MINING-SPECIFIC COST AND PROJECT CONTROL
Know What Every Tenement and Project Costs
From exploration commitments to construction WBS control and ongoing operations.
CLASSIC TENEMENT/PROJECT COSTING
Connect finance, exploration, construction and operations around one consistent, auditable view of expenditure
Classic Mining ERP captures expenditure where it happens – purchasing, invoices, inventory, payroll, banking and journals – and directs it to the tenement, project, WBS activity or operating cost requirement that caused it.
THE CHALLENGE
Costs should be easy to capture, allocate and report
When tenement costs are spread across finance systems, invoice files and geology spreadsheets, the result is familiar: late allocations, inconsistent coding, limited commitment visibility and a rush to assemble statutory expenditure reports.
A BETTER WAY
Classic allows the user to receive a scanned invoice via email, Approve the invoice and Code the expenditure, allowing cost allocation across multiple tenements \ across companies, by percentage , $ amount or preset allocation tables.
Allows you to report on your projects in many ways – by tenement, project, phase, requirement, period, supplier and Form 5 category.
One mining-specific costing structure
Class, Department and Group codes add further reporting dimensions, while Form 5 classifications can be attached at the detailed requirement level.
TENEMENT / PROJECT / WBS
The primary cost object: a tenement, AFE, construction project, maintenance job or operating area.
PHASE
The is the activity being actioned on the tenement /projects or WBS: EXPLN: Admin – Drill – Tenmt Mgmt WBS – Civils – Plant – Admin OPS – Operations vs Maint Costs.
COST REQUIREMENT
The detailed cost bucket: contractor, labour, materials, equipment, assay, fuel or consumables.
Designed for the way mining organisations work
Exploration
Track annual commitments, anniversary periods and detailed exploration activities.
Construction
Control approved budgets, commitments, actuals and forecasts through a structured project WBS.
Operations
Manage recurring departmental, production, maintenance and site operating expenditure.
Maps to the General ledger in multiple ways (keep your GL lean and meaningful)
The structured costing in the project system ensures that the right account is selected for the relevant activity/budget saving time is reallocating as less entry errors.
Control Acct (by one)
Map all project s to a single Capex or P & L accouns.
Control Acct (by some)
Discern between different projects and code to the GL by area or project.
Control Acct (many to many)
Each expense code can have its own control account. This allows a summing of the expenses by natural account to the GL.
Capture the cost at its source
The Tenement/Project Costing module operates as the detailed costing layer within Classic Mining ERP. In an integrated environment, operational transactions flow into the same cost structure with minimal re-entry.
Commitments
Requisitions and Purchase orders provide early visibility of planned goods and services and ensure that approval processes are followed. Reports reflect the Actual vs Budget plus Committed Costs to present Budget Variances.
Actual costs
Supplier invoices are scanned and electronically approved. If not on a PO then the recipient can allocate the costs on the invoice, these, stock issues, payroll and bank transactions build the cost record.
Adjustments
General Ledger journals and controlled reallocations support after-the-event correction. If costs cannot be directly allocated then general cost projects can be established to be reallocated at month end.
TRANSACTION-LEVEL TRANSPARENCY
Move from a high-level tenement total to the underlying supplier invoice, stock issue, labour cost or journal – supported by posting reports and audit detail.
CONSTRUCTION AND OPERATIONS
Manage mine construction through a controlled WBS
During project development and mine construction, the same costing engine can be structured around a Work Breakdown Structure. The project becomes the primary cost object, with phases and requirements representing WBS control accounts, work packages and detailed cost categories.
Approved baseline
Hold the authorised estimate or budget by project, WBS phase and detailed requirement.
Committed cost
Bring purchase orders and contracts into the cost picture before supplier invoices are received.
Actual and forecast
Compare actual expenditure, commitments and forecast-to-complete against the approved budget.
Project
mine development, processing plant, camp, power, water, roads or other capital program.
WBS phase
engineering, procurement, earthworks, civils, structural, mechanical, electrical or commissioning.
Cost requirement
labour, contractor, materials, equipment, freight, overhead or another controlled cost category.
Management Visibility
Report month-to-date, year-to-date and whole-of-project expenditure, identify major cost variances and retain the transaction trail behind each WBS cost.
Continue into ongoing operating cost management
When construction moves into production, Classic can retain the same integrated platform and use the costing structure for recurring operational control. Sites, departments, processing areas, maintenance activities or cost centres can be established as operating jobs with period budgets and forecasts.
Site operations
Capture mining, processing, camp, logistics, environment and administration costs.
Maintenance
Accumulate labour, materials, equipment, subcontract and overhead costs by work activity.
Budget control
Compare monthly actuals with budget and forecast while retaining whole-of-life history.
PLAN. MONITOR. REPORT.
Control expenditure across the complete project lifecycle
Classic supports complementary planning views, allowing each organisation to manage exploration, construction and operations within the same integrated costing framework.
Whole-of-life estimate
build a bottom-up estimate by phase and requirement for an exploration program, AFE or capital project.
Period budget and forecast
compare actual, budget and forecast by fiscal period and retain the history across the life of the tenement.
Annual commitment
monitor the annual or anniversary-year expenditure obligation for each tenement.
Variance management
identify major cost exceptions, project commitments and forecast completion costs before they become surprises.
Support for anniversary and Form 5 reporting
Built into the costing structure
Form 5 detail codes can be linked to cost requirements, enabling Anniversary Reports and WA Form 5 reports to be produced from posted expenditure data.
The system also maintains current-period, annual and lifetime expenditure totals and can bulk-advance tenement anniversary dates. Statutory outputs should always be reviewed against current requirements and the organisation’s configured version.
Reporting for every level
Management
Project summaries, commitments, budget/forecast and major variance reporting.
Finance
WIP analysis, capital project control, transaction extracts and reconciliation reports.
Operations
Tenement, WBS, maintenance and operating cost analysis from summary to transaction.
WHY CLASSIC MINING ERP
Turn tenement and project costing into a controlled business process
One source of truth
Finance and exploration teams use the same posted data instead of reconciling separate spreadsheets.
Consistent coding
Reusable tenement structures and estimates improve comparability across projects and reporting periods.
Better visibility
See commitments, actuals, budgets and forecasts across tenements, WBS projects and operations.
Auditability
Retain the path from reported expenditure back to detailed source transactions and posting reports.
Flexible accounting
Support immediate expensing or capitalised exploration/WIP treatment according to approved policy.
Scalable structure
Move from exploration to construction and operations without rebuilding the costing system.
THE OUTCOME
From exploration to production - without changing systems
Classic Mining ERP connects tenement and project costing with finance, procurement, inventory, payroll, fixed assets, maintenance and operational approvals. As a project advances from field activity to construction and production, the business retains one integrated platform and one consistent source of information.
More timely cost information. Greater transparency. Stronger expenditure control. Less dependence on spreadsheets.
See the system in action
Talk to Classic Information Systems about your tenement structure, construction WBS, operating cost reporting and approval requirements. We can demonstrate how Classic Mining ERP supports mining companies from early-stage field programs through project development, construction and ongoing operations.