business plan for small scale mining

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Business Plan for Small Scale Mining Entrepreneur

Recent estimates show that small-scale, entrepreneurial mining operations produce around 20 percent of the world’s gold, 20 percent of the total diamond weight, and about 80 percent of usable sapphires. 

Small Scale Mining Business Plan

Business planning is what we specialize in at wise.

Wisebusinessplans, a global leader in the business planning community, is now assisting small mine owners and operators in the quest for steady, sustainable growth through the use of effective Small Scale Mining Business plans  and goals mapping options.

“A small mining operation can make a healthy profit when managed carefully by following specific planning practices that lead to earnings protection and secure long-term business life.

” said Joseph Ferriolo,  Director of Wisebusinessplans.  “At Wise, we look at each client as an individual, one whose interests, ideas, and goals are unique to that business and we work one-on-one with every client.”

Wisebusinessplans’ custom-crafted mining business plan is tailor-made to showcase startup or expansion concepts as companies seek to acquire funding from investors , look to raise capital through venture capitalists, or work with private investors.

All plans include market research and custom financials that are developed for each individual company. Design experts give every mining business plan a unique, professional look and each client is entitled to a free revision to ensure the plan is done right.”

We feel privileged to assist men and women in the business world, such as mining entrepreneurs, who are working hard to not only make a better life for themselves but are also creating employment opportunities for others in their communities,” said Ferriolo.

Firms in this industry provide support services, on a fee or contract basis, for mining, quarrying, and oil and gas extraction. Firms may also provide services such as drilling ; taking core samples and making geological observations at prospective mine sites. Download our mining business plan sample and related business plan sample here.

Wisebusinessplans , staffed with professional MBA Business Plan writers , researchers, and financial experts, is a trusted partner for businesses across a broad spectrum of products and services. Our mission is to empower our clients to make the best possible business decisions, boost company performance and facilitate their funding success by laying the groundwork for strong businesses that excite, inspire and retain talented and exceptional employees.

A business plan for a small-scale mining entrepreneur should include sections on the executive summary, company overview, market analysis, marketing and sales strategies, operational plan, financial projections, and risk management. It should also outline the entrepreneur’s goals, target minerals, mining methods, and environmental considerations.

Market analysis for a small-scale mining business involves researching the demand for specific minerals, identifying target customers or industries, assessing competition, and understanding market trends and pricing dynamics. This information helps in determining the viability and profitability of the mining venture.

The operational plan should cover aspects such as the location and accessibility of the mining site, equipment and machinery needed, workforce requirements, safety protocols, environmental considerations, mining processes, and extraction techniques. It should also address permits, licenses, and compliance with mining regulations.

Financial projections for a small-scale mining business involve estimating startup costs, including equipment, permits, and infrastructure expenses. Additionally, projecting revenues based on expected mineral extraction volumes, pricing, and market demand. Cost considerations, such as labor, maintenance, and operational expenses, should also be factored in.

Common risks in small-scale mining include geological uncertainties, price volatility, regulatory changes, environmental impacts, and safety hazards. Risk management strategies may include conducting thorough geological surveys, maintaining diverse mineral portfolios, staying informed about market trends, complying with regulations, implementing safety protocols, and developing contingency plans for unexpected events.

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Gold Mining Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Mining Sector

Do you want to start a gold mining company? If YES, here is a detailed sample small scale gold mining business plan template & feasibility report.

There are money spinning businesses that are monopolized by wealthy people and accredited investors and one of such businesses is operating a gold ore mine. The gold ore mining business is indeed a profitable business, but you must be ready to scale through very high barriers before launching this type of business.

If you have conducted your market research and feasibility studies, the next step to follow is to write a detailed blueprint of how you intend raising your seed capital, setting up the business, managing the flow of the business, sorting out tax and marketing your services amongst others.

Below is a sample gold mining company business plan template that will help you successfully launch your own business;

A Sample Gold Mining Business Plan Template

1. industry overview.

Players in the Gold and Silver Ore Mining industry primarily mine gold and silver-bearing ores. Mining activities include the development of mine sites and the on-site processing of ore into a concentrate or bullion. Gold and silver ore mining companies typically retain ownership of the semi-processed gold or silver products and pay for further refining on a toll-charge basis.

If you are an observer of the Gold and Silver Ore Mining industry, you will notice that the industry revenue is largely a function of production volume and commodity prices. For the Gold and Silver Ore Mining industry, output volumes and sales prices for both gold and silver have fallen over the past five years, leading to significant industry contraction.

Meanwhile, demand from manufacturers of electrical equipment, electronic products and jewelry, which comprises the industry’s primary markets, has stagnated or even declined over the past five years as a result of high import penetration and input costs. Overall, industry revenue is expected to decline over the five years to 2017.

In the united states of America, the industry generates over $9 billion annually from more than 162 gold and silver ore mining companies scattered all around the country. The industry is responsible for the employment of over 14,282 people.

Experts project the industry to grow at a -9.0 percent annual rate. Barrick, Kinross Gold and Newmont are the market leaders in this industry in the United States of America; they have the lion market share in the industry.

A recent report published by IBISWorld shows that the five years to 2017 have been volatile for the Gold and Silver Ore Mining industry. The report further stated that the industry revenue spiked until 2012, proving this industry to be one of the few that benefited from the financial crisis, as well as the years of economic instability that followed.

In times of economic turmoil, investors look to buy safe-haven assets such as gold and silver, causing gold and silver prices to surge. This helped industry revenue to grow through to 2012. In fact, strong demand from domestic and international investors drove gold prices to all-time highs.

Furthermore, an undersupply of gold due to decreased industry production in the 2000s further contributed to the spike in prices.

If you are considering starting a gold mining business whether on a small scale or on a large scale, then you should ensure that you obtain all the necessary permits from the local, state and federal government . The truth is that this type of business does pretty well when it is strategically positioned.

In summary, gold mining business is a profitable business venture and it is open for any aspiring entrepreneur to come in and establish his or her business; you can choose to start on a small scale on a large scale with robust distribution networks all across the United States of America and other countries of the world.

2. Executive Summary

TTK® Gold Mining Company is a standard and licensed gold and silver mining company that will be based in the Boise Basin in Boise County – Idaho, USA but we will own.

Our business goal as a gold mining company is to become the number one choice of jewelry making companies and other companies that make use of gold and silver in the United States and other countries of the world. As a business, we are willing to go the extra mile to invest in owning our own environmentally friendly gold and silver mines and also to hire efficient and dedicated employees.

We have been able to secure permits and licenses from all relevant departments both at the local government and state level in the United States of America. TTK® Gold Mining Company is set to redefine how a standard gold mining business should be run all across the world. This is why we have put plans in place for continuous training of all our staff .

The demand for gold and silver is not going to plummet any time soon which is why we have put plans in place to continue to explore all available market around the United States and other countries of the world. In the nearest future, we will ensure that we create a wide range of distribution channels all across the United States of America and other countries of the world.

TTK® Gold Mining Company will at all-time demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible. We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely.

TTK® Gold Mining Company is a partnership business that will be jointly owned by Tony Kenneth, Tyson Barker and Karis Murphy.

Tony Kenneth who is the Chief Executive Officer of the Company has a Degree in Mining Technology with over 10 years’ experience working in related industry as a senior manager cum mining engineer prior to starting TTK® Gold Mining Company. He will be working with a team of professionals to build the business and grow it to enviably heights.

3. Our Product and Service Offerings

TTK® Gold Mining Company is established with the aim of maximizing profits in the gold and silver mining industry. We want to compete favorably with leaders in the industry which is why we have but in place a competent team that will ensure that our products are of high standard.

We will work hard to ensure that TTK® Gold Mining Company is not just accepted in the United States of America, but also in other countries of the world where we intend supplying our products. Our products are listed below;

• Gold ore mining
• Silver ore mining
• Gold ore beneficiation
• Silver ore beneficiation
• gold and silver bullion , ore and concentrates

4. Our Mission and Vision Statement

• Our vision as a gold mining company is to own gold and silver mines all across the United States of America and other countries of the world; we want to become the number one brand in the gold and silver mining industry.
• Our mission is to establish a standard gold mining company that in our own capacity will favorably compete with leaders in the industry at the global stage. We want to build a gold mining company that will be listed amongst the top 5 gold mining companies in the world.

Our Business Structure

As part of our plan to build a top flight gold mining company in Boise County – Idaho that will favorably compete with leaders in the industry, we have perfected plans to get it right from the onset which is why we are going the extra mile to ensure that we have competent employees to occupy all the available positions in our company.

In view of that, we have decided to hire qualified and competent hands to occupy the following positions at TTK® Gold Mining Company;

• Chief Executive Officer (Owner)
• Gold Mine Manager

Human Resources and Admin Manager

• Sales and Marketing Officer
• Accountants/Cashiers

Gold and Silver Mining Casual Workers

Truck Drivers

• Customer Service Executives

5. Job Roles and Responsibilities

Chief Executive Officer – CEO (Owner):

• Increases management’s usefulness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; collaborating values, strategies, and objectives; assigning accountabilities; preparing, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Answerable for fixing prices and signing business deals
• Responsible for providing direction for the business
• Makes, connects, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Accountable for signing checks and documents on behalf of the company
• Evaluates the success of the organization

Gold Mining Site Manager

• Oversees the smooth running of operations in the mine
• Makes sure that quality is maintained at all times
• Maps out strategies that will lead to efficiency amongst workers in the organization
• Responsible for training, evaluation and assessment of the workforce
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Ensures that our gold and silver mining site meets the expected safety and health standard at all times.
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Defines job positions for recruitment and managing interviewing process
• Carries out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Oversees the smooth running of the daily business activities.

Sales and Marketing Manager

• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Models demographic information and analyze the volumes of transactional data generated by customer purchases
• Identifies, prioritize, and reach out to new partners, and business opportunities et al
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with customers
• Develops, executes and evaluates new plans for expanding sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Liable for operating excavators and other machines in the gold and silver mining site
• Handles the mining of gold and silver
• Assist in loading and offloading of our gold and silver into and out of the trucks

Accountant/Cashier

• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management , general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization
• Assists in loading and unloading gold and silver et al
• Maintains a logbook of their driving activities to ensure compliance with federal regulations governing the rest and work periods for operators.
• Keeps a record of vehicle inspections and make sure the truck is equipped with safety equipment
• Inspects vehicles for mechanical items and safety issues and perform preventative maintenance
• Complies with truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures
• Reports defects, accidents or violations

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries (answer customer queries regarding our gold and silver ore mining business)
• Finds out the customer’s needs, recommend, select and help locate the right merchandise, describe a product’s features and benefits.
• make suggestions and encourage purchase of products

6. SWOT Analysis

Due to our drive for excellence when it comes to running a standard gold mining company, we were able to engage some of the finest business consultants in the United States of America to look through our business concept and together we were able to critically examine the prospect of the business and to assess ourselves to be sure we have what it takes to run a standard gold mining business that can compete favorably in the industry.

In view of that, we were able to take stock of our strengths, our weakness, our opportunities and also the threats that we are likely going to be exposed to in the United States of America. Here is a of what we got from the critically conducted SWOT Analysis for TTK® Gold Mining Company;

Our strength lies in the fact that we have state of the art gold and silver mining equipment and trucks that has positioned us to meet the demand of our clients even if the demand tripled overnight.

Another factor that counts to our advantage is the background of our Chief Executive Office; he has a robust experience in the industry and also a pretty good academic qualification to match the experience acquired which has placed him amongst the top flight players in the gold and silver mining industry.

We are not ignoring the fact that our team of highly qualified and dedicated workers will also serve as strength for our organization.

We do not take for granted the facts that we have weaknesses. In fact, the reality that we are setting up a gold mining company in the United States might pose a little challenge. In essence our chosen location might be our weakness.

• Opportunities:

The opportunities available to us are unlimited. There are loads of jewelry making companies and other manufacturing companies that make use of raw gold all across the globe and all what we are going to do to push our products to them is already perfected.

The threat that is likely going to confront us is the fact that we are competing with already established gold mining companies in the United States and other countries of the world. Of course, they will compete with us in winning over the available market. Another threat that we are likely going to face is unfavorable government policies and economic downturn.

7. MARKET ANALYSIS

• Market Trends

Gold and silver mining is a lucrative business in the United States and Canada and in looking at the trends of these mega countries over the course of gold’s bull, it is apparent that the results vary quite substantially; and China and Russia that have experienced the biggest growth over this stretch.

