Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

GLE 2024 (Day 3) > EXPLORATION GEOLOGY (MIN ECON) > Flashcards

EXPLORATION GEOLOGY (MIN ECON) Flashcards

1
Q

An ore when location, quantity, grade , geol characteristics, and continuity of mineralisaton are known and there is a concentration or occurence of the material of intinsic economic interest in or on earth’s crust in such form and quantity that there are reasonable prospect for eventual economic extraction

A

Mineral Resource

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Econmically minerable part of a measure or indicated mineral resource

A

Ore Reserve

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

A portion of a mineralized envelope within which ore reserves have been defined

A

Orebody

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What does the term economic imply in terms of ore reserve?

A

Extraction has been establsihed or analytically demonstrated to be viable or justifiable under reasonable investment assumption

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Any single mineral or combination of minerals occuring in a mass, or deposit, of econmic interest

A

Mineralisation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What event in the mid seventies abruptly slowed down the demand in metals

A

Coeval Oil Crisis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is the most produced mineral resources?

A

Sand and Gravel

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is the least produced?

A

Diamond, PGEs Gold, electronic metals and Silver

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is the most valuable mineral resources produce?

A

Crude oil, Natural gas, Coal and Sand and Gravel

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What happens if demand for a minreal product is greater that the present supply?

A

Prices increases and companies profit and more investment is poured into the industry

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What happens if the there’s a surplus of supply and low demand?

A

Price falls, producers loss and pulling out of resources/investments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Forces determining prices of mineral products

A

1) Demand and Supply
2)Gov’t Action
3)Recycling
4)Substitution and New technology

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

How does demand change?

A

1) Significant commodity substitution and
2)A change in technology
3)Expectation of future price change or shortagescan lead to hoarding thus increading demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is supply?

A

It refers to how much of a commodity will be offered for sale at a given price over a set period of time which is dependent on price and conditions of supply

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What level of price will stimulate supply?

A

HIgh prices stimulate supply and increase in output

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

How does supply change?

A

1) Changes due to force majeure circumstances 2) Improved technology in exploitation and 3)Discovery and exploitation of large new bodies

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

How does government action affect metal price?

A

Government can stabilize prices by hoarding stockpiles and control the spike of price.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

How does recycling affect metal price?

A

Recycling prolong resource life, reduce mining waste and smelter effluecnts this leading to immunity from price rising, shortages of primary materials and actions of cartels. Also, energy for recycled materisals are usually lower than for ore treatments

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

How does substitution and new technology affect metal price?

A

Diminution in demand as the world thrives to improve techonology and find more effective substitution

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Year when OPEC created uprecedented oil and metal price increase

A

1973

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

This helps in forecasting price trends of metals over intermediate term (decades)

A

rise and fall of world business activity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

An example of a world event which greatly affected metal price

A

OPEC 1973 oil crisis

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What is the reason of nongold discoveries from 1976 onwards?

A

Difficult of exploration of a viable deposit in an unfavorable economic climate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

What types of metals significantly decline in demand durng the 1990s?

A

Traditional metals, Mn, Pb, Sn ad W

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

What metals fluorished instead?

A

Ti, Ta and others

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

what was the price of Gold from 1934 to 1973?

A

$US 35 per troy ounce

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Who and when was fixed link between dollar and gold removed?

A

Nixon, 1971

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Highest price of Gold during the 1980s?

A

$US 850 per ounce

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

What was the result fo the rise of Gold price in 1971?

A

There was an increase in prospecting and disocvery of many large deposits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

What type of industrial minerals are meant for local market?

A

Low Unit value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

What type of industrials minerals are internationally tradeable?

A

High Unit Value minerals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

How can a low unit value become valuable?

A

When it is available close to a market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Differentiate the effects of world business activity between metals and non metals?

A

IM are generally more stable and affected less compared to metals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

What brings greater stability in industrial mineral price?

A

Their use ad partial use in consumer nondurable for which consumption remains comparatively stable during recession or in other words, since industrial minerals are consistentl used by consumers its price is relatively stable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

how does the value of a industrial mineral vary?

A

Depending on its end use and amount of processing/purification it has indergone.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

An example of industrial mineral which varied with supply and demand?

A

POtash

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

What industrial minerals are likely to be short in supply?

A

sulfur, barite, talc and pyrophyllite

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Cut Off Grade

A

?Lowest Grade of Material included in the potentially economic part of the deposit
?Determines the resource potential
?Used to calculate resource tonnage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Who calculates the tinnage and grade of a resource?

