PRECIS OF RECENT A&S METAL MINING & PROCESSING ASSIGNMENTS
(ORGANIZED ALPHABETICALLY BY COMMODITY / PROJECT SCOPE)

Private Equity Firm: Aluminum

This study provided an economic overview and evaluation of a major, aluminum, rolled products business. 

·            It provided our judgments as to whether improvement in economics could be realized by a new buyer and, if so, (a) what they would comprise; (b) what the amount of these improvements could and would likely be; (c) when they would take place; and (d) what was needed to be done to attain them.

·            As part of the work we visited a number of the potential acquisition’s operation and facilities and headquarters offices, and studied extensively the previous three years’ financial statements.

Major International Mining Company: Aluminum

Evaluation of a major aluminum company. 

·            Our client was one of the world’s largest international mining company that was contemplating a minority investment in a major, state-owned mining company that was about to be privatized.

·            This assignment entailed analysis, observations and comments on an integrated aluminum producer owned by the company to be privatized for the purpose of assisting our client to evaluate the producer's business, assets and ultimately value in the context of preparing a bid to acquire a minority position in the company that owned these assets. 

·            The work focused on our making an economic assessment of the integrated aluminum producer's operations and its competitive and comparative position in the world's bauxite, alumina and aluminum markets.

Private Equity Firm: Aluminum/Alumina

Our client a large private equity firm, and one of many firms in the first round of bidding on a large, global, alumina-based, specialty chemicals company, retained A&S to assist it in its due diligence and preparation of its offering bid. 

Given the limited amount of time, i.e., about two weeks, our client had to prepare and submit its bid, A&S agreed to communicate the essential elements of our seven-man team’s deep knowledge about the alumina-based, specialty chemicals industry and the target company during a conference call with our client, based upon a detailed list of questions provided to us by our client, to which we responded.  As such, the A&S team quickly:

·                Read and reviewed a confidential offering memorandum about the company for sale;

·                Participated in a series of teleconference calls to discuss and respond to our client’s questions regarding the target company’s business, competitors, risks and to discuss and formulate our views;

·                Reviewed with our client our answers to the client’s list of questions that our client wanted answered by the consultant;

·                Gathered relevant data and prepared analyses that were relevant to our addressing our client’s questions and its preparation of its bid;

·                Prepared a written presentation, which we provided to our client and served as the basis of our final report – both verbal and written – addressing our client’s questions about the company for sale and the global, alumina-based specialty chemicals business.

During one lengthy conference telephone call with our client we conveyed our team’s views, which were supported by our consulting team’s many years of experience in the business regarding: (a) standard operating business practices in the global, alumina-based, specialty chemicals business, (b) market trends, (c) recent technology developments, (d) applications of alumina-based, specialty chemicals, sold to and consumed by, the global refractory and steel industries, (e) a business outlook for the industry, (f) the operating and financial performance of the target alumina company in the near, intermediate and long term, as well as (g) discussions/responses to our clients’ team’s questions that arose during our discussion. 

Major Public Accounting Firm: Aluminum

A&S was retained by an international accounting firm to conduct a desktop review of the State of Victoria’s electricity supply arrangements for two primary aluminum smelters. 

·      This work was done in support of a major accounting firm’s corporate finance work for the State of Victoria, Australia. 

·      Included in our work was a projection of the price of primary aluminum, both on a worldwide basis and in Australia.

Two Private Equity Firms: Aluminum

A&S was engaged to familiarize the clients with the can sheet segment of the aluminum business, as an aid in his decision regarding the acquisition of a very large, aluminum rolled products company.  The rationale was that the client wished to increase his knowledge of the current market and the target company’s activities and standing in the can sheet segment. 

We provided both a broad and detailed view of the beverage can (the aluminum food can market is quite small) segment, its record and potential for growth across the various regions of the world, and the key players and characteristics within the competitive environment.  Further, we offered some insight as to the competitive position of the target company in various regions (for can sheet is largely a regional supply product), some initial thoughts on cost improvement potential where possible, and some opinion as regards the optimal asset utilization strategies for the target company.

The work involved gathering data on growth trends in the drivers of the beverage can consumption.  These data were compiled for regions across the globe, including North and South America, Europe, Asia (with special attention to China), and Africa. 

Our forecasts were employed to help interpret the beverage can production data gathered for those same regions.  We also obtained and analyzed data for the rigid container stock (RCS) producers to establish the nature of the logistics in the supply chain.

