but bulk sampling is challenging.

We've touched on why geology is a pivotal factor in assessing resources and its role as a modifier when converting resources to reserves. But it doesn't stand alone. Other modifying factors include mining practices, economics, legal and regulatory frameworks, environmental considerations, infrastructure, social dynamics, and more. These factors touch on everything from determining the cutoff grade and scheduling production to managing cost, revenue, and overall financial analysis.

It's important to highlight the specific challenges encountered when attempting to automatically convert national classifications of reserves and resources - for example, categories B, C1, C2 or class codes 111, 221 - into internationally recognized categories like Measured, Indicated, and Proved, as per the CRIRSCO template.

Even with documents that align UNFC 2009 with the CRIRSCO template, evaluating resources involves unique economic considerations tied to the legislative and taxation frameworks of each country.

For example, an assessment report stating 10 million tonnes of reserves in category B from a post-Soviet country could, after automatic conversion, be equivalent to class code 111 (indicating commercial projects, aligning with the Proved category in the CRIRSCO template). Additionally, through 3D modeling and resource re-evaluation, 3 million tonnes might be reclassified to 221 (Indicated, potentially commercial projects, aligning with the Measured category).

This discrepancy often stems from variations in discount rates and the project's minimum profitability level, determined by national regulations and codes - and may be set by the government for a specific time frame. These factors influence how resources are classified on the state balance sheet as Proved or Probable reserves.

The concept of the cutoff grade also varies significantly between countries. While it may be defined for a certain period in government reports (typically ranging from 1 to 5 years), it is described as the minimum ore content necessary for delineating ore bodies in a vertical section along the workings - which differs from the economic understanding of cutoff grade. These differences can lead to significant variations in the calculations of tonnage, average content, and consequently, project profitability.

A crucial aspect of any report is a clear statement regarding whether the mineral resources are reported in addition to or inclusive of the ore reserves.

We also want to share insights into modifying factors and non-technical challenges that are often not comprehensively detailed in resource assessment reports, which investors might face.

Geotechnical and groundwater conditions - It's really important to ask whether detailed studies have been carried out. These factors have a big impact on how the mine is designed and built, so it's crucial to conduct specific investigations to establish the right parameters for each situation - at least up to the pre-feasibility stage.

For open pit mines, one major area to focus on is the design of pit slopes. This isn't just about the interface between ore and waste - we also need to pay attention to the surrounding ground that forms the walls of the pit. Getting slope design right is key to making mining operations economically viable - it's all about maximizing value while minimizing risks.

If software tools are being used to optimize open pit operations, it's essential to clarify which initial factors were taken into account in the model calculations. It's also crucial to disclose whether any areas have been excluded from the model - like dump sites, tailings areas, or zones set aside for environmental protection.

Let's delve into the unique world of mining consolidated deposits like alluvium, mineral sands, or placer. This involves a specialized approach within open pit mining, often using dredges or excavators within designated dredge ponds.

When dealing with these operations, it's crucial to focus on several key factors: carefully managing the water balance to prevent issues, ensuring the stability of excavation phases, understanding geotechnical properties of the tailings and slimes produced during mining, and balancing the overall materials involved.

In our experience with mineral sands projects, we've encountered challenges such as flooding from both atmospheric and groundwater sources, as well as instances where the upper overburden layers have slid or collapsed during mining. These unexpected events have led to significant ore dilution, causing disruptions in processing plant operations that weren't initially anticipated or factored into the project evaluation.

When it comes to designing underground mines, having a solid grasp of how rock mass will behave during excavation and mining is absolutely essential. Factors to take into account include designing support systems and pillars, understanding how caving works, and figuring out the balance between dilution and ore recovery rates.

Groundwater management in underground mining is a major concern, especially when establishing initial access points like shafts or declines. We need to be extra cautious when dealing with significant aquifers or areas with high permeability near mining activities. It's also crucial to conduct flood risk assessments using data on rainfall and catchment areas. This helps us anticipate potential flooding scenarios and plan effective drainage solutions for the mine site and its infrastructure. Additionally, we need to evaluate the chemical composition of the water to prevent corrosive effects on metals and structures. Proper filtration and reuse of water for industrial processes are essential to mitigate these risks.

In open pit mining, groundwater management focuses on two main concerns: managing the location of groundwater within operational areas, and addressing the impact of groundwater pressures on the stability of pit walls, pit floors, and adjacent waste dumps or spoil piles.

Managing water resources is closely tied to evaluating the environmental effects of mining operations. This assessment needs to cover a range of factors, including how to handle hazardous wastes and byproducts, and the best strategies for storing waste and tailings. We need to keep an eye on issues like acid drainage (leading to low pH), contaminants that dissolve at neutral pH, alkaline drainage (resulting in high pH), salinity, radionuclides, and the presence of problem minerals like asbestos, spontaneous combustion, and toxic elements such as arsenic or mercury.

