Using Dynamic DCF and Real Options to Assess the Value and Risk of Mining Investments

Sunday , November 3 , 2024 | 08:00 to 16:00

$425 regular rate
$125 student rate

(Includes 2 coffee breaks + lunch)

 

Register Here
Presenters
Workshop Description
Workshop Objectives

Presenters:

Mike is a leading Integrated Valuation and Risk Modelling practitioner in the natural resource industries with over 30 years of mining experience.  He has extensive professional experience valuing mining projects with complex forms of flexibility and risk.  His assignments have ranged from exploration stage to late-stage capital investments and include project financing and contingent taxes.  Mike was previously an Associate Partner and Senior Manager at EY for 11 years where he valued complex financial securities such as employee stock options, contingent contracts, and financial derivatives in addition to his consulting work in the mining industry.  Before this, he worked for AMEC as the Technical Director of Mineral Economics.  He currently assists mining clients align capital allocation decisions with business strategy through SCM Decisions.

Vikram Jayaraman is an experienced general manager at DRA Global, where he brings over a decade of experience in strategic business planning, mining project assessments, planning of mining projects worldwide. Vikram’s expertise lies in bridging technical project requirements and financial feasibility with focus on mineral economics, ESG footprint and delivering project business case. Vikram is also well skilled in developing financial models, conducting comprehensive risk assessments, and structuring innovative financing solutions tailored to the unique challenges of the mining sector. His deep understanding of the mining industry, combined with his financial acumen, makes him a sought-after advisor for both junior and major mining companies.
Vikram holds an MBA in Finance from Rotman School of Management, and a Master’s degree in Mining Engineering from McGill University, equipping him with a rare blend of skills that are highly valued in the industry.
In addition to his role at DRA Global as SVP – Operations and Advisory, Vikram is a frequent speaker at industry conferences and workshops, where he shares his knowledge on mining finance strategies and the latest trends impacting the sector. His presentations are known for their clarity, depth, and practical relevance, making him a respected voice in the field.

Kent is an expert decision quality and probabilistic analysis advisor, instructor, and consultant. He is highly skilled in strategy framing, economic modelling/investment analysis, uncertainty assessment, and all levels of probabilistic analysis, including the value of information analysis.  Kent has a B.A.Sc. in Mechanical Engineering with Honors from the University of British Columbia and is a Fellow of the Society of Decision Professionals.  He previously worked as a Reservoir Engineer at Petro-Canada, a Managing Director of Merak Projects UK Ltd, and the Manager of Oil & Gas Business Consulting, Middle East and Asia at Schlumberger.  Kent is based in Calgary and has been with Decisions Frameworks since 2003.

Mr. Paduada has provided specialist valuation and risk management services as a corporate manager and advisor to the finance and natural resource industries for more than 15 years.  His advisory work has focused on modelling financial market uncertainty and its impact on the design, risk management, and financing of mining projects and the valuation of financial assets.   Mike has extensive numerical and computer programming skills from his years developing tailored project evaluation models for clients.  He currently works data science and data engineering for a leading manufacturing automation company while also providing technical advice to SCM Decisions.  Mike has a Master’s of Mathematics from the University of Waterloo with a focus on finance.

Objectives:

This workshop is a practical overview of using Dynamic Discounted Cash Flow