Welcome
Pipeline’s telling truths As regular readers will be aware, the Project Pipeline Handbook was originally the reverse-engineered product of Mining Journal Select – an exclusive investor event featuring development projects seeking finance, hand-picked for their quality. The shortlist for the first iteration of the conference in 2017 was produced by the Mining Journal editorial team, managing editor, the Association of Mining Analysts in London and a handful of regular advisers. That process was both incredibly time-consuming and inappropriately subjective and so it fell to the research team the following year to build a sustainable formula with which to rate assets. This formula and the reasoning behind it can be found in the Methodology chapter of this report. By the time Mining Journal Select 2018 came around, the research team had fed around 80 of the better development assets through the formula. Today, there are more than 400 assets that have had their key metrics normalised and ratings assigned. Having been launched in only 2018 as the platform on which the Mining Journal Select investor event was built, our Project Pipeline Database of global development projects has been underused for the past two years thanks to a COVID-induced hiatus on physical events. Work on the database over that period has, however, continued. The number of assets rated and compared within the database has grown from less than 100 leading into the that first event, to more than 400 today. Because the database focuses almost exclusively on single-asset companies, its constituents represent the most highly leveraged opportunities for exposure to a specific commodity through the success (or failure) of an individual project. Similarly, they are a deep pool of acquisition opportunities that can be lined up in various different orders according to the metrics of greatest important to the predator. Analysis of the 2022 database throws off telling truths. A healthy performance across most asset groupings tracked record commodity-pricing levels, which followed a post-COVID slump and was in-part triggered by geo-political dynamics (chiefly Russia’s invasion of Ukraine). In terms of our ratings methodology, this has shown through in both the ‘Economics’ and ‘Confidence’ asset metrics. Despite all the hype around battery metals and the energy transition – and the improving ratings for existing
2022 edition
Group managing editor, Chris Cann
battery-metal development projects – there remains an under-representation of this commodity grouping in the database. A majority of future production is likely to come from assets held in major portfolios and so not covered by our numbers, but the dearth of junior development assets to feed the pipeline of those same majors should be a concern. And, finally, the database is starting to feel current inflationary pressures, as capex numbers from more recently published studies start to comfortably outstrip more dated work. The bulk of this report will focus on what we rate as the best investment opportunities based on, essentially, overall returns and the risk to those returns. We have presented the top assets for each commodity class covered. In addition, we will keep milking the database for insight throughout the year as it continues to grow and will be regularly publishing our findings through Mining Journal.
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