China in particular has carved out an incredible growth story, with its production volume up a staggering 92 percent since 2001.

Talking about the two North American land giants, their gold-mining trends have been ugly over the last decade or so. Incredibly, both the US and Canada have seen output fall by nearly a third to 2011’s respective tallies of 237mt and 110mt.

Their mature gold-mining infrastructures were just decimated by the secular bear that preceded the current bull. Up until the 1990s the US and Canada’s gold-mining industries operated like well-oiled machines, with the miners consistently putting forth sizeable capital towards exploration and development.

Exploration was successful in renewing and growing the reserves that were being mined, and continual expansion and new development sustained and even grew production. It is common trend in the gold and silver ore mining line of business to find mining companies positioning their business in locations and communities where they can easily have access to mines and of course cheap labor.

If you make the mistake of positioning this type of business in a location where you would have to travel a distance before you can access gold and silver mines, then you would have to struggle to make profits and maintain your overhead and logistics.

Also, another trend in this line of business is that most registered and well organized mining companies look beyond the market within their locations or state; they ensure that they strike business deals with leading jewelry making companies in the United States of America and other countries of the world.

The truth is that if as a gold mining company you are able to become a vendor to one or more jewelry making giants in the United States of America or in other countries of the world, you will always continue to smile to the bank.

8. Our Target Market

When it comes to supplying product from gold and silver mines, there is indeed a well-defined market. This goes to show that the target market for products from gold mining companies is far reaching. In view of that, we have conducted our market research and we have ideas of what our target market would be expecting from us. We are in business to engage in supply of raw gold and silver to the following organizations;

• Jewelry production companies
• Electronic components manufacturing companies
• Art and culture companies
• Gold and silver merchant

Our Competitive Advantage

Some of our competitive advantages are availability of resource, ability to forward sell production when appropriate and of course the ability to comply with environmental laws.

As a standard and licensed gold mining company, we know that gaining a competitive edge requires a detailed analysis of the demographics of the surrounding area and the nature of the existing competitors. And even if you are successful at first, new competitors could enter your market at any time to steal your regular customers.

Hence we will not hesitate to adopt successful and workable strategies from our competitors. Another competitive advantage that we have is the vast experience of our management team; we have people on board who understand how to grow a business from the scratch to becoming a national phenomenon.

Our large and robust distribution network and of course our excellent customer service culture will definitely count as a strong strength for the business.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category in the industry, meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives.

We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

TTK® Gold Mining Company will generate income by simply supplying the following;

10. Sales Forecast

One thing is certain when it comes to gold and silver mining, if your business is strategically positioned and you have good relationship with players in the jewelry manufacturing industry, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in and around the United States of America and we are quite optimistic that we will meet our set target of generating enough profits from the first six months of operation and grow the business and our clientele base.

We have been able to critically examine the gold and silver ore mining line of business, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to startups in the United States of America.

Below are the sales projections for TTK® Gold Mining Company, it is based on the location of our business and other factors as it relates to small scale and medium scale gold and silver mining company startups in the United States of America;

• First Fiscal Year: $900,000
• Second Fiscal Year: $2 million
• Third Fiscal Year: $4.5 million

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor offering same product and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location to start TTK® Gold Mining Company, we conducted thorough market survey and feasibility studies in order for us to penetrate the available market in the United States of America. We have detailed information and data that we were able to utilize to structure our business to compete with other gold and silver mining companies.

We hired experts who have good understanding of the gold and silver ore mining line of business to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market. TTK® Gold Mining Company will adopt the following sales and marketing approach to sell our raw gold and silver;

• Introduce our business by sending introductory letters to production companies and other stakeholders in and around the United States of America
• List our business and products on yellow pages’ ads (local directories)
• Leverage on the internet to promote our product cum business
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

Regardless of the fact that our gold mining company can favorably compete with other leading mining companies in the United States of America and in any part of the world, we will still go ahead to intensify publicity for all our products and brand.

TTK® Gold Mining Company has a long term plan of exporting our product all across the United States of America and other countries of the world. This is why we will deliberately build our brand to be well accepted in Boise County – Idaho before venturing out to other cities all across the United States of America and other countries of the world.

As a matter of fact, our publicity and advertising strategy is not solely for selling our products but to also effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise TTK® Gold Mining Company;

• Place adverts on both print (community based newspapers and magazines) and electronic media platforms
• Sponsor relevant community programs
• Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, et al to promote our brand
• Ensure that all our staff members wear our customized clothes, and all our official cars and distribution trucks are customized and well branded.

12. Our Pricing Strategy

At TTK® Gold Mining Company we will keep the prices of our products below the average market rate by keeping our overhead low and by collecting payment in advance from well – established jewelry manufacturing companies that would require constant supply of raw gold and silver.

• Payment Options

The payment policy adopted by TTK® Gold Mining Company is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America. Here are the payment options that TTK® Gold Mining Company will make available to her clients;

• Payment via bank transfer
• Payment via online bank transfer
• Payment via check
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our clients make payment for our gold and silver without any stress on their part. Our bank account numbers will be made available on our website and promotional materials.

13. Startup Expenditure (Budget)

From our market survey and feasibility studies, we have been able to come up with a detailed budget of how to achieve our aim of establishing a standard and highly competitive gold mining company in the United States of America and here are the key areas where we will spend our startup capital on;

• The total fee for registering the business in the United States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
• Marketing promotion expenses for the grand opening of TTK® Gold Mining Company in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The cost for hiring business consultant – $2,500.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – ,400 .
• The cost for payment of rent for a gold and silver ore mine – $500,000 (Per Annum)
• The cost for acquiring gold and silver ore mine operating license fee – $500,000
• Other start-up expenses including stationery ( $500 ) and phone and utility deposits ( $2,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $150,000
• The cost for start-up inventory (gold and silver ore mining equipment, trucks and other related gold and silver mining devices) – $250,000
• The cost of launching a website – $600
• Miscellaneous – $5,000

We would need an estimate of two million dollars ( $2 million ) to successfully set up a standard and highly competitive gold mining company in the United States of America.

Generating Startup Capital for TTK® Gold Mining Company

No matter how fantastic your business idea might be, if you don’t have the required money to finance the business, the business might not become a reality. Finance is a very important factor when it comes to starting a gold and silver mining business.

TTK® Gold Mining Company is a partnership business that is owned and financed by Tony Kenneth, Tyson Barker and Karis Murphy. They do not intend to welcome any external business partner which is why they decided to restrict the sourcing of startup capital to 3 major sources.

• Generate part of the startup capital from personal savings and sell of stocks
• Source for soft loans from family members and friends
• Apply for loan from the Bank

N.B: We have been able to generate about $500, 000 ( Personal savings $400, 000 and soft loan from family members $100, 000 ) and we are at the final stages of obtaining a loan facility of $1.5 million from our bank. All the papers and documents have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the number of loyal customers that they have the capacity and competence of their employees, their investment strategy and their business structure. If all of these factors are missing from a business, then it won’t be too long before the business close shop.

One of our major goals of starting TTK® Gold Mining Company is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to supply our raw gold and silver a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

TTK® Gold Mining Company will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit to operate gold and silver ore mines in the United Stated of America: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of a facility and renovating the facility as well: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed gold and silver mining machines and equipment, furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Launching party planning: In Progress
• Establishing business relationship with Jewelry production companies and other stakeholders: In Progress
• Purchase of tippers and delivery trucks: Completed

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Everything You Need to Start & Grow a Business

Start Your Own Small Mining Company: An In-depth Guide

Looking to start a mining company but not sure where to begin? Want to unlock the commercial potential of natural minerals and rocks in your area? This article is here to help. From owning a mine to selling resources , we’ll provide you with the guidance you need to launch a successful venture.

While mining is a risky industry, with constantly fluctuating commodity prices, our tips on consistent hard work, thorough planning, and a dash of luck will set you on the path to profitability. Ready to learn more? Keep reading.

Assess Your Expertise

Assess your mining expertise to see if you’re ready to lead a mine to success. Essential skills include knowledge of environmental sciences, geology, engineering, mathematics, and related fields, as well as the operation and maintenance of mining equipment.

Gain hands-on experience through work at a mine before launching your own business venture. Ensure you have what it takes before starting out. Be sure to learn new skills in marketing and promoting your business to stand out from the rest.

Secure Financing for Your Mining Company

After assessing your expertise level in mining, it is essential to secure financing for your small-scale mining company from potential investors willing to make an initial investment into the venture capital fund needed for start-up costs such as land acquisition fees, permits & licenses fees and purchasing equipment & supplies as well as covering operational costs during the first years of business operations until revenue streams begin to flow in consistently over time from sales proceeds of mined minerals/resources.

It is important to note that since this type of business involves high-risk investments, it would be wise to approach bank loan officers who are more experienced with financing miners versus traditional lending institutions who are unfamiliar with this industry sector’s specific needs & requirements.

Establish a Business Plan for the Mining Company

After securing funding for start-up costs such as land acquisition fees and purchasing equipment & supplies, as well as covering operational costs during the first few years of business operations until revenue streams begin to flow in consistently over time from sales proceeds of mined minerals/resources, develop an effective business plan by considering factors like market analysis, competition & pricing strategies, financial projections, and operational management.

A well-planned business plan can help to ensure your small mining company’s success as it will serve as a guide for decision-making during the early stages of operations and over time.

Acquire Equipment & Supplies

Once your business plan is complete, purchase all necessary equipment & supplies needed to operate your small-scale mining business, such as drills, ventilation systems, and other machinery. Additionally, you should also consider investing in safety gear for staff operating these machines, such as helmets, overalls, and protective gloves. Invest in a Steel Roller to make your operation run smoothly.

Starting a small mining company requires dedication, research, and hard work. It is important to understand the industry you are entering by researching the types of minerals or resources available in your area as well as applicable laws and regulations related to mining. Goodluck

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Mining Business Plan

The following document outlines a mining business proposal to design and construct a free standing toll plant facility, known in this document as Peru Toll Treatment (PTT), in southern Peru to accommodate the needs of a growing quantity of small scale miners who produce up to 14 percent of the country’s annual gold production. The plan includes the basic design criteria on which the plant will be built, the model for generating revenue and a detailed annual cash flow forecast for the proposed operation for a period of ten years.

The proposed 7.5 tonne per hour plant will cost approximately $2.9 million to design (including $473,000 in VAT taxes which will be reimbursed from revenues), construct and startup and will generate revenues by providing a custom milling facility for small producers who sell their production to the plant. This business opportunity does not include any involvement in mining or the production of mineral. It only involves the purchase and treatment of gold minerals. While the market for such a plant can easily accommodate a 350 tonne per day operation the business plan is based on processing 150 tonnes per day only with the ability to later expand to multiple plants of 350 tonnes per day each.

The plan calls for raising the $2.9 million from public equity financings. Once in operation, the operating company will retain $250,000 for working capital and all subsequent profits will be paid to the shareholders every 3 months as a dividend. The cash flow model is for a single plant of 150 tonnes per day, calculated on an after tax (Peruvian fiscal regime) basis for a 10 year project life. On a project basis using a $1500 per ounce gold price and a discount rate of 10 percent the project will generate a net present value of almost $22.0 million. The payout of the capital investment on a project basis is 1.1 years and the calculated rate of return is over 200%. Testing the project economics against changes in the primary input variables (capital cost, operating cost and gold price) indicates that the project is very robust and even with significant increases in costs or reductions in revenue sources the project has a positive rate of return.

How to Start a Mining Business for Gold & other Metals

Appendix 5 of this Business Plan includes expressions of interest from two formal miners who are 100% owners of their concessions and can offer 450 tonnes per day of production. PTT has visited one of the mines and confirms the potential for a 350 tonne per day operation. In order to facilitate the commencement of mining production PTT intends to rent $100,000 of mining equipment to these owners as part of a preferred mineral provider position. This cost has been included in the project economics.

PTT believes that health, environmental and social improvements will accrue to the informal miners in those areas of Peru in which the Company operates and these are important aspects of the expansion phase of the project. Current informal mining practice involves the uncontrolled use of the toxic substances mercury and sodium cyanide to obtain the gold at very low recovery rates. Many of the informal miners are, in effect, stealing the gold from the government or legitimate concession holders causing significant social disruption in the affected areas of the country. It is, therefore, an important aspect of this business plan to reduce the negative health and environmental aspects of informal mining activity by offering an advanced technology which safely removes up to 90% of the gold from the ores resulting in a much higher payback to the people who mine the ore. Purchasing gold ores from informal miners who do not own their concessions is illegal in Peru and rightfully so. It is the intention of PTT to work with informal miners to ensure that they legitimize their activities by entering into registered contracts with the owners of the mineral resources.