We surveyed the history of the aluminum can business, providing detailed accounts of the technological and commercial developments over the last thirty-five years, focusing on particular data from the past ten year period.

The players in both the can manufacturing and RCS supply industries were investigated, and in the RCS supply segment, ranked for cost and capability.  This exercise was particularly difficult with the limited data access and the short time frame involved for us to complete the work.  The experts engaged for the project had a wealth of data and personal knowledge of all of the target company’s facilities and many of the competition’s facilities. 

The work also required that we evaluate the aluminum can as a packaging alternative.  We constructed and used manufacturing cost models to compare and contrast, from a cost perspective, alternate materials and technologies, including PET (plastic) bottles, glass bottles, and steel and aluminum cans.  Other considerations in the packaging decisions were also discussed and analyzed.

Finally, we offered opinions on the target company’s cost improvement options in the RCS supply segment, including strategies and tactics as well as operational improvements that could be accomplished.  We discussed their current strengths and weaknesses, and offered opinion on the opportunities and threats that are current and foreseen in the markets and regions in which they compete.  As a last item, we included our thoughts as to what enterprise capabilities are imperative for profitable participation in the RCS market.   

Medium-Sized Gold Company: Barite

Financial valuation of a barite mine and drill mud company In Mexico.  Our client was a gold mining company with a 100% interest in a barite mine and 49.5% ownership share of a drill mud company, both located in Mexico. 

A&S was retained to evaluate the value of the barite mine and the client’s interest in the drill mud company.  The A&S assignment included:

·          Development of projections for each key economic component of the business, including a global barite supply/demand analysis;

·          Selection of the appropriate valuation method;

·           Determination of value.

For this work A&S fielded a consulting team including a drill mud industry specialist, economic geologist, valuation expert, and senior industrial minerals business advisor.

Major Primary Silver/Zinc Development Company: Compensation Benefits

Our client was a start-up mineral exploration and development company in the process of recruiting three senior management executives (plus a director).  The company needed a fringe benefits package that reflected competitive practice in the mining industry and met the needs of the new management being recruited.  It also needed a base salary structure that could be used by the new management to administer base compensation in the future that reflected the competitive needs in the mining industry. 

The A&S assignment was to:

·            Conduct a compensation survey using public data in the filings; and
·            Develop an interim structure for base salaries and fringe benefits. 

For this work A&S used a team of five consultants.  Our work program included the following:

·             A survey questionnaire was developed.

· Data were obtained from an analysis of proxy statements from various sized companies (juniors, intermediates and seniors). 

·              A field survey was conducted.

·              The results of the proxy analysis and field survey were combined.

A&S presented the client with a summary report of competitive compensation.  A&S recommended a base salary structure and provisions of the fringe benefit plan.

Gold Mining Exploration & Development Company: Compensation Study

A&S was engaged by a precious metals development-stage company to develop compensation information on key positions at the company.  Our research and analyses provided our client with current views as to the competitiveness of our client’s proposed compensation arrangements.

Precious Metals Development Company: Controls Optimization

A&S was retained by a silver company to evaluate its methods and controls-in-place by working closely with the entire management group.  Here, we assessed existing and planned future controls against criteria developed by A&S and agreed to by our client.  The controls reflected procedures focusing on (a) a major mining project in a remote area of South America and (b) continued development of the company’s resources base outside of its major project.  We prepared a report and reviewed it with top management that focused on acceptance and implementation of the controls recommendations.

Global Accounting Firm: Controls Review

At the request of the local office of a global accounting firm, A&S was asked to provide its mining expertise to assist our client in completing an assignment for the central office or headquarters of a major east European mining company.  The mining company’s business involved a broad array of metals, but we also examined the company’s other key businesses. 

The assignment was to design a format for reporting quarterly results to the CEO in a concise manner that would allow the CEO to make informed decisions as to future company actions.  Due to the multiple and rich ore bodies and number of minerals produced, the reporting of results is a complex matter. 

·             A&S traveled to the company’s offices and provided specific examples of monthly and quarterly reports used by five major global mining companies, all of which were publicly held and were considered to be quite successful. 

·             As representative examples of best practices reporting, A&S prepared industry summaries for the nickel, copper, platinum group minerals and gold industries that provided background information on the critical drivers in each business. 

A&S assisted in the preparation and the presentation of the assignment results to the client’s Deputy General Director while our client provided detailed assistance in the areas of best practice for mining companies’ financial reporting.

