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Feasibility Studies
The use of the term feasibility study and the accuracy associated with such studies is often misunderstood. RFMC draws attention to some terms and accuracies, in use within the industry, reproduced below from the Cost Estimation Handbook, for the Australian Mining Industry, (The Australasian Institute of Mining and Metallurgy (AusIMM), 1993). Due acknowledgment is given to the references and the additional components are well worth reading in the Handbook. The publication is available from The AusIMM.
It is strongly recommended that this information be considered when requesting and commissioning such studies. Discussion on this aspect, the concepts in the Handbook and the commissioning of feasibility studies are welcomed at RFMC.
In Chapter 1, Using The Handbook, Michael Noakes elaborates on some terms commonly used in cost estimating and their associated accuracy.
"Estimation Terminology"
"Commonly the name assigned to a given study type implies the accuracy of the study. Renoylds (1990) recommends the use of four levels or classifications of engineering completion to define the study (as opposed to the estimate per se) as shown in Table 1.1"
"Similarly Frew (1990) refers to four levels of "estimation" accuracy as shown is Table 1.2."
The terminology used in Tables 1.1 and 1.2 are considered clear and consistent.
In chapter 11, Predevelopment Expenditure, Neil Cusworth outlines a comparison of quality aspects coupled with associated accuracies and contingencies for estimates at various predevelopment stages and tabulates that in Appendix 11.2.
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