Interim CFO for mining services in a down commodity cycle.

01 Why the seat changes when the cycle does

A seated CFO at a mining services group built through an up-cycle is, more often than not, the person who built the cost base for that cycle. The financing structure, the equipment-finance covenants, the joint-venture reporting, the overhead layer — they are products of the seat that bought them, and that is not a criticism of the seat. It is what the seat was hired to do at the time. The political problem is that the same person cannot easily unwind their own decisions inside the same board. The cost of admitting that the cost base needs a full reset is too high; the alternative — incremental cuts that never quite catch up to revenue compression — is what gets boards to call an interim.

Across the three engagements I have run, the trigger has been the same: revenue down 20-35% year on year, EBITDA down 50-70%, covenant headroom inside one quarter of breach. The seated CFO is exhausted, has lost some board confidence, and is usually relieved to be working alongside an interim with a mandate to do the unpopular work. The Alvarez & Marsal CFO Services framing — "rapid stabilization plus performance improvement" — is exactly the shape of the engagement. The mining-specific overlay is that the cost base is asset-heavy: an equipment-finance book, a workforce roster, a joint-venture obligation set, and a closure-provision schedule that all need to be re-examined in parallel.

The advisory firms that publish on this space — Alvarez & Marsal, FTI Consulting, Deloitte, KPMG, EY, BDO — converge on the same 90-day cadence. Days 1-30: diagnose and stop the bleeding. Days 31-60: build the operating reset. Days 61-90: lock in the new rhythm. The 30-60-90 structure is industry-standard for a reason; what changes in mining services is the specific work that lands inside each band.

02 Days 1–30: cash, covenants, concentration

The first month is not a finance project. It is a tempo change. Cash gets pulled to a weekly rhythm; the 13-week forecast is rebuilt from scratch — not adapted — because the assumptions inside the old one are tied to a price deck that no longer exists. Covenant tests are re-run forward across two cycle-low scenarios. Top-five customer concentration gets stress-tested for the case where the worst-paying counterparty stops paying. The companion 13-week template we publish for mining services is the starting point; the assumptions inside it are not.

None of this is dramatic. It is the work that the seated CFO almost always intended to do, but did not have the political room to insist on. The interim seat unlocks that room precisely because everyone in the building knows the seat is temporary. ZRG Partners' first-90-days CFO playbook calls this out explicitly: the early diagnostic phase carries more authority when it is bounded in time, because the organisation is willing to accept findings from an interim that it would resist from the seated executive.

The weekly cash cadence

A 13-week cash model on its own is not the work. The work is the cadence around it: a Monday cash call, a Wednesday variance review, a Friday lender-pack draft if the covenant test is inside two quarters. The model is rebuilt against actuals every week. By week four, the model is forecasting cash within 3-5% of actual for the rolling four-week window. That accuracy is the gate that opens the next conversation with senior lenders — the one where the seated CFO's "we are managing through it" narrative gets replaced with a numbered forecast that the lender can use to size waivers.

Covenant headroom across two cycle-low scenarios

Standard practice: model the leverage covenant (net debt to EBITDA), the interest coverage covenant, and any minimum liquidity floor across a base case (revenue flat to current) and a downside case (revenue down a further 15% from current). The downside case must include the second-order effects — the customer-concentration loss, the JV pull-back, the equipment-finance margin step-up — that the base case typically misses. If the downside case breaches inside four quarters, the covenant conversation moves from "monitor" to "negotiate" inside the engagement.

Customer-concentration stress

Mining services revenue concentration runs higher than most operating finance teams admit on a normalised basis. Top-five customers at 60-80% of revenue is common; top-three at 40-55% is not unusual in single-region drilling or contract-mining shops. The first-30 stress is to model what happens if the lowest-margin and slowest-paying of the top five suspends activity for two quarters. That is the case the lender will model on their own once the covenant conversation opens; better that the interim CFO arrives at the meeting having already modelled it.

03 Days 31–60: cost base re-architecture

Mining services cost structures are deceptively fixed. The variable layer — fuel, consumables, sub-contractor labour — moves with revenue. The semi-fixed layer — equipment finance, residual workforce, the corporate overhead that does not turn off when a project ends — is where the down-cycle margin gets murdered. Days 31 through 60 are spent finding the semi-fixed layer that everyone has accepted as fixed for the last seven years, and asking the question nobody has been positioned to ask: what does this look like at 65% of last year's revenue, holding the up-cycle service standard?

Equipment finance

Most mining services groups carry equipment fleets at debt-to-revenue ratios that work in an up cycle and break in a down one. Refinancing the fleet — extending tenor, releasing equity, walking away from non-core assets — is the single highest-impact lever and the one boards are least comfortable greenlighting. The interim seat is built to drive that conversation past the comfort threshold. Emeco is the cleanest public example of fleet rationalisation as a recurring operating discipline rather than a one-time event: in weak markets Emeco has historically used asset sales, fleet resizing, refinancing, and deleveraging as standard moves, with utilisation and financing cost actively managed each cycle. That is the template, not the exception.

