Good day, I am a project Manager for a Silica Mining project and have been tasked to get a practical way of cost valuation of Mineral ore in the ground ? The Mineral resource has gotten to the measured state and the reserve proven. Solutions are welcome. Thank you. Saving Changes...
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Peter RapinSubject Matter Expect; Project Delivery| Independent ConsultantOntario, Canada
You definitely need an expert. Even if you know how much is in the ground, it costs money and time to extract it. Silica is also a commodity so the value fluctuates with the market.
Now you have a situation where you have an outward cash flow to mine the silica, an inward cash flow when you sell it, and price estimations as to what the future price will be when you sell it. If it is a long mining project, the interest rates (cost of money) also changes with time.
The estimation is a net present value problem, but the respective cash flows require specialized mining knowledge and some financial engineering. Saving Changes...
