It is clear that Whittle Consulting could be a great support for those seeking to do acquisitions in the mining business. If it can help you get a better sense of the potential value of a business than the current owners, then it's worth considering. The fact that Whittle methods are not widely used now suggests great potential.
Apparently, the Whittle Consulting methods have the biggest impact on valuation of businesses with a large amount of variability in the geological conditions of the mine. Variability provides opportunity to make the hard decisions. That may not be comforting, but it is useful to those looking for the biggest delta in valuation.
As in my tweet from the midst of day #1 at the Money Mining seminar with Whittle Consulting in Vancouver, there are a lot of ways you could use the Whittle Consulting methods to help you shop for a mine. For one, you could seek out companies that have the most to gain from optimization. That’s important, but most acquisitions of gold mining companies seem to be done by other gold mining companies. As such, there are a whole bunch of other issues to consider.
Consider a mining company that survives a near-death experience. New owners change the management and they take the plunge with Whittle Consulting. Things go so well that the company starts considering acquisitions. They make a short list of targets and consider how each would fit with their existing business. Are they better together?
This mining company faces a fascinating optimization problem for how best to integrate multiple mining businesses. There is a profound degree of uncertainty around the terms of the acquisition, but I believe there is still much insight to be found using Whittle methods in such cases.
With all the talk of the "poor performance of the gold mining industry", there must be some big opportunities out there for speculators to shake things up. I wonder if the talk will translate into action. Will we see a $1B fund mandated to acquire control of mining businesses and optimize value through implementation of Whittle methods?
Find out more on all this here: http://www.whittleconsulting.com.au/codeless_portfolio/ivanhoe-platreef/
