Valuation of Coal Mining Projects

Postponed to 2010

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Background

In recent years the transformation and restructuring of the minerals industry has occurred at an unprecedented rate.

While the valuation of coal projects are based on similar principles to those used in the valuation of other bulk volume commodities dependent on infrastructure, important differences need to be recognised.  The conventional treatment of grade in metal and mineral projects particular requires a quite separate approach based on yields and linked to wash recovery. Revenue linked the range of different coal products with up to eight different categories recognised in some South African operations.  Volumetric conversions and extraction factors need to be handled with care.

Course Aims and Structure

The aim of this course is to provide a comprehensive guide to the valuation of coal mining projects.  It will be delivered based on traditional lectures designed to provide an overview of the key technical aspects of the coal industry together with an overview of key financial concepts. Emphasis will, however, be placed on workshop sessions, in which fully linked financial models will be used to determine the weighted average cost of capital and the optimum level of gearing for a range of mineral project types. Debt performance indicators and ratios will be considered.  Given that many financial institutions combine mining and petroleum into a single natural resource division, there will be complementary sessions on the similarities and difference that are present between minerals and hydrocarbons.

Who Should Attend?

This course will be of particular interest to all financial professionals, who are involved in the funding of minerals projects in general but with an interest in the energy sector. They might be working for financial institutions as mining analysts, fund and asset managers, or securities and corporate finance investment bankers. They might also be working for junior mining companies preparing business cases, and other specialists involved in the appraisal, financing and development.

Pre-course e-learning

To enable registered delegates to derive maximum benefit from the live sessions, they will be provided with an internet url, user name and password prior to the course. This will give them access to the Virtual Learning Environment (VLE) designed specifically for the programme, where important course information will be available. This includes joining information and easy access to the different interrelated components of the course. Here all the course material covered in the live sessions will be available prior to the start of the course. It will also enable participants to post details about themselves and to be involved in post course follow-up.

For a limited period, participants will be able to access an EduMine e-Learning module through the VLE (www.edumine.com) which will provide them with an introduction to modelling project finance and cover the critical issues associated with the debt financing of mining projects. A fully integrated IC-CoalEval-generated spreadsheet model is included in the module, together with interactive review sessions. 

To access the e-learning module, the consent of delegates is required to forward their e-mail addresses to EduMine. The details are used only to activate logins and will not be shared with any other parties.

IC-CoalEval

Use will be made in the workshop sessions of the IC-CoalEval software provided by IC-FinEval, Excel™-based spreadsheet programme automating all stages required to produce models for a wide range of mineral projects. IC-CoalEval produces a balance sheet, and profit and loss account from the cash flows, with tax provisions linked to the profit and loss account. the cost of debt is calculated, as is the weighted average cost of capital and the cost of equity. Output modules include the base case discount cash flows, as well as key financial ratios and performance indicators such as NPV, IRR payback and maximum cash exposure. Sensitivity analysis can be undertaken on key variables.

The functionality of IC-Coal Eval will be delivered over the internet through the software as a service (SAAS) system with InfoMine (http://software.infomine.com/)  Delegates will be expected to have their own laptop computers available and will be provided with wireless access to the college's internet. They will need to have administrative rights for their laptops, as there will be need to install ActiveX to access the system. Delegates will be given access to SaaS a few days before the start of the course. (Delegates with AppleMac and Firefox internet browsers may need some support.) Delegates all have access to the functionality of IC-CoalEval through SaaS for a further four weeks after the course. Access beyond that will be available on subscriptions.

Further Informa tion

Provisionally book on this course

 Course Brochure

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