Professional Documents
Culture Documents
Course Information
Overview
Grading scheme / Labs and assignments
Course syllabus
Books
Pre-requisites:
jbb@ualberta.ca
T.A.:
Maksuda Lillah
Office Hours:
TBA
lillah@ualberta.ca
01-1
Course Resources
Course Textbook
Notes:
Other References
None officially
Online (hopefully) before class
Gentry, D.W. and T.J. ONeil, 1984, Mine Investment Analysis; (c) SME, Littleton,
Colorado.
Runge, I., 1998. Mineral Economics and Strategy, SME, Littleton, Colorado.
Vogely, W.A. (Editor), 1985, Economics of the Mineral Industries, 4th Edition; (c) by
AIMMPE Inc., New York.
Gocht, W.R. et al., 1988, International Mineral Economics; (c) by Springer-Verlag,
Berlin Heideberg.
Ostwald, P.F., 1974, Cost Estimating for Engineering and Management; (c) PrenticeHall, Englewood Cliffs, NJ.
Price Waterhouse, 1994, Canadian Mining Taxation; (c) Price Waterhouse, Toronto,
Ontario.
Rudenno V,The Mining Valuation Handbook. Wrightbooks, 2009, 539.
(good general/current book)
Software Packages
Decisioneerings Crystal Ball (likely just Excel)
Grading
Final grades will be established
on the following basis:
Assignments/Labs
40 %
Midterm Examination 25 %
Final Examination
35 %
Descriptor
Excellent
Good
Satisfactory
Poor
Minimal Pass
Failure
Letter Grade
A+
4.0
4.0
A-
3.7
B+
3.3
3.0
B-
2.7
C+
2.3
2.0
C-
1.7
D+
1.3
1.0
F or F(R)
0.0
01-2
February 21 - 25
Reading Week
April 18 (tentatively)
Final Examination
University Policy
Policy about course outlines can be found in Section 23.4(2) of
the University Calendar. (GFC 29 SEP 2003)
The University of Alberta is committed to the highest standards
of academic integrity and honesty. Students are expected to be
familiar with these standards regarding academic honesty and
to uphold the policies of the University in this respect. Students
are particularly urged to familiarize themselves with the
provisions of the Code of Student Behavior (online at
www.ualberta.ca/secretariat/appeals.htm) and avoid any
behavior which could potentially result in suspicions of cheating,
plagiarism, misrepresentation of facts and/or participation in an
offence. Academic dishonesty is a serious offence and can
result in suspension or expulsion from the University. (GFC 29
SEP 2003)
01-3
Plagiarism
Cite correctly
No excuses (including ignorance)
01-4
Participation
How to listen to a technical talk
Pad of paper
Notes
Ideas
Questions
01-5
Major Topics
DCF
MCS
Real Options
Assessing costs
Questions on logistics
01-6
3. High risk
01-7
Consequences of Risk
Windfall profits
Unexpected growth in company
Huge losses in capital & revenues
Over/under-estimation of reserves
Wrong investment choices
Wrong timing of investments
Liability of company assets
Over/under-estimation of value
Complete project failure
Bankruptcies in critical situations
01-8
Evaluation
assessment of the relative economic viability of the mining
project or investment opportunity.
estimates of project ore reserves, mining rates, revenues, costs,
expected returns and associated risks, etc., as well as the dollar
worth (valuation) are made for each project or investment
opportunity.
Project Acquisitions
Corporate Taxation
Financing Requirement
Regulatory Requirement
Liabilities Preclusion
Negotiating Tool
Basis Of Decision
01-9
COST APPROACH
MARKET (COMPARATIVE SALES) APPROACH
EARNINGS APPROACH
Cost Approach
Market approach
Concept assumes open market conditions
Supply & demand determine asset price
Not applicable in mining because there are few sales of
unique mining properties
Earnings Approach
Stream of income from an asset >= its value
Asset value is sum of the discounted net future earnings to
the present time
Widely used in the mining industry
Used in mining venture evaluation
01-10
Industry sensitivities:
Global economy
Environment / Social / Political pressures
Valuation Approaches
Cost Approach
Market (or Capital Market) Approach
Earnings Approach
Evaluation Approach
Important iterative procedure
01-11