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sample business plan for mining operation

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plan of operations for mining activities on …

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

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

plan of operations for mining activities on …

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

mining business plan - mineral processing & metallurgy

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

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

mining business plan - mineral processing & metallurgy

This Business Plan is based on the construction and operation of 1 plant to demonstrate the profitability of the toll treatment plant concept. During this first year of operation the management will be evaluating expansion opportunities in other areas of the country as well as at the current site. PTT intends to build and operate 4 – 350 tonne per day gold plants in Peru within 5 years and the company will generate an estimated after tax, net cash flow of $40 million per annum

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

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