Solved by verified expert:Write 800 words case analysis.Doubled space.4 pages. I have attached all the requirements and instructions. Please read them very carefully and make sure similarities no more than 10 per cent. Thank you!!
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Case Analyses (I need only a total of 1000 words.)
Case Analysis Paper Format
Each case analysis paper submitted should include five sections: (try to keep the word
counts in each section the same!!!!!!)
1. What is the key problem or challenge facing the firm that you will try to resolve
2. Your external analysis (the industry and economic environment) check the sample
if you’re not sure.
Do not copy and paste, or simply summarize up the whole information into
paragraphs. I need personal thoughts, also critical thinking
Making anaylsis by using one of the below models
PESTLE analysis
To check how it works – https://www.nibusinessinfo.co.uk/content/pestle-analysisexample
Porter’s five forces analysis
To check how it works https://en.wikipedia.org/wiki/Porter%27s_five_forces_analysis
Example:
3. Your internal analysis (the firm’s internal resources and capabilities using model)
Do not copy and paste, or simply summarize up the whole information into
paragraphs. I need personal thoughts, also critical thinking
Value chain analysis
To check how it works – https://www.strategicmanagementinsight.com/tools/valuechain-analysis.html
4. Two mutually exclusive alternatives that solve the problem
A) list out the two mutually exclusive alternatives
B) list out the pro and cons for each
C) financial and operational implications considered
example:
5. Your recommended chosen alternative course of action and justification for the
alternative you have chosen
A) What you recommend
B) The limitations of your recommend alternative
C) How to overcome these limitation
D) Implications considered
Please check this before you write the essay. I will double check this after receiving
your work, if one of them is missing there is the possibility I will need revision. So
kindly make sure you do cover all sections in the initial work. Also, 1000 words is
enough, there is no need to do extra work.
A guideline for case analysis is provided separate to this syllabus will be available on
the first day Blackboard is opened. Case analysis can be no longer than two- to twoand-a-half pages (single-sided, single spaced, 12-point Times New Roman, 1”
margins throughout). Use the five headings above (those in bold!) for your case
submissions. Up to two additional Appendix pages can be used for supporting
information, references, tables or figures. Each case should be submitted to
SafeAssign on Blackboard and should be submitted in WORD. Please note that I
want you to only refer to the case when completing a case analysis and write-up. Do
NOT use any other external references for ANY case analysis.
For the exclusive use of S. Bai, 2018.
9 -9 1 8 -5 0 9
FEBRUARY 5, 2018
ROBERT J. DOLAN
SUNRU YONG
Rosslyn Resource: Monetization and Sales Strategy
For 14 years, Grace Quinn, co-founder and CEO of Rosslyn Resource, had guided her firm to success
in the high-risk business of the mining industry. A geologist by training, Quinn had focused her
company on early-stage exploration of potential mineral deposits and would then sell off sites where
Rosslyn’s study indicated potential. Buyers, typically larger companies, then conducted additional
studies to assess whether the capital expense of developing a mine at the site was justified. Rosslyn
typically received an upfront fee and then a small, 2–3% royalty on any revenues generated by the
mine, if developed.
From its start in 2003, Rosslyn Resource invested heavily in developing proprietary, innovative
equipment that would make exploration cheaper and faster. For example, its Pioneer X vehicle,
introduced in 2005, was built with off-road capabilities to carry out induced polarization (IP) surveys
in tricky terrains. Rosslyn was also an innovator in equipping unmanned aerial vehicles, or drones,
with electromagnetic (EM) sensors. This dramatically cut the cost of traditional EM surveys, which
typically required helicopters, and enabled Rosslyn to justify the studies much earlier in the exploration
phase. These equipment innovations were complemented by Rosslyn’s work in leveraging large data
sets to generate inversions, or three-dimensional maps of the subsurface. With the right geophysical
data gathered, Rosslyn’s proprietary algorithms allowed it to create sophisticated models of large
areas. These helped it pinpoint the most promising exploration targets, providing cost-effective, highprobability targets, identified well in advance of any digging. Rosslyn’s edge allowed it to quickly
identify the best opportunities. Quinn explained, “When we pair our exploration equipment with the
experience and instincts of our geologists, we get better insight into new opportunities—earlier and at
lower cost. Making the right bets early on, when acquiring mineral rights is still cheap, gives us a crucial
advantage.”
