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  • Continuing professional development

Valuation of Mineral Projects Based on Technical and Financial Modelling

Learn how technical, financial and debt-related risks shape mineral project value. This course builds expertise in mine valuation, financing decisions and quantitative finance for mining.

Course key facts

  • Date

    25 - 28 May 2026

  • Duration

    4 days

  • Credits

    Non credit bearing

  • Format

    In-person

  • Fee

    £2,850

  • Location

    Sweden

Overview

While the intrinsic value of a mineral project is still a key consideration, understanding the interrelationship between technical and financial risk to truly understand the long term value of an asset, helps companies make better investment (or divestment) decisions.

Companies that are able to secure debt finance for both development and acquisition of advanced projects have greater strategic flexibility. Understanding how debt impacts the valuation of projects allows for an objective approach to determining levels of gearing; this is relevant to both the investment banking and mining communities. The Valuation of Mineral Projects course is designed to address these issues.

This course is for professionals with a basic to intermediate understanding of the principles of the accounting cash flow model that wish to gain expertise in quantitative finance in the context of mining. Actual operating mine valuations are a central focus of the course. To gain the most out of the course, attendees should have had some exposure to the technical aspects of minerals and mining.

This course aims to enhance an understanding of the business of mining. Actual operating mine valuations are a central focus of the course.

Workshop sessions are also an integral part of the course delivery and use will be made in the workshop sessions of the IC-MinEval software which automates the generation of  Excel™-based spreadsheet to produce models for a wide range of mineral projects. These models can be saved as fully-linked workbooks and continued use is quite independent of IC-MinEval. Delegates can generate their own models which can be preserved indefinitely and having normal excel functionality.

Particular attention is given during the workshops to demonstrating how financial models should be set up with a rate of production appropriate to the size of the resource. Realistic associated capex and opcosts are determined with reference to CostMine. The circumstances in which it is appropriate to set up models based on a straight discount rate basis compared to including debt are outlined. In the latter case the approach to determining the appropriate level of debt will be explained.

Analysis will be undertaken during the workshop sessions on the financial performance indicators generated and there will also be an indication of the valuation that could be placed on the asset. A key deliverable would be templates that generate key valuation performance metrics which would include P/NAV, EV/NPV and EV/EBITDA based on operational and financial variables. This would allow projects to be ranked according to intrinsic value and thereby identifying which might be given priority in new the new business development divisions of the mining companies. Even then the vicissitudes of volatile metal prices and operational factors means that an intrinsic value will fluctuate, and this would be reflected in the volatility of the share price of a listed holding company.

Learning journey

Day 1: Cash Flow Modelling and Financial Accounting

1. Introduction. 

Principles of DCF Modelling. Discount rate. Net Present Value. Internal Rate of Return. Payback Period and Choice of Discount Rate. Impact of different discount rates over time. Cash flow for a mineral project. Scenarios illustrating the range of economic performance indicators. Case history of gold operation.  Setting up base case. Nominal versus real.


2.1 Valuation of Companies  

Professional Codes. Relationship between resources and reserves. Alternative valuation methods. Accounting vs Economic model.  Optimisation of capital structure. Treatment of sunk capital. Acquisition cost and valuation of long-life projects.  Share performance metrics: Terminology. Building a DCF model versus alternative approach to determine NPV. Share performance metrics: Interpretation and Implication. Capital Raising – Dilution of existing shareholders. Accretion. Setting share price, share splits and dual-class shares. Share repurchase. Multiple-partner modelling. Accounting impairment.

2.2 Case Study – Single Project Copper Company  

Variables and financial performance indicators. Sustaining and sunk capital. Share price movements. Share performance metrics. Quantitative finance. Grade-tonnage relationships and pit optimisation. Role of debt. Multiple separate mining operations.

3. Workshop Session 

DCF exercise based on annuity tables. Review of spreadsheet-based solution.

4. Analysis of Risk and Uncertainty 

Sensitivity analysis. Application to Monte Carlo simulation techniques. Treatment of multivariant systems. Brownian motion and probabilistic modelling. Crystal Ball modelling of gold project. Precision versus accuracy.

5.  Project Finance and the Cost of Equity 

Sources of capital funding. Weighted average cost of capital (WACC). Integrated economic and accounting model for a simple gold project demonstrating the interrelationship between DCFs and the financial accounts. Capital asset pricing model. Optimisation of gearing. Project Finance cover ratios

6. Demonstration of IC-MinEval. 

Treatment in the financial model of profits after tax before interest (ATBI), profit before interest and tax (PBIT),  profit after interest before tax (PAIBT) (and profit after interest and tax (PAIT).

7. Value Creation in Mineral Projects 

The cycle of value creation in mineral projects. Exploration Stage. The pyramid reflecting the evolution of a gold mineral exploration and evaluation programme. Drivers – Commodity Prices. Resource Base and Asset Life – Mineral Resources. Synergies and Portfolio Optimisation. Single project mining company stages of development and funding options and sources of capital. Funding Options for Mineral Projects  - Pre-Initial Public Offering, Listing, Joint Venture Agreement and Project Finance. Multiple-partner modelling.

Course details

The course fee would include access to Professor Buchanan’s new edumine On-Demand/e-Learning Valuation course 'Valuation of Mineral Projects Based on Share Performance Metrics' which is designed  to support delivery of this Distance Learning course as it contains much supporting material. Details at 

In addition to the presentation slides, attendees will receive a copy of the  book authored by Prof. Buchanan.

Participants are expected to have their own laptop computers available for this course.

Your Instructors

Emeritus Professor of Mining Geology & Senior Research Fellow

Professor Buchanan works jointly between the Department of Earth Science and Engineering and the Business School at ÌìÃÀ´«Ã½ and will act as the Course Director. Professor Buchanan's current research interest lies in addressing the underlying technical principles applying to mineral projects and demonstrating how these influence financial modelling. He has 38 years’ experience teaching mining geology, mineral exploration and mineral project appraisal and is responsible for the MSc in Metals and Energy Finance. This is a joint degree between the Department of Earth Science and Engineering and the Business School at Imperial College. Professor Buchanan has worked as a Mining Geologist in both gold and platinum mines in South Africa and had wide experience as a consultant to industry, as an expert witness and in designing and delivering short courses for industry

Chris Worcester

Advisor

Chris Worcester began his City career in 1993 at Barclays de Zoete Wedd, where he worked in the Metals and Mining project finance team and with Dr Alan Richards, the Head of Mining Research and Extel number-1 rated Mining analyst and Rio Tinto’s corporate broker. In 2000, he joined the Royal Bank of Scotland as Director and Global Head of Financial Modelling and Analysis, leaving in 2002 to join WestLB Capital Markets, where he established and managed the global Metals and Mining team until 2007 and took them to number-2 rated mining debt bank from scratch. Since then, Chris has been actively involved in securing funding and investment for natural resource companies through private, specialist corporate finance company Green Road Capital. He has arranged and structured transactions that have twice won European mining deal of the year and twice won African Mining deal of the year. He is currently advising clients on raising new capital in the iron, copper, gold and energy sectors

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