Abstract
Investments in the mining and minerals industry are considered to be risky. The major challenge of project evaluation is how to deal with the uncertainty involved in capital investment. Discounted Cash Flow (DCF) methods, Decision Trees (DT), Monte Carlo Simulation (MCS) and Real Options (RO) are commonly used for evaluating mining projects. This paper briefly reviews the previous studies, outlines and summarises above four methods. Subsequently it employs these methods to evaluate a mining project where the decision whether or not to open the mine is considered. Pros and cons of investigated methods are discussed in the final section.
Original language | English |
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Pages (from-to) | 62-76 |
Number of pages | 15 |
Journal | International Journal of Mining and Mineral Engineering |
Volume | 1 |
Issue number | 1 |
DOIs | |
Publication status | Published - 2008 |
Keywords
- 2008
- analysis
- dcf
- decision
- decision tree analysis
- discounted cash flow
- evaluation of a mining
- flow analysis
- follows
- mcs
- mine project evaluation
- monte carlo simulation
- project using discounted cash
- real options
- reference to this paper
- ro
- should be made as
- topal e