Sector
Mining and natural resources
Valuation of cash flows, instruments and projects exposed to commodity, operating, schedule and technical uncertainty.
The decision
In mining, price and volume are not enough: recovery, costs, royalties, asset life, implementation and evidence quality materially change the economic view.
When to engage
- Valuation of projects and linked instruments
- Price, volume, cost and schedule scenarios
- Opinions and support for complex decisions
Deliverables
- FCFF model and cash-flow reconciliation
- Technical and commercial assumptions register
- Sensitivity and downside scenarios
- Opinion or executive memorandum
Method
- 01
Separation of resource, production and financial flow
- 02
Dated and sourced assumptions
- 03
Coherent, non-additive scenarios
- 04
Conclusions proportionate to evidence
Selected mandate
Instrument linked to a large iron-ore asset
Analysis of debenture and royalty cash flows with an estimated present value of US$386.5 million; the figure does not represent the mineral asset value.
Next step
Discuss a project