Speaking of non-technical risks, they include geographic factors such as land access, land claims, bureaucratic hurdles, corruption, social and civil unrest, infrastructure challenges, natural disaster risks including weather, resource nationalism, and labor relations.

For instance, there have been reports where critical information was omitted, such as the presence of old cemeteries, residential areas, stadiums, nationally significant gas pipelines, railway stations, and even environmental protection zones adjacent to mining operations. There have also been instances where unauthorized extraction of resources - such as amber or construction materials like clay and sand by local residents - went unreported. So while you may be quoted resources at 2,000 tonnes, the actual reserves could be significantly lower.

Furthermore, there were situations where reports failed to mention that a pit had been submerged under water for years. This oversight can drastically impact the quality of extracted ores and compromise the stability of pit walls. Hence, we always advocate for a site visit before making any investment decisions. Both JORC and NI 43-101 recommend site visits, but this advice is frequently overlooked.

Additionally, there are instances where local communities living near a mining site block access, fearing that mining activities might lead to water scarcity or result in radioactive contamination. Their opposition can delay project development - however, such social concerns are rarely highlighted in reports.

It's also crucial to consider weather patterns, the risk of natural disasters, and vicinity to potential military conflicts. Airborne geophysical surveys may be hindered by dense forestry, and mining and construction activities can face a long-term halt upon the discovery of significant archaeological finds. All these elements play a crucial role in the comprehensive assessment of project risks and should not be overlooked.

Numerous country risk compendiums are regularly updated to provide high-level insights on how risks vary across different jurisdictions, but they should really be considered as initial references. It's essential for companies to refine their approach by incorporating details specific to their circumstances, aiming to precisely evaluate and measure the actual risks they encounter - especially those stemming from non-technical factors.

Other significant non-technical risks pertinent to the mining industry encompass fluctuations in commodity prices and foreign exchange rates. Moreover, businesses also face generic risks that are common across various sectors. At the corporate level, these risks amalgamate into what is known as "going concern risk," reflecting the aggregate threat from unforeseen challenges - both technical and non-technical - to a mining company's sustainability. This risk escalates particularly when a company faces the initial burden of constructing a new mine before it has started generating revenue from its operations, and is most pronounced for a company whose new mine represents its inaugural asset.

The mining sector globally has increasingly recognized the significance of non-technical risks, acknowledging that they can be as crucial - if not more so - than technical risks. For instance, a mining claim or land access rights could become void due to changes in government policy or the stance of a local landowner near the mine.

In our discussion today, we aimed to outline key considerations for evaluating before committing to a mining project investment. As we're wrapping up, just want to remind those of you heading to PDAC about our event focused on investing in the mining industry. It's happening on Sunday afternoon, March 3rd, and it's free for all PDAC attendees. Just scan the QR code on the screen to register. We'll be discussing in more detail some of the highlights we touched upon today.

Anna: All right, let's bring back geologist Tatiana and see if we have any questions.

Question 1: What to do if an incorrect resource model was created by a contractor company, and a report was compiled by another consulting company? Or, for example, the report contains gaps in geometallurgy - who's responsible for reporting in this case?

Tatiana: Thank you. Estimation of ore reserves is very commonly a team effort, and it's recommended that where there is a clear division of responsibility within a team, each Competent or Qualified Person and their contribution should be identified and responsibility accepted for that particular contribution.

If only one Competent or Qualified Person signs the mineral resource or reserve documentation, that person is responsible and accountable for the whole of the documentation. It's important in this situation that the Competent Person accepting overall responsibility for a mineral resource and/or reserve estimate - and supporting documentation prepared in whole or in part by others - is satisfied that the work of the other contributors is acceptable.

Question 2: What drilling methods are more reliable and representative for exploration?

Tatiana: It really depends on your targets.

• Air core - The quickest and cheapest, but least accurate. Still very useful for testing geochemistry, but very poor for resource estimation.
• RC (Reverse Circulation) drilling - Quick, less cheap, and more accurate. Very useful in defining mineralization close to surface, but can be difficult to define geological information, particularly structural information, since the rocks are smashed to bits.
• Diamond drilling - Clearly the best, but very expensive and slow in comparison to other methods. It enables you to see rocks from underground - measure, categorize, sample, and record exactly what you want.

So it's up to you and your project requirements.

Anna: I think that's it for the questions from the audience today. Thank you so much, Tatiana, for creating this webinar. Thank you so much for joining us again. If you're going to Toronto at the beginning of March for the PDAC event, please stop by our event where we will invite more experts to discuss in more detail all technical and non-technical risks when it comes to investing in mining assets. Thank you so much, everyone. See you next time - or see you at PDAC!