A

Geologist

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

A waste that has a grade below cut-off but is estimated to have a grade above cutoff

A

Misclassified Waste

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

An ore classified as waste and dumped without extracting any metal

A

Misclassified Ore

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

1) Classical Statistical Methods

A

?Global estimation of Volume and Grade w/in the mineralisation envelope
?Samples must be randomly chosen or else it will biased and each geological areas must have separate calculations
?Plotted in Frequency Distribution Graphs (Histograms)
?Scatter Diagrams (Correlation graphs)
?Cumulative Frequency Distributions - Signifant departure from a straight line indicates presence of more than one grade zone

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

2) Conventional Methods

A

?T = A x Th x BD
T- Tonnage in Tonnes
A- Area of Influence on a plan in sq.km
Th - Thickness of the deposit w/in the area of influence in meters
BD- Bulk Density

Methods
1) Thickness Contours
2) Polygons
3) Triangles
4) Cross Sections
5) Random Stratified Grid

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

Factors that determine the methods for conventional Calculations

A

1) Shape
2) Dimensions and complexity of Deposit
3) Type, dimension and pattern of spacing of sampling info

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

Concept of Spatial Variability

A

Concept of spatial Variability

?Variable or properties of a depsit (Grade or thickness) are a function of the geological and structural environment (Thus changes the geol envi will result to variations in such properties)

?A sample taken aat a very close interval tend to reflect the same geol conditions, but as the sampling distance between two samples increases, the degree of correlation or similarity decreases until it reaches a dstance where there will be no correlation anymore

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

Semi-Variogram

A

A method used to quantify and display the saptial variability within a deposit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Spherical Scheme Model

A

A model of idealized semi-variogram in which the model is fitted to the experimental data and is the most common used type

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Nugget Variance or Nugget Effect

A

A discontinuity near the origin in semivariogram models

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

Variability increases as

A

Separation Distance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
50
Q

Changed in variability or increase of variability is marked by

A

A steep gradient

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
51
Q

A term used to denote a variability that is equal to the theoretical variance of the sample values and is marked by a zero gradient (horizontal)
Zero Correlation

A

Sill (C+Co)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
52
Q

The point at which the sill value is reached

A

Range (Of the Semivariogram)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
53
Q

If a range of a data is at 500 m what does it mean?

A

If drill spacing is greater than 500 m then data from each sample point would not show any correlations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
54
Q

Industry standard of sample spacing in terms of semi variogram

A

2/3 of the range

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
55
Q

How many sample points are needed in order to have reliable semivariogram w/o suffering from anisotropy

A

30 evenly distributed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
56
Q

A geostatistical estimation technique used to estimate the value of a point or a block as a linear combination of the availblae, normally distributed samples in or near that block

(The value of a block or point is determined by the NORMALLY distribued samples in or near the block)

A

Kriging

57
Q

How is a sample point given a weight? (Paano madedetermine kung gaano ka influencial ang isang sample point sa block under investigaition?

A

Done in reference to semi variogram (Na nagdedetermine ng variability between two points)

58
Q

When will kriging be considered as unbiased?

A

If the sum of the weights assigned is 1

59
Q

What other factors are considered in Kriging?

A

1) Distance ( The closer samples the higher the wright)
2) Clustering
3) Contnuity
4) Anisotopy
5) Geometry of data points
6) Character of the variable being estimated
7) size of block

60
Q

A geostatistical technique, used to verify kriging procedure to ensure that the weigths being used do minimize estimation variance

A

Cross Validation

61
Q

The square of the difference between the Known Value (Z) and the estimated Value (Z*)

A

Estimation Variance

62
Q

As the size of the block increases the Estimation Variance (Increass or Decreases)?

A

Decreases

63
Q

As distance increases in semi variogram, the estimation variance (Increases, decreases?

A

Increases

64
Q

How to minimize estimation variance?

A

Only the essential samples which are nearest to the block being estimated should be used in the estimation process

65
Q

A function of the distance of the samples used to estimate the value of a block?

A

Kriging Variance

66
Q

The limit set to dertemine areas that fall outside the parameter and are conisdered unreliable

A

Confidence Limits

67
Q

Conventional

A

Important to know the Weighting Factor
(Can be Length in core samples,
Width in Stoping in channels
Bluk Density and Length
Area of Influence)

68
Q

What does gaussian transformed mean?

A

Normalized

69
Q

Mine Life

A

?Total ore reserve/ average annual production
?the greater the tonnage of mineable mineralisation the longer the mine life

70
Q

Factors Affecting Mine Life

A

1) Legal Limitations - Hanggang kelan ang Mining Permit? Will it exceed the mine life? Will there be extensions?

