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Objectives & Outcomes

Since 1999, Whittle Consulting has conducted over 150 Whittle Enterprise Optimisation studies around the world. Time and again we have seen that there are several reasons why mining businesses decide to explore the implementation of a Whittle Integrated Strategic Planning process.

Some of these objectives and the resultant outcomes are listed below.

Improve cash flow profile

Objective

  • Increase overall cash flow
  • Bring cash flow forward

Outcome

A better cash flow profile increases the economic viability of a mining project or operation. Cash provides security, flexibility and creates options for distributing value to all stakeholders.

Recent Examples

Whittle Consulting has developed over 150 Enterprise Optimisation models for mining businesses across all continents and commodities. These have consistently proven to significantly enhance the economics of mining projects and operations.

The full effects of a Whittle Enterprise Optimisation study conducted using the Whittle Integrated Strategic Planning process can be extraordinary. Where an NPV uplift of 5% can sometimes be the difference between a project being financially viable or unviable, Whittle Consulting has regularly achieved NPV increases of 15%, and in many cases substantially more. These results occur even when other conventional optimisation techniques have already been applied.

Increasing overall cashflow

Bringing cashflow forward

Increase Net Present Value (NPV) of a project or operation:

Objective

  • Increase the Internal Rate of Return (IRR)
  • Increase the Return on Investment (ROI)
  • Reduce payback period
  • Increase capital efficiency

Outcome

NPV recognises the time value of money. The result of the Whittle Integrated Strategic Planning process has been repeatedly proven to enhance the economics of a mining business by more than 15%, and in many cases substantially more. This occurs even when other conventional optimisation techniques have already been applied. This can make or break the very existence of a mining project or operation and its survival in a competitive and volatile market.

Whittle Consulting NPV uplift results
Typical Net present Value (NPV) uplift of 15%-65%

“The results have stunned us. They are far better than we thought they would be.”

Mark Child, CEO and Executive Chairman, Condor Gold, La India Project, Nicaragua

Support Pre-feasibility Studies (PFS) and Feasibility Studies (FS):

Objective

  • Support PFS and FS

Outcome

The ideal time to commence Whittle Integrated Strategic Planning is during the planning stages of a project, before any major decisions are made. There is enough data in a PFS or FS to construct and operate a meaningful Enterprise Optimisation model. This process will inform project shaping decisions to maximise the likelihood of success.

Guide investment decisions:

Objective

  • Greenfield or brownfield
  • Takeovers, Mergers and Acquisitions (M&A)
  • Rank capital options
  • Evaluate technologies
  • Determine size and timing of expansions

Outcome

Mining companies generally have a long list of investment options, including expansions, acquisitions, exploration and new technologies.

Most investment options generate obvious local improvements, but may have detrimental effects downstream. Others may have compounding benefits. The full effect of an investment option won’t be identified without a complete and integrated view of the business as a whole.

Whittle Enterprise Optimisation models simultaneously optimise the interconnections across the business. This enables quantification of the full effect that the investment combinations will have on the value generated by the whole system. The result is the proper
ranking and prioritisation of investment decisions.

Raise finance:

Objective

  • Debt or equity
  • Calibration of Initial Public Offering (IPOs) or another share issue
  • Improve and/or articulate the business case

Outcome

The ability to raise finance and the calibration (dilution) involved is directly driven by the strength of the business case being presented. Whittle Integrated Strategic Planning is the way to ensure you are putting the best case forward. The business case is a combination of expected financial outcomes, sustainability and an appreciation of the risk and opportunities involved.

Achieve sustainable operations:

Objective

  • Local community relationships
  • Employee wellbeing/labour relations
  • Government relations
  • Environmental protection

Outcome

Shareholders are not the only stakeholders we need to consider when running a sustainable mining business. Local communities, employees, governments and environmentalists have much higher expectations and far more power than in the past. With higher visibility of our actions, we cannot and should not ignore their needs and preferences. We need to act with a sense of Corporate Social Responsibility (CSR). We are in business to create value for all our stakeholders, who must be regarded as partners.

Not all stakeholder values are monetary. Therefore, Whittle Integrated Strategic Planning aims to find the balance between financial value and other stakeholder values by employing the Five Capitals Framework. If successful, we will achieve the ultimate goal of an “enduring Licence to Operate”.