There are risks to the project but most can be mitigated by doing appropriate engineering prior to plant design and construction. The plant will use standard gold processing technology and country/political risk is the greatest threat to the project. Peru has signed free trade agreements with both Canada and the United States which is normalizing its business activities.

Overview of Peru

Mineral Wealth

From the days of the Spanish conquest, foreigners have come in search of the products of Peru’s mines and the mining sector has been a core part of the economy up until the modern era. Operations at the historic zinc-mining center of Cerro de Pasco began in 1905 and the Metallurgical Complex at La Oroya started production in 1922. Much of Peru’s rail network was created to serve the needs of the mining industry. Nevertheless, relatively little exploration was carried out in the 1960s and 1970s and development of the mining sector came to a halt. Peru’s favorable geology has been under-exploited and while reserves have been exploited intensively in the US, Canada and Chile, to date only about 12 per cent of Peru’s mineral resources have been identified. Peril has the capacity to double or triple current levels of output, especially in base metals. In all, Peru holds about 16 per cent of the world’s known mineral reserves, including 15 per cent of copper and 7 per cent of zinc reserves.

Mining activity contributes 45% of foreign currency to the national economy which implies investment commitments, promotion of a modern managerial philosophy, increased responsibility towards safety and care of the environment as well as improved rural social development.

While mining provides relatively few jobs, it is vital to Peru’s economy in other ways. Thanks both to high mineral prices and rising output, mineral exports were up by almost half last year, and accounted for 55% of total exports. Mining brings in 29% of total tax revenues. Of this money, the government last year returned $138m as a local royalty to mining areas, most of which are otherwise poor and remote.

As a result of its favourable geology and improving economy Peru is taking a dominant position in the production and sale of many base and precious metals. It occupies first place in Latin America in zinc, tin, lead and gold; second place in silver and copper; fifth in iron. In the context of world mining production, Peru is in fifth place in gold, second place in silver, third place in tin, fourth place in zinc and lead, fifth place in copper and twenty-fifth place in iron as shown on Table 1 below.

Table 1: Peruvian Minerals Production

Business Climate

Since the constitutional and business/economic reforms of the early 1990’s Peru has enjoyed a robust economy with strong economic growth tied closely to the business cycles of its primary metals production. The country allows any person or company to create and own a Peruvian entity and all profits can be repatriated to another jurisdiction free of additional levies.

The tax code is relatively simple and taxes are calculated as 30% of net profits after depreciation. Machinery and equipment are all subject to depreciation on a straight line basis and the majority of items are considered to have a 10 year life. A recently introduced royalty provision requires an additional payment to the government depending upon mine production level – the higher the production level, the higher the royalty to a maximum of 3% of sales. Currently small producers (less than 350 tonnes per day) are exempt from this royalty.

Labour laws are not restrictive and employee burden is approximately 30% of base salary. Unskilled labour is relatively inexpensive and university trained and skilled trades labour are paid commensurate with the level of training. Skilled and professional talent exists in abundance and is of a high quality.

Political Stability

Peru has a long history of political instability. In 1993 Alberto Fujimori enacted several far-reaching legal and constitutional reforms which have stabilized the political situation. Although he left the country under a cloud of suspicion in 2001, his legacy is a well performing economy and a gradually improving jurisprudence and governing infrastructure. As the government bureaucracy becomes more stable and professional the incidence of corruption is diminishing. Corruption remains an unfortunate fact of life in Peru but it has noticeably declined in the past 10 years.

The governments of Alejandro Toledo and Alan Garcia have been much maligned but the outgoing president has turned over to the new president (on July 28, 2011) an enviable economic record and a strong financial position.

There is a confidence in the Peruvian economy as it moves forward buoyed by continued high commodity prices and a wider spreading wealth across all social classes. Many of functionaries have made considerable personal advances on the basis of the resurging mining economy so it is expected that the new government will be friendly to the mining industry and investment.

Social Development and Corporate Social Responsibility

A significant benefit of this business plan, apart from the very robust economics, is the opportunity to advance the indigenous mining industry through improving the health and environmental impacts as well as obtaining a higher recovery of gold from the mined rock returning a greater economic benefit to the mineral owners – the people of Peru. PTT has commitment letters for 450 tonnes per day of mineral production from two legitimate, small scale miners and as it expands production beyond this, its policies will have beneficial impacts as follows;

Health Issues

Informal and small miners in Peru currently do not have the financial capacity to install modern, large capacity plants. As a result, the mine producers crush the ore in stone grinding mills called quimbaletes and then agglomerate the gold in the crushed material with natural mercury. Not only is the process very labour intensive with low productivity, it also leads to significant health problems. In order to release the gold from the mercury amalgam, the material is heated on open fires to boil off the mercury creating a mercury poisoning risk for anyone nearby including children. The mercury vapour eventually cools and condenses on the ground to create an ongoing health hazard.

In those cases in which sodium cyanide is used to leach the gold from the ore there is the additional health problem due to cyanide spills which may contaminate local water supplies.

Environmental Degradation

As described above the uncontrolled use of mercury and sodium cyanide often lead to issues of significant environmental degradation. The gold mining regions of Peru are noted for the deep blue staining in areas where ore is leached in cyanide baths that are developed without due regard for the environment. The baths are rarely lined with geomembrane to prevent the liquid toxins from moving out into the rock and eventually into the nearby water courses. To argue that many of these areas are in arid zones with no natural vegetation or water courses does not obviate the fact that environmental destruction occurs when toxic materials are allowed to accumulate in surface soils.

Ore Recovery

All subsurface materials are owned by the people of Peru under the trusteeship of the Peruvian government and any practices which do not optimize the recovery of wealth from these subsurface materials denies the people of Peru their rightful share of this wealth. The antiquated processing methods described above rarely recover more than 35% to 40% of the gold from the ore material. Modern plant recovery techniques can often recover more than 90% of this same gold returning a higher value to the people of Peru.

Corporate Social Responsibility

The current state of informal mining in Peru is somewhat chaotic and in many cases, informals are, in effect, stealing ore from the concession owners who are powerless to stop them. PTT will not purchase ore from informal miners who do not have a rightful claim to the ore they are selling and will go further in attempting to bring some order to the regions in which it works by;

• Assisting informal miners to obtain concession rights to the areas they are mining if there are no pre-existing concession rights and
• Assisting informal miners who are illegally selling ore obtained from concessions that belong to third parties by obtaining agreements with the owners of the concessions. In this way the production of gold ore is legal and the concession owners will get a return for their ownership of the concession.

Thus PTT will permit informal and small scale miners to earn much greater returns on their labour (through higher recoveries of gold) with much less effort. Modern plants, built to the exacting environmental standards of the Peruvian Ministry of Energy and Mines using state of the art gold processing technologies will result in an improved environment and fewer health risks to the miners. Perhaps as important, the social chaos which characterizes many gold mining areas of Peru will become more orderly as concession owners are paid a return (royalty) on the gold mined from their concessions.

Southern Peru Gold Belt Analysis

Nazca – ocona gold belt.

The Nazca-Ocona Gold Belt is 350 km long and 40 km wide covering portions of three Departments; Ayacucho, Ica and Arequipa. It is typified by narrow, gold bearing quartz veins, which are formed in hypothermal to mesothermal environments. The mineralized structures are found in andesitic volcanic rocks and in the intrusives of the Andean Batholith. Veins found to crosscut granodiorite and diorite, tonalite or andesite often contain higher gold grades in the diorite, tonalite or andesite than in granodiorite. The mineralization is known locally as “rosario” formations due to the fact that the veins tend to narrow and widen in a regular pattern much like the beads on a rosary.

The mining activity that has developed in the Nasca-Ocona belt has largely been by artesanal methods although there are some more modern mines in the area. There exist also mining formal activities of iron and copper.

Artesanal mining is characterized by its labor intensity and lack of modern mining equipment. As a result, the miners develop lodes or veins of narrow thickness but high grade Au. The veins range in width from 30 centimeters to 1.5 meters. In some exceptional circumstances they reach up to 2 m wide. The concentrations of Au range from 15 to 150 grams per tonne (gpt).

The artesanal miners selectively extract from the lode and veins using a technique called the circado. This is essentially a resuing method whereby an opening large enough for a person to work is made alongside the vein and the ore is then slashed off the wall. This reduces dilution and the ore is removed from the opening in small canister with as much as 1.6 grams of gold per 45 kilogram canister (35 grams per tonne). The treatment of the mineral begins with the “pallaqueo”, or hand sorting to selectively upgrade the ore before being processed or sold.

The mineral extracted from high grade (> 2 grams gold (Au) / canister), is crushed and processed directly in a quimbaletes or manually operated, wetted grinding stones at a rhythm of 30 minutes per canister. While no formal reporting is done it is believed that the gold production in lca and Arequipa is 9 tonnes of dore annually.

Cyanide is sometimes used to extract the gold and the dissolved gold is recovered using activated charcoal. Typically the tails of the quimbaletes process contains important quantities of gold that can be recovered only by cyanide. The grade of the tailings ranges between 12.8 and 25.6 gpt and contains considerable quantities of mercury (introduced from mercury amalgam processes) which end up in the cyanidation tails.

Figure 2: Informal Mining in Southern Peru

The map shown above comes from information taken from the Ministry of Energy and Mines (MEM) and includes 68 artesanal mining locations. The MEM database includes a total of 270 locations and even this is known to understate the actual number of small mining operations.

It is believed that less than one third of the mines are registered, or included in the reports of MEM. Therefore, the total material that is mined and treated is unknown. It is known, however, that the amount of informal mining activity has increased with the increasing gold price. This increases the mining potential of the zone.

Peru Small/Informal Mining Situation

Small mining in Peru is divided by MEM into two categories: traditional and artesanal. Not only is artesanal mining labour intensive with only rudimentary equipment, it is, also in general, an informal activity. Traditional mining makes use of mechanical technologies and is formally registered with the government following norms of labor relations, safety and mining hygiene, environmental requirements, the payment of taxes and reporting to the MEM. According to the statistics of the MEM, the artesanal mining contributes 14 % of the entire gold production of Peru. Half of the national exports come from the mining and from 1998 the gold is the principal product of national exportation.

Beneficiation Plants

Only 5 plants in the study area use modern process equipment and can be considered to have acceptable reliability. These are shown on Table 2 below:

Table 2: Operating Plants

Plant Site Location

The geography of Peru is such that the coastal plain is entirely desert except in those areas in which rivers run westward out of the Andean highlands. The entire coast then is truncated every 100 kilometers or so by irrigated arid lands stretching a kilometer or two on either side of the river. The mining activities which are of interest to this report take place within the mountain barrier and usually at elevations below 3500 meters above sea level (masl). While the straight line distances from these mines to the coast are not large (less than 100 km) the steep nature of the terrain makes transportation of the mineral quite difficult and expensive.

This business plan proposes to locate the plant approximately 30 kilometers south of the city of Nazca at a distance of 500 meters along the PanAmerican Highway. The next step in development will be to apply for additional mining leases, purchase the mineral and surface rights to the plant site location and convert the lease underlying the plant to a beneficiation plant lease.

Infrastructure for the plant is excellent with water available from either a well on-site (50 meters) or via pipeline approximately 5 kilometers away. Construction to bring electrical power to within 2 kilometers of the site is underway and is currently 7 kilometers from the plant location.

A layout of the plant on the property will be developed as part of the engineering studies to be carried out prior to construction.

Small Gold Plant Design

A local metallurgical laboratory has completed 3 cyanidation tests to determine the optimum dosage of cyanide to recover the gold in ore from the Nazca-Ocona gold belt. The composite ore sample used had a head grade of 19 grams per tonne and the ore was leached for 48 hours with intermediate samples taken to determine the rate of gold dissolution. The results of this work are shown on Figure 4 below.

It is important to note that PTT intends to use the latest gold processing technology to ensure that all Peruvian regulatory requirements are met or exceeded. None of the technology to be used is experimental and all of the equipment required can be readily manufactured in a number of fabrication shops in Peru.

This test work forms the basis for the operating cost estimate and a preliminary flowsheet as discussed below. Based on other plant experience with this material and the preliminary bench scale testing that was done it was determined that a simple cyanidation plant would recover between 92 and 95 percent of the gold from the ore.