2) Market Forecast - What will be the future demand and consequently value of the mineral products?

3) Political Factors - changing of leaders would more likely affect operations since not all politicians have the same views. (Gina lopez for example)

4) Financial return - for a suitable level of return, minimum life of a mine should be 7-10 years

5) Type of Mining
6) Scale of Operations
7) Accessibility of mineralisation
8) Capex limitations

71
Q

What does AAPR Mean?

A

Average Annual Production Rate

72
Q

Which entails more expensive production cost?

A

Underground entails 3x the cost of surface mining

73
Q

the ratio of tonnage of waste removed to tonnage of ore which is fundamental economic control

A

Stripping Ratio

74
Q

If the Stripping ratio is 4:1 and the mining cost were $US2/t, how much will be the extraction cost per ton of ore?

A

$US 10/t (since we have to take into account the extraction of waste as well (4+1)*$2

75
Q

In an open pit mining what is the relationship of Cost and Extraction?

A

The higher the extraction of Ore plus waste the lower the cost

76
Q

An underground mining method which is designed as low maintenance working envi with minimal operating costs but high productivity?

A

Block Caving

77
Q

which is higher to mine, a massive tabular or a narrower vein type of deposit?

A

Narrower vein type since it will use labor intensive methods

78
Q

What is the effect of increasing depth in an open pit mine?

A

Stripping ratio will be higher and will be more expensive

79
Q

Effect of slope to Stripping ratio

A

Greate the slope (Gentler) the less the waste rock to be extracted

80
Q

The larger the annual output

A

the lower the production cost per tonne

81
Q

The raw mined material as it is delivered by the mine cars, skips, or conveyors and prior to treatment of any sort.

A

Run-of-Mine Grade

82
Q

Commodities that usually sold as ROM

A

Coall
Iron Ore
Bulk (Aggregates, Sand and Gravel etc)

83
Q

Commodities usually needs beneficiation

A

Base Metals
Precious Metals

84
Q

In terms of location of mineralsation, what conditions will make a mienralisation or valuable products of greater value?

A

When there is a local availability of power, water supply, an skilled labor. Local housing, educational and recreational facilities for the workforce

85
Q

Normal Distirbution of A mining Company’s Income or Revenue

A

In decreasing weight percent
1) Wages, salaeries and Benefits to employees
2) Loan Capital payments
3) Production and Processing Costs
4) Transport of the product to the market
5) Product Marketing
6) Dividends to shareholders
7) Local and National Taxes
*See Mine Law for detailed taxes in PH

86
Q

The most important single variable in a feasib study which is also the most difficult to predict?

A

Product Price

87
Q

Why is it important to predict future demand for at least over the life of the mine or at least the first 10 years of the mine, whichever is shorter?

A

Because, the demand for the product will determine the price of the product

88
Q

If the the product has low price based on the market, what should the mining company do?

A

Minimize Operation Cost
Maximize revenue
(Adjust Cut-off grade to extract MAX possible tonnage of easily accessible mineralisation at the HIGHEST GRADE)

89
Q

If the product is at high, what should the mining company do

A

Extract low grade material as well

90
Q

what economic factors are crucial to life of mine?

A

1) Inflation
2)Demand for product
3) Prediction of general business sentiment
4) Rising equipment and labor costs
5) Higher interest rate

91
Q

What are the effects of recession (and inflation) to mining companies?

A

Falling mineral prices
Rising Interest rates on loans
Increasing operation costs

92
Q

Other considerations that determines a Healthy Profit or investment for a Mining Company?

A

1) Safety and Health of Employees,
2) Efficient Mineral Extraction
3) Care for the Environment
4) Payment of Local and National Taxes

93
Q

What should exist between the host and the contractor?

A

Mutually agreeed Contract within the framwork of acceptable law

94
Q

What are the Essential aspects of integral part of mining lease approval process?

A

1) Social
2) Environmental
3) Health and Safety
4) Governmental

95
Q

What is an EIA?

A

A document that would explain how the company will mitigate issues such as blasting vibrations, dust, noise, atmospheric and water pollution, and increased traffic density

96
Q

What are the aspects of that constribute to closure costs of a mine?

A

Decommisioning
Rehabilitation
Sustainable Development

97
Q

A framework which decides items such as taxation of profits, import duties on Equipments, Transfer of dividends and Capital Abroad

A

Fiscal Policy

98
Q

What is it important to consult local trade unions before starting a new mining project?