Investment Management Firm: Copper

A&S was retained by the New York-based private equity firm to evaluate its potential investment in a copper oxide mining operation located in the Southwest U.S.A. 

Within a three-week period, A&S organized a team of senior experienced consulting professionals that included:  a mining engineer and economist who was a former CEO/President of an international copper mining company; a geologist; a metallurgist; an environmental expert; and two economic/business analysts. 

Our scope of work included our reviewing and providing our client with our views of the copper company’s: permits; environment; geology and reserves and resources; metallurgy; mine development and operations; milling and processing; operations and operating schedules; likely future opex, capex and throughput. 

Key members of our team visited the mine(s) and reviewed the copper company’s data with both company personnel and the company’s outside mining consultants.  We also reviewed the copper company’s overall operating and capital cost data that were made available to us.  Our team provided our findings to our client in an oral report wherein we answered our client’s questions about the company’s operations, potential expansion and future reserve outlook.  Copper price projections were provided to us by our client.

Major Investment Bank: Copper

A&S was retained by a major investment bank to perform due diligence on a copper rod and wire producer located in Eastern Europe.  The company’s assets consist of a copper smelter and refinery utilizing copper scrap and purchased anodes as feed as well a rod and wire plant. 

A&S spent three days reviewing both operations as well as the plans to install relatively new furnaces to include a Hazelett anode caster purchased from a plant recently closed in Europe. 

·            A&S reviewed production schedules, capital expenditures, operating costs, sources of copper feed, construction schedules and manning for the expanded business. 

·            We presented our findings verbally to the client in London and followed up with a written report. 

Government Regulatory Agency: Copper

A&S was retained by a government tax agency to provide a fair market valuation of a large group of overseas copper operations and assets.  Our assignment required our assessment of an integrated copper operation comprised of: a large, high-altitude, open-pit copper mine and grinding mill; a copper and molybdenum flotation plant; an open-pit and underground mine and a concentrator; SX-EW operations and facilities; a copper smelter and related ancillary and infrastructural assets. 

Important to our client was that this assignment was a retrospective valuation, which required that our conclusions not be influenced by any events subsequent to the valuation date.  To complete our study, A&S toured the properties; worked with several local A&S associates with knowledge of the operations and reviewed more than 3,000 pages of information about the operations submitted by the taxpayer to the government regulatory agency. 

Special Committee and Global Investment Bank: Copper

A&S was retained by a Special Committee of the Board of Directors of a large integrated copper company on a series of assignments wherein we provided technical assistance as the committee considered an acquisition offer in the form of stock of the acquiring company.  A&S worked closely with the Special Committee’s investment banker providing technical and operational inputs for its economic model.  Our team of nine experts visited all of the mines, concentrators, smelters, and refineries involved.  Our team of experts had substantial experience with the company and assets as well as required language capabilities. 

Following our due diligence work, our team reviewed expansion plans for two of the major copper properties, interviewed senior operating executives and their consultants who developed the expansion plans and conducted additional environmental due diligence.

As the transaction progressed, A&S reviewed and made comments on the Purchase Agreement and A&S prepared a fairness opinion relative to the merits of the transaction for the shareholders.

Large Investment Banking Firm & Minerals Producer: Copper & Molybdenum

Our client was the Special Committee of the Board of Directors of a company purchasing the majority interest in a copper/molybdenum mine and concentrating plant located in western U.S. and its investment banker. 

The seller was the sole stockholder of a company that owned 50.1% of the copper/molybdenum mine, and was also the Chairman and 30% owner of the operating company that owned the copper/molybdenum mine and mill.  The Special Committee retained its own law firm and investment banking firm, and requested that the investment banking firm hire a minerals business consulting firm to provide technical and business support. 

The A&S assignment was to:

·            Provide an independent, objective view on likely future operating costs, capital costs, production rate or throughput, metallurgical grade and environmental liabilities of the mine and concentrator and make judgments about the validity of the ore reserve estimates;

·            Provide judgments as to the adequacies of the other costs required to support the projections such as logistics and administrative.

·            Provide input on valuation approach and alternative economic scenarios used by the investment bankers in their valuation work.

For this work A&S fielded a consulting team of six specialists including the project manager, copper mining specialist, environmentalist, metallurgist, geologist, and project reviewer.  The size of the acquisition being studied by A&S, in terms of its annual output, was (a) 52.5 million pounds of copper and (b) 10 million pounds of molybdenum.  The value of the transaction was approximately $125 million.

