Economic feasibility of responsible small-scale gold mining

Artisanal mining (AM) activities are generally seen as a source of concern owing to their illegality and the environmental pollution that they cause, but in recent years it has been demonstrated that gold mining can be performed on a small-scale mining (SSM) in a responsible way outside of the artisanal dimension. A previous study by the same authors demonstrated how mineral resources and reserves can be managed to achieve a sustainable form of SSM, based on the concepts of proving a "minimum reserve" and working with "replication" of the operation on subsequent small reserves. It was shown that SSM can be viable with 1/100 of the reserves necessary to prove the feasibility of a large-scale mining business. However, that work made some simplifications in terms of value of money over time and taxation. The present work continues by undertaking a realistic analysis of economic feasibility through a cash flow analysis (CFA) on various scenarios of investment strategy for the SSM business, considering the "minimum reserve" approach along with the traditional mining business strategy. The results show that the "minimum reserve" approach is always more attractive from an economic point of view, in terms of value of the project, rate of return of investment and payback time. Finally, the most suitable profile for investors in the SSM business is discussed, and it is shown how small-scale investors and large corporations can fit into this approach. (C) 2016 Elsevier Ltd. All rights reserved.