There are a couple ways to do this. Fastest and easiest is to find an unlevered or levered number that comes up with a pounds-in-the-ground valuation estimate. Example of an unlevered metric would be: EV/Reserves and Resources whereas a levered ratio would be something like: P/NAV. Although the NAV number is usually found by doing a DCF of the mine, many bankers use consensus P/NAV multiples.
A more accurate and complex method of valuation would be some sort of DCF as mentionned above. Take note, however, that your DCF would have an end date since there will be no terminal value to the mine (it is an exhaustible resource).
They are synthetic options created from real-life situations. In a mining context, the value of a mine also depends on the value of the option itself to either wait to extract, sell the mine...Essentially, in addition to holding the mine, your total value from the mine is actually higher because of these real options.
I disagree. One bank in the US uses real options and that's it. A mine model is used (Similiar to a DCF, with no TV as mentioned above), and then generally a P/NAV multiple is applied.
Early stage companies it's more of an EV/Resource.
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dcf of the mine
dcf only scratches the surface
real options
There are a couple ways to do this. Fastest and easiest is to find an unlevered or levered number that comes up with a pounds-in-the-ground valuation estimate. Example of an unlevered metric would be: EV/Reserves and Resources whereas a levered ratio would be something like: P/NAV. Although the NAV number is usually found by doing a DCF of the mine, many bankers use consensus P/NAV multiples.
A more accurate and complex method of valuation would be some sort of DCF as mentionned above. Take note, however, that your DCF would have an end date since there will be no terminal value to the mine (it is an exhaustible resource).
real options is the only accurate way to value a mine. standard dcf doesn't say jack
what are real options?
They are synthetic options created from real-life situations. In a mining context, the value of a mine also depends on the value of the option itself to either wait to extract, sell the mine...Essentially, in addition to holding the mine, your total value from the mine is actually higher because of these real options.
Is it a plot of land with intentions to turn it into a mine or is it fully functioning?
do bankers use real options?
ibddddd - yes.
I disagree. One bank in the US uses real options and that's it. A mine model is used (Similiar to a DCF, with no TV as mentioned above), and then generally a P/NAV multiple is applied.
Early stage companies it's more of an EV/Resource.
Ea quod rerum quos. Laudantium blanditiis illo quo quia est autem et. Dicta maxime aut tenetur et nobis.
Mollitia maiores sunt est quia. Expedita officiis voluptas consectetur sit. Autem quas culpa natus corrupti provident.
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