Two Major North American Metal Mining Companies: Copper & Nickel

A&S was retained by two global, North American-based, mining companies to determine the feasibility of refining copper anodes produced by one company in the other company’s copper refinery.  For this project, both companies (our clients) organized multi-disciplined teams comprised of senior executives and managers who regularly met and participated in interim meetings wherein A&S presented several interim progress reports, and then our final report.

For this assignment, A&S’ team of experts conducted an in-depth, on-site examination of the operations and related key assets as well as extensive interviews of key operating personnel employed at both companies. 

·            As a result of A&S’ work and analysis of each company’s operations and flow of materials, A&S developed an alternative strategy for our clients that required minimal additional capital expenditure and a plan that could be implemented in a few weeks’ time, rather than two years. 

·            Importantly, our alternative method also more than tripled the projects’ net present value. 

Major Investment Bank and Financial Institution: Diamond

Our client a large international investment bank was retained to sell a Canadian diamond mining and exploration company.  This company owned 29 percent of a Canadian diamond mine. 

Our client hired A&S to provide the technical data and judgments for it to model and value the mine.  Using a team of five professionals, A&S reviewed the data available and constructed a general mine plan with capital and operating costs for 20 years.  The team advised our client on inputs for their economic model and provided a written report of the work done.

Independent Valuation of a Diamond Exploration Company: Diamond

A large mining company made an above market offer to the outside shareholders of a diamond exploration company to buy a significant equity stake in the diamond exploration company, our client.  Local law mandated that an independent valuation opinion be made by an Independent Expert. 

Our client engaged A&S to provide an independent opinion as to whether the bidder’s offer was fair and reasonable as those terms are defined under local law.  A&S invited another firm to joint venture the project with A&S to assist it on the technical and operational evaluation of diamond properties (a highly technical subject).  This firm elected not to be a joint venture partner.

The assets consisted of one potential diamond mine that was under evaluation, a number of exploration properties, and the diamond exploration, acquisition and development skills of its management.

The valuation process involved first (1) determining the value of the prospect by identifying (a) all reasonable possible alternative development scenarios for the property, (b) the economical potential of each scenario, and (c) the likelihood of each scenario coming to pass; (2) determining the value of other exploration properties; and (3) translating those factors into an “intrinsic” value per share of the company’s stock.

A&S in its financial valuation had to determine whether (a) the market premium over its intrinsic value was an appropriate constituent of value and why, and (b) whether the premium above market value offered by the bidder truly reflected the intangible value of the company, as well as being fair by takeover standards in the industry. 

Major International Trading & Industrial Company: Expert Witness

A large global raw materials corporation with direct and financial interests in metals and minerals producing and processing assets and trading around the world engaged our firm as industry consultants to support the efforts of its principal legal advisor in response to a case being heard before an international court proceeding.  (Our client was the respondent in this case.)

Our assignment was to respond to the claimants' technical industry consultant, who prepared estimates or values of three types of financial values as claimed by the respondents, which the claimants argued were not recognized in the purchase price of the claimants' assets by our client.

Operating under a tight time constraint, A&S assembled a team of its officers and associates, the latter with career-long industry and technical expertise relevant to the assertions being made by the claimants' business consultants.  Our analyses of the claimants' and its industry consultant's value estimates concluded that the estimated values were flawed and not founded in fact with regard to the realities of the particular component of metals industry being examined and the assets involved in the period in question.

Following A&S’ development of its findings and conclusions presented in an expert witness statement, our team provided to our client’s lead counsel our views regarding the claimants’ case and its technical and commercial representations.  In addition, A&S presented a summary of its findings and conclusions before the international arbiter as our client’s lead industry expert witness. 

Gold Mining Company: Gold

Our assignment consisted of an initial evaluation of twenty-six gold mine concessions and a kaolin clay concession in the southeast portion of Bolívar State in Venezuela.  The concessions are all majority-owned by a foreign investor.  The gold concession produced 20-to-25,000 ounces per year of gold and had its own CIL, cyanide recovery plant.  There is an active multi-drill rig exploration program ongoing. 

A&S reported its preliminary findings to the client and its financial advisor, a major international investment banking firm.  We recommended, and were retained to study further, the concessions.

