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Short Course

Valuation of Mineral Projects based on Technical and Financial Modelling

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Qualifies for CMS

Certification in this course is eligible for credit towards a Certificate in Mining Studies from leading mining universities.

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  • Format: Short Course Tool Tip
  • Application: Management - Risk - Financial Tool Tip
  • Audience Level: Professional | Technical Tool Tip
  • Registration Fee: $2850.00 Tool Tip
  • Early Bird: $2565.00 Tool Tip
  • Enrollment: Included Tool Tip
  • Dates: Tool Tip
  • Location: Vancouver, BC, Canada Tool Tip
  • Duration: 4 days
  • CEUs: 3.2 (32 PDHs) Tool Tip
Valuation of Mineral Projects based on Technical and Financial Modelling

Course Summary

Background

Current market turbulence has increased the need to understand the interrelationship between technical and financial risk. The key consideration is the intrinsic value of a mineral project. Where current market conditions undervalue the true long-term worth of assets, which is then reflected in low share prices, strategic planning can identify opportunities. The ability to secure debt finance for both development and acquisitions for advanced projects allows greater strategic flexibility. Understanding how this impact on the valuation of projects also permits 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.

Course Aim and Structure

This course aims to enhance an understanding of the business of mining. Use will be made in the workshop sessions of the IC-MinEval and IC-CoalEval software provided by IC-FinEval: Excel™-based spreadsheet programmes automating all stages required to produce models for a wide range of mineral projects.

The course will be delivered by Dennis Buchanan, Emeritus Professor and Senior Research Fellow at Imperial College London.  He is also Director of the MSc Metals and Energy Finance programme, a joint Imperial College Business School and Faculty of Engineering degree. The theme of Valuation of Mineral Projects was launched in 2006 by EduMine and has run successfully up to three times a year since then.  The course content for the current delivery is based on previous courses with significant additions and upgrades, including in-depth coverage of discounted cash flow modeling and its application.

Full use is made of workshop sessions as an integral part of the course delivery. Particular attention is given during the workshops to demonstrating how financial models should be set up with a rate of production appropriate to the size of the resource.  Realistic associated capex and opcosts are determined with reference to CostMine.   The circumstances in which it is appropriate to set up models based on a straight discount rate basis compared to including debt are outlined. In the latter case the approach to determining the appropriate level of debt will be explained.

Analysis will be undertaken during the workshop sessions on the financial performance indicators generated and there will also be an indication of the valuation that could be placed on the asset. Sensitivity analysis will be undertaken on key variables. Particular attention will be given to why sensitivity on variables such as mining dilution should not be considered. Consideration will also be given to the role of financial models in identify those technical variables that have the greatest impact on financial performance and then back-engineering that to the corresponding technical risk.

Discussion will be aimed at enhancing the level of understanding demonstrated in the analysis of the financial performance indicator generated and the degree to which conclusions can be supported by the assumptions made.

Pre-Course e-Learning

Prior to the course, registered delegates have access to the online e-learning material consisting of an introductory course titled An Introduction to Modelling Metal Project Finance.

Certificate in Mining Studies

This course qualifies for four days of short course credit for the Certificate in Mining Studies (CMS), a continuing education program of accredited short courses, webcasts and online courses for lifelong learning in mining, supported by University of British Columbia and University of Arizona. more details »

Continuing Professional Development (CPD)

This course meets the requirements for formal CPD activity for most Canadian provincial associations and US state boards and may contribute the equivalent in hours towards your CPD requirement. more details »

Who Should Attend?

The course will be of particular interest to mining analysts, fund and asset managers, bankers, engineers responsible for development planning, exploration managers and other specialists in the valuation of mineral projects.

It will also be of interest to industry-based geologists and engineers. 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. With the emergence of private equity funds aimed at financing junior mining, the course will be relevant to entrepreneurs needing to understand the qualifying framework that such funds use in evaluating projects.

