We review dozens of African mining opportunities every year, from operating mines seeking growth capital to greenfield licences with little more than a geologist's hunch. Most fail our screening. Not because they are fraudulent, though some are, but because the story and the evidence do not match. Here is the framework we use, shared in the hope that it saves someone an expensive lesson.
Start with the licence, not the geology
The first question is never "how much metal is there?" It is "who actually holds the right to mine it, and until when?" Verify the licence directly with the mining cadastre, check the expiry date and renewal conditions, and confirm that the entity selling the opportunity is the entity on the licence. Then check the environmental approvals, which in most jurisdictions are separate documents with their own expiry dates. A surprising number of deals fall apart at this first step, which costs almost nothing to perform.
Treat resource claims as claims
There is a wide spectrum between "estimated reserves" in a seller's presentation and a resource statement prepared to an international reporting code. Both have their place, but they are not the same thing, and the price should reflect the difference. When we see high grades quoted, we ask three questions. Who took the samples? Which laboratory analysed them, and is it accredited? And do the sample locations actually represent the ore body, or just its best outcrop? Grades of 6 percent copper or 10 grams per tonne gold do exist, we have seen both verified, but extraordinary numbers require ordinary evidence: assay certificates, sample maps, and chain of custody.
Cheap data before expensive data
Modern due diligence has a wonderful cost curve if you sequence it properly. Satellite multispectral analysis, historical exploration records, and geophysical surveys can rank a licence's potential for a small fraction of the cost of drilling. We increasingly advise clients to fund a remote sensing and desk study phase first, and let those results decide whether drilling dollars are justified. The goal of early diligence is not to prove the deposit. It is to earn the right to spend the next tranche.
The commercial questions that get skipped
Technical work gets most of the attention, but the deals that disappoint usually fail commercially. Before investing, be sure you understand the route to revenue: who will buy the product, at what specification, and through which port or border. Understand the capital sequence, because "US$5 million to production" often means US$5 million to the next raise. Understand the partners, especially in joint venture structures where operational control and economic interest can be very different things. And visit the site. There is no substitute. We have seen deals transformed, in both directions, by a single day on the ground.
Diligence is an investment, not a cost
The pattern behind every good mining investment we have been part of is the same: a motivated seller, a verifiable asset, and a buyer who did the work. The work is not glamorous. It is cadastre searches, lab certificates, site visits, and awkward questions. But in this market it is also the highest-return activity an investor can fund.
We conduct technical and commercial due diligence on African mining assets for investors worldwide. If you are evaluating an opportunity, we are happy to give you a first read.