Course Description

This course builds on and complements the Edumine course Introduction to Modelling Metal Project Finance, which explores the critical issues involved in financing mining projects through debt. That foundational course introduces the objectives of project financing, outlines the steps leading up to its application, and provides practical guidelines for constructing preliminary-level cash flow models. Using nickel and platinum as example commodities, it demonstrates how project finance can enhance valuations. A case study on a polymetallic (lead, zinc, and silver) development project further illustrates these concepts.

The Introduction to Modelling Metal Project Finance course also covers:

• Technical aspects and major costs associated with developing a large-scale open-pit nickel sulphide project, followed by a step-by-step guide to building a discounted cash flow (DCF) model using MinEval, a software package designed for financial modelling in mining.
• Similar modelling exercises for underground platinum mining, based on both narrow Merensky Reef and thick Platreef scenarios.
• A polymetallic mine scenario demonstrating how project finance can serve as an alternative to funding development from holding company cash flows.

This current course extends those principles by focusing on the valuation of mining companies. It examines how share performance metrics of listed companies can be integrated with DCF models of underlying operations or projects to provide a holistic valuation. The course emphasizes that valuing mineral assets is an art as much as a science, requiring imagination and interpretation—particularly in acquisition scenarios aligned with strategic business goals.

By the end of the course, participants will have a clear framework and practical guidelines for creating templates that combine key share performance indicators with DCF modelling. These templates can be used as benchmarks for valuing companies and informing decisions in investment strategy, acquisitions, and business development.

Recommended Background

The course will be of particular interest to mining analysts, fund and asset managers, bankers, engineers responsible for development planning, exploration managers and other specialists in the valuation of mineral projects. It will also be of interest to industry-based geologists and engineers as well as government officials.

Learning Outcomes

The concepts outlined in the course will provide professionals in new business development divisions of the major finance and mining companies the tools needed to generate quantitative valuation metrics. With the emergence of private equity funds aimed at financing mining projects, the course will provide an  understanding of the qualifying financial framework that such funds use in evaluating projects.

About the Author:

Professor Dennis Buchanan is an Emeritus Professor of Mining Geology, and works jointly between the Department of Earth Science and Engineering and the Business School at Imperial College London.  

Professor Buchanan's current research interest lies in addressing the underlying technical principles applying to mineral projects and demonstrating how these influence financial modelling. Particular interest is directed towards the treatment of key independent variables, such as grade and metal price, dependent variables, such as grade-tonnage relationships, and the way these influence the rate of mining, associated operating and capital costs, and the optimization of the NPV of a project. These models are then applied to concepts of enhancing shareholder value for minerals companies and the related consideration of the role of gearing in maintaining an efficient balance sheet.

He has over 40 years of experience teaching mining geology, mineral exploration and mineral project appraisal and  was responsible for the MSc in Metals and Energy Finance.  This is a joint degree between the Department of Earth Science and Engineering and the Business School at Imperial College. Professor Buchanan has worked as a Mining Geologist in both gold and platinum mines in South Africa and had wide experience as a consultant to industry, as an expert witness in legal cases and in designing and delivering short courses for industry.

Duration: 10 Hours

Category: Finance

Level: Advanced