SELECTION AND ENTRY INTO PROMISING ASSETS FOR THE EXTRACTION AND PROCESSING OF SOLID MINERALS
A Mergers and Acquisitions (M&A) transaction typically involves the following main steps:
⦁ Negotiation.
⦁ Conclusion of an agreement of intent.
⦁ Conducting due diligence of the target company.
⦁ Structuring an M&A transaction based on the results of Due Diligence.
⦁ Implementation of the transaction (including all registration and corporate procedures).
Conducting Due Diligence of mining mines/assets for the purpose of mergers and acquisitions (M&A) is a detailed analysis of the business and all its aspects conducted by the buyer to assess the risks and opportunities associated with the proposed transaction.
In the context of M&A, the Due Diligence process includes the following aspects:
⦁ Technical analysis: technical and technological assessment of the state of production facilities, assessment of the mineral resource base of the asset, determination of the potential for the development of the enterprise.
⦁ Financial analysis: assessment of the financial condition of the company, including financial statements, debts, profitability, working capital and other financial indicators.
⦁ Legal Analysis: Reviewing the company’s legal documentation, including contracts, licenses, lawsuits, intellectual property, and other legal aspects.
⦁ Operational analysis: analysis of the company’s operational processes, assessment of its market position, competitiveness, technical equipment and other operational aspects.
⦁ Risk and Opportunity Analysis: Identification of potential risks and opportunities associated with the transaction and their impact on the company’s future operations.
⦁ Personnel analysis: assessment of the composition of personnel, the qualifications of key employees, working conditions, talent pools and other aspects related to human capital.
⦁ Strategic analysis: assessment of the strategic feasibility of the transaction, as well as its compliance with the strategic goals of the buyer.
The results of due diligence affect the decision to complete the transaction or refuse it, allow you to determine the terms of the transaction, including the price and structure of the transaction.
Risks that Due diligence mitigates:
⦁ Buying a business at an unreasonably high price.
⦁ Loss of money due to the acquisition of an illiquid asset.
⦁ Failure to meet the declared production indicators.
⦁ Recognition of the transaction as invalid by law.
⦁ Loss of intellectual property;
⦁ Imposition of a penalty or seizure on property.
⦁ Prosecution, including tax or criminal liability.
⦁ Occurrence of losses due to the actions of competitors.
⦁ Litigation, etc.