how do you value coal assets?PE
To anyone working in an energy / natural resources group...
How does one value a coal mine? The only method I can think of are precedent transactions, where (agg value / tons of annual production) and (agg val / tons of proven reserves) can be applied as multiples.
What are the other considerations in valuing a coal asset? How does particulate (ash, sodium, etc.) matter come into play? What types of basic info do you need to run a DCF (e.g. volume coal sold, pricing, overhead costs, etc.... how do those fit into deriving capex and working capital assumptions)?
Any input would be greatly appreciated.