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Discovering a mineral deposit is only the beginning of the story. Between discovery and mine development sits one of the most consequential steps in the entire project lifecycle: the feasibility study. It’s the process that turns a geological resource into a bankable investment decision — or reveals, before hundreds of millions of dollars are committed, that a project simply doesn’t work.
This guide explains what mineral feasibility studies involve, the different levels of study companies typically progress through, and why getting this stage right matters as much as the discovery itself.
What Is a Mineral Feasibility Study?
A feasibility study is a comprehensive technical and economic evaluation of whether a mineral deposit can be developed profitably. It integrates geology, mining engineering, metallurgy, environmental and social considerations, infrastructure planning, and financial modeling into a single, defensible document that answers the fundamental question: should this project be built?
Feasibility studies are typically required to secure project financing, satisfy regulatory permitting processes, and meet reporting obligations under mineral resource and reserve codes such as JORC, NI 43-101, or SAMREC, depending on the jurisdiction. For publicly listed companies, these studies also form the basis of statutory disclosure to investors and regulators.
The Study Progression: From Concept to Bankable Document
Feasibility studies aren’t produced in a single step. Most projects progress through several increasingly detailed levels of study, each narrowing uncertainty and increasing the confidence of cost and revenue estimates before the next, more expensive stage of work is committed to.
Scoping Study (Preliminary Economic Assessment)
The scoping study, often called a Preliminary Economic Assessment (PEA) in North American reporting frameworks, is the earliest-stage evaluation. It uses relatively limited data — often based on inferred resources — to provide a preliminary indication of whether a project has reasonable prospects for economic viability. Cost estimates at this stage typically carry a wide margin of error, often in the range of 30-50%, and results are explicitly not intended to support a final investment decision.
Despite its preliminary nature, a scoping study plays an important gatekeeping role: it helps companies decide whether further, more expensive investment in resource definition and engineering work is justified.
Pre-Feasibility Study (PFS)
The Pre-Feasibility Study represents a significant step up in rigor. It requires a higher proportion of measured and indicated resources, more detailed engineering design, and tighter cost estimation, typically within 20-25% accuracy. A PFS is generally used to select among project development alternatives — different mining methods, processing routes, or infrastructure configurations — and to determine whether the project warrants progression to full feasibility.
Definitive Feasibility Study (DFS) / Bankable Feasibility Study (BFS)
The Definitive or Bankable Feasibility Study is the most detailed and rigorous level of study, intended to support a final investment decision and, typically, project financing. Cost estimates at this stage aim for 10-15% accuracy, engineering design is developed to a much finer level of detail, and the study incorporates comprehensive input from every relevant technical discipline. Given the scale of investment a DFS is meant to justify, this stage typically takes many months to over a year to complete and represents a substantial cost commitment in its own right.
Core Components of a Feasibility Study
Geology and Mineral Resource Estimation
The study begins with the geological foundation: a mineral resource estimate, classified into inferred, indicated, and measured categories based on data confidence, developed from drilling, sampling, and geological modeling. The quality and classification of the underlying resource directly determines what level of study can credibly be supported — a project with mostly inferred resources cannot support a Definitive Feasibility Study, regardless of how much engineering work is done downstream.
Mining Engineering and Mine Design
This component addresses how the deposit will actually be extracted — open pit or underground, mining method, production schedule, equipment selection, and mine sequencing. Mine design directly drives capital and operating cost estimates and must be closely integrated with the resource model to ensure the mining plan is geologically and geotechnically sound.
Geotechnical and Hydrogeological Assessment
Slope stability for open pits, ground support requirements for underground workings, and groundwater management all require dedicated geotechnical and hydrogeological investigation. These findings directly affect mine design, dewatering requirements, and, in some cases, whether certain mining methods are viable at all.
Metallurgy and Processing
Metallurgical testwork determines how efficiently valuable minerals can be recovered from the ore and informs the design of the processing plant. Recovery rates, processing costs, and product quality all flow from this work and have a direct, often outsized, impact on overall project economics.
Environmental and Social Impact Assessment
Modern feasibility studies integrate environmental and social impact assessment as a core component rather than an afterthought, addressing water use, tailings management, biodiversity impacts, community engagement, and the regulatory approvals needed before construction can begin. Environmental and permitting risk is increasingly one of the most significant sources of project delay and cost overrun, making early and thorough assessment essential.
Infrastructure and Logistics
Access roads, power supply, water supply, and transportation logistics for both supplies and product all need to be planned and costed, particularly for remote projects where infrastructure development can represent a substantial share of total capital cost.
Capital and Operating Cost Estimation
All technical components feed into detailed capital expenditure (capex) and operating expenditure (opex) estimates, developed with a level of precision appropriate to the study stage. These estimates are among the most scrutinized elements of any feasibility study, since they directly drive the financial modeling that follows.
Financial Modeling and Economic Analysis
The study concludes with financial modeling that translates all technical inputs into project economics: net present value, internal rate of return, payback period, and sensitivity analysis around key variables like commodity price, exchange rates, and operating costs. This is ultimately what investors, lenders, and boards use to make development decisions.
Why Rigor at This Stage Matters So Much
The cost of errors in a feasibility study compounds dramatically once construction begins. A resource estimate that overstates grade, a geotechnical assessment that underestimates slope instability risk, or a metallurgical testwork program that doesn’t represent the full range of ore variability can each individually derail project economics — and problems that would have been relatively cheap to identify and correct during the study phase become enormously expensive once a mine is under construction or in production.
This is why experienced feasibility study teams place such emphasis on data quality, appropriate contingency allowances, and honest, defensible uncertainty ranges at each study stage, rather than presenting overly optimistic figures that may look attractive to investors in the short term but set a project up for disappointment later.
Common Pitfalls
Projects run into trouble at the feasibility stage for recurring, largely avoidable reasons: rushing to a Definitive Feasibility Study on an inadequate resource base, underinvesting in geotechnical and hydrogeological investigation relative to the scale of the proposed mine, insufficient metallurgical testwork across the full range of ore types the mine will actually encounter, and underestimating the time and cost required for environmental permitting in increasingly demanding regulatory environments.
Working with the Right Technical Team
A credible feasibility study depends on genuine multidisciplinary expertise — geology, mining engineering, geotechnical engineering, hydrogeology, metallurgy, and environmental science all need to be integrated coherently, with realistic assumptions and appropriate contingencies at every stage. An experienced geoconsulting partner can contribute the geological, geotechnical, and hydrogeological rigor that underpins a defensible study, helping ensure the resulting document genuinely reflects the risks and opportunities of the project rather than presenting an overly optimistic case that doesn’t hold up to lender or investor scrutiny.
Progressing a project toward a scoping, pre-feasibility, or definitive feasibility study? Our geoscience team can support the geological, geotechnical, and hydrogeological components your study needs to stand up to scrutiny. Get in touch to discuss your project.
