Selling a Mining Business

Most mining valuations start with mine life and risk, then work back to cash flow. Buyers usually triangulate (1) EBITDA/SDE adjusted for sustaining capex, (2) margin per ton and whether throughput is reliable, and (3) downside cases for strip ratio, recovery/yield, diesel or power, and closure. A shorter mine life can still command a strong price if margins are durable and permitted expansion or resource conversion is realistic. Use Rejigg’s free valuation calculator for a starting range, then tighten it with mine-life and closure assumptions.

They forecast the cash the site can generate before depletion, then back out what it takes to keep mining and to shut down properly. That includes sustaining capex, development and rising haul or strip, plus rehab, water work, monitoring, and any bond or LOC constraints. Most buyers focus on “runway certainty,” which comes from reconciliation history, a realistic strip ratio, and a credible path to permitted expansion. Even if you cannot extend mine life, clear end-of-life documentation can speed closing and reduce re-trading. Rejigg’s data room keeps mine-life and closure diligence in one place.

Sometimes, but it depends on the asset and lender appetite. Many lenders get cautious with reserve depletion, environmental exposure, bonding, and heavy equipment risk, so SBA-backed buyers can be more common in mining services (drilling, hauling, maintenance) than in reserve-based owner-operator mines. If SBA is in play, expect deeper review of financials, transferable contracts, and identifiable hard assets, plus clear disclosure of closure and permit risk. You can model scenarios with Rejigg’s SBA loan calculator before you commit to a structure.

Most well-run sale processes land in the 6–12-month range from go-to-market to close, and it can stretch longer if permit transfers, bonds, or title issues need third-party approvals. The timeline is usually driven by technical diligence, including reserve confidence, mine plan realism, environmental and closure review, and equipment condition. You can shorten it by staging disclosure and running a tight diligence checklist. Rejigg supports that workflow with buyer vetting, NDAs, and a built-in data room. See the due diligence checklist.

Most buyers want the technical backbone up front. That usually includes reserve or resource summaries (or your internal tonnage method), the mine plan, monthly production and throughput history, a cost-per-ton breakdown, a permit register, inspection and citation close-outs, closure and reclamation plans with bond documents, and a fleet and plant list with rebuild history. After that, expect customer and offtake summaries, key contracts, and any water or tailings monitoring records. Rejigg’s data room is built around staged sharing so you control who sees what and when. Start with the preparation guide.

They hit value two ways: buyers account for the closure work itself, and they account for capital tied up in bonding or financial assurance. Price pressure is usually highest when closure scope is unclear, such as legacy disturbance, long-term water treatment, or tailings obligations, or when bond replacement after a change of control is uncertain. You can often improve outcomes by showing how the bond is calculated, proving progressive reclamation with photos and sign-offs, and providing a closure estimate with a reasonable range. Rejigg’s data room keeps bond instruments and closure documentation organized and easy to share under NDA.

Often, they do not, and the details vary by jurisdiction and by permit. Many agencies require notice, a formal transfer application, updated financial assurance, or a change-of-control review, especially for water discharge, disturbance, and reclamation bonding. Buyers ask for a permit register because transfer timing can affect the deal structure, including delayed close, escrow, or interim operating agreements. If you can show clear transfer steps and recent compliance history, the process usually goes smoother. Rejigg supports controlled permit review with vetted buyers; see due diligence and closing.

Most blowups come from three areas: weak reserve or mine-plan support, permitting or closure surprises, and near-term capex shocks. Examples include no reconciliation history, optimistic strip assumptions, unaddressed bottlenecks, permit noncompliance patterns, bond or closure costs higher than expected, or deferred maintenance on single-point-of-failure assets with long lead-time parts. Deals also slip when land access is informal or key supervisors plan to leave. A staged diligence package helps prevent last-minute price cuts. Rejigg’s deal tracking helps keep questions organized and momentum high without losing confidentiality.

Working capital is usually negotiated around what the site needs to run normally at closing. In mining, that can include diesel, wear parts, liners, explosives where applicable, receivables timing, payables, and prepaid insurance or permit items. Working capital needs can swing with seasonality, stockpile builds, winter haul constraints, or planned shutdowns, so buyers often propose a normalized target with a post-close true-up. The cleanest approach is a monthly working capital trend tied to production. Rejigg’s offer tools help you compare working capital terms side-by-side across buyers.