Global Investment Bank: Gold

A&S was engaged by both the London and Canadian groups of a global investment bank to evaluate the reopening of two gold mines located in Eastern Europe, which use both open pit and underground mining methods, to extract gold from both oxide and sulfide ores. 

We were engaged to determine and evaluate the current ore reserves as well as the operating economics, to include the operating costs (opex), capex and adequacy of planned expenditures going-forward. 

In addition, A&S was asked to comment on the mill process flow sheet and the new BIOX plant being built.  Our client understood that the BIOX plant would be operating in extremely cold climatic conditions and therefore, wanted to know the impact on opex and capex inherent in such a situation. 

To conduct our work, A&S formed a consulting team comprised of (a) an experienced gold metallurgist and process plant operator and (b) an experienced hydro-metallurgist with extensive experience.  Both of these consultants visited the property.  The third member of the A&S team focused on the properties’ geologic resources and mine methods. 

The entire team reviewed the project’s five-year plan and commented on the financial and operating assumptions contained therein. 

Government Trade and Development Agency: Gold/Metals

The assignment involved the selection and profiling of sixteen small- and medium-sized mining projects in Argentina and the preparation of a briefing book containing both information about the projects and relevant background information.  The resultant materials were presented to potential U.S. investors and equipment suppliers at a conference held in the U.S. on Argentina’s mining sector. 

The work program examined ninety projects identified by Argentine federal, provincial and local governments and others.  An analysis scheme was used to select from those submitted, the more technically, economically and financially viable projects. 

·            Sixteen of these projects were profiled in depth in a briefing book prepared by A&S. 

·            In addition to the profiles, the briefing book contained background information on the mining sector (geography, economic conditions, political structure, infrastructure, mining exploration & development, legal framework, repatriation of debt, etc taxes and royalties, Nuevo Cuyo Region, and financing). 

·            A copy of the Mining Investment Laws & Relevant Environmental Regulations was also included in the briefing book.

For this work A&S assigned a two-person team to travel to Argentina who were experienced in the development of mining projects.  In addition two other specialists provided financial and project evaluation expertise.

Private Equity Firm: Gold and Tantalum

Our client, a U.S.-based, buy-out firm, whose focus was acquiring companies in bankruptcy, was interested in evaluating a company located in Western Australia, which company was in both the gold and tantalum businesses, and had recently declared bankruptcy. 

Our work, which was done by our Australian company, involved reviewing (a) the company’s website; (b) the records with the Australian Stock exchange file; (c) its bankers’ financial model provided by the client; and (d) the work of a number of other parties.  Our work included holding discussions with Australian financial journalists, fund managers, the Voluntary Administrators in Australia; various receivers from other companies; and various gold analysts from Australia’s brokerage firms.

Our ultimate assignment was to develop and bring to our client’s attention alternative transactions that would enable our client to acquire the assets in which they were interested.

Major International Mining Company: Iron Ore

This assignment was a global iron ore, supply and demand study that included a 20-year forecast projection for production and prices to assist the client to evaluate a major iron ore producer's business, assets and value in the context of preparing a bid to acquire a minority position in the company that owned these assets. 

The work focused on providing the client with an understanding of the economics of the iron ore business and its markets, such as all significant factors that impact these markets, including the forces that would shape market share and price differentials between Brazilian and Australian producers. 

International Mining Company: Iron Ore

The focus of this assignment was for A&S to evaluate the rail, port and shipping activities of a major iron ore producer. 

·            The assignment encompassed a review, observations and comments on information provided relative to three significant business activities, i.e., rail, ports and shipping, of a major iron ore producer. 

·            Its focus was to assist our client to evaluate the target producer’s business, assets and value, in the context of preparing a bid to acquire a minority position in the company that owned these assets. 

·            This assignment focused on an assessment of the data's suitability as a basis for projecting the transportation economics in the producer’s core business, i.e., iron ore.

Major International Mining Company: Iron Ore

Our client, a global multinational mining company, was giving serious thought to acquiring a major iron ore business based in a country where our client had no other iron ore operations.

The selling company’s Board of Directors declared itself for sale, and we were retained to do a broad variety of analytical work – all, in one way or another, leading to valuation of the potential acquisition.  As part of this work we were required to provide an overview of the global iron ore industry as well as an overview of the potential acquisition and its fit into the global iron ore business.

Major Australian Mining Company: Iron Ore

Our client was an iron ore producer considering a strategic investment in a major Brazilian iron ore producer.  A&S' assignment was to prepare a report providing details about the Brazilian company. 

