Valuation of Mineral Projects Based on Technical and Financial Modelling

Market turbulence significantly affects the mining industry. While the intrinsic value of a mineral project is still a key consideration, understanding the interrelationship between technical and financial risk to truly understand the long term value of an asset, helps companies make better investment (or divestment) decisions. Companies that are able to secure debt finance for both development and acquisition of advanced projects have greater strategic flexibility. Understanding how debt impacts the valuation of projects allows for an objective approach to determining levels of gearing; this is relevant to both the investment banking and mining communities. The Valuation of Mineral Projects course is designed to address these issues.

This course is for professionals with a basic to intermediate understanding of the principles of the accounting cash flow model that wish to gain expertise in quantitative finance in the context of mining. Actual operating mine valuations are a central focus of the course. To gain the most out of the course, attendees should have had some exposure to the technical aspects of minerals and mining.

Attendees are expected to have their own laptop computers available for this course. Workshop sessions are an integral part of the course delivery. Use will be made of the IC-MinEval software, which automates the generation of Excel™-based spreadsheets to produce models for a wide range of mineral projects. These models can be used independently of the software once the course is completed.

At the end of the course, attendees will:

Know how to build a financial model using realistic assumptions and inputs such as a rate of production appropriate to the size of the resource, and associated capex and opex costs using CostMine data.
Understand the circumstances in which it is appropriate to set up models based on a straight discount rate basis vs a model that includes debt (in the latter case the approach to determining the appropriate level of debt will be explained).
Be able to analyse the financial performance indicators generated by the IC-MinEval software outputs and indicate the valuation that could be placed on the asset based on the output.
Be able to undertake a sensitivity analysis on key technical and financial variables. Particular attention will be given in the course to why sensitivity on variables such as mining dilution should not be considered.
Appreciate the role of financial models in identifying those technical variables that have the greatest impact on financial performance and then back-engineering that to the corresponding technical risk.
Have worked through a variety of case studies that are based on real projects.
This course is characterized by dynamic interaction between presenter and delegates that promotes inter-delegate professional dialogue.

Previous courses presented in Vancouver, London, Johannesburg and Stockholm have received wide participation from major finance and mining companies, providing an opportunity to bring together professionals with common concerns in this area.

In addition to the presentation slides, attendees will receive a copy of the book Metals and Energy Finance, authored by Prof. Buchanan.