In our own engagements, the equipment-finance lever has produced 8-14% of cash release inside the first 90 days. The mechanics are unremarkable — sale and leaseback on under-utilised units, walking back the OEM-financed portion of the fleet to a shorter-tenor revolver, releasing equity from owned units that have aged into their final third of useful life. The Wingspire / Turner Mining $150M equipment financing in 2024 is a public benchmark for the structured-equipment lender appetite that exists outside the major banks; private contractors with $40-200M of fleet routinely have access to the same lender pool when the seated CFO has the bandwidth to run the process.

Workforce reshape

Not a cut. A reshape. Most groups have a residual technical workforce that survives one cycle on retainer-style economics because the senior operators know the value of holding the bench. The reshape question is whether that bench is the right shape — by skill, by site, by tenure — for the cycle ahead, not the one behind. Mader Group's labor-light support model is the canonical contrast: remote maintenance, responsive labor deployment, tight overhead-to-revenue control, and a willingness to move workforce intensity with the demand curve. Asset-heavy peers that hold workforce across a full down-cycle tend to underperform Mader-style peers by 200-400 basis points of EBITDA margin over the cycle, on the data we see.

JV reporting cleanup

Most mining services groups have at least one JV that has been carrying overhead allocations the seated CFO would rather not re-examine. The interim seat is the right moment to re-examine them. The work product is unglamorous — a JV-by-JV reconciliation of management charges, equipment-cross-charges, and closure-provision allocations against the JV agreement itself. The gap between the agreement and the practice is consistently 5-15% of the JV's reported EBITDA contribution to the parent, and the direction of the gap depends entirely on whose CFO drafted the original allocation. The lender does not care about the politics; they care about the number.

04 Days 61–90: capital structure

By day 60, the operating numbers should be moving. The third 30 days are about the capital structure: the senior debt, the equipment finance, the working-capital facility, the off-balance-sheet liabilities — closure provisions, JV obligations, royalty deferrals — that nobody quite owns. The interim CFO maps every dollar of capital against every dollar of obligation and presents one page that the board uses for every external conversation for the next four quarters.

What the lender pack looks like

The lender pack assembled in days 61-90 has four pieces. First, the 13-week cash forecast, now operating with under 5% rolling-four-week variance against actual. Second, the covenant schedule out four quarters across base, downside, and recovery cases, with the assumed amend-and-extend mechanics flagged. Third, the cost-base rebuild summary — what changed, what it cost, what it saves, with the timing. Fourth, the customer-concentration map with the top-five revenue exposure and the contractual visibility into FY+1 and FY+2. The pack reads in one sitting and is the artefact the lender will reference for the next four quarterly reviews.

Covenant renegotiation mechanics

Across 2024-2026, the covenant amend-and-extend pattern in mining services lending has been consistent. Leverage covenants typically step up 0.5-1.0× for 12-24 months. Interest coverage floors are lowered, sometimes with "deemed EBITDA" treatment for contracted backlog. Tenor on the RCF or term loan extends 1-3 years, priced with a 50-100 bps margin step-up and upfront/back-end fees. Working capital facilities pick up additional LC/bonding sub-limits. Equity cures are codified into the covenant package — the sponsor or the board commits to inject capital if EBITDA breaches a defined floor. The Independence Contract Drilling pre-pack in December 2024 sits at the harder end of the spectrum (senior secured note equitisation, noteholder-funded exit financing) and is increasingly the template lenders point to when sponsors resist the softer amend-and-extend mechanics earlier in the cycle.

BDC, EDC, and the patient-capital layer

In the Canadian mining services credits we have worked with, the BDC and EDC layers are routinely under-used in the seated-CFO phase. BDC subordinated debt or quasi-equity is patient enough to rebalance the senior leverage line, and EDC export-receivables guarantees can unlock working capital tied up in slow-paying overseas mine clients. The interim seat is usually the right moment to surface these facilities — they require six to ten weeks of preparation and are seldom the seated CFO's priority once a quarterly covenant test is two months away.

05 The quiet killer — closure provisions and JV obligations

The piece of the cost base that gets the least attention in the up cycle and the most attention when a sale process opens is the closure-and-decommissioning provision schedule. Under IAS 37 and IFRIC 1, a mining services group books closure obligations when it is more likely than not (greater than 50%) that an outflow will be required and the amount can be reliably estimated. Under US GAAP ASC 410 and ASC 450, "probable" is a higher hurdle (generally interpreted as greater than 70%). The practical consequence is that an IFRS reporter shows more on-balance-sheet closure provision; a US GAAP reporter shows more off-balance-sheet contingency that an acquirer's buy-side QoE team will dig out and re-base.