A

Because union disputed can effectively stop a mine

99
Q

When is mineralisation valuable?

A

When there’s a saleable product that can be exracted or produced from it

100
Q

Factors that will enhance the Value of Mineralisation?

A

Increase:
1) Tonnage
2) Grade
3) Mineral Recovery
4) Products sales and Price
5) Political Stability
6) Sustainable Development

Decrease in
1) Mining Cost
2) Ore Beneficiation Cost
3) Transport to Market Cost
4) Capital Cost
5) Taxes

101
Q

sustainable development good practice

A

Economic Activty = Envi Integrity and Social Responsibility

102
Q

An annual summary of the Revenue and Cost of a proposed mining operation calculated on a yearly basis over either 10-year period or over the expected mine life. And

a process that will determine if a mineralisation will be considered an ore depending on its ability to produce higher revenue that costs

A

Cash Flow

103
Q

Cash flow formula

A

CF=Cash into the project (Revenue/Income) - cash leaving the project (cost/expenditure)
or
CF = Income - (Mining cost+Beneficiation cost+transport cost+sales cost+capital cost+interest cost+ taxes)

104
Q

How do cash flow determine the value of mineralisation

A

If the overall mineralisation has the ability TO PRODUCE A SERIES OF POSITIVE CASH FLOW (Revenue>Expenses)

105
Q

When will you have an ideal negative cash flow

A

at the early stage of mining

106
Q

Why do geologists need to participate fully in financial deliberations?

A

Because the ultimate success or failure of a project is measure by financial terms and the decisions (including financial) are made with whatever geological information is available it is the geologists’ responsibility to ensure that as much critical information is taken into account

107
Q

General Sequnce of Studies in Mining

A

1) Conceptual
2) Order of Magnitude
3) Pre-feasibility
4) Feasibility

108
Q

Exploration on new deposits

A

Greenfields

109
Q

Evaluating a mine extension based on the result of
1) additional ore discovery
2)increase in commodity price
3) change in mning method or
4) introduction of different technology

A

Brownfield

110
Q

Who prepares these technical and economic studies which are required to determine if the project is valuable to the company concerned?

A

Competent Person

111
Q

Genreal divisions of a technical study

A

1) Objectives
2) Series of Work Programs to achieve the objectvie
3) Decision Point (proceed, Pause, discard)

112
Q

How do these resource contribute to the development or opening of a mine?

A

1) reports discuss different technical and business issues
2) from the combination of technical and business aspects of the project, Capital and operating costs will be derived to prepare cash flows
3) Cash flows will determine the value of mienralisation
4) The value of mineralisation will be the basis of decision making (Strategic, Political, Technical, Financial, and social)

113
Q

Who can be the readers of the report?

A

1) Internal - Operations or admins
2)External - Gov’t, Investors or Banks

114
Q

Conceptual Study

A

Objectives: Establish the LIKELY Presence of a Resource based upon reference to deposits of similar genesis and size and may only be an OFFICE Evaluation
Work Program:
1) Identify potential issues usch as access, topographical or mining lease contraints
2) Use similar deposits as basis to establish technical fesibility
3) Costing of up to 35% of the engg requiremetns
4) Identify Major Social and Environmental Sensitivities
Decision Point: Indicate Potential to Produce Enhanced Value when compared to other potential investments
JORC/PMRC: leading to definition of inferred Resource

115
Q

Order-of-Magnitude Study

A

Costs: Fairly low but increasing trhough the years
Objectives: Establish whether there could be a viable project that would justify the cost of progressing to a Pre-feasib
Work Program:
1) Limited Drilling and other sampling
2) Mineralogical studies to identify undesirable element and other metallurgical issues
3) Define sufficient tonnage above a given cut off to determine possible mining options and production rates and the preliminary size of equipments
4) Initiate Social and Environmenal Baseline studies
5) Financial Modeling of Options and Sensitivities

Decision: Inferred Mineral resource

116
Q

Pre-Feasibility Study

A

Objecives:
?To eval various options and possible combintaions of business and techinal issues
?To Assess sensitivity of the project to changes in individual parameters
?To Rank vairous scenarios prior to selecting the most likely for further detailed study

Work Program:
1) Major sampling + Test Work Programs
2) Pilot Plant testing
3) Evaluate mine infra, labor requiremetns, envi impact
4) Detailed eval of capital and operating costs to come up with a Preliminary Mine Schedule
6) Sensitivity analysis: alernative mine and metallurgical methods and their outputs
7) INtegration of social and envi aspects in decision making esp. in determining impacts
8) Project with highest value at an acceptable (lowest) risk will be considered most viable