The report included a discussion of all areas of operations (mines, transportation and port facilities), plus an assessment of areas offering scope for operating improvements (there was a discussion of the key aspects of the previous year’s operating results).  A&S included details and comments on the company’s current expansion plans, sales and marketing, and expected future demand for its products. 

·            Our overall conclusions included a discussion of those areas that we regarded as having the greatest risks and impacts on projections. 

·            As requested by the client, the report included a bibliography with details of important references, industry sources and company data.

For this work, A&S assigned a team of five consultants (three from the U.S. and two from Brazil).  Following a review of A&S’ extensive database, additional data requirements were identified and obtained.

A&S contacted other industry experts, and did on-scene fact-finding in Brazil, although A&S did not have official contact with management to obtain detailed information.  Other visits were made to Brazilian industry and institutional contacts. 

A comprehensive report on the company and its activities was prepared.  The draft report was presented to the client for discussion prior to finalization.

Major Australian Mining Company: Iron Ore

Our client was an iron ore producer considering a strategic investment in a major Brazilian iron ore producer.  A&S assignment was to assist our client in gaining a deeper understanding of the key components required for a foreign company to do business successfully in Brazil. 

A&S identified key people who possessed the required knowledge and would be willing to meet with the client including people involved with business, political, government including regulatory, military, mining, banking and finance, and environmental, etc.  A&S arranged a program of appointments and accompanied the client to the interviews.  For this work, A&S assigned a team of three experts one from the U.S. and two from Brazil.

Global Iron Ore Mining Company: Iron Ore

A&S was engaged to evaluate the potential future deployment of a new, advanced, iron-making technology – in the development stage - by steelmakers around the world.  Our work also involved determining the economic values from future revenues flowing from the sale and licensing of the technology, under five different, future economic scenarios. 

The principal outputs of our work on this assignment included:

·            Our developing a regional and global economic model to be used to formulate economic value(s) from the sale and licensing of the technology to steel makers.  Data input into our model would involve using four global and regional iron ore and steel industry scenarios provided by our client, and a fifth scenario that our client asked A&S to develop based on our view of the future. 

·            In addition, to providing our client with the economic model, that was custom designed to model the varied future scenarios, our final report described and compared, in the five scenarios the forecast values calculated from the sale and adoption of the new technology to the global steel making industry. 

·            Our report also provided an analysis of management, operating and other issues that the business unit’s chief executive officer faced in the near term to ensure meeting stated goals and the expectations of the division’s management. 

For this project A&S formed a team comprised of six experts, including the former head of commercial and strategic planning for a major iron ore mining company; a former technical head of blast furnaces of a large integrated steel company with current expertise in the steel industry; an economic modeler and other staff with relevant operations, industry, economic and financial expertise. 

To conduct our work our team visited the client’s headquarters where we received a thorough briefing about the technology, its current status, etc. from the business unit’s management; reviewed extensive relevant planning and technical documentation as well as drew upon our own databases to complete the study.

Major International Mining Company: Iron Ore

The objective of this assignment was to examine, from an operating/business/technical/economic perspective, numerous pellet plants that form an integral part of a major iron ore producer in the context of our client preparing a bid to acquire a minority position in the company that owned these assets.

The work focused in on an assessment of the pellet plants and their comparative and competitive position in the world pellet plant business. 

This work included an evaluation of the pellet plant activities, an estimate of their capital and operating cost projections, and A&S' comments on future developments in that business.

Industrial Minerals Company: Kaolin

For this assignment A&S assessed the suitability of a kaolin deposit located in Venezuela for use in the world paper industry.  Our team studied and addressed the physical and chemical characteristics of the kaolin, developed a process flow sheet to produce paper grade kaolin and commented on the demand and pricing for paper grade kaolin as part of our assessment of the competitiveness of the reserve property, particularly with respect to kaolin from Brazil and Georgia.

Major Financial Institution: Limestone

This assignment involved determination of the residual value of a quarry owned jointly by a South American based company and a local company operating in a South American nation.  Our client was selected by two other investment banks to provide an independent valuation of the residual value of a large quarry. 

The quarry had several remaining years of production and covered 250 acres.  It had been mined for decades and now had a very large housing development located immediately adjacent to it.  Our assignment was to predict the remaining years of production, examine various methods of closure, define the most suitable use of the quarry, and then determine a value.