In our experience the under-provisioned closure liability is the single most expensive item that a down-cycle sale uncovers. The acquirer's QoE team will walk the obligation universe — statutory rehab requirements, contractual demob clauses in master services agreements, JV-attributable closure costs, environmental remediation commitments — and reconcile it to the booked provision schedule. The gap is consistently 5-15% of headline EBITDA on a recurring-cost basis once it is annualised over remaining mine life. At 6-8× EBITDA for a mining services group in a down-cycle process, that 10% adjustment is approximately 0.6-0.8 turns of effective valuation lost in diligence. The interim CFO who lands this work pre-process gives the next CFO a starting position the buyer cannot reopen.

Onerous contracts under IAS 37

The second adjacent quiet killer is the onerous-contract test. A long-term mining services contract that flipped from marginal to loss-making — commodity-indexed rates that the operator priced in 2021 against a 2023-2025 commodity deck, diesel pass-through caps that did not survive the rate environment — is technically an onerous contract under IAS 37 and triggers an obligation to provision for the unavoidable fulfilment cost above the economic benefit. Under US GAAP, losses on firmly committed onerous contracts are generally not recognised unless another standard requires it. Buy-side QoE teams normalise EBITDA for the onerous contract margin gap whether it has been booked or not, and the adjustment is typically 3-10% of headline EBITDA depending on commodity exposure.

Equipment fair value vs book

The third adjacent killer is depreciation policy. In a down cycle, the temptation to extend useful lives and lift residual values to suppress depreciation and avoid impairment is real, and seated CFOs under board pressure to defend EBITDA often take it. The buy-side QoE re-bases depreciation against OEM guidance, market norms, and the seller's own historical disposal experience. The adjustment runs 4-8% of EBITDA on an under-depreciated fleet. The interim CFO who pre-empts this by aligning the depreciation policy with realistic useful lives and residual values takes the conversation off the buy-side table before it opens.

06 The handoff

An interim CFO mandate that succeeds ends in a handoff, not an extension. The successor seat — permanent CFO, finance director, controller-promoted — is built into the engagement from week one. The interim seat is partly there to absorb the political cost of the work; the successor seat inherits a finance organisation that is two cycles ahead of where it started.

In our practice, the handoff document is a single sheet: what we changed, why, what the next CFO must protect, what they can revisit. It is the work product the board returns to most often after the engagement closes. The sheet has six lines: the covenant package and its triggers; the cost-base rebuild and its protected savings; the equipment finance structure and its tenor; the JV reporting cleanup and its allocations; the closure-provision schedule and its assumptions; the lender relationship state and the next two scheduled touch-points.

Fee structures for these engagements vary. The market range in North America, the UK, and Australia for an experienced mid-market mining-services interim CFO is approximately $35,000-$60,000 per month for a stressed turnaround mandate, rising to $60,000-$100,000+ per month for sponsor-backed distressed situations. Day rates run $2,000-$5,000+. Success fees, where structured, run $25,000-$250,000+ tied to refinancing, amendment, sale, or turnaround milestones — sometimes 0.5%-2% of value unlocked in larger engagements. The Olaplex public-company interim CFO engagement is the most visible high-end benchmark; that level of fee is not normal for the $60-240M revenue mid-market segment that mining services interim seats typically operate in.

07 Fractional CFO vs interim CFO — the seat distinction

A note on the seat structure, because it gets conflated. A fractional CFO is a part-time, ongoing engagement — typically 2-5 days per month, sitting on top of an internal finance team that owns the day-to-day. The fractional seat is the right answer for a junior mining producer or services group with a clean balance sheet that needs senior CFO judgement at a board cadence and cannot economically support a full-time CFO. Our companion post on fractional CFO seats for junior mining producers is the longer read on that shape of engagement.

An interim CFO is full-time, time-bounded, and almost always inside a stress event. Three to six months is the typical window; six to nine months for the harder cases. The fee profile is heavier, the political authority is higher, and the deliverable is the handoff to a successor seat rather than an ongoing advisory cadence. The two seats are not interchangeable, and one of the cleanest filtering questions for a board considering which to engage is whether the work in the next 90 days requires day-to-day execution authority. If it does, the seat is interim. If it does not, the seat is fractional. Sponsor boards routinely conflate them and end up with the wrong seat.

08 Three questions for this quarter

1. If commodity prices stay where they are for four more quarters, where does the covenant test break — and what is the runway from today to that test?
2. Which line of the semi-fixed cost base would the board not let you touch six months ago, and is that still the right answer with the rate environment 170 basis points lower than it was at the Q1 2024 peak?
3. Who is the named successor to the CFO seat by name, and what does the handoff document need to say about your cost base, your closure provisions, and your JV reporting for them to inherit it cleanly?