Process Testing

PTT obtained a 50 kilogram sample of ores from the Nazca-Ocona area and retained the private laboratory of TECSUP to undertake 3 cyanidation leach tests at different cyanide dosages. The report from this laboratory work is included in Appendix 1 to this document.

The grade of the 50 kilogram sample was 18.7 gpt of gold and the sample was pulverized to an 80 percent passing 200 mesh size consist for the testing. The three cyanide dosages used 0.5, 1.0 and 2.0 grams per liter and the consumption of cyanide after 48 hours was 3.06, 3.58 and 3.61 kilograms per tonne. If the material is leached for only 24 hours the recovery is essentially complete and the

Figure 4: Process Test Results

consumption of sodium cyanide drops to 2.5 kilograms per tonne. The three samples were placed in a glass container and agitated for 48 hours. Twenty milliliter samples of the liquid phase were extracted periodically as shown to determine the rate of extraction and identify the optimal concentration of sodium cyanide. The results of the analysis are shown on the graph in Figure 4 below.

Plant Flowsheet

The standard process for this plant is shown on the preliminary flowsheet on Figure 5. The list of equipment is shown on Table 3. Ore will be brought by the miners to the plant in small trucks with an average size of 10 tonne lots and the material will be dumped on a compacted patio in a segregated bay. The material will be sampled and analyzed for gold grade, impurities and moisture allowing a fair assessment to be made of its value. The owner of the material will be paid on the basis of the analytical results. The method of payment is discussed below.

From the patio, the ore will be fed by small loader over a scalping grizzly and into a 60 tonne feed bin which discharges onto a screen. The screen oversize passes into a jaw crusher and the undersize passes by conveyor to a second screen. The discharge from the jaw crusher passes onto the same conveyor and also across the second screen. The oversize from the second screen goes to a cone crusher and the undersize passes by conveyor to a 150 tonne fine ore bin. Based on the granulometry of the material tested, less than 25 percent of the ore will need to be crushed.

The fine ore is taken from the bin via conveyor and discharged into a 7 foot by 7 foot ball mill. Water, lime and cyanide are added at this point. The ball mill discharge is pumped to a hydrocyclone with the underflow going back to the ball mill and the overflow feeding a 5 foot by 5 foot ball mill. The discharge from this ball mill is also sent to a hydrocyclone with the underflow going back to the ball mill and the overflow going to the first of four, agitated leach tanks.

The leach tanks work in series and by the time the solids pass through the fourth tank the gold has been leached from the fine solids. The slurry then passes into the first of three carbon-in-pulp tanks where fine carbon particles move in counter current with the slurry to absorb the gold laden cyanide solution. The slurry is pumped from the bottom of the third tank and sent to a standard tailings facility and the liquid phase is sent to the first of three desorption tanks.

The gold laden carbon is washed with stripping solution to remove the gold from the carbon and this solution is then sent to a small electrolytic cell where the gold particles are plated onto a gold cathode. The cathodes are periodically taken to a furnace and melted to make ingots of dore bullion. The carbon is washed with hydrochloric acid to regenerate its adsorption qualities and then sent to a rotary kiln to be reactivated and reused in the process. The sintered carbon is passed across a double deck screen to remove fine particles generated in the process. The fine

carbon which is removed will be stored for subsequent burning to capture any residual gold particles. The first step in the project process following financing will be to do more extensive metallurgical testing to finalize the process flowsheet and estimate an accurate mass balance. It is anticipated that several cost savings will be made at this point. For example the gold ore from the Nazca area is very highly oxidized and is delivered to the area plants with few rocks larger than 6 inches in size. It is not considered likely that much crushing will be required. Also the sizing of the ball mills will be more accurate and it is likely that smaller equipment will be used. The rapid reaction kinetics may allow for fewer tanks to be used. It is considered that the flowsheet presented in this business plan is conservative. The detailed design to be done post-financing will result in a target cost estimate and construction drawings.

Plant Cost Estimate

The cost estimate is based on a detailed budget quotation from a respected Peruvian plant fabricator. All equipment will be sourced Peru and the cost estimate is summarized below on Table 4.

The net result is a capital estimate accurate to within plus or minus 15 percent. Added to the installed equipment capital cost will be working capital to maintain an owner’s team during design and construction and to pre-purchase a one week supply of ore. The capital cost estimate quotation is included in Appendix 2 to this Business Plan.

Discussions have been held with a reputable Peruvian engineering company with extensive experience in building this size and type of plant. Basic contract terms have been agreed upon pending financing. Their preliminary cost estimate to build the plant on a turnkey basis was less than this constructors estimate.

Plant Security

Security is an issue whenever there exists a small object of high value such as a brick of dore bullion. Security will be built into the plant design by surrounding the facility with a fence or wall and putting the final processing equipment into secured building. Workers will be required to wear company clothing and change and shower on site. Special traps will be built into all effluent discharges and private security will protect the plant.

The removal of gold bricks will be done under contract with one of the international, bonded security companies that operate in Peru and they will take custody of the gold at the plant site. There is a small asphalt airstrip at Nazca and flying the gold from this nearby town will be investigated. Plant security will be fully addressed in the detailed design stage following financing.

Plant Operating Cost Estimate

The plant operating cost estimate is developed from the power cost and reagent costs which are the largest cost items. Power requirement is determined by the horsepower requirements of the plant equipment and it is assumed that all power will be from the national power grid at a cost of US$0.10 per kwhr. A backup generator will be available in the event of power outages which are frequent in this part of the country. The plant operating cost estimate is shown on Table 5 below;

Plant Personnel

This manpower schedule assumes two, 12 hour shifts per day for 365 days per year requiring 3 shifts of personnel. The plant availability is assumed to be 95 percent resulting in 346 effective operating days per year. The labour cost shown in the operating cost estimate is based on this labour schedule assuming that qualified labour is paid $600 per month and tradespeople are paid $630 per month. The payroll burden is assumed to be 30 percent additional to the payment of 15 salaries in every 12 month period. Additionally a 6 percent profit sharing bonus is paid. The manpower complement at the plant is 21 operators, 8 technician/tradesmen, 3 shift supervisors, the plant metallurgist and the Operations Manager.

Fiscal Regime

The Peruvian fiscal regime is well understood and has been in place for the past 12 years. The recent election assures another 5 years of political peace and the ruling Aprista party is pro-mining and is not considering significant changes to this tax regime. It is emphasized that PTT will follow all Peruvian laws with respect to the paying of all tributes and taxes including payroll taxes and profit sharing and this is reflected in the cash flow model used in this Business Plan.

Income taxes

Income taxes are a flat 30 percent of resource revenue and most capital expenses are amortized straight line over a 10 year useful life. The lack of accelerated write-offs has been a topic of conversation between the mining industry and the government for some time but with commodity prices at high levels it is not considered likely that any changes will be instituted at this time.

Royalty Structure

Royalties are a new device in the Peruvian fiscal system and the graduated scale is dependent upon production rate at the mining face. As a result the plant will attract no royalties.

Proposed Development Schedule

The development schedule is shown on Figure 6 below. When the project has been financed there will be a one month design phase to confirm that the flowsheet is appropriate for the project. Fifty kilograms of ore will be obtained from the operations which have signed letters of intent for this purpose.

Discussions have already taken place with a local engineering company which has the competency for this project and they have expressed, in writing, their interest in providing a lump sum bid to engineer, purchase and construct the plant. Engineering of the plant will commence as soon as the design of the flowsheet is known in sufficient detail to start sizing the equipment. As previously stated, as much as possible, the plant will be built in modules which can be easily transported to the site and quickly interconnected. Plant engineering and purchasing is anticipated to take only 2 months as many of the contractors already have construction drawings for the equipment to be installed.

As soon as the equipment list is ready, orders will be placed for the components which will all be available locally. As each plant module is designed fabrication will commence. It is anticipated that construction of the plant will require 4 months.

All necessary permits will be applied for immediately following financing. These will include construction permits, water licenses and operating permits. A local consultant with specialized skills will be hired to write the necessary permitting documents and that the whole process will take from 3 to 5 months.

Management Team

A very high quality management team has been created comprised of well trained and experienced expatriates and Peruvians.

Cash Flow Analysis

The cash flow results are shown in Appendix 4 to this report and summarize the costs and revenues for a 10 year project life. The table shown assumes a gold price of US$1500 per ounce and a gradually increasing gold feed grade.

The revenue formula for the plant is based on two items; 1. A plant charge per tonne of throughput based on gold price. 2. A recovered gold payable equal to 90% of the total plant recovery. The company retains any gold recovery above 90%. 3. A marketing fee of US$20 per tonne.

When the gold ore is brought to the plant it will be evaluated and a purchase price assessed based on the average gold price of the previous 7 trading days, the ore grade and moisture content and the plant revenue factors identified above.

The processing charge was calculated from an understanding of the process charges for the major competitor to PTT. While not wanting to upset the current pricing regime, PTT will be at or below the competition at any given gold price. Note that this calculation is based on pricing at a time when the gold price was $450 per ounce. It has moved up since this time and the economics presented are based on an increase of $20 in the process charges shown below. The deviation from our competition widens as the gold price increases as shown in Figure 7 below. For clarity, this figure shows the amount paid to the sellers of the ore and is not the amount paid to the plant.

The processing fee floor value was determined from a supply cost analysis at a gold price of US$300 per ounce and a grade of 10 grams per tonne. It was determined that a charge of US$54 per tonne of ore is required to obtain a 25% rate of return on the project (at a gold price of US$300 per ounce). Based on this analysis, the processing charge is calculated according the following formula;

Processing Charge (US$/t) = -0.0074 x gold price² + 1.6411 x gold price + 58.27

The operating cost has been described above and the cash flow analysis uses this cost with an additional 4% for marketing and head office administration. As gold prices have topped $1500 per ounce and additional $20 per tonne was added to this processing charge.

Two written expressions of interest have been received from concession owners who have mines currently not operating. PTT have visited the Erika mine and confirm that it is capable of producing 350 tonnes per day of gold mineralization. The total production being offered by the two formal mining companies is 450 tonnes per day.

Taxes and royalties are as described above. The capital cost allowance for all capital requirements is assumed to be a 10 percent, straight line deduction for 10 years (the assumed life of this project).

Figure 7: Comparison to Competitor Plant

The net cash flows are then calculated as shown in the Appendix and, for this base case production scenario, the project net present value at a 10 percent discount rate is $22,000,000, the rate of return is over 200% and the payback period is 1.1 years. Figure 8 indicates the expected net present values at varying discount rates for the base case cost and revenue assumptions.

Figure 8: Net Present Value at Varying Discount Rates

Sensitivity Analysis

A sensitivity analysis for the project has been undertaken as shown on the spider diagram in Figure 9. The input values of gold price, operating cost and capital cost have been varied in 25% increments from 25% of base case to 175% of base case values. The slope of the criterion lines indicates how sensitive the project economics are to changes in these criterion – the steeper the line the more sensitive the project economics are to that variable.

It can be seen from this sensitivity analysis that the project is extremely robust and is largely indifferent to capital cost nor very sensitive to gold price as most of the plant revenue comes from the processing charge.

As expected the project economics are most sensitive to mineral grade and PTT will pay particular attention to its product mix in order to get access to the highest grade and cleanest ores.

Mining Project Risks

While the project demonstrates excellent potential economic returns it is not without its risks. These are discussed below;

The plant does not effectively separate the gold:

The technology for winning gold from these types of ores is well understood and there are other much older and quite dilapidated plants operating successfully in the area. It can be seen from the economic sensitivity analysis that the project remains economic even with significant changes in capital and operating costs. When capital and operating costs are at 175% of the base case ($4,200,000 and $58.00 per tonne) and the ore grade and gold price are at 50% of the base case values (10 grams per tonne and $325 per ounce) the project will have an NPV10 of $3,682,000.

There is not enough ore to meet the throughput design

As stated previously, 14% of all the reported gold produced in Peru comes from small scale and informal miners. With high gold prices there are literally thousands of small miners operating in the area of interest and there is not enough plant capacity for them. Currently, a “miner’s cooperative” is being created to subsequently sign an agreement with the writers of this Business Plan.

The plant will not compete on the basis of pricing but rather on the honesty of its operation. The small miners will be given full value for their ore as determined by a third party, internationally recognized laboratory – which is not currently the case. As well the plant site is located within 1 kilometer of the main Peruvian highway while the competitors plant is located approximately 2 hours from the highway along a difficult, narrow gravel road. The plant location will guarantee a continuous supply of feed stock.

