Economic evaluation and risk analysis

Economic evaluation and risk analysis

Economic evaluation and risk analysis
Review of the common techniques and tools to evaluate the worth and risk of the design.

Revenue estimation
Revenue models are discussed, based on the concept of the Net Smelter Return, incorporating the models presented
in the two previous sections.
Metal prices
The revenues, and by consequence, the cut-off grade and the mining method, will be a function of the metals prices
used for the cash flow estimations. This section covers the approaches for selecting prices for evaluation purposes,
the sensitivity of the in-situ value resources as a function of the metal price, and the impact of varying metal prices
on the spatial continuity of the ore and the cost of developing the orebody, the potential production rate of the
orebody, and the mining method.
Net smelter return
The equations are presented including a discussion on each component. Smelter contracts for various metals are also
shown in order to identify the differences between each. Factors influencing the transport costs, treatment charges,
and refining charges are also analysed.
NSR ractors
The Net Smelter Return can be converted into NSR factors to more easily manage resource blocks and stopes in
polymetallic deposits; the mathematics is described here, as well as their uses and limitations.
Examples
Many examples are given for various metal concentrates to illustrate the differences in contracts, as well as a detailed
example of a polymetallic ore with various concentrate streams.

Cash flow and DCF estimation

methodology for calculating the cash flows and DCF, factors affecting the selection of the discount rate, real option
applications.

Sensitivity analysis
Techniques for calculating, presenting, and analysing a sensitivity analysis

Risk analysis
techniques for calculating, presenting, and analysing a risk analysis

Valuation using real options

technique to estimate the value of the mine using the Brennan-Schwartz real option analysis.

Article Sources and Contributors

Article Sources and Contributors

Economic evaluation and risk analysis Source: http://www.minewiki.org/index.php?oldid=890 Contributors: ARCHIVE, SDMcKinnon, WikiAdmin

License
Attribution 3.0 Unported
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