7.2 Economic and Financial Evaluation

Information Technology has addressed those problems unique to senior management in the mineral industry. In general, these problems are those concerned with decision-making. Peter Drucker in his discussion of making effective decisions identifies five phases: (1) define the problem, (2) analyze the problem, (3) develop alternate solutions, (4) decide the best solution, and (5) convert the decision into effective action. The scope of the chapter by Guernsey addresses the first three phases which provide input to the decision-maker. The decisions to be made relate, in most instances, to the economics related to a mineral property or process. Computer models have been designed to generate these economic and financial evaluations. No one model is appropriate to the solution of all management's problems. In this chapter several applications are identified and summarized; a model for the economic evaluation of a mineral property is described in greater detail. The implementation of such models is dependent on the unique needs of management.