By 2017, the company was earning royalties from six projects that had become operating mines. The
mines were spread across Canada and produced copper, zinc, nickel, cobalt, and potash. Collectively,
they generated over $9 million of revenue per year for Rosslyn, providing over $3 million in annual
operating cash flow that Rosslyn reinvested in new exploration. Exhibit 1 offers an overview of
Rosslyn’s financial performance.
________________________________________________________________________________________________________________
HBS Professor Robert J. Dolan and writer Sunru Yong, HBS MBA 2007, prepared this case solely as a basis for class discussion and not as an
endorsement, a source of primary data, or an illustration of effective or ineffective management. Although based on real events and despite
occasional reference to actual companies, this case is fictitious and any resemblance to actual persons or entities is coincidental.
Copyright © 2018 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685,
write Harvard Business Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. This publication may not be digitized,
photocopied, or otherwise reproduced, posted, or transmitted, without the permission of Harvard Business School.
This document is authorized for use only by Shiwen Bai in WPC 480 Capstone 2 Spring taught by Roland Burgman, Arizona State University from March 2018 to May 2018.
For the exclusive use of S. Bai, 2018.
918-509 | Rosslyn Resource: Monetization and Sales Strategy
Recently, the data from the firm’s exploration of the Two Rivers site (which it wholly owned) near
Quebec, Canada, produced a favorable assessment of the site’s prospects. Waldorf Global, a large
mining company already operating near the Two Rivers site, had reviewed Rosslyn’s data and was
interested in securing rights to the site under Rosslyn’s typical monetization model of an upfront fee
plus a royalty in the 2–3% range. Quinn’s first instinct was to continue with Rosslyn’s proven product
strategy of selling rights at an early stage. She explained, “My initial view was that we should work
with Waldorf Global and do what we have done before—sell the mineral rights in return for a royalty,
which in this case would be bigger than anything else we have done. In the meantime, we could
continue doing what we do best and build our portfolio of projects.”
However, she listened with interest as Jamison Sharra, the Vice President of Business Development,
and others in the company argued for making a bigger bet on the Two Rivers asset and simultaneously
evolving the company’s overall strategy. Sharra argued:
We are very good at what we do, but should we do this same thing forever? If we
choose a joint venture route instead of our traditional selling-off strategy, we could invest
directly in the project itself and retain more of the upside. If the Two Rivers project works
out, it would be both a financial and a strategic game-changer for Rosslyn. By
participating in the project with a partner, we would also begin developing capabilities in
mine construction, operations, and customer management that we are missing today. If
we stick to our current strategy, we will always be leaving money on the table.
With Quinn’s authorization, Sharra began to search for an appropriate partner with testing, mine
construction and operation, and customer management skills. Sharra shared Rosslyn’s data with
potential partner Crest Minerals and, in turn, Crest expressed interest in a joint venture deal. Under
the Crest deal, Rosslyn would cost share in the required further analysis and mine construction (if
justified), but would gain an ongoing 12% of cash flow rather than just 2% of revenue.
Given the significance of the Two Rivers project and a possible change in business model, Quinn
would be presenting a recommendation to the board of directors next week. Should she recommend
Rosslyn stick with the “sell rights early” model (going with Waldorf) or switch to keeping a hand in
operations and sharing in the profits of selling iron ore (with Crest)?
Introduction to Mining Exploration
The mining industry, with an estimated $2 trillion in global revenues in 2015, extracted minerals
and ores such as metals, gemstones, coal, potash, and rare earth elements. It provided critical inputs
for many industries. For example, power generation relied on coal and copper mining. Iron ore was
used in steel production, which fed manufacturing and infrastructure development. Precious metals
and diamond mining were inputs for the retail sector, while the agriculture industry used potash and
phosphate. These inputs were usually extracted as ore by surface or underground mining on land or
by dredge mining in water. This ore was processed to separate the valuable minerals and metals from
the surrounding waste material, which was usually disposed of or redeposited nearby.