Most buyers price the business as a going concern, but they still underwrite the fleet and plant separately because condition drives downtime risk and near-term capex. Expect requests for a detailed equipment list with hours, rebuild history, maintenance backlog, and any critical spares strategy, especially for crushers, conveyors, pumps, and primary load and haul units. If your rebuild cadence is documented and you can show downtime trends, you often protect value. Rejigg’s data room makes it easy to share fleet schedules and maintenance records securely, with permissions that fit different buyer stages.

Earnouts show up when there’s a gap between buyer and seller on forward assumptions, like recoverable tonnes, future strip, recovery or yield, or a permitting expansion. The earnout works best when it ties to measurable metrics such as tons shipped, realized price by product, verified reserve conversion, or specific permitting milestones, with clear measurement and audit rights. Disputes are common when the buyer changes the mine plan after closing, and the metric becomes hard to interpret. Rejigg helps you compare earnout structures across offers and keep timelines and definitions straight. See deal negotiation guide.

There isn’t a standard percentage. In mining, notes often come up when buyers see technical or regulatory uncertainty, such as reserve confidence, permit transfer timing, bonding replacement, or unclear closure scope, or when lenders cap leverage due to environmental exposure. If you consider seller financing, push for protections that match mining risk: covenants, collateral where available, reporting, and clear default remedies. Terms can also depend on whether the buyer is funding near-term rebuilds and spares. Rejigg helps you compare cash, seller notes, and earnouts side-by-side so you can spot risk hiding behind the headline price.

Buyers typically stress-test pricing and may shape terms to survive a downturn, such as more holdbacks, contingent payments, or tighter working capital and capex expectations. They will also dig into what you can control at the site: unit costs, indexation, contract terms, and whether sales are spot, indexed, or bid-based. Clear break-even math helps keep negotiations grounded. Most buyers also watch for maintenance deferral, since it can look like margin is being propped up at the expense of reliability. Rejigg helps you answer downside questions consistently across buyers so the story stays aligned.

Confidentiality can be tough in mining because pit maps, reserve hints, and customer pricing travel fast. A staged approach is usually safest: share a high-level operating snapshot first, then release detailed pit maps, reserve models, and customer-specific pricing after the buyer is vetted and under NDA. It also helps to watermark sensitive files and control download permissions, depending on the situation. Rejigg is designed for this workflow with pre-vetted buyers, digital NDAs, and permission controls in the data room. Start with finding buyers.

No, though some owners still prefer one for outreach and process management. Brokers often charge 5–10% for packaging, buyer contact, and running diligence. If you know your operation and can answer technical questions, you can run a process yourself with the right tools, especially when confidentiality matters. Rejigg provides buyer vetting, digital NDAs, a secure data room for technical and financial diligence, and a dashboard to track and compare offers, while letting you control staged disclosure. If you want a step-by-step path, use the Owner’s Guide.

Mining deals often hinge on purchase price allocation across land, equipment, and intangible value like permits, contracts, and goodwill. That allocation can change depreciation recapture, capital gains treatment, and state or provincial taxes. Buyers often push for more allocation to equipment to increase depreciable basis, while sellers usually prefer allocations that reduce ordinary income recapture, but the best answer depends on your entity structure and whether it’s an asset sale or equity sale. Retained royalties or mineral interests can add complexity. Bring in a tax advisor early and model a few allocations before signing an LOI, since changing it later is difficult.

Transitions tend to be hands-on because the buyer has to learn site reality. Many deals use 30–90 days of intensive handover with frequent touchpoints, followed by 3–12 months of on-call support, often with a retained superintendent or consultant. If the owner holds key relationships with regulators, landowners, or anchor customers, buyers may ask for a longer consulting period. The right length depends on how documented your routines are and how strong your bench is. Rejigg’s resources help you define scope and timelines clearly. See transition planning guide.

Look past enterprise value and line up the terms that typically move in mining. Compare cash at close, contingencies tied to permit transfer or bond replacement, working capital targets and true-ups, capex expectations, earnout definitions, and any escrow or holdbacks for environmental or closure items. Close probability matters too. A buyer who understands mines, funds spares and rebuilds, and has a credible safety culture often re-trades less and closes faster. Rejigg’s offer comparison dashboard puts these terms side-by-side so you can judge risk-adjusted value. See negotiate a deal.