Professor Dennis Buchanan

Dennis is Emeritus Professor of Mining Geology and Senior Research Fellow at the Royal School of Mines, Imperial College, where he is responsible for the MSc course in Mineral Deposit Evaluation and running short courses for industry. He has worked as a Mining Geologist in both gold and platinum mines in South Africa.

He is founder and Chairman of the Imperial College start-up company, IC Fineval Ltd, which provides financial evaluation, risk assessment and decision making software. He has 28 years experience teaching mining geology, mineral exploration and mineral project appraisal. He has also had wide experience as a consultant in the exploration, evaluation and exploitation of mineral deposits, acting as an expert witness and in running short courses for industry.

Provisional Schedule

This course is divided into four sessions with following topics:

Day 1: 5 November 2013, from 8:15am – 5:00pm Pacific Standard Time
Time Session

8:15 – 08:45am

Registration

8:45 – 9:00am

Welcome and Profile of Participants

9:00 – 10:00am

1.1 Financial Modelling

  • Discounted cash flows.
  • Time value of money.
  • Discount rates.
  • Indicators of economic viability (NPV, IRR and payback).
  • Maximum cash exposure.
  • Sensitivity analysis.
  • Rate of production, effect of changing cut-off grade and optimisation of NPV.

10:00 – 11:00am

1.2 Workshop

  • DCF exercise based on annuity tables.
  • Review of spreadsheet-based solution.
11:00 – 11:30am Break

11:30am – 1:00pm

1.3 Demonstration of IC-MinEval

  • Case history of gold operation.
  • Setting up base case.
1:00 – 2:00pm Lunch

2:30 – 3:30pm

1.4 Analysis of Risk and Uncertainty

  • Treatment of multivariant systems.
  • Application to Monte Carlo simulation techniques.
3:30 – 3:45pm Break

3:45 – 5:00pm

1.5 Tax and Company Structure

  • Tax models.
  • Taxation agreements.
  • Carry forward provisions.
  • EPT.
  • Royalties.
  • Depreciation allowances.
  • Management accounts and audits.
Day 2: 6 November 2013, from 9:00am – 5:00pm Pacific Standard Time
Time Session

9:00 – 10:00am

2.1 Value Creation in Mineral Projects

  • The Life Cycle of mineral projects.
  • Drivers.
  • Stages of planning and execution.
  • Relationship between risk and valuation.

10:00 – 11:00am

2.2 Feasibility Studies

  • Role of a prefeasibility study.
  • Scope of a full technical feasibility study.
  • Role in raising equity.
  • Role in securing debt finance.
  • Engineering, Procurement, Construction and Management contracts.
11:00 – 11:30am Break

11:30am – 1:00pm

2.3 Resource Estimation

  • Concepts of geological continuity.
  • Resource block estimates.
1:00 – 2:00pm Lunch

2:00 – 3:30pm

2.4 Resource Estimation

  • Geostatistics.
  • Cut-off grades.
  • Reserve and resource definitions.
  • Interface between envelopes of mineralization, resource blocks and mine design.
3:30 – 3:45pm Break

3:45 – 5:00pm

2.5 Scale of Mining

  • Relationship between costs and scale of mining.
  • Valuation of long life projects.
  • Key differences between the type of project that would be material to a major compared to the junior sector.
Day 3: 7 November 2013, from 9:00am – 5:00pm Pacific Standard Time
Time Session

9:00 – 10:00am

3.1 Scenario Analysis – Base Metals

  • Illustration of extractive metallurgy through the hydrometallurgy and pyrometallurgy of copper ores.
  • Oxide versus sulphide ores.
  • Solvent extraction and electro-winning.
  • Net Smelter Returns.
  • Negotiating an off-take agreement for a project that produces a polymetallic concentrate.

