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A mineral discovery is not a mine. Between the first promising drill intersection and the first shipment of product lies a sequence of technical and economic studies that test whether a deposit can be extracted profitably, legally, and responsibly. These are feasibility studies. They are the documents that banks, investors, and regulators rely on when deciding whether to commit capital, and in Kenya they must account for local geology, infrastructure, licensing, community, and market realities.
What Is a Mineral Feasibility Study?
A feasibility study is a comprehensive technical and economic assessment of a mineral project. It examines geology, mining method, processing, infrastructure, environmental and social factors, capital and operating costs, and financial returns. Its purpose is to answer one question: should this project proceed to development?
The Three Levels of Study
Mining projects are normally evaluated in stages of increasing detail and cost:
Scoping study (Preliminary Economic Assessment). A low-cost, high-level evaluation using early resource estimates and broad assumptions. It tests whether the project has potential and identifies key risks. Accuracy is typically modest, and results guide further exploration spending.
Pre-feasibility study (PFS). A more detailed study based on a better-defined resource. It compares mining and processing options, selects a preferred approach, and produces cost estimates with greater confidence. A PFS often supports decisions on whether to commit to a full feasibility study.
Definitive or bankable feasibility study (DFS/BFS). The most detailed level, based on well-defined resources, tested processing flowsheets, and refined cost estimates. It is the document used for financing and final investment decisions.
Core Components of a Feasibility Study
Geology and resource model. The foundation of the study. It includes drilling data, QA/QC, geological interpretation, and a resource estimate classified under JORC or NI 43-101. Only part of the resource, the portion converted to reserves after applying mining, metallurgical, economic, legal, environmental, and social factors, can be used in economic evaluation.
Mining method selection. Open-pit, underground, or alluvial mining is chosen based on deposit geometry, depth, grade, and ground conditions. Geotechnical data on rock strength and groundwater determine pit slope angles or underground support requirements.
Metallurgy and processing. Testwork establishes how well the ore responds to crushing, grinding, gravity separation, flotation, leaching, or other methods. Recovery rates, reagent consumption, and plant design depend on this work.
Infrastructure. Power, water, roads, accommodation, and tailings storage must be planned. In remote Kenyan areas, access roads and power supply can significantly influence costs.
Environmental and social impact assessment. Baseline studies, impact assessment, and management plans are required under Kenyan law. Community engagement, resettlement or compensation, and closure planning are central to project acceptability.
Legal and fiscal framework. The study must reflect licence terms, royalties, taxes, local content requirements, and obligations under the Mining Act, 2016 and associated regulations.
Capital and operating cost estimates. Costs are built from quotes, benchmarks, and engineering designs, with contingency appropriate to the study level.
Financial analysis. Cash-flow models estimate net present value (NPV), internal rate of return (IRR), payback period, and sensitivity to variables such as commodity price, grade, recovery, and exchange rate.
Risk assessment. Technical, market, political, environmental, and execution risks are identified and ranked, with mitigation measures proposed.
The Role of Independent Review
Banks and investors often require an independent technical review, particularly where the study was prepared by the project owner. Reviewers check assumptions, data quality, and compliance with reporting standards. Independence strengthens credibility and may unlock funding on better terms.
Kenya-Specific Considerations
- Resource quality and data density: Many Kenyan projects require additional drilling and QA/QC before they can support reserve estimation.
- Artisanal mining and land use: Overlapping claims, existing workings, and community expectations must be integrated into planning.
- Infrastructure costs: Distance to roads, power, and water affects economics, especially for lower-grade or bulk commodity projects.
- Regulatory timelines: Licensing, environmental approvals, and community agreements can be time-consuming, so schedules should include realistic allowances.
- Market access: For industrial minerals and construction materials, proximity to demand centres and transport costs are often decisive.
Typical Timeline and Budget Drivers
Timelines vary with project complexity. Scoping may take weeks to a few months, a PFS several months, and a DFS longer, since it includes testwork, engineering, and environmental studies. Costs rise with each level and depend on drilling, metallurgical programmes, specialist consultants, and site conditions.
Common Reasons Feasibility Studies Fail or Mislead
- Over-optimistic resource estimates built on insufficient or poor-quality data.
- Metallurgical assumptions not backed by representative testwork.
- Underestimated infrastructure and permitting costs.
- Ignoring commodity price volatility and currency risk.
- Weak community engagement that later halts the project.
- Treating inferred resources as if they were reserves.
How to Prepare for a Study
Project owners can improve outcomes by organising data early: validated drilling databases, assay certificates, survey control, geological models, licence documents, and baseline environmental data. Engaging experienced consultants at the scoping stage helps design a work programme that fills data gaps efficiently.
Conclusion
Feasibility studies convert geological promise into investable reality, or expose weaknesses before major capital is spent. In Kenya, rigorous technical work combined with careful attention to regulation, community, and infrastructure improves the chance that a good deposit becomes a successful mine.
Innercore Geoconsultants Services Limited supports mineral projects through resource evaluation, technical review, and feasibility-level geological input. Contact us to assess your project’s readiness for the next stage.