The plant workers rob from the company

Plant management has been chosen with great care and special attention will be taken to hire only qualified and reputable people. The company will also contract the services of a reputable firm to periodically audit the operations for shrinkage.

There is no backout strategy for the investors

While the initial money is being raised privately it is anticipated that within 2 or 3 years of startup the company will be taken public.

There is political instability in the country

The new regime in Peru has announced that it is committed to maintaining a pro-mining position while directing additional social development funds to the outlying regions of the country. Recently the government announced that informal miners must follow the same environmental guidelines of formalized mining companies. The best insurance against fall-out from such political instability is to maintain a very low business and community profile. This area of Peru is also known for being relatively peaceful and stable thanks to the self-organizing activities of the informal miners. While they do not operate under the aegis of Peruvian mining codes and laws they do an excellent job of protecting their own interests. The World Bank has specific programs to reduce the use of mercury in artesanal gold operations and will be supportive of this plant.

The signing of free trade agreements with Canada and the United States will do a great deal to normalize Peruvian business conditions in order that they are aligned with North American practices thus stabilizing the business climate.

This mining business example was created in 2010 – Some data might be out-of-date.

How To Write a Business Plan for Gold Mining in 9 Steps: Checklist

By henry sheykin, resources on gold mining.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan
• SWOT Analysis
• Business Model
• Marketing Plan

Gold mining is a lucrative industry that continues to experience growth and demand worldwide. According to Statista, the global gold production amounted to 3,531 metric tons in 2019, with a projected increase to 3,700 metric tons by 2022. As the market expands, it is important for entrepreneurs to have a solid business plan in place.

If you're considering starting a gold mining operation, there are several crucial steps to take. Research is key to identifying potential locations and understanding legal and operational requirements. Conducting a thorough analysis of costs and securing financing is also critical to success.

The latest mining technologies and environmental standards must also be considered in developing a strategic plan, along with establishing a team of experienced professionals. Lastly, creating a strong marketing plan will generate interest and attract potential investors or customers.

Although the process can be complex, with careful planning and execution, a successful gold mining business can be established.

Research The Gold Mining Industry And Market Trends.

Before venturing into the gold mining business, it's crucial to conduct thorough research on the industry and market trends. The findings will provide valuable insights that will inform critical decisions during the start-up and operation of the business.

Start by gathering information on the history of gold mining and how it has evolved over the years. This knowledge will aid in understanding the current state of the industry and what to expect in the future. Familiarize yourself with the major players in the industry and how they operate.

• What are the current market trends?
• What are the factors driving the demand and supply of gold?
• What are the challenges faced by the industry?
• What are the opportunities available?

The research should also cover the international market for gold and its trends. Analyze the global demand and supply situation and the geopolitical factors affecting it. Furthermore, research the specific market segment you intend to serve. Identify the target audience, their interests, and purchasing behavior. This information will help tailor your marketing strategy and develop products that meet the needs of your customers.

Finally, study the gold mining regulations in the countries you plan to operate. Ensure you understand the laws that govern the industry and the regulatory bodies involved. Compliance with the laws and regulations is crucial for the success of the business and will help gain the confidence of investors and stakeholders.

Identify Potential Locations For Gold Mining Operations

One of the most important steps in starting a gold mining business is identifying potential locations for extraction. Here are some important factors to consider:

• Geological surveys: Consult geological maps and surveys to identify areas with high potential for gold deposits. Look for areas with known gold deposits or geological formations that suggest the presence of gold.
• Accessibility: Consider the accessibility of potential locations. Areas that are difficult to access or require significant infrastructure to reach may not be cost-effective for mining operations.
• Environmental impact: Assess the potential environmental impact of mining operations in each location. Look for ways to minimize the impact on the environment, such as selecting sites away from sensitive ecosystems or implementing sustainable practices.
• Infrastructure: Check the availability of necessary infrastructure, such as roads, power, and water, in each location. Locations with existing infrastructure may be more cost-effective for mining operations.
• Political stability: Evaluate the political climate in each potential location. Look for stable countries with established mining industries and supportive government policies.
• Consult with regulatory bodies and local communities to determine any regulatory hurdles for mining activities in potential locations.
• Consider partnering with local communities to ensure the sustainable development of mining operations and minimize negative impacts on their livelihoods.
• Research the demand for gold in potential markets and factor this into the decision-making process for selecting mining locations.

Once potential locations have been identified, further exploration and testing may be necessary to confirm the feasibility of mining operations in each location.

Determine The Legal Requirements For Starting A Gold Mining Business.

Before starting a gold mining business, it is essential to have a clear understanding of the legal requirements that must be met. This will help to avoid costly legal troubles and ensure compliance with local, state, and federal laws. Some important legal requirements to consider when starting a gold mining business include:

• Obtaining necessary permits and licenses: Depending on the location of the mining operation, various permits and licenses may be required, such as environmental permits, water use permits, and land use permits. It is important to research and obtain all necessary permits and licenses before beginning the mining operation.
• Complying with safety regulations: Mining can be a dangerous activity, and safety regulations are in place to protect workers. Compliance with regulations such as the Mine Safety and Health Administration (MSHA) standards is essential to prevent accidents and ensure the safety of all involved.
• Following environmental regulations: Responsible mining practices aim to minimize the environmental impact of mining operations. Environmental regulations must be followed to ensure that the mining operation does not harm the environment or wildlife in the area.
• Meeting labor laws: Hiring practices, working conditions, and wages must comply with local labor laws and regulations. Failure to do so can result in legal action against the company.
• Consult with a lawyer who is experienced in mining law to ensure compliance with all legal requirements.
• Keep up-to-date with any changes to relevant laws and regulations to ensure ongoing compliance.
• Consider obtaining insurance to cover potential legal problems.

Once all legal requirements have been met, the gold mining business can begin operations with peace of mind, knowing that all necessary precautions have been taken to ensure legal compliance.

Analyze The Costs Associated With Starting And Running A Gold Mining Operation

In order to start and run a successful gold mining operation, you must have a comprehensive understanding of the costs associated with it. You need to consider the capital expenses required for setting up mining sites, operational expenses such as salaries, equipment maintenance, and energy costs, as well as the variable costs that may arise during the mining process.

Capital Expenses

One of the most significant costs associated with starting a gold mining operation is the initial investment required for purchasing and installing the necessary equipment and infrastructure. You will need to conduct a feasibility study to determine the estimated capital expenditure required for purchasing machinery and equipment, acquiring mineral rights, and constructing necessary infrastructure such as roads and mine shafts.

Operational Expenses

Operational expenses are essential for running an efficient and profitable gold mining business. This includes salaries and wages, maintenance of mining and processing equipment, electricity and other utility costs, and insurance. Additionally, you must consider the cost of waste management and environmental protection measures that should be put in place to ensure sustainable mining operations.

Variable Costs

Variable costs associated with gold mining include the transportation costs of gold ore from the mining site to processing plants, refining and processing expenses, and other expenses that might arise during the mining process. You must consider these costs as they can have a significant impact on profitability and earnings.

Here are some tips to keep the costs in check:

• Choose the mining site wisely to reduce transportation and energy costs. Sites close to water and electricity sources are more affordable to run.
• Invest in modern and energy-efficient mining and processing equipment that minimizes maintenance costs, lowers energy costs and provides a higher yield of gold.
• Train your employees to carry out routine inspections and conduct maintenance tasks to reduce repair costs.
• Consider outsourcing certain tasks such as waste management to reduce labor costs but still maintain high environmental standards.

By carefully analyzing and planning for the costs involved in starting and running a gold mining operation, you can make informed decisions that will ensure the long-term success and sustainability of your business.

Assess The Availability And Cost Of Necessary Equipment And Labor.

One of the key considerations when starting a gold mining business is assessing the availability and cost of necessary equipment and labor. The cost of equipment and labor can make or break a gold mining operation, so it is crucial to thoroughly assess and plan for these costs.

First and foremost, you will need to identify the specific equipment needed for your mining operation. This will depend on a variety of factors, including the size and scope of your operation, the type of mining you will be doing, and the location of your mine. Some equipment commonly used in gold mining includes excavators, rock trucks, crushers, and conveyors.

Once you have identified the necessary equipment, you will need to assess its availability and cost. This may involve contacting suppliers or manufacturers to obtain quotes, or researching leasing or financing options.

In addition to equipment, you will also need to evaluate the availability and cost of labor. Gold mining operations typically require skilled workers, such as miners, geologists, and engineers. It is important to determine the necessary staffing levels and qualifications, as well as the availability of labor in your chosen location.

• Consider leasing or financing equipment to reduce upfront costs.
• Research labor regulations and requirements in your chosen location to ensure compliance.
• Consider utilizing contractors or outsourcing work to reduce labor costs.

Overall, assessing the availability and cost of necessary equipment and labor is a critical step when starting a gold mining business. Thorough research and planning can help ensure that your operation is equipped to succeed in the competitive and challenging world of gold mining.

Secure Financing Or Funding For The Operation.

Securing financing or funding is one of the most critical steps when starting a gold mining business. You will need substantial capital to cover the costs of obtaining and setting up equipment, hiring staff, legal fees, and other expenses. Here are some steps to help you secure financing or funding for your gold mining operation:

• 1. Determine your budget and funding requirements: Before you approach investors or lenders, you need to have a clear understanding of your budget and the amount of funding required to start and run your gold mining operation successfully. This will help you narrow down your options and present a clear business proposition to potential investors.
• 2. Identify potential funding sources: You can consider funding options such as bank loans, personal savings, venture capitalists, angel investors, and crowdfunding platforms. Conduct thorough research on the pros and cons of each option, and identify which sources align with your business goals and objectives.
• 3. Develop a business plan: A business plan is essential when seeking financing or funding for any business. Your plan should demonstrate the viability of your gold mining business, outlining details about the industry, market trends, financial projections, and your strategy for success.
• 4. Prepare a strong pitch: Make a compelling case to investors or lenders, emphasizing the potential ROI and risk mitigation strategies clearly. You can hire a professional writer to help you with the presentation and use graphs, charts, and other visuals to help you present your case better.

Tips for securing financing or funding for your gold mining operation:

• Network with industry players: Attend industry events and network with other professionals in the field. This can help you gain valuable insights and connect with potential investors or lenders.
• Show a track record of success: If you have previous experience in the mining industry, highlight your track record of success to build confidence with potential investors or lenders.
• Be flexible: Consider alternative financing options or restructuring your business plan if you face challenges securing funding or financing.
• Focus on responsible mining: Show that your mining operation will be responsible and sustainable, aligning with the interests of responsible investors.

Securing funding or financing for your gold mining operation can be a challenging process, but by following these steps and tips, you can increase your chances of success. Remember to stay resilient and determined towards your business goals, and seek professional help if needed.

Develop A Strategic Plan And Timeline For The Start-Up And Operation Of The Business.

Once you have conducted thorough research on the gold mining industry and identified potential locations, determined the legal requirements, analyzed costs, assessed equipment and labor availability, and secured financing, it is time to develop a strategic plan for your gold mining business. A well-crafted plan is crucial for the successful start-up and operation of the business.

The first step in developing a strategic plan is to identify your business goals and objectives. In this case, you want to establish a successful gold mining operation that will supply clients across the globe while adhering to high environmental standards. This goal will guide your decision-making process and help you prioritize tasks.

Tip: Use the SMART method to set goals: Specific, Measurable, Achievable, Relevant, and Time-bound. This method will ensure that your goals are clear, tangible, and achievable within a specific timeline.

• Define Your Business Model: Develop a clear business model that outlines how you will source and mine gold, process gold, and deliver it to clients. This section also includes information on your value proposition, target market, competition, and marketing strategy.
• Estimate Your Costs: Develop financial projections for the start-up costs, operational costs, and estimated revenues. This information should be included in your business plan, and it will help you decide how much funding you need to secure to start and operate your mining operation.
• Develop A Timeline: Create a timeline that outlines the critical tasks and milestones for starting and operating your gold mining business. It includes a schedule for obtaining permits, securing financing, buying equipment, hiring personnel, and commencing mining operations.
• Assess Risks: Identify potential risks and develop a risk management plan. This plan should include strategies for preventing risks, minimizing their impact, and recovering from them if they occur.
• Establish Operational Procedures: Establish procedures for managing day-to-day operations, including monitoring mining activities, analyzing ore samples, refining gold, and delivering gold to clients.
• Build A Support Team: Build a team of experienced professionals in the field, including geologists, miners, and engineers. This team will help you implement your strategic plan and contribute to the long-term success of your gold mining business.

