Project Committee Mandate for Major Capital Projects
After a Project Initiation Document is approved by the Board of the Company, the Board may establish a Project Committee (the "Committee"), which, if established, shall include:
- At least two Independent Directors within the meaning of applicable and regulatory standards, who will constitute the majority of members. At least one of the two Independent Directors should have direct experience in delivering major capital projects;
- The Senior Responsible Owner, who shall be the CEO unless the Board otherwise determines;
- The Project Director or COO
Committee members and the Committee Chair will be appointed and removed by the Board. The Committee will meet at a frequency consistent with the Project rhythm as determined by the members of the Committee and with a goal to hold at least a majority of meetings in person.
A "major capital project" or "Project" is a project for which the estimated total capital cost requires Nevsun Board approval.
A "Project Initiation Document" ("PID") outlines the business opportunity and includes the estimated cost, schedule and financial outcome of the Project.
Duties and Responsibilities, and Authority
- The Committee will review and approve all policies related to the development of the Project.
- The Committee will ensure that industry-leading practices are applied to the process for the development of the Project, including initiation, study, technical development, engineering, execution and review.
- The Committee will recommend to the Board for approval the authority levels for Project decisions and expenditures.
- The Committee will review the Project at the various approval tollgates and recommend to the Board whether the Project is ready to proceed to the next stage of development.
- The Committee will review, recommend and approve key Project decisions, which will include, at a minimum, team, study budgets, capital cost estimates, project milestones, schedule, the selection of mining methods, process flow sheets, major equipment commitments, EPCM/EPC, execution methodology, and independent reviewers.
- The Committee will review, recommend and approve any other decisions that have major potential to affect study budget, capital costs, financial outcomes, schedule or project or company reputation.
- The Committee will implement a Project Assurance program. This may include the appointment of organizations or individuals to ensure that the Project is properly planned, organized, executed and controlled. Project Assurance may also include assessment of technical decisions, project budget, estimated capital costs, schedule and financial outcomes.
- The Committee will ensure that the person who is deemed to have single point accountability for day-to-day Project activities has the necessary authority for successful Project delivery.
- Review this mandate at least annually and recommend to the board of directors any necessary amendments.
Responsibilities of the Committee Chair
The Committee Chair is responsible for the management and effective performance of the Committee and provides leadership to the Committee in fulfilling its mandate and any other matters delegated to it by the Board. The Committee Chair's responsibilities include:
- working with the CEO and the Corporate Secretary to establish the frequency of Committee meetings and the agendas for meetings;
- presiding over Committee meetings;
- facilitating the flow of information to and from the Committee and fostering an environment in which Committee members may ask questions and express their viewpoints;
- reporting to the Board with respect to the significant activities of the Committee and any recommendations of the Committee; and
- taking such other steps as are reasonably required to ensure that the Committee carries out its mandate.
This Project Committee Mandate was adopted by the Board on December 8, 2017.
NEVSUN RESOURCES LTD (the "Company")
APPENDIX TO PROJECT COMMITTEE MANDATE
SPECIFIC TO THE TIMOK PROJECT
Board – Ian Ashby and Ian Pearce
Senior Responsible Owner – CEO
Project Director – Jerzy Orzechowski
CFO – Ryan MacWilliam
PID – Project Initiation Document
In this case, the PID for Timok originated by way of the proposed acquisition of Reservoir Minerals, the owner of the Timok Project until June 2016. The proposal to acquire Reservoir was entirely based upon the due diligence and evaluation of the Project by management, with support from various technical and financial advisors. A summary case for the acquisition and intended follow-on investment was presented to the Board and approved on April 22, 2016, the culmination of rigorous due diligence over the prior six months.
Evidence of the Board approval is contained in the April 22, 2016 minutes of the Board meeting. The recommendation by management is at the end of a six-page summary document, supported by a detailed risk and opportunity assessment which in turn was supported by a detailed model and associated due diligence carried out by various third party experts and all fundamental areas of concern for the development of the Project.
In the interests of not re-inventing the wheel or re-creating additional paper work, a further PID is not considered necessary. Both the above referenced summary and detailed appendix are submitted to the Project Committee for this purpose.