Mining Modeling 1: Stand-Alone Project
This course focuses on the skills required to design and create a dynamic financial model of a mining project that is developing an open pit mine. Issues related to mining, milling and processing will be discussed. The course material includes model design, logic, construction and operational concepts to create a best-in-class financial model of a mining project. Various intermediate Excel tools along with helpful keyboard shortcuts will also be covered throughout the course.
Participants should have a basic working knowledge of Excel and the mining sector prior to taking this course.
Design and Structure a Financial Model
- Design and layout a mining project model clearly and logically
- Discuss the need for a model to serve as a marketing tool
- Create clearly defined inputs and assumptions sections
Build Powerful Scenarios and Financial Statements
- Use switches to create effective scenarios and value drivers
- Forecast and build up the project’s revenues and expenses
- Construct all necessary schedules, including:
- Mine sequencing showing waste, ore and strip ratio
- Commodity pricing for primary and secondary metals
- Variable and fixed operating costs (including mining,
milling and refining charges)
- Development and maintenance capital costs
- Depreciation schedule using a unit of production method
- Resource tax (includes regional resource tax rules)
- Working capital schedule
- Discuss by-product accounting for secondary metals
- Develop a cash flow projection for the mining project
Evaluate the Project and the Company
- Incorporate a schedule to evaluate the project’s returns:
- Pre Tax Unlevered Free Cash Flow (“UFCF”)
- Net Present Value (“NPV”)
- Use various sensitivity tools to sensitize the project’s returns
- Conditionally format output tables to highlight specified results
- Build a dynamic summary page to display results for the project
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