10:00 – 11:00am

3.2 Project Finance

  • Case history of an open pit copper project.
  • Relationship between cost of debt, taxation, Balance Sheet, profit and Loss account and cash flow.
  • Calculating the cost of debt and equity.
  • Determining the weighted average cost of capital and optimum level of gearing.
11:00 – 11:30am Break

11:30am – 1:00pm

3.3 Scenario Analysis – Base Metals

Workshop session – Underground Operation

  • Engineering concepts behind block caving mining method.
  • Technical risks of the side-wall failure in the open pit on dilution in subsequent block caving operations.
  • Implications for the reserve tail and project finance.
  • Multi-partner scenario analysis:
    • determining relative return for different stakeholders as a function of investment contribution.
1:00 – 2:00pm Lunch

2:00 – 3:00pm

3.4 Scenario Analysis – Industrial Minerals

Workshop session – Iron ore

  • Chemistry of primary minerals.
  • Price based on dry metric tonne units as a function of iron content.
  • Product specifications and penalties.
  • Beneficiation and yields as a function of iron content.
  • Infrastructure:
    • power,
    • transport of ore (rail and slurry pumping), and
    • port facilities.
  • Optimisation of NPV against yield.
3:30 – 3:45pm Break

3:45 – 5:00pm

3.5 Scenario Analysis – Industrial Minerals

Workshop session – Mineral Sands

  • Mineralogy of mineral sands.
  • Mining methods, environmental impact and optimisation of NPV.
Day 4: 8 November 2013, from 9:00am – 5:00pm Pacific Standard Time
Time Session

9:00 – 10:00am

4.1 Scenario Analysis – Industrial Minerals

Workshop session – Diamonds

  • Geological settings and pricing.
  • Alluvial deposit case history.
  • Evaluation of projects.
  • Instability of DCF models.
  • Primary kimberlitic projects.

10:00 – 11:00am

4.2 Scenario Analysis – Industrial Minerals

Workshop session – Bauxite

  • Value chain from bauxite through to alumina and then aluminium.
  • Environmental impact of bauxite mining.
11:00 – 11:30am Break

11:30am – 1:00pm

4.3 Environmental Review

  • Site visits.
  • Impact assessment.
  • Baseline conditions, impacts and mitigation.
  • Management and monitoring.
1:00 – 2:00pm Lunch

2:00 – 3:30pm

4.4 Scenario Analysis – Energy

Workshop session – Coal

  • Geology and classification.
  • Evaluation.
  • Coking Coal.
  • Role of volumetrics in setting up a financial model.
3:30 – 3:45pm Break

3:45 – 5:00pm

4.5 Surface coal operations

  • Justification of an investment in equipment.
  • Set up IC-CoalEval open pit scenario.
  • Funding based on debt and equity.
  • Sensitivity analysis.

How to Register

To register yourself, click the ‘Register Now’ button and complete the online registration form.
To register on behalf of someone else, or to register groups of 2 or more, please contact us; discounts may apply.

Questions? Please contact EduMine: +1 604 683 2037 or edumine-support@infomine.com and we will get back to you during regular business hours, Monday - Friday, 8:00am to 5:00pm Pacific Time.

Participants are expected to have their own laptop computers available for this course.

Fees

The full fee for the four day program is CAD 2,850 + tax. The fee covers the lecture, a comprehensive set of course notes, access to EduMine pre-course e-learning, a certificate of attendance, use of IC-MinEval software, and catered breakfasts and lunches including light refreshments. The fee does not cover accommodation.

Early Bird: there is a 10% discount if you register at least 30 days prior to the course start date. A 10% discount is offered for groups of 3 or more OR if you provide your Annual EduMine subscription User ID at time of registration. The maximum discount that can be applied is 20%.

Venue

The course will be held at the Metropolitan Hotel Vancouver, 645 Howe Street, Vancouver, B.C., V6C 2Y9, Canada. Detailed arrival instructions will be sent to all participants 10-14 days prior to the commencement of the course.

Hotel Accommodation

If you need to make hotel reservations, we recommend the following hotels. Each hotel is within a 5-15 minute walking distance of the course venue and provides convenient access to transportation and 'Canada Line' rapid transit to/from Vancouver International Airport.

When making reservations make sure to ask for the "InfoMine corporate rate".