Developing a strategic plan and timeline for a gold mining business is a complex process that requires careful planning and attention to detail. However, a well-crafted plan will help you maximize your chances of success and ensure that your operations run smoothly and efficiently.

Create A Marketing Plan To Generate Interest And Attract Potential Investors Or Customers.

The success of any business relies heavily on its ability to attract and retain customers. For gold mining businesses, the key to success is creating a solid marketing plan that will generate interest and attract potential investors or customers. The following are some steps to consider when creating a marketing plan:

• Define your target market: Before developing a marketing plan, it is important to know who your target audience is. Is your business targeting individual investors or larger commercial clients? Knowing your audience will help you tailor your marketing efforts more effectively.
• Develop a brand identity: Your brand identity should reflect the values and mission of your business, and convey a sense of trust and reliability. A strong brand identity will not only attract customers but also help retain them in the long run.
• Use digital marketing: In today's digital age, it is important to have a strong online presence. Use social media, search engine optimization, and email marketing to reach your target audience and promote your business.
• Attend relevant industry events: Attending industry events is a great way to network with potential investors and customers. Consider setting up a booth or presenting a keynote speech at such events to showcase your business and its services.
• Partner with other businesses: Partnering with other businesses in related industries can help increase your reach and attract more investors and customers. For example, consider partnering with mining equipment manufacturers or refining companies to offer bundled services to customers.
• Create a detailed marketing budget and track your expenses.
• Periodically assess and adjust your marketing efforts based on their effectiveness.
• Make sure your messaging is consistent across all marketing channels.
• Consider offering promotional deals or discounts to attract new customers.

By following these steps and tips, businesses can create a marketing plan that will help generate interest and attract potential investors or customers. Remember, the key to success lies in understanding your target audience and tailoring your marketing efforts to address their needs and concerns.

Establish A Team Of Experienced Professionals In The Field, Including Geologists, Miners, And Engineers.

When building a business like gold mining, it is essential to have a team of experienced professionals who understand the nuances of mining, geology, and engineering. These professionals will form the backbone of your operation and help ensure its success.

Here are some important things to keep in mind when building your team:

• Look for individuals with experience in gold mining and exploration. These individuals have the necessary knowledge and skills to help you navigate the unique challenges of the industry and succeed in your endeavors.
• Don't overlook the importance of geologists in your operation. These individuals are crucial in the identification and verification of gold deposits, which is a key factor in the success of your operation.
• Miners and engineers should also be a part of your team. They will help you design and implement an efficient and safe mining operation. It is crucial to ensure that they have the necessary experience and qualifications to carry out their functions effectively.
• Consider hiring local talent to help you with your operations. These individuals have a better understanding of the region and can help you navigate local laws, customs, and regulations that may affect your business.

When building your team, look for professionals who have a proven track record of success in the industry. You want people who are reliable, experienced, and committed to your goals. It's crucial to have a coherent plan in place that outlines the roles and responsibilities of each team member and sets expectations for performance.

Remember that building a team is not a one-time event. You will need to continually evaluate your team's performance and make adjustments as necessary. Ensure that all team members have access to the latest training and resources so that they can continue to learn and grow.

Your team will be critical to the success or failure of your gold mining business. Keep these key considerations in mind as you build your team of experienced professionals in the field.

Conclusion:

Establishing a gold mining business requires extensive research, careful planning, and a competent team of professionals. By following these 9 steps, you can create a comprehensive business plan that covers all the essential aspects of your operation.

From identifying potential locations to securing financing, analyzing costs, and developing a strategic timeline, you'll need to consider every detail and prepare for any challenges that may arise.

By establishing a business that focuses on responsible and innovative gold mining practices, you can set yourself apart from the competition and attract the attention of investors and customers alike. With the right strategy and team, your gold mining business can thrive in today's market.

• Research the gold mining industry and market trends.
• Identify potential locations for gold mining operations.
• Determine the legal requirements for starting a gold mining business.
• Analyze the costs associated with starting and running a gold mining operation.
• Assess the availability and cost of necessary equipment and labor.
• Secure financing or funding for the operation.
• Develop a strategic plan and timeline for the start-up and operation of the business.
• Create a marketing plan to generate interest and attract potential investors or customers.
• Establish a team of experienced professionals in the field, including geologists, miners, and engineers.

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How to make small-scale mining sustainable

Dangerous. Polluting. Illegal. Wrong. The conventional narrative around artisanal and small-scale mining in Africa, Asia and Latin America tends to use words such as these. And while it is true that the sector has problems in spades, it also has the potential to clean up its act and provide sustainable livelihoods for millions of the world's poorest people.

Lina Villa knows what a difference a fresh approach can make. She runs the Alliance for Responsible Mining (ARM) , a global network that develops environmental and social standards for responsible artisanal and small-scale mining, so certified miners can sell their products for a premium.

One of the big inspirations for ARM is Oro Verde (Green Gold), a Colombian initiative working with Afro-Colombian artisanal gold miners in the Chocó bioregion – an area marked by high rates of poverty, social exclusion and a very sensitive ecosystem. Oro Verde has involved about 1,300 miners in the certification system and the premium they earn helps pay for local community development projects and diversification into other livelihood activities. Now a brand in its own right, the programme has successfully merged the ancestral knowledge of local communities with scientific and technical know-how to make mining clean, green and safe – the gold they mine is being certified and labelled as both Fairtrade and Fairmined .

But Oro Verde is – for now – a rare gem. Most small-scale mining operates at the fringes. Neglected by governments, in conflict with companies, and overlooked by donors who see small-scale agriculture and forestry as more worthy projects to support. Yet the sector provides jobs for 20-30 million people, often from the poorest and most marginalised of communities. That's 10 times more people worldwide than large-scale mining does. Small-scale miners produce about 85% of the world's gemstones and 20-25% of all gold.

For Villa, the first step is to change minds. Governments and big business need to recognise small-scale mining as both highly productive and as a legitimate part of the mining sector. It is time for governments to bring it into their economic and rural development plans, create incentives for small-scale miners to make their operations legal and help miners access finance, technology and secure land rights.

Villa says it is particularly crucial for governments to shake up the systems that license mining. While licences for big mining companies typically last 30 years or more, those for small operations can last as little as a year – even though some deposits are only suitable for smaller players. With such a skewed playing field, it's hardly surprising that artisanal miners struggle to invest in greener production techniques.

Attitudes won't change and policies won't improve on their own. A new report by IIED shows that what's needed first is better knowledge and understanding of the sector. Only then can the right institutions grow and the right investments flow. The report points to three major gaps in how knowledge shapes policy. First, the knowledge that does exist is poorly shared. Second, the experience of small-scale miners and local communities is largely overlooked – and that's a consequence of their marginalisation and lack of effective representative bodies in many countries. Third, there is no multi-stakeholder space where committed individuals and organisations from different parts of the sector can come together to build trust, learn, innovate and find shared solutions.

The report shows that, while there is good hands-on experience and innovation on-the-ground – for instance, with some governments adopting more inclusive policies and with the beginnings of ethical sourcing – these are often not widely known about, or face huge implementation challenges which stall progress. What is clear is that the only effective way for governments to deal with the social and environmental problems in small-scale mines will be if they work in partnership with the miners themselves.

IIED plans to help to fill the knowledge gap with a new programme of work that will connect stakeholders – including small-scale miners with decision-makers – and ensure that better quality information is generated and used effectively in policymaking at local, corporate, national and international levels. As well as operating national-level projects with partners in countries with large numbers of artisanal miners, it will also focus on global problems such as child labour, health hazards, informality, human rights, pollution, and transparency in supply chains. The new report presents several programme options that IIED has identified following initial consultations with sector stakeholders. The institute now welcomes responses to these options and expressions of interest in collaboration .

The time is ripe for policymakers, donors, companies and miners to come together to help small-scale mining realise its potential to be a force for good. The global demand for mineral resources continues to grow. Meanwhile, the UN's new Minamata Convention on Mercury, agreed in January 2013, will require signatory governments to develop plans to reduce or eliminate use of the pollutant mercury from artisanal and small-scale mines, and create public awareness campaigns as part of the plans. This will create opportunities for policymakers to look beyond mercury and ensure small-scale mining meets its potential to improve lives and take better care of local environments

Sarah Best is a senior researcher at the International Institute for Environment and Development. She can be emailed at [email protected].

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Mining Business Plan Template

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This mining business plan template has 25 pages and is a MS Word file type listed under our business plan kit documents.

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Business Plan [YOUR COMPANY NAME] [INSERT IMAGE/LOGO] [YOUR NAME] - Owner [YOUR ADDRESS] [YOUR CITY], [YOUR STATE/PROVINCE] [YOUR ZIP/POSTAL CODE] [[email protected]] [YOUR PHONE NUMBER] [YOUR FAX NUMBER] Business Plan

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Simplified Gold Mining Business Plan

• Post author: Ane
• Post published: May 2, 2020
• Post category: Business Tips / BUSINESS-PLAN-AND-FEASIBILITY-STUDY / MINING
• Post comments: 0 Comments

Simplified Gold Mining Business Plan – Gold mining is a lucrative business. This is because gold is highly valuable. In fact, the voluability of gold stems from its unique physical chemical characteristics.  Its ductility, malleability, quasi-indestructibility, and rarity gives gold its value. Therefore, if you are looking for a lucrative mining business, gold mining is the answer.

Scale of Operations:

Table of Contents

Furthermore, this Simplified Gold Mining Business Plan gives comprehensive details of both small and medium scale gold mining business plan. As a matter of fact, this piece is valuable for mining projects and investment proposals. In fact, this simplified edition of mining business plan is also good for other solid mineral business plans like copper, grannite, gypsun, coal, zinc and lead. In fact, this is a brief on how to start a mining business in Nigeria. The mining project profile, cost of setting up a mining business, marketing and management profile are covered here. Indeed, every aspect of the business forecast are covered in the detailed viability analysis embedded here.

INDUSTRY OVERVIEW For Simplified Gold Mining Business Plan

In addition, it’s worth overviewing the Nigerian mining industry for us to keep abreast with the trend of mining activities in Nigeria. As a matter of fact, Nigeria is endowed with numerous solid mineral resources. These include talc, iron ore, bitumen, gold, rock salt, gypsum, lead and zinc. Others are coal, gemstones, kaolin, tantalite, bentonite and baryte. These are located in different parts of the country in commercial quantity.

However, the ownership of the mineral resources is vested in the Federal Government of Nigeria. So, the state is the custodian on behalf of the citizens of the country. The state regulates this industry through its solid mineral development Act. This same Act defines title ownership, community relationship and solid mineral tax matters. For more on this contact us for your commercial information at minimal costs. Or ask for our solid mineral mining e-book.

Need for Foreign Investors:

Recently, the Nigerian government has recognized that the successful exploration and exploitation of its mineral resources may not be met by only the indigenous miners. That it requires both technical expertise and financial strength to a large extent which can be provided by foreign investors. This had led to evolving of certain mining incentives for all miner investors. This is detailed below.

Mining Titles:

In this regard, the government grants mineral titles to allow suitable investors to explore for, mine and market the mineral resources. In this connection, government is both the ‘owner-operator’ and ‘administrator-regulator’. In fact, the solid mineral cadastral office receives applications for mineral titles and licenses.

Investors are, therefore, free to apply for mining titles at any time for any area not covered by an existing title or not otherwise reserved by the government. You can own more than one title if you can afford it.

Mining Incentives:

Furthermore, government has evolved policies aimed at encouraging both domestic and foreign investors in the mining industry. These incentives include granting of a three-year tax holiday to new mining companies which may be extended for one further period of two years. In addition, mining operators are granted exemptions from payment of customs and import duties in respect of plant, machinery, equipment and accessories imported specifically and exclusively for mining operations.

Additionally, every holder of a mineral title is guaranteed free transferability of funds through the Central Bank of Nigeria. Again, they are also permitted to retain a portion of their foreign exchange in a foreign exchange domiciliary account for use in acquiring spare parts and other inputs required for the mining operation. But such must be those that would otherwise not be readily available without the use of such earning.

Furthermore, this sector includes such business activities as the importation and local marketing of modern mining equipment. In fact, you can invest into modern mineral testing and quality control technologies and reagents. Also you are allowed to invest in local sales and export of crude or processed solid minerals. These are all business opportunities in the solid mineral sector of Nigeria’s economy.

The executive summary of Simplified Gold Mining Business Plan now follows.

