Description

An Introduction to Modelling Metal Project Finance serves as an introduction to the critical issues associated with the debt financing of mining projects. The aims and objectives of project financing are discussed with an overview of the steps leading up to application. The course is aimed at professionals throughout the mining industry and assumes a basic appreciation of the main financial parameters.

Logical guidelines on how to construct a preliminary level cash flow model of project finance are provided, with descriptions of the major input variables. Nickel and platinum are used as example commodities with which to demonstrate the principles of modelling project finance where the use of debt can enhance a valuation. There is also a case study of a polymetallic (lead, zinc and silver) development project.

A background discussion on the technical aspects and major costs involved in developing a large-scale open pit nickel sulphide mining project is followed by a step-by-step guide to the development of a financial model of the project using the financial modelling software tool MinEval. This is a purpose-designed software package for the financial modelling of mining projects.  Similarly, background discussion on platinum mining is followed by a step-by-step guide to developing a financial model of an underground platinum mining project (based on both the narrow Merensky Reef as well as the thick Platreef scenarios) using MinEval. The polymetallic scenario is based on an existing mine where project finance is used as an alternative to drawing on the cash flows of the holding company

The workbooks generated by MinEval are also included as downloadable spreadsheets for each worked example. The course is complementary to case studies  included in Prof. Buchanan's book, Metals and Energy Finance (2025) and incorporates multiple choice questions in review sections.  These are aimed at consolidating an understanding of key principles through self-assessment.

Authors

• Prof. Dennis Buchanan
• Dr. Mark Heyhoe
• Prof. Tim Shaw

Course Content

The course comprises 28 viewing sessions of 30–60 minutes each with supporting figures, tables, and extensive worked examples for nickel and platinum projects, plus interactive course reviews. Course duration is equivalent to approximately 10 hours of viewing content. The worked examples include fully integrated sets of the completed spreadsheet models.

Learning Outcomes

• Recognize the theory and requirements of project finance modelling based on spreadsheets.

Recommended Background

• A basic appreciation of the main financial parameters of mining project finance modelling.
• A basic appreciation of spreadsheet modelling applications.

Duration: 10 Hours

Category: Finance

Level: Advanced