The limitations of gold-mine evaluation

The limitations of gold-mine evaluation by P. R. JANISCH, B.Sc. (Sur.) (Natal) (Visitor) Inherent uncertainty in the choice of parameter values places theoretical and practical limitations on the interpretation of a gold-mine valuation that are not necessarily removed by comparison of two valuations on the same assumptions. These limitations arise mainly in the estimates made of cost inflation and gold-price escalation, and lead to inconsistencies in the 'league table' method of investment analysis. The choice of discount rate is also critical in many cases. An approach to the overall problem that takes these limitations into account is suggested.