Respond to market and contextual changes:

Objective

  • Metal/commodity prices
  • Exchange rates
  • Competition
  • Energy cost
  • Legislation
  • Climate and environment
  • Conflict
  • Health epidemics

Outcome

Any strategic plan is a function of the assumptions made about the future market and context. A change in these assumptions requires different plans, not just a more vigorous execution of the original plan.

A comprehensive strategic planning process should involve rehearsals for a range of potential futures, understanding the respective strategies that would apply for each. By developing and maintaining a suite of plans for a variety of scenarios, mining company management can achieve true strategic agility. This allows us to know how to react as conditions change.

Perform Due Diligence (DD) and/or validate current plans:

Objective

  • Review the economic efficiency of the plan.
  • Validate the numerical consistency of current models (i.e. geological, geotechnical, mining, metallurgical, logistics, commercial and financial models)

Outcome

A mining business is complex. Whittle Integrated Strategic Planning is a validation/audit of the conclusions that have been drawn from a planning process, evaluating whether the maximum economic potential of a mining property has been identified.

The task of ensuring consistency and integrity between the numerous models that cover the entire business is onerous and fraught with risk. Whittle Integrated Strategic Planning involves creating a single model of the entire business, from the resource model through to the financial model. Whilst not the primary objective of a Whittle Enterprise Optimisation project, a by-product is the assurance that the total business plan adds up.

Design management processes and systems:

Objective

  • Operational data structure
  • Cost accounting design
  • Management reporting
  • Key Performance Indicators (KPIs)
  • Targets
  • Incentives

Outcome

Budgets, targets, reporting, KPIs and performance measurement must be aligned to the strategy of the business. Whittle Integrated Strategic Planning will identify the key drivers of value for mining businesses. This understanding should therefore dictate the content and format of the operational data, cost accounting and management reporting systems. If the management culture is one of value creation, then a consistent framework between all the management mechanisms is essential. There is no use having the right strategy if you don’t execute it.

Harness Big Data:

Objective

  • Data Driven Mining
  • Artificial Intelligence (AI)
  • Machine learning
  • Automation

Outcome

Big Data provides new opportunities for improving the efficiency of operations. However, the pace of development of information technology enables the collection of data to the point where we are overwhelmed by it. Data systems should be designed in a structure that supports the execution of the company strategy. We should ensure that the key value drivers, which Whittle Integrated Strategic Planning identifies, become the focus of data systems. Data collected on other subjects can be less relevant and possibly even a distraction.

Identify bottlenecks and leverage points:

Objective

  • Identify bottlenecks
  • Identify leverage points

Outcome

Whittle Consulting utilises Theory of Constraints in a strategic context to identify bottlenecks and take the consequences of them right back to the orebody. This results in a very different view of where value is spatially. This approach has a substantial effect on the mine design, and the operating strategy over the life of the operation.

Increasing the performance of the bottleneck in the system improves the
performance of the whole system. This approach provides substantial leverage
for improving business performance.

Embrace complexity:

Objective

  • Embrace complexity

Outcome

As our understanding of the orebody and system increases, we can become overwhelmed by the amount and complexity of the detail. Prober E allows mining businesses to explore, fully understand and exploit the complexity within a project or operation. Prober E has
the power to optimise the largest and most complex multi-variable, non-linear
problems presented by mining.

Increasing the performance of the bottleneck in the system improves the
performance of the whole system. This approach provides substantial leverage
for improving business performance.

Enable Business Improvement (BI):

Objective

  • Reduce costs
  • Increase productivity and efficiency
  • Manage variation

Outcome

Whittle Integrated Strategic Planning provides a holistic view of the system. Without this, well-meant localised cost/productivity/efficiency improvement initiatives may be less relevant or even counterproductive.

Uncontrolled performance variation must be minimised – especially in the primary system bottleneck. However, inherent ore body variation can be regarded as an opportunity to be exploited, not a problem to be avoided. Whittle Integrated Strategic Planning coordinates the operating policies across the system to positively respond to the variety of characteristics throughout the orebody.

Rescue distressed assets:

Objective

  • Loss making or marginal projects and operations
  • Poor performing assets
  • Business turnarounds

Outcome

Improving good projects/operations is a very worthwhile undertaking. However, turning loss makers into positive performers is life-changing for all involved. Whittle Integrated Strategic Planning can make the difference to your business survival.

Drive innovation

Objective

  • Create a business case
  • Determine true financial impact

Outcome

The ideal way to evaluate innovative technologies is to understand the impact on the complete system.