EXECUTIVE SUMMARY On Simplified Gold Mining Business Plan

 This Simplified Gold Mining Business Plan is for Complete Gold Mining Company. Complete Gold Mining Company is a legally incorporated mining company based in Keffi, Nasarawa State of Nigeria. Currently, Complete Gold Mining Company has three gold mining licenses for three different locations in Nasarawa State.

As a matter of fact, this business plan is our business forecast for the next three years. In fact, it is our administration and mining operation manual for the period covered.  In this plan are our company profile, products, production flow chart, and our market and marketing strategies. The feasibility analysis of our operation for the period under consideration are also covered here. So, the feasibility analysis covers all the cost of operation, marketing, and turnover forecast. All of these are finally presented in the company income statements for projected gross income and net profit propositions. The balance sheet and the cash flow statement speaks volume for our capacity to operate seamlessly without any financial hitch in the next three years.

Our Vision Statement

Furthermore, our vision as a gold mining company is to own more gold mines in the North Central geopolitical zone of Nigeria. We want to become the number one brand in the gold mining industry in this geopolitical zone.

Mission Statement

In fact, establishing a world class gold mining company in Nigeria is our goal. Therefore, we want to build a gold mining company that will be listed amongst the top 10 gold mining companies in West Africa.

Our Business Structure:

As a matter of fact, we know that to establish a world class gold mining company our organisation must have in place a standard corporate governance structure. Such structure that are hierarchically linked right from the board of directors to the least commanding officer in the company. Therefore, we have perfected plans to get it right from the onset. In this wise, we have gone the extra mile to ensure that we have only competent employees to occupy all the available positions in our company.

In view of that, we have decided to hire qualified and competent hands to occupy the following positions in Complete Gold Mining Company.

• Chief Executive Officer – Principal Director
• Gold Mine Manager – an incorporated second director.
• Human Resources and Admin Manager
• Sales and Marketing Officer
• Accountants/Cashiers
• Gold Mining Casual Workers
• Truck Drivers
• Customer Service Executives

OUR PRODUCT & SERVICES:

In addition, Complete Gold Mining Company is established with the aim of maximizing profits in the gold mining industry. Therefore, we have taken time to define our products and services. In fact, with efficient management team in place, we are sure that our products are going to be of high standard.

As a matter of fact, we will work hard to ensure that Complete Gold Mining Company is not just accepted in Nigeria and West Africa alone but globally. Therefore, our products are listed below;

• Gold ore mining
• Gold ore beneficiation
• And gold bullion, ore and concentrates
• Gold mining Consultancy Services

THE MARKET For Simplified Gold Mining Business Plan

Furthermore, the market trend is encouraging. In fact, Gold mining in Nigeria has shown to be a lucrative business. Ghana has continued to maintain the market lead in West Africa for a long time and up to now. South Africa is another major producer in the Africa. Until recently, Nigeria’s gold-mining industries had witnessed poor investment. It failed to operate as well-oiled machines. In fact, the miners have not considered it wise to put forth sizeable capital towards exploration and development. But with recent government incentives in place, exploration will be successful and will extend to renewing and growing the reserves that were being mined.

In fact, it’s hoped that a continual expansion and new development of mining sites will be sustained leading to growth in production. It is common trend in the gold ore mining line of business to find mining companies positioning for business in locations and communities where they can easily have cheap access to mines and labour. This policy is like an industrial standard. It actually, enables miners make profits and maintain overhead and logistics.

Furthermore, is that there is an industrial trend in this line of business. Tha is, that most registered and well organized mining companies look for market beyond their locations, state or country. In fact, they enjoy economies of scale and with that ensure that they strike business deals with leading jewelry making companies globally beyond the countries of their operation. This is because if one becomes a vendor to one or more jewelry making giants in USA or other countries of the world, one will always smile to the bank.

MARKETING STRATEGIES for Simplified Gold Mining Business Plan

In the light of the above, we have to define our target market. Indeed, when it comes to supplying product from gold mines, there must be a well-defined market. This goes to show that the target market for raw gold is far reaching. In view of the above, we have conducted our market research to take care of this. Now, we have ideas of what our target market would be expecting from us. In actual fact, we are in business to engage in supply of raw gold to the following organizations;

• Gold merchants
• Jewelry production companies
• Electronic components manufacturing companies
• Art and culture companies
• Government agencies for promotional purposes

Our Competitive Advantage:

Some of our competitive advantages include:

• availability of resource,
• ability to forward sell production when appropriate and
• the ability to comply with environmental laws.
• vast experience of our management team
• robust distribution network
• excellent customer service culture
• taking care of our personnel welfare and working conditions.  package

As a matter of fact, we have these competitive advantages through our ability to prepare detailed analysis of the demographics of our surrounding areas and the nature of our existing competitors.  In fact, we also have in place workable strategies to remain afloat even when new competitors enter our market at any time.

Marketing Strategies:

Our marketing strategies include:

• Cause Marketing.
• Direct Selling.
• Co-Branding and Affinity Marketing.
• Point-of-Purchase (POP) Marketing.
• Internet Marketing.
• Paid Media Advertising.
• Word of Mouth Advertising.

This is our operational checklist. We intend to adhere to it to achieve our goals.

• Business Name Availability Check
• Business Registration
• Obtaining TIN
• Opening of Corporate Bank Accounts – Regular & Mobile Money Accounts and Online Payment Platforms
• Application for mining license and permit to mine and market gold
• Insurance for the Business
• Leasing essential facilities and renovating them 
• Conducting Feasibility Studies
• Generating capital from family members, Loan from the bank,
• Writing of Business Plan

Further timelines;

• Drafting of Employee’s Handbook
• Drafting of Contract Documents and other relevant Legal Documents
• Design of The Company’s Logo
• Printing of Promotional Materials
• Recruitment of employees
• Procurement of the needed gold mining machines and equipment, furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV
• Creating Official Website for the Company
• Creating Awareness for the business both online and around the community

Additional time lines;

• Health and Safety and Fire Safety Arrangement (License)
• Launching party planning
• Establishing business relationship with Jewelry production companies and other stakeholders
• Purchase of tippers and delivery trucks

NOW READ ALSO :

• How to get your Mining Exploration Lease in Nigeria
• Where & How to get Small Scale Mining Lease in Nigeria
• Get a Quarry license here
• A 25-Year Mining Lease in Nigeria
• Small Scale Lead Mining BPlan
• Mining Quarry Business Plan with Feasibility studies
• Solid Mineral challenges for Artisinal Small scale Mining
• How to be a millionnaire miner in Nigeria

At this juncture, we advise you to get a business consultant to assist you. What has been narrated above look simple reading them. But I tell you there are a lot of technicalities involved.

We recommend Complete Full Marks Consultants Limited, owners of this website. This firm is made up of experienced consultants.  As professional accountants and tax practitioners, they will do good jobs for you.

OUR CONTACTS:

If contacted, they will ensure all your start-up challenges listed in the operational checklist above are taken care of.

Order this Simplified Gold Mining Business Plan from us. The feasibility analysis is a technical aspect of the business plan. We can do it for you.

Contact us via +234 8034347851 or  [email protected]

GET THESE DONE:

For your existing business outfits contact us also for the following, as a continuous validation of the above landmarks. And then;

• Up-dating the certificates – Renewing Mining licences and others
• Rendering statutory annual returns for C.A.C
• Rendering statutory annual returns for FIRS
• Obtaining Tax clearance certificates annually,
• Making necessary changes in the CAC incorporated documents as need arises

Furthermore, are;

• Obtaining the necessary contract bidding compliance certificate for ITF, NSITF, PENCOM and BPP
• Updating management business plans
• Updating contract agreements
• Making Expansion business plan
• And many others

SHARE FOR US:

Please, help us share to reach others. Thanks for reading through.

Deacon Anekperechi Nworgu, a seasoned economist who transitioned into a chartered accountant, auditor, tax practitioner, and business consultant, brings with him a wealth of industry expertise spanning over 37 years.

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Viable project management for small-scale mining success

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29th October 2021

By: Claire O'Reilly

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The multidisciplinary nature of mining projects requires strict, iterative processes in terms of establishing what will make the project and its future operation viable, says Johannesburg-based consulting and project management company Bowline.

While large mining companies are still executing new projects, small- to medium-scale companies are attempting to execute twice, even thrice as many new projects. These tend to be less successful. While these small-scale mining companies across Africa often receive financial support from their respective governments, a lack of planning and appropriate de-risking results in unsustainable operations, says Bowline MD Breton Scott .

“Smaller mining companies may not always have the in-house resources required to implement proper project management and it is highly recommended that they outsource.”

However, their inherent financial limitations ensure that they do not have the means to contract a large team of consultants. Although they need to be nimble and flexible, large teams may not be conducive to achieving those goals.

Small- or medium-scale mining companies tend to be more sensitive to macroeconomic factors and these, combined with mining projects being a long-term investment, mean that the projects need to be more resilient to economic fluctuations, especially during the project execution phases.

The project management approach and mine design should also be sufficiently flexible to create this resilience by accommodating economic fluctuations. The project management approach and project teams should be suitably conversant with these mitigating measures and respond accordingly, he explains.

“For example, should there be a downturn in commodity prices, the project should be in a position to adjust certain non-critical deliverables accordingly, by removing some of the less essential items, but maintaining the integrity of the project setup and remaining legally compliant.”

Scott says small-scale mines need not mimic the physical elements required at a large-scale mine to be legally compliant.

“Why build a R30-million brick-and-mortar equipment workshop when you can start by building a R30 000 hard stand, out in the open, that still enables you to maintain your mining equipment effectively and be legally compliant?”

The long-term goal should be to upgrade the workshop over time using operating costs and not capital expenditure, he adds.

Scott notes that small mining companies should not blindly accept the project management body of knowledge (PMBOK) as their code of practice, but appreciate that it is a guideline only.

PMBOK methodology creates a broad framework of standards, conventions, processes, best practices, terminologies and guidelines that are accepted as project management industry standards, as different-scale projects at different stages of development do not need to address all the elements of the PMBOK guidelines every time.

“The underlying principles should, however, be honoured for every project, but there should be a difference in use – PMBOK largely depends on the level of detail, scope of work and extent of resources required,” emphasises Scott.

When comparing large-scale mining projects to small- or medium-scale mining projects, the success factors or priorities are often very different, but aligning projects to business strategy is crucial.

The stipulated success factors for a given project dictates the appropriate project management approach and the PMBOK guidelines that should be followed.

Consequently, project owners must find the right balance between project management and effectively using resources without losing sight of critical items that can make or break a successful mining project.

Some of these critical items include risk management, resource management (mineral, human, financial and technical), budgeting, time management and balancing project delivery with sustainable business plans or strategies, Scott illustrates.

Accumulated Challenges

Addressing challenges relating to managing and tracking project performance of virtual project teams, and ensuring teams have been given very strict deadlines and deliverables, are imperative.

Another challenge in mining projects is collaboration or consultation with new emerging miners, which do not necessarily have extensive project development experience in the industry, as they tend to focus on “easy wins” as opposed to early, yet sustainable, wins, adds Scott.

Further, while the project management industry is facing challenges, technological development will create new opportunities.

“I see new development in the incorporation of artificial intelligence and data analytics, or project business analysis, into long-term projects. This is a means of simulating potential changes in the project’s environment to develop appropriate mitigating measures that can be activated in a timely fashion in response to contingencies  such as new legislation instituted, governmental regime change, unexpected climatic conditions, project ownership change, other project related risks et cetera – that can impact quality, safety, time and cost.” 

However, the project management industry is seeing some forward motion, as “big players in the mining industry are tired of waiting and are now entering into a ‘make or break’ stage: companies that have had projects lined up for a long time must execute them now or go out of business”.

Moreover, commodity prices are on an upswing, making some mining projects more viable and more attractive to investors. The current price trends also afford companies a certain level of flexibility and agility to adjust to changing market conditions, adds Scott. 

He concludes that a balance between using experienced in-house resources and like-minded and expert outsourced resources is key to fast-tracking mining projects without taking shortcuts.

Edited by Nadine James Features Deputy Editor

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BUSINESS PLAN FOR THE MINING INDUSTRY

The Lampotal Plant is located on Ejido property in the Municipality of Veta Grande, Zacatecas, Mexico, in the town of Lampotal. The Plant’s original design was that of a 10 tank static vat leaching plant, which operated for approximately 30 years, processing approximately 200 tons a day, of material from the Spanish Colonial period, that was first processed by the mercury amalgamation process. In 1995, the Plant shut down due to continued increases in operating expenses, and the low spot market price of silver that came about in the later part of the 1980s. Each leaching tank can hold approximately 320 metric tons of tailings. Traditionally, static vat leaching plants processing this type of material, recover about 50% of the ore’s recoverable precious metals values. The final product would be a concentrated precipitate of silver, gold, mercury, copper, and other trash base metals and organic materials.

