Test Pilot Pro­duc­tion (TPP) is a комплекс of activ­i­ties that com­bines sci­en­tif­ic research and lim­it­ed indus­tri­al oper­a­tions aimed at study­ing and exploit­ing min­er­al resources or oth­er nat­ur­al resources.

Test Pilot Pro­duc­tion of min­er­al deposits rep­re­sents a tran­si­tion­al stage from geo­log­i­cal explo­ration to com­mer­cial extrac­tion.

Activ­i­ties relat­ed to TPP are reg­u­lat­ed by the Reg­u­la­tion on the Pro­ce­dure for Orga­niz­ing and Con­duct­ing Test Pilot Devel­op­ment of Min­er­al Deposits of Nation­al Sig­nif­i­cance. TPP is car­ried out on the basis of a Test pilot pro­duc­tion plan, devel­oped for the sys­tem­at­ic study and eval­u­a­tion of the min­er­al deposit’s poten­tial and deter­mi­na­tion of its indus­tri­al attrac­tive­ness.

Test Pilot Pro­duc­tion of a sub­soil area is con­duct­ed to clar­i­fy geo­log­i­cal char­ac­ter­is­tics of the deposit, deter­mine the fea­si­bil­i­ty of fur­ther indus­tri­al devel­op­ment, and assess the eco­nom­ic attrac­tive­ness of the sub­soil area.

Clar­i­fi­ca­tion of geo­log­i­cal char­ac­ter­is­tics involves detailed inves­ti­ga­tion of the deposit struc­ture, rock prop­er­ties, size and con­cen­tra­tion of min­er­als or oth­er resources. These data are nec­es­sary to eval­u­ate the deposit’s poten­tial, deter­mine its suit­abil­i­ty for indus­tri­al devel­op­ment, and Reserves Cal­cu­la­tion.

After clar­i­fi­ca­tion of geo­log­i­cal fea­tures, an assess­ment of the fea­si­bil­i­ty of fur­ther indus­tri­al devel­op­ment is car­ried out. This includes analy­sis of phys­i­cal, tech­ni­cal, envi­ron­men­tal, and eco­nom­ic fac­tors influ­enc­ing the pos­si­bil­i­ty and effi­cien­cy of resource extrac­tion. Con­sid­er­a­tions include extrac­tion costs, trans­porta­tion and pro­cess­ing expens­es, avail­abil­i­ty of nec­es­sary infra­struc­ture, envi­ron­men­tal con­straints, and socio-eco­nom­ic impacts.

Eco­nom­ic attrac­tive­ness assess­ment of the sub­soil area devel­op­ment includes analy­sis of finan­cial indi­ca­tors such as devel­op­ment and extrac­tion costs, pro­ject­ed rev­enues from resource sales, project prof­itabil­i­ty, risk eval­u­a­tion, and oth­er fac­tors affect­ing eco­nom­ic effi­cien­cy. Based on this assess­ment, deci­sions are made regard­ing fur­ther indus­tri­al devel­op­ment. If results demon­strate eco­nom­ic via­bil­i­ty and suf­fi­cient prof­itabil­i­ty, full-scale indus­tri­al devel­op­ment pro­ceeds.

Deci­sion-mak­ing also takes into account risks asso­ci­at­ed with deposit devel­op­ment, includ­ing geo­log­i­cal risks, tech­no­log­i­cal chal­lenges, finan­cial risks, and oth­er fac­tors that may affect project suc­cess. Risk assess­ment results help estab­lish mit­i­ga­tion mea­sures and devel­op risk man­age­ment strate­gies.

Eco­nom­ic eval­u­a­tion is a crit­i­cal stage in deci­sion-mak­ing con­cern­ing indus­tri­al devel­op­ment of min­er­al deposits. It deter­mines finan­cial fea­si­bil­i­ty and con­sid­ers var­i­ous fac­tors influ­enc­ing project suc­cess, includ­ing sus­tain­able devel­op­ment require­ments.

TPP offers numer­ous advan­tages, pri­mar­i­ly by reduc­ing risks and costs in sub­se­quent devel­op­ment stages through more accu­rate infor­ma­tion about deposit char­ac­ter­is­tics. Deter­mi­na­tion of reserve vol­umes enables eval­u­a­tion of eco­nom­ic via­bil­i­ty and cal­cu­la­tion of invest­ment pay­back peri­ods. Analy­sis of min­er­al qual­i­ty deter­mines indus­tri­al usabil­i­ty and mar­ket demand. TPP also pro­vides an oppor­tu­ni­ty to con­duct an Envi­ron­men­tal Impact Assess­ment and devel­op mea­sures to min­i­mize neg­a­tive envi­ron­men­tal effects, which is essen­tial for sus­tain­able devel­op­ment and com­pli­ance with envi­ron­men­tal stan­dards.

Test Pilot Pro­duc­tion of min­er­al deposits pro­vides the nec­es­sary infor­ma­tion for informed deci­sion-mak­ing regard­ing fur­ther extrac­tion. It ensures effi­cient resource uti­liza­tion, reduces risks, improves prod­uct qual­i­ty, and guar­an­tees com­pli­ance with envi­ron­men­tal stan­dards.

TPP is con­duct­ed over a three-year peri­od.

Dur­ing TPP, as a tran­si­tion­al stage from geo­log­i­cal explo­ration to extrac­tion, lim­it­ed extrac­tion oper­a­tions may be per­formed to fur­ther eval­u­ate and con­firm the deposit’s poten­tial. How­ev­er, the vol­ume of extract­ed raw mate­ri­als is lim­it­ed to five per­cent of the total min­er­al reserves used to deter­mine the ini­tial price of the spe­cial per­mit for sub­soil use.

After extrac­tion of min­er­al raw mate­ri­als dur­ing TPP, the com­pa­ny or orga­ni­za­tion con­duct­ing the works must com­ply with estab­lished rules regard­ing sale or fur­ther use. This may include sell­ing mate­ri­als on the open mar­ket or con­clud­ing agree­ments with buy­ers in accor­dance with applic­a­ble leg­is­la­tion and per­mit con­di­tions. Addi­tion­al­ly, upon sale of extract­ed min­er­als, the enter­prise is required to pay sub­soil use tax in accor­dance with the Tax Code of Ukraine. The tax rate and pay­ment pro­ce­dure are estab­lished by rel­e­vant legal reg­u­la­tions.

After suc­cess­ful com­ple­tion of Test Pilot Pro­duc­tion and obtain­ing all required per­mits and licens­es, the project tran­si­tions to the stage of actu­al min­er­al extrac­tion. This phase involves prac­ti­cal imple­men­ta­tion of the approved devel­op­ment project and exe­cu­tion of extrac­tion oper­a­tions. Dur­ing extrac­tion, reli­able man­age­ment of min­ing process­es is ensured, includ­ing com­pli­ance with occu­pa­tion­al safe­ty require­ments, envi­ron­men­tal pro­tec­tion stan­dards, and estab­lished qual­i­ty stan­dards.