  • Executive Hotel Le Soleil, named by Resorts & Great Hotels Magazine as "One of the Top 100 Hotels in the World," has been recipient of the American Automobile Association's (AAA) 4-Diamond rating since its opening. Executive Hotel Le Soleil differentiates itself with a unique mixture of stylish sophistication and old world elegance. Featuring 119 luxury boutique lodging accommodations, it is conveniently located across the street from the InfoMine/EduMine offices. Experience Copper Chimney restaurant's award winning chefs and enter into an exotic world of Indian fusion food.
    The Hotel Le Soleil website link is: http://www.hotellesoleil.com
  • Metropolitan Hotel Vancouver: make yourself at home in one of the Metropolitan Hotel's 197 elegantly appointed guestrooms and suites. Enjoy the Metropolitan's 24-hour Business Center; fully-equipped Health Club with indoor pool, whirlpool, sauna, and squash court; and the Diva at the Met restaurant, a AAA 4-Diamond rated restaurant featuring Vancouver's finest cuisine, celebrated Chef's table, and distinguished wine cellar. The Metropolitan has received a "4 Green Keys" rating through the Green Key Eco-Rating Program.
    To book your room online with our personal InfoMine corporate rate link go to: http://private.metropolitan.com/VDZKNSEDL2.
    The Metropolitan Hotel's website link is: http://www.metropolitan.com/vanc/
  • Vancouver’s most art-full hotel, the Listel Hotel is a cultural tourist’s dream and a showcase for eco-friendly practices. Packed with original art, this 129 room boutique hotel boasts comfortable, contemporary furnishings and a perfect location in the West End, the city’s most eclectic shopping and dining neighbourhood. The hotel is also home to Forage, a pioneer in sustainable restaurant operations and home to Chef Chris Whittaker’s award-winning farm-to-table fare. Forage is known for its small plate dining and BC wine and craft beer on tap.
    The Listel Hotel's website link is: http://www.thelistelhotel.com.
    To book the InfoMine corporate rate (inclusive of breakfast), please email reservations@thelistelhotel.com
  • Days Inn Downtown Vancouver Hotel: experience the modern comforts of the historic full-service business hotel located in the core of downtown Vancouver. Their West Coast hospitality will ensure your stay is as comfortable as possible. Discover true value at the Days Inn Downtown Vancouver Hotel as they provide FREE Wireless Internet, Bottled Water / Tea & Small Business Center. InfoMine’s corporate rate includes $10.00 breakfast voucher, best available room at check-in, Day Pass to Health and Fitness Centre around the corner.

    The Days Inn Downtown website is: http://www.daysinnvancouver.com/.
    To book the InfoMine corporate rate, please mention code C030 and call directly to +1-604-681-4335.

Continuing Professional Development (CPD)

Short courses earn PDH/CEU credits for engineers in provinces and states that have CPD requirements. EduMine is an approved provider of continuing education by the Authorized Provider Commission of The International Association for Continuing Education and Training (IACET).

For more details, check provincial or state requirements.

Certificate of Attendance

Provincial/state regulations for CPD require that you attend the entire short course and that you complete an evaluation at the end of the course. Your Certificate of Attendance, with earned PDH, is issued on completion.

Terms and Conditions

By submitting a short course registration form, you agree to pay the associated fees in full before the course start date.

Cancellations

Notice of cancellation must be given in writing by letter, fax or email and action will be taken to recover, from the delegates or their employers, that portion of the fee owing at the time of cancellation.

A 10% administration fee will be levied for cancellations made 10 or more business days prior to the first day of the course. Cancellations thereafter will be liable for the loss of the full fee.

EduMine reserves the right to cancel an advertised course on short notice. It will endeavour to provide participants with as much notice as possible, but will not accept liability for costs incurred by participants or their organisations as a result of the course being cancelled or postponed. If a course is cancelled, fees will be refunded in full. EduMine also reserves the right to postpone or make such alterations to the content of a course as may be necessary.