Mineral Project Appraisal and Finance

20 - 24 February 2012

Registration includes pre-course access to e-learning and a course demonstration licence for IC-MinEval software.

Background

Securing finance for mineral projects (whether equity or debt) requires all the relevant technical, operational, permitting and financial components to be presented in an integrated and transparent manner.

For projects to be able to secure equity funding and mining finance they normally require the inclusion of a resource that can be placed into one of the internationally recognised systems of classification. To take a resource into the reserve category requires the development of a pre-feasibility or full technical feasibility study.

This would expect to add significant value to a project, which might otherwise comprise mainly exploration potential as it permits the generation of a discounted cash flow financial model. Where through sensitivity analysis the NPV and IRR generated can be shown to be robust, this not only enhances the valuation of the project for the equity market, it can also be used to secure project finance.

Course Aim and Structure

The aim of the course is to provide a comprehensive guide to understanding the main factors involved in securing the financial support for mining projects through equity, debt, or entering into a joint venture. This involves addressing the underlying technical principles, applying these to mineral projects and demonstrating how these influence the financial modelling.

Particular attention will be given to the treatment of key independent variables, such as grade and metal price, dependent variables, such as grade-tonnage relationships, and the way these influence the rate of mining, associated operating and capital costs, and the optimisation of the NPV of a project. Real options that impact on the valuation of a mineral asset will be considered. Operational issues that investors consider essential to developing a successful project will be addressed, including the role of permitting and environmental compliance. The structure of joint ventures and the role of tax models in enhancing the features of a mineral project will be outlined.

The course is structured in two sections. The focus of days 1 and 2 is on technical appraisal issues, and that of days 3 - 5 is on quantitative finance aspects. While not facilitating the development of a balanced overview, attendance on either module separately is possible.

Pre-course e-learning

To enable registered delegates to derive maximum benefit from the live sessions, an internet url, user name and password will be supplied prior to the course providing access to a Virtual Learning Environment (VLE) designed for the programme. All the course material covered in the live sessions will be available here prior to the start of the course, together with important course information, including joining instructions. It will also enable participants to post details about themselves and 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). This gives an introduction to modelling project finance and covers the critical issues associated with the debt financing of mining projects. 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.

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-MinEval

Use will be made in the workshop sessions of the IC-MinEval software, an Excel™-based spreadsheet programme automating all stages required to produce models for a wide range of mineral projects. IC-MinEval 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 mo dules in clude the ba se case discount cash flows, as well as key financial ratios and performance indicators such as NPV, IRR payback and maximum cash exposure. Sen sitivity analysis can be undertaken on key variables.

The functionality of IC-MinEval 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 the need to install ActiveX to access the system.  Delegates will be given access to SaaS a few days before the start of the course. (Deleg ates w ith AppleMac and Fi refox internet browser s may need some s upport.) Delegates al l have access to the functionality of IC-MinEval through SaaS for a further four weeks aft er the course. Access bey ond that will be availab le on subscriptions.

Who Should Attend?

This course will be of particular interest to all professionals who are involved in the funding of minerals projects. They might be working for financial institutions as mining an al ysts, fund and asset man agers, or se curities and corporate finance i nvestment banker s. They might be working for junior mining companies preparing business cases, or for developm ent aid of fi cials and other specialists invol ved in the appraisal, fin ancing and development o f min ing projects. Authoritative revie ws of key disciplines will be of inte rest to industrially based geologists and engineers.

Previous courses have received wide international participation from major mining and finance corporations, providing an opportunity to bring together professionals from more than fifty different countries.

Comments From Previous Course Participants

• Excellent course, many useful subjects in short time. Mix of speakers/teachers was excellent.
• Course was both stimulating and of great practical benefit.
• A thoroughly professional course presented by extremely well qualified and knowledgeable lecturers.
• Enjoyable, interesting and valuable.
• Very helpful indeed.
• Thanks to everyone involved. An excellent course - I will definitely encourage people to attend.
• Excellent course. I feel I have greatly benefited from clear, concise explanations behind the "myths" of mineral processing and engineering mining.
• Very interesting subjects covered, useful and clear.