Major Investment Bank : Loan Agreement Benchmarks

Following an earlier study we conducted for an international investment banking client A&S was asked by our client to assist it in preparing a loan agreement.  A&S provided likely completion points, draw down of funds, schedules, completion schedules and inspection schedules.

Global Accounting Firm: Management Structure Review

This assignment, done for a global accounting firm, was to provide our view on how a West African government ministry responsible for solid minerals might organize the management of its coal and minerals activities.  The objective was to maximize the country’s potential from its solid minerals resource.  The work involved our:

·      Reviewing relevant documentation on the current institutional framework and national mineral inventory. 

·      Describing best mining management organization practice and outlining the potential application of basic mining management organization practice to the development and operations of the minerals and coal resources. 

We also recommended the steps necessary to develop the management structure that is best for the country.  For this work, A&S senior management consultants reviewed the current situation and developed a preliminary report.

Major International Mining Company: Manganese

This assignment involved a review of a world manganese ore supply and demand study that included a 20-year forecast projection of production and prices.  This work was done to assist the client to evaluate a manganese ore producer's business, assets and value in the context of preparing a bid to acquire a minority position in the company that owned these assets. 

The work focused on providing the client with an understanding of the economics of the manganese business and its markets, including all significant factors that impact these markets.

Major Metals Company: Molybdenum

Our client, a major metals company, had recently acquired, as part of a major merger, a smaller primary molybdenum business.  Our assignment involved providing the client with an independent review and assessment of the client’s primary and secondary molybdenum business, focusing on the development of alternative strategies, the evaluation of same, and the recommendations as to which strategy should be followed. 

As part of this work, we did an independent supply-and-demand study over a ten-year period to act as a framework for our analysis and provided a separate analysis of the steel markets for molybdenum.

Private Investment Group: Silica

In this study, A&S developed trend analyses of four silica sand product markets in the United States – Oil and Gas, Foundries, Abrasives and Coated Sands.  These markets were of interest to our client that was evaluating expanding its base of industrial minerals operations by acquiring additional businesses.  A&S used a team of experts knowledgeable about these markets with life long experience in conducting market studies. 

A&S’ approach consisted of gathering data on all four markets from a wide variety of sources and conducting extensive interviews with customers, suppliers and trade organizations using 2000 as a base year and making trend forecasts out to 2004.  In addition to A&S developing these trend analyses, A&S provided to our client:

·            An overview for each of these markets;

·            Identification of the demand drivers, technological developments, competitive situations, environmental and governmental issues, etc.;

·            Projections of demand and prices through 2004 for each market; and

·            Conclusions regarding the outlook for each market and the target companies’ relative position in each market. 

A Technical Development Company: Technology Evaluation & Assessment

Our client is a technical development company that has, over the last decade, developed innovative proprietary biotechnology for processing minerals and environmental remediation.  The technology encompasses processes for recovering gold from refractory ores and concentrates, recovery of base metals from sulfide ores and concentrates, desulfurizing coal and environmental remediation of contaminated soils.  Patents covering the technology have been granted, or are pending, in the United States and other countries.

The company is currently conducting pilot scale tests of the technology on sulfide gold concentrates from mines in North America and is planning pilot scale tests for desulfurizing coal and decontamination of soils, with the objective of demonstrating the capabilities of the technology at a large scale. 

The company intends to license the technology to mining companies for commercial use.  The company also is planning to build custom biooxidation plants in the United States and other countries to process and recover gold from refractory sulfide gold concentrates for third parties on a toll fee basis.

In light of this background, it was key for the company to find out – and accordingly they commissioned us to do so – the availability of refractory gold concentrates in North America and the economics pertaining to the sale of such concentrates to North American smelters.  Thus, a key component of our work output was our projections of the price and tonnage of such refractory gold concentrates that would be sold to North American smelters.

To do the work, we launched a two-pronged approach. 

·            First, we surveyed base metal smelters in North America to learn the key aspects of their commercial arrangements with mining companies. 

·            Second, we launched an exercise to identify gold concentrate produced in the United States and Canada.

Because of this two-pronged approach we were able to learn about refractory gold concentrates from the point of view of potential customers and potential competitors.  Using these data as a base, we ultimately provided a forecast of tonnage and price for these refractory gold concentrates.

 

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Anderson & Schwab Inc.
Mineral, Metals & Business Consultants
444 Madison Avenue
New York, New York 10022-6903
Telephone: 212-758-6800
Fax: 212-755-9576
info@andersonschwab.com