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Sample Gold Mining Business Plan

Do you need help starting a gold mining company? If YES, here is a sample gold mining Business Plan.

Gold mining is not only capital intensive but requires a thorough planning process to be successful. If you are reading this, chances are that you are looking for help on how to put together a good plan for your gold business.

The value of gold keeps rising even while faced with an economic crisis. Many individuals and companies are interested in starting their own gold mining business because of its continued popularity. This is more eminent in countries where there is gold to mine.

Businessmen and women are urged to start a gold mining business because it is much cheaper to produce, and they will gain more money once they’ve sold it. Some find it easier investing in quarry business .

GOLD MINING BUSINESS PLAN SAMPLE

Just like other types of businesses, gold mining investment opportunities are truthfully risky businesses to establish.

Though the income is high, many are still doubtful of opening this kind of business since there’s a huge possibility that it will not succeed.

This is a good reason why it is important to give yourself time to think about it before deciding to have your own gold mining business

GUIDE : Sand Mining Business Planning

Since this business isn’t one you just jump into anyhow, when looking for how to get into the gold mining business, you must check if it is possible to establish it in your country.

Most of the large companies you see today doing this kind of business choose to mine in other countries where there’s gold available.

So, if you want to have your own gold mining company, you need to do your researches appropriately. Gold prospectors who want to start a gold mine have choices to make when beginning to create a mining operation.

In fact, we were made to understand that besides choosing to rent a gold mine lease or pan for gold on public lands, a miner can claim land and start a gold mine on undeclared land.

Gold mining operations range from tiny to gigantic. Definitely, the location and size of the operation will determine how a miner will start a gold mine. All these must be captured in even a small-scale gold mining business proposal.

Here is a sample business plan for starting a gold mining company.

1. Prospect the site with a shovel and pan.

You must record the concentrations of naturally occurring gold in the gold ore on the claim. You are to dig where exposed bedrock is on the claim and where waterways collect gold in the beds of the river or stream around the inside bend of a corner in the water.

Prospecting accurately will increase the amount of gold you pull from the claim per hour of work.

2. You are to set up mining equipment that compliments the geography of the area. Though water is an important feature of many gold mines, some experts said it is not needed for separating the gold from the ore. Necessary things as sluice boxes and shakers can run by either water or air. You just develop the right mine for your site.

3. Ensure you provide living quarters for the miners and power the housing with a generator that can power the electrical mining equipment as well.

You should know that the larger the gold mine the more power, equipment, and housing you will need. If you can, ensure you separate the living quarters from the mill site.

Why? To avoid contaminating the water supply with human byproducts.

4. Excavate gold ore from the most productive sampling sites on the claim and collect the ore near the mining equipment. When enough ore has been stored to run a complete shift of mining operations you can begin to separate the gold from the ore and make money with a gold mine.

5. You should store pure gold and highly concentrated gold ore in separate containers for further processing.

Actually, the processing of gold is the most time-consuming task; eliminating all the debris from the gold can be better managed at a later time.

You should process the ore until all that is left is heavy black sand and gold; then store it for cleaning at a later time.

In conclusion, you should note that you might take some pounding from stronger competitors. In fact, you might make a business mistake or even face intricate gold business challenges like a change in government policy.

GOLD MINING BUSINESS PLAN EXAMPLE

This gold mining business plan sample will help you achieve your desire. We simplify the whole process by including the most relevant sections every plan should have.

You should also not complicate the whole process. The simpler it is, the better. However, an essential requirement is a knowledge about gold mining. This information will be needed in putting your plan together.

• Executive Summary

Buck Mining Corporation is a precious metal mining company involved in the commercial mining of gold. Our gold mining reserves are located in the fringes of Bridgeport, Connecticut.

The discovery of an additional gold reserve outfield has necessitated the expansion of our operations to cover this new location. This expansion will require sourcing the needed funding to cover these operations.

We have acquired the mineral mining rights to explore this new location. The combined size of our current site and our new location is over 4,000 acres.

Gold mining and explorations will commence immediately after we finalize the loan applications.

• Our Products

We are a major gold mining business involved in the exploration and mining of precious minerals. Our team is made up of seasoned geologists, metallurgical and engineering professionals.

These skilled professionals oversee every aspect of gold mining that relates to their field.

Buck Mining Corporation has been in business for the past 5 years.

With the discovery of more gold deposits, our vision is to break into the major league of gold mining within the next 5 years. The expansion of our operations will help us achieve our target within this specified period.

• Our Mission

The desirability of gold as a store value for wealth has only increased over the years.

As demand grows, we seek to supply mined gold to smelting companies to meet these demands. Our mission is to use safe mining practices in extracting these precious metals.

To achieve our expansion plans, a significant amount of funding is needed. We need the sum of $150,000,000.00.

Out of this total amount, $50,000,000.00 is available. This has been raised from profits. The sum of $100,000,000.00 will be sourced through loans from 4 banks.

This loan application has reached an advanced stage already.

• SWOT Analysis

An analysis of our state of health as a business has been done by a reputable business consultancy firm. Our performance has been measured against vital indices which have brought important facts to light;

Our gold mine business has experienced considerable patronage over the years. We have built a strong team of professionals consisting of geological and metallurgical experts in addition to engineers among many others.

These form the backbone of our operations.

We are a growing gold mining business with formidable competitors. The industry is pretty much dominated by these major players. Although there are regulations in place to check against monopolizing the gold mining sector, an increasing number of businesses like ours are underfunded to compete effectively.

• Opportunities

The discovery of an additional gold deposit has enhanced our chances and market share. Our expansion drive seeks to take advantage of this discovery. We will commence exploration as soon as mining equipment is bought and installed.

By this find, our capacity to meet more demand is enhanced.

Threats to our business come in the form of multiple taxations and unfavorable government policies. The impact the latter has on our gold mining business is enormous. This can make it more difficult to do business.

• Sales Projection

With an expansion of our gold mining operations, our profits are expected to witness a jump. We have a projected growth in sales that is expected to rise considerably over the next three years as shown in this chart;

• First Financial Year $10,000,000.00
• Second Financial Year $25,000,000.00
• Third Financial Year $45,000,000.00
• Competitive Advantage

There are advantages we hold over other gold mining businesses. Some of these include the quality of our workforce.

This is made up of experts with many years of experience in the gold mining industry. We have been careful to select only the best as we believe that this will reflect in our operations. The discovery of an additional gold mine and obtaining the operating license has further added to our reserves.

• Marketing Strategy

We already have a network of existing clients who have proven to be valuable assets to our operations. These will be crucial to the take-off and smooth running of our new gold mine. Through the expansion of our current capacity, we will work with more major gold merchants to create a distribution channel for our products.

• Operational Sustainability

The extraction/mining of gold from our reserves is expected to last a period of 3 decades. During this time, more explorations will be carried out in addition to gold processing which we will be embarking on within 2 years. These will enhance our sustainability and make our gold mining business a stable and highly profitable venture.

This gold mining business plan sample has attempted to provide you with the guidance you need. You mustn’t complicate things when writing your plan.

The better informed you are about this business; the easier it is to write a plan when you have a template to work with. It is believed that this will help entrepreneurs in no small measure.

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Business Plan Considerations for a Small Scale Mining Operation

Mercy manyuchi, publisher: ieom society international, track: business management.

A business plan is a written document describing a company's core business activities, objectives, and how they plan to achieve their goals. Start-up companies like Zvicherwa Pvt Ltd, a gold mining company, in this case use business plans to get off the ground and attract outside investors. The Zvicherwa business plan includes: an executive summary, mission and vision, products and services, marketing strategy and SWOT analysis considering threats such as COVID 19, financial planning, and a budget. A total investment of USD 250, 000, 000.00 is required to kick-start Zvicherwa Pvt Ltd with a projected production of 200 000 ounces of gold over 20 years.

Published in : 6th North American International Conference on Industrial Engineering and Operations Management, Monterrey, Mexico

Publisher : IEOM Society International Date of Conference : November 3-5, 2021

ISBN : 978-1-7923-6130-2 ISSN/E-ISSN : 2169-8767

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Six Key Factors in Formalizing Artisanal and Small-Scale Mining

Formalizing the artisanal and small-scale mining (ASM) sector would bring it into the formal sector through legal, regulatory and policy frameworks. We explore six of the key ways we can formalize ASM to bring about potential benefits to millions.

Working in artisanal and small-scale mining (ASM)—informal mining activities carried out using minimal technology or machinery—provides livelihoods for millions of people.

At the same time, the sector — ­­which includes informal individual miners seeking a subsistence livelihood, as well as small-scale commercial mining entities — poses challenges for governments in about 80 countries where ASM continues to grow.

Informal ASM refers to operations that do not have the requisite licenses and permits required by law, but do have a social license to operate. Formalizing the sector would bring ASM’s informal income-earning activities and economies into the formal sector through legal, regulatory and policy frameworks.

Formalizing the sector would also result in the inclusion of marginalized miners throughout the process of developing, adapting and revising legal frameworks and support. If well designed, this process fosters the conditions to integrate ASM into the formal economy, potentially transforming the lives and safety of millions of people worldwide who depend on the sector.

To be successful, this process must address the key barriers associated with the sector, while also supporting and incentivizing miners to get formalized.

What are six of the key ways we can formalize ASM, to bring about potential benefits to millions?

Developing Conducive and Comprehensive Legal Frameworks

Comprehensive legislation specific to ASM needs to be developed. These legal frameworks should account for ASM’s diverse character in countries where ASM is illegal or where it is legal but unregulated. In countries where ASM is legal, reforms to existing legislation should prioritize the ASM sector for national development.

There are some important considerations to bear in mind when developing this legislation, such as licensing; access to land; gender equality; community participation; and environmental, safety and labour standards.

Providing Access to Geological Data

A lack of geological data can lead ASM miners to enter environmentally sensitive areas, creating tension between ASM miners and large-scale mining companies in the area. It can also create difficulties when requesting bank loans or other support services when ASM miners do not have geological information as collateral.

Without access to geological data, those working in the ASM sector are often left with little to drive their activities except guesswork or trial and error. This often results in low yields, loss of investment and increased environmental degradation. Mapping a country’s potential reserves and land use, and providing access to this data, is crucial to determining appropriate locations for ASM.

Benefits to small-scale miners would include more efficiency and longevity at sites, minimized environmental degradation and improved profitability.

Ensuring Access to Capital

Debt and poverty are major concerns in ASM, as informal work means miners cannot access finance given their non-legal status.

However, a certain level of capitalization is required to register and gain a concession and to buy the necessary equipment to process minerals and mine. Methods to increase access to credit and finance could include microfinance credit and savings, grants and government loan facilities.

Providing Access to Equipment

Another major challenge for ASM miners is not having the equipment nor the resources to be able to replicate or adapt mining techniques.

To increase access to equipment for those in the ASM sector, equipment should be simple in design and able to be produced locally, be affordable to individual miners, and combine both manual and mechanized processing techniques. Hire purchase loan schemes and centralized processing centres can enable alternative access to equipment.

Developing More Capacity Building

In the past, a poor understanding of the dynamics of ASM communities has led to inappropriate technologies and support services.

Capacity building can spur successful formalization within the ASM sector if training programs promote best practices and focus on practical mining-related topics and are geared towards women and their integration into the mining sector. They should be tailored to the socioeconomic characteristics of the individual mining communities, and provide education and resources on how to foster partnerships with stakeholders, including community organizations and the private sector.

Enabling Dialogue between ASM Stakeholders

Individuals within the ASM sector must be involved throughout the formalization process to ensure changes are in tune with realities on the ground.

To create long-term sustainable formalization strategies, a number of things need to be considered. These include creating a platform for positive and regular dialogue between ASM stakeholders and government to provide a conduit for consultation on changes, informing dialogue based on research on mining communities to understand the complexities of the ASM sector and establishing a co-created roadmap outlining interventions with input from various stakeholders, including non-mining ones, at all levels.

The Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development and the International Institute for Environment and Development recently launched a joint report entitled Global ASM Progress: A Review of Key Numbers and Issues.

Read more about global ASM progress and a review of key figures and issues in this report.

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