Resource upgradePlatform focus

Resource upgrade

From → to: PEA → PFS
Chance of a mine: 30% → 45%
Money spent so far: ~$20M → ~$40M
Typical duration: 1–2 years

Illustrative mid-range figures for a mid-size project. See the odds curve

What it is

With a PEA published, the odds reach about 1 in 3. The job now is to upgrade confidence: infill drilling turns Inferred resources into Indicated, the category that can become reserves. Spending doubles, and the stage ends when a pre-feasibility study (PFS) declares the first reserves.

For investors. An investor is buying a first view of the economics and a plan to firm it up. A PEA can rely on Inferred resources, so its numbers are early. Ask how much of the PEA's mine plan is Inferred, how sensitive it is to price, and how much infill drilling stands between the project and a PFS.

Work done in this stage

Infill drilling to upgrade Inferred to Indicated
Geotechnical, hydrogeology and metallurgical drill holes
Detailed metallurgical testwork
Environmental baseline studies (water, flora and fauna, archaeology)
The pre-feasibility study (PFS)

Drilling

Metres: About 20,000–100,000 m of infill
Spacing: About 40–100 m, roughly half the Inferred spacing
Other holes: About 5,000–20,000 m of geotechnical, hydrogeology, metallurgical and condemnation holes
Purpose: Raising confidence, not adding tonnes

Cost and where the money goes

About $20M in this stage

Infill and technical drilling: about $10M
Testwork and environmental baseline: about $5M
Pre-feasibility study: about $2–10M

What moves it to the next stage

A pre-feasibility study (PFS) is published, declaring the first Probable reserves. The project moves to stage 5.

How the PEA, PFS and FS differ

What it takes:

Enough Indicated resources to support a mine plan
Mining, processing, economic, environmental and social factors applied (the modifying factors)
Study accuracy of about ±25–30%

Data you should expect to see

A published PEA with mine plan, costs and economics
Resource table with Indicated and Inferred
Metallurgical testwork results
Early environmental baseline data

Key risks

A PEA is an early view and may rely on Inferred resources
Infill drilling can shrink the resource or lower its grade
Metallurgy, permitting and infrastructure can change the economics
Typically only 50–80% of Inferred tonnes convert to Indicated

Typical financing

Who funds it: Few natural funders: the funding gap continues.

Spending doubles to around $20M. Equity is still the base, but the PEA gives buyers numbers to value, so larger royalties, strategic stakes and partners become available. Larger miners start due diligence with a view to buying later.

Share placementsMain route
From: Resource funds, generalist institutions, strategic investors
Larger placements, priced against the PEA's NPV and usually at a deep discount to it.
Royalty saleMain route
From: Royalty companies
Larger royalty sales, priced off the PEA's cash flows with a heavy discount for development risk.
Strategic stake by a larger minerMain route
From: Mid-tier and major miners
A strategic investor takes a stake to fund infill drilling and the PFS, often with a right of first refusal or a right to match any offer for the project.
Joint venture with a larger partnerSometimes used
From: Mid-tier and major miners
The partner funds the PFS and sometimes the FS to earn a majority, and usually becomes the operator.
Sale to a mid-tier or major minerSometimes used
From: Mid-tier and major miners
Some projects are bought at this stage, when the buyer sees the potential before a full study raises the price.

See the financing path across all six stages

Questions an investor should ask

What are the key assumptions in the PEA, and how sensitive is it to price?
How much of the PEA's mine plan relies on Inferred resources?
How much infill drilling is needed before a PFS, and at what cost?
When does the environmental baseline start, and how long will it take?

What a listing looks like at this stage

Usually filled

Screening
Location and access
Geology and resources (Indicated and Inferred)
PEA study card
Metallurgy
Early permitting

Usually not yet

Reserves (until the PFS)

Current listings at this stage

No listings at this stage yet. Projects will appear here once the marketplace opens.