Decision:
To have enough geol confidence to declare Ore Reserves (measured and indicated) and any other mienral resource

117
Q

Feasibility Study

A

Objectives:
1) To confirm and maximize the value of the preferred technical and business options idenftified in the pre-feasib

Work Programs:
1) Envi and Statutory approvals processes will be accelerated
2) Consultaions and Negotiations w/ Local Community groups to have a basic agreement
3) Social and Envi Impact Assessment (EIA)
4) Submiission of Permiting and other statutory proceses
5) Sufficient Sample collection and Test work in this stage will be for more resource estimate to be reported in measured category
6) Sensitivity Anlyses of Risk pertaining to teh reserve

Output: Final Mine Design

118
Q

Detailed Engg Studies

A

1) Final Stage before major capital expenditure is incurred
2) Involves producing detailed plans an work schedule
3) Orders are placed for equipments for mine devt based on the detailed plan and work sched

119
Q

MINERAL PROJECT VALUATION AND SELECTION CRITERIA

A

Done when a company needs to select amongs a number of projects to fund based on their relative value (which is dependent on the absolute value (cash flow) of individual projects)

120
Q

Payback

A

?Ranks projects based on the number of production years of expected investment capital return
?can serve a preliminary screening but fails to account the earnings after payback and time value of money
?Suitable for areas with political instability where recovery of investment is of particular importance

121
Q

Operating Margin to Initial Investment Ratio

A

?Dimensionless number w/c indicates the amount of cash flow generated per dollar invested
?Indication of how financially safe the investment is
?The larger the ratio the higher the value of mienralisation

122
Q

How do discount factors affect value of mineralisation?

A

1) Discount Factors are highest in the Early Years thus the value of a project is enhanced by generating high cash flows at the beginning of the project.
This can be obtained by extract higher grade and more accessble (lower mining cost) ore at the beginning of a poroject can enhance its value

123
Q

Money that have the same purchasing power today as the money which can be received in the future

A

Constant Money

124
Q

Present Value

A

the cash flow from each projected year is discounted to get the equivalent present value

125
Q

Net Present Value (NPVs)

A

Summed PVs- Initial Capital Investments

126
Q

Acquisition Value

A

a bonus payment during NPV Summation

127
Q

Discounted Cash Flow rate of return

A

Special case of NPC where interest rate chosen is that which will exactly discount the future cash flows of a project to a PV equal to the initial capital investment

128
Q

What is sensitivity analysis?

A

Part of planning or study where risk is calculated
To identify which cmponents have greater effect upon the size of the cash flow

129
Q

Between Operating cost and revenue which have greater risk?

A

Revenue because selling prices can decrease and increas in extreme instances

130
Q

Break even Price

A

the selling price of the commodity at which operating and financing costs can be met and the mine can continue in production

131
Q

The weighted average of various price increase within a particular national economy

A

Gross National Product Deflator

132
Q

Negative Differential Inflation

A

when the increase in cost is slower than the measured general inflation

133
Q

Constant Money

A

Assumed to have the same purchasing power thrughout the valuation period and the basis for the calculation OF NPV

134
Q

Current money

A

figures used in calculation are adjusted for the anticipated rate of inflation each year and represent the net available profit of loss

135
Q

Traditional financing Sources

A

1) Equity
?Financing provided by owners (Shareholders) of the copamby developing the project through purchase of shares in the company when it is floated on a stock market.
?Can be bought or sold throughout the mine life
?Dividends to shareholders (paid out of profits)

2) Debt
?Financing by external sources (Banks)
?Lenders may have the power to cease trading if loans are not paid in agreed manner
?Ultimate control of company is in the financer

3) Retained Profits
?Undistributed profts which, if accumulate, can be used to develop another mineral property

136
Q

Project Financing (Conventional Financing Source/Modern)

A

?Differs in a way that the lendor looks at the cashflow of the project as the source of paying the loan and its assets as security for the loan
Thus the developer is external in the decision making
?Commonly in a form of consortium to spread lending risk
?However, sponsor or the developer, needs to isolate the specific project funded form their other projects
?Rate of Payback period and Good Management are factor considered by banks

137
Q

Notes

A

?Banks have the right to replace mangament in case they are proven incompetent in doing business
?Banks would not accept technical risks
?Banks reveiew envi and social impacts or issues

138
Q

Summary

A

Cash flows in constant money (not considering inflation) are tested by senisitvity analysis

GLE 2024 (Day 3) (48 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions