3 DAY COURSE/WORKSHOP STRATEGIC OPEN PIT MINE PROJECT EVALUATION

Transcription

1 3 DAY COURSE/WORKSHOP STRATEGIC OPEN PIT MINE PROJECT EVALUATION MiningMath Associates and the Laboratory of Mineral Research and Mine Planning of UFMG have partnered with Rompev Pty Ltd to bring to you Strategic Open Pit Mine Project Evaluation: A Quantitative Risk And Option Analysis. This workshop will be of particular interest to mining managers and analysts, geologists and engineers, fund and asset managers, bankers, development planning engineers, exploration managers and other specialists who are regularly involved in the evaluation of open pit mine projects. Starting from the principles of ore grade and economic block modelling, open pit mine plan and design, and economic analysis, this workshop also shows delegates how to evaluate a mine project under conditions of geological (metal grades) and economic (metal prices) uncertainties as well as how to use managerial and operational flexibility to minimise risk while maximising upside potential and project value. Expected Outcomes Upon completion of this course, you will be able to accomplish the following: Understand the principles of open pit mine planning, design and evaluation, Understand open pit mine plan and design concepts such as ultimate pit limits and cutback design, Understand long term/short term production scheduling, pit shell generation and revenue factors, mining processing adjustment factors and sensitivity analysis, Understand the basic mine evaluation concepts such as the Discounted Cash Flow (DCF), Net Present Value (NPV), Internal Rate of Return (IRR) and the discount rate used in the evaluation process given as the corporate Weighted Average Cost of Capital (WACC), Basic skills in evaluating an open pit mine project Run a sensitivity analysis on key project indicators, Output final mine project results using Excel for further economic analysis,

2 Understand Monte Carlo simulation - to Crystal Ball software Run a traditional risk analysis on key project indicators using Monte Carlo simulation Understanding metal grade uncertainty using Conditional Simulation Assessing the effect of metal grade in project evaluation. Understanding metal price forecasting. Assessing the effect of metal price uncertainty in mine project evaluation. to Real Options Analysis Run a simple real options analysis to make final investment decisions such as delaying or closing mine operations. Course Structure Flow Day 1 Base Case mine plan and design Understanding Block grade/economic model (theory session) Block grade model - block grade estimation, introduction to kriging Block grade model characteristics Block economic model block value estimation Workshop 1: Understanding block modelling using a 2D Copper orebody model in Excel (Workshop 1) Participants are given the opportunity to practice, understand and visualise the process of block modelling using a simple 2 dimensional Copper block model in excel Resource modelling Afternoon Part 1 Understanding open pit mine planning and design and valuation (theory session) Open pit mine plan and design (part 1) the ultimate pit, cutback generation, long term scheduling definitions. Building a cash flow spread sheet analysis for project evaluation Understanding the Discounted Cash Flow (DCF) analysis

3 Understanding the discount rate as the Weighted Average Cost of Capital basics Understanding the Net Present Value (NPV), Internal Rate of Return (IRR) and Payback Period (PBP)- definitions Afternoon Part 2 Workshop 2: Understanding open pit mine plan and design using a 2D Copper orebody model in Excel Participants are given the opportunity to practice, understand and visualise the process of planning and designing an open pit mine project using a simple 2 dimensional Copper block model The ultimate pit and production scheduling mine design are based on the floating cone algorithm Building the cash flow model for the 2D Copper project Day 2 Monte Carlo simulation and Quantitative Risk Analysis Understanding Risk and Sensitivity analysis (theory session) Workshop 3: to Monte Carlo Simulation using the Crystal Ball software Sensitivity analysis Identifying sources of uncertainty in a mine project Uncertainty, risk and upside potential - definitions Monte Carlo simulation -. The Crystal Ball Software Quick Getting comfortable with the use of Crystal Ball by practicing some simple exercises Running a Risk Analysis on the 2D Copper project - using Cristal Ball Advanced Risk Analysis Quantifying and assessing the effect of metal grade Workshop 4: Assessing the effect of Uncertainty in metal grade estimation - Using Conditional Simulation as tool for quantifying metal grade distribution Assessing the effect of metal grade

4 metal grade uncertainty on project Afternoon Part 1 Advanced Risk Analysis Quantifying and assessing the effect of metal price Workshop 5: Assessing the effect of metal price uncertainty on project Afternoon Part 2 Workshop 6: Assessing the combine effect of both metal grade and metal price uncertainties on project Uncertainty in metal price estimation - The Geometric Brownian and the Mean Reverting Models as tools for quantifying metal price behaviour over time Assessing the effect of metal price Here the attendees will have the opportunity to run an advanced risk analysis on the 2D Copper project to assess the combined effect of metal grade and metal price uncertainties on project Day 3 Decision Making and Real Options to decision making in mine project evaluation (theory session) to project evaluation and decision making Revisiting the discount rate analysis (WACC and CAPM) to financial options pricing financial options Pricing Financial and Real Options using the Binomial Lattice Workshop 7: Pricing financial and Real options using the Binomial Lattice Main Sources of uncertainty in a mine project generalities to Binomial Lattices Using binomial lattices and diffusion processes basics Workshop

5 Afternoon Part 1, 2 Workshop 8: Applying Real options and Decision making on the 2D Copper Project Assessing the joint effect of metal grades and prices in the copper- Copper mine project Discussion Decision making option to close mine operations Decision making option to delay mine project start General discussion.