Course Introduction

An Introduction to Modelling Metal Project Finance

Version: 07 April 2010

Prof. Dennis Buchanan Dr. Mark Heyhoe Prof. Tim Shaw

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Introduction

An Introduction to Modelling Metal Project Finance serves as an introduction to the critical issues associated with the debt financing of mining projects. The aims and objectives of project financing are discussed with an overview of the steps leading up to application. The course is aimed at professionals throughout the mining industry and assumes a basic appreciation of the main financial parameters.

Logical guidelines on how to construct a preliminary level cash flow model of project finance are provided, with descriptions of the major input variables. Nickel and platinum are used as example commodities with which to demonstrate the principles of modelling project finance.

A background discussion on the technical aspects and major costs involved in developing a large-scale open pit nickel mining project is followed by a step by step guide to the development of a financial model of the project using the financial evaluation software tool IC-MinEval. Similarly, background discussion on platinum mining is followed by a step by step guide to developing a financial models of an underground platinum mining project using IC-MinEval.

Note: Metal prices prevailing in 2005 are used in the nickel mining example as subsequent increases in metal prices generate key performance indicators in the financial models that virtually ensure that the project could support unsustainable levels of debt. 2005 prices allows for a much more realistic treatment of how the level of gearing for a project is normally determined. This is the primary learning objective of the course.

Course Content

The course comprises 13 viewing sessions at both summary and text level, multiple-choice reviews, and extensive worked examples for nickel and platinum projects. Course duration is equivalent to approximately 12 hours of viewing content. The worked examples include fully integrated sets of the completed spreadsheet models.

Learning Outcomes

Participants who successfully complete this course and the certification requirements will be able to perform the following:

• Discuss the theory and requirements of project finance modelling based on spreadsheets.

• Apply the IC-MinEval software tool to mining project finance modelling.

Course Requirements

Basic requirements for successful completion of this course include the following:

• A basic appreciation of the main financial parameters of mining project finance modelling.

• A basic appreciation of spreadsheet modelling applications.

Course Certification

This course qualifies for EduMine Certification. A certificate will be issued to an EduMine enrollee who registers for certification and successfully completes the certification requirements. The total certification fee for this course is Can$172.

1.2 CEUs (Continuing Education Units) will be awarded for successful completion of certification requirements for this course. EduMine meets the Criteria for Certification established by the Authorized Provider Commission of The International Association for Continuing Education and Training, 1620 Eye Street, N.W., Suite 615, Washington, DC 20006.

To register for certification for this course use the "Register for Certification" link above or below on the right.

UBC Certificate in Mining Studies

This course qualifies as online learning for the University of British Columbia - Certificate in Mining Studies in the Mine Management, Risk Assessment, Financial Analysis stream. Students who complete the certification requirements for this course may optionally register for the Certificate in Mining Studies program and complete the associated classroom component. For further information click UBC Certificate in Mining Studies.

[Note: Participation in the UBC Certificate in Mining Studies program is optional. For EduMine certification proceed as described under Course Certification above.]

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