Potential mining projects were usually classified along two dimensions: the degree of geological
assurance and the degree of operational feasibility. A mine often started as a “geological concept” or
possible exploration target. As further study improved a potential developer’s knowledge of the site,
the resource could be reclassified in successively more valuable ways, as follows:
2
BRIEFCASES | HARVARD BUSINESS SCHOOL
This document is authorized for use only by Shiwen Bai in WPC 480 Capstone 2 Spring taught by Roland Burgman, Arizona State University from March 2018 to May 2018.
For the exclusive use of S. Bai, 2018.
Rosslyn Resource: Monetization and Sales Strategy | 918-509
Inferred resource: The quantity and grade of the deposit were estimated based on limited
sampling and geological evidence. The feasibility of economical operation was not determined
for an inferred resource.
Indicated resource: Quantity, grade, and other characteristics were estimated with confidence
sufficient to begin a pre-feasibility study of the deposit, including mine planning and economic
viability.
Measured resource: Quantity, grade, and other characteristics were determined within an
acceptable margin of error and sufficient certainty to conduct a detailed feasibility study.
A resource was classified as a reserve through an assessment of its economic viability, processing,
infrastructure, and legal, environmental, and social impact. Depending on the depth of knowledge and
degree of confidence in a resource’s feasibility, it could be considered either a probable reserve or a
proven reserve. Changes in market conditions or extractive technologies could change the economic
viability—and therefore the feasibility—of a project over time.
The path from identifying a target to determining its feasibility as a productive mine required
increasingly rigorous and expensive exploration and analysis. In the early stages, an exploration target
was identified for prospecting, surveying, and analysis of existing data. On-site studies could involve
sampling or use of specialized equipment to measure the magnetic and electrical properties of surface
and underground rocks. These explorations would result in an estimate of the potential and grade of
the deposit. Most projects then followed a series of milestones corresponding to specific studies. The
methods and claims of these studies were governed by similar industry standards across markets, and
needed to be certified by a qualified geologist. Each milestone study increased the degree of confidence
in the properties of the site and enabled a potential investor to judge the potential and risks of a project.
Three successively in-depth investigations were:
Preliminary assessment: Also known as a scoping study, this assessment provided a technical
and economic analysis to increase understanding of the potential project. It usually did not
provide sufficient insight to classify the find as a measured or indicated resource, but
demonstrated whether progress to a pre-feasibility study was justified.
Pre-feasibility study: This study was an evaluation of the project, including the selected
method for mining and processing, and a financial analysis based on assumptions of technical,
engineering, legal, environmental, and other factors. A pre-feasibility study could provide
enough data to classify a find as a measured resource or convert a resource to a reserve.
Feasibility study: This was a comprehensive study of the deposit in which all factors of the
project were evaluated. This evaluation encompassed an analysis of the ore concentrates and
their recoverability, planning of the mine and associated infrastructure, identification of waste
removal options, and a projection of financing needs. The lifecycle of the proposed mine was
projected, from initial excavation through reclamation of the land. The study provided
sufficient rigor and detail to inform the decision to finance and commence the project.
The industry rule of thumb was that 1,000 geological anomalies for which an explorer would stake
a claim might yield only 50 to 100 advanced exploration projects, including pre-feasibility studies. This
would in turn lead to 10 feasibility studies, of which only one would become a productive mine. Actual
success rates varied significantly by mineral, geography, and exploration company. At each milestone,
the decision-makers of a mining company could decide whether to invest in the next step or to sell
HARVARD BUSINESS SCHOOL | BRIEFCASES
3
This document is authorized for use only by Shiwen Bai in WPC 480 Capstone 2 Spring taught by Roland Burgman, Arizona State University from March 2018 to May 2018.
For the exclusive use of S. Bai, 2018.
918-509 | Rosslyn Resource: Monetization and Sales Strategy
rights to others to exploit the site. A “no go” decision usually meant the project was abandoned or put
on hold until market conditions or extraction and processing technology changed its attractiveness.
With a positive outcome from the feasibility study, the company developed the mine or sold the
mineral rights. If the mining company developed the project, work would begin to access the ore body.
This effort would include construction of the mine itself, as well as any supporting infrastructure,
processing plants, and equipment installation. The time required from initial excavation to
commissioning a fully operational mine ranged from one to several years. The mine company operated
the mine until it was no longer economical to do so. For the most productive mines, the period of
production could be decades. Once the mine was no longer economically viable, it would be closed
and reclamation of the area would commence (see Exhibit 2 for a summary of the life cycle of a mine,
including activities and risks).
Mining Companies and the Junior Business Model
The mining industry broadly comprised two types of companies. The majors were large global
companies with significant capital and the wherewithal to develop major mines on their own. Most
majors were private-sector businesses, such as Vale ($27 billion in 2016 revenues) and Rio Tinto ($8
billion in 2016 revenues), but some were large state-owned enterprises such as Coal India Limited or
Shenhua in China. Rosslyn belonged to the second type of mining company, known as the juniors,
which were smaller and had less capital and fewer operational capabilities. Juniors usually focused on
exploration—identifying targets and advancing them toward a feasible project, but then selling off
rights to a major. The major could buy the property outright or obtain mineral rights in return for a
royalty arrangement with the junior. Royalties were usually negotiated as a percentage of the price per
ton that the project produced over a defined period. Juniors sometimes moved into commercial
production by raising capital for the most promising projects or, more often, by partnering with other
companies in a joint venture. Such larger juniors—sometimes described as intermediates—were thus no
longer pure-play exploration companies.
Each step in the value chain had different risks and costs. Prospecting to identify exploration targets,
the earliest stage, was a low-cost endeavor. It could be done with limited workforce, little equipment,
and just enough cash to claim mineral rights in a specific area. A company that became involved earlier
in the process would buy low, as the probability of a given site becoming an operating mine was low.
With every step, if the enhanced geological understanding was favorable, the risks decreased, and thus
the project became more valuable. A company that became involved at a later stage—such as after a
successful pre-feasibility study—would have to invest significantly more to acquire a meaningful stake.
Investing in the project at a later stage also required more capital because each subsequent step became
more capital-intensive. Advancing a find usually required geophysical analysis, sediment sampling,
and some level of drilling, the costs for which could be millions of dollars. Actual development of the
project into a productive mine could require investment of billions of dollars.
For a junior, even bringing a project to the pre-feasibility stage could prove too capital-intensive.
The overriding concern for most juniors was raising just enough capital to proceed with exploration so
the value of the project could be increased. The challenge was to do so without getting overly diluted
and thus giving up too much a share of future profits. Many juniors turned to capital markets in
London, Johannesburg, Sydney, and Toronto to raise funds. They would pitch to investors using
preliminary data on the quality and size of the mineral deposit. Juniors would present evidence of their
strategic edge, such as the expertise and experience of their geologists, the promising data from their
exploration, or the location of their project near a proven reserve.
4
BRIEFCASES | HARVARD BUSINESS SCHOOL
This document is authorized for use only by Shiwen Bai in WPC 480 Capstone 2 Spring taught by Roland Burgman, Arizona State University from March 2018 to May 2018.
For the exclusive use of S. Bai, 2018.
Rosslyn Resource: Monetization and Sales Strategy | 918-509
Most juniors hoped to develop a claim into a compelling project, then sell out to a major for an exit.
There were well over a thousand publicly-traded juniors in Canada and several hundred in Australia.
It was a risky business. Their historical track record was poor: about half would fail or find themselves
with so little cash that they were effectively defunct. One cause of failure was that the junior “drilled
and killed” a project, meaning exploration had led to a clear “no go” decision.
Rosslyn Resource and the Project Generator Model
Rosslyn Resource was a particular type of junior, i.e., a project generator. Like other juniors, it found
and advanced opportunities for sale to other mining companies. The fundamental difference between
a project generator and most juniors was the former’s portfolio approac …
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