3.7 Mine Valuation - 1. Technical Overview

Mine valuation is a multifaceted, interdisciplinary process by which the economic viability of an old, existing, or new mining property or venture is determined. The problems associated with arriving at a representative and accurate value for a mining property are complex and numerous, and the procedures utilized in determining these values vary from simple, back-of-envelope calculations to sophisticated mathematical manipulations requiring computer modeling and analysis. Regardless of the complexity or the degree of sophistication associated with any particular project, the evaluation process must ultimately provide management with two basic types of information. First, the evaluation process should indicate whether or not the mining project is economically viable after careful consideration of all engineering, environmental, geologic, and other variables pertaining to the project. Second, the evaluation process should provide management in- formation on the relative attractiveness of the project when compared to other alternatives. In some cases, it may be extremely difficult to supply this information for a project directly. Nonetheless, the evaluation process should and must present all information necessary in a format which can be incorporated into the decision-making process as expeditiously as possible.