Streamlining Financial Planning to Maximize ROI in Mining Operations

Background

Our client is a growth-oriented gold mining company engaged in the exploration, development, and operation of gold mines. With a portfolio of eight mines across North and South America, the company prioritizes operational excellence and low-cost, high-quality gold production. Cost management and forecasting are critical to disciplined capital management across its diverse asset base and operations. However, the company faced significant challenges in aligning financial planning with operational realities. Their existing mine planning approach relied on disconnected spreadsheets and outdated models, making it time-consuming to forecast costs, optimize resource allocation, and adapt to market fluctuations. Each mine operated with varying degrees of maturity, mining methods, and processing techniques, further complicating standardization and financial visibility. To address these challenges, they required a modernized, connected planning tool and global alignment on forecast methods and standards. Keyrus developed an Anaplan solution that replaced fragmented cost planning processes with a unified, standardized framework based on activity-based budgeting (ABB) principles. This transformation provided greater accuracy, consistency, and collaboration across all mines, enabling data-driven decision-making at both the site and corporate levels.

Challenge

Effective financial planning in the mining industry requires balancing operational complexity, cost control, and strategic decision-making. However, mining companies face significant hurdles in achieving standardization and efficiency across multiple sites, each with unique geological, operational, and regulatory challenges. Our client’s ability to forecast costs and align financial strategies with real-world operations was hindered by numerous obstacles, including the following: • Planners were all performing recurring ABB (Activity Based Budgeting) tasks in disparate spreadsheets, wasting hundreds of hours each month. • Siloed Planning & Forecasting: Finance and operations worked in isolation, leading to inefficiencies and misalignment. • Volatile Commodity Pricing: Market swings made it difficult to project cash flow and manage cost variances. • Complex Capital Expenditures: Long-term mine investments lacked a streamlined budgeting and approval framework. • Regulatory & ESG Compliance: Reporting obligations required more transparency and agility. • Diverse Site Operations: With eight sites across North and South America operating in three different languages and using different source systems, standardization and governance were challenging. • Varying Mining Methods & Engineering Activities: Different mining techniques and site-specific engineering activities led to inconsistencies in planning and operational requirements. • Ore Body Variability: Engineering activities had to account for differences in bench, lithology, and ore body characteristics, complicating accurate equipment and consumable cost forecasting. • Processing Complexity: Fluctuations in ore quality and type impacted processing efficiency, reagent costs, fixed maintenance costs, stockpiles, and recovered ounces, adding further complexity to financial planning.

Approach

Keyrus employed a phased approach to modernize and standardize financial planning across the client’s mining operations, ensuring alignment between financial and operational data: • Proof of Concept (POC) & Phased Implementation: Keyrus initiated a POC, followed by a phased rollout based on functional areas, allowing for a structured examination and standardization of data and planning methods across all eight sites. • Activity-Based Budgeting: A standardized global financial planning process was implemented, accommodating different mining methods and engineering activities such as drill & blast, stoping, backfill, load & haul, and underground development. • Flexible Cost Driver Framework: Keyrus established a process to generate cost drivers specific to pits, benches, lithology, or other geological characteristics, enabling precise planning of consumable costs, equipment hours, and other operational expenses. • Processing & Forecasting Optimization: The model accounted for variations in ore processing methods, including run-of-mine (ROM) heap leach, crushed heap leach, and plant operations, allowing financial forecasts to integrate tonnage, recovery, and grade metrics to predict costs related to maintenance, reagents, and consumables. • Technology Integration: The solution unified data from Deswik (mine planning software), multiple ERP systems, and fleet management software, ensuring seamless integration between operational and financial planning.

Key results

Benefits

• Created alignment across eight sites to standardize data expectations. • Increased accuracy of consumable costs, leading to better cost control and forecasting. • Improved planning synchronization between engineering and maintenance disciplines. • Standardized financial planning methodology across all eight sites, ensuring consistency. • Enabled a user base across four countries, three languages, and six functions through virtual and on-site training, with live human translations and translated documentation for each discipline. • Enhanced financial and mine operations analysis and reporting, providing deeper insights into operational performance. • Improved rigor around forecast cycle execution and accuracy, driving better decision-making. • Streamlined corporate review of financials for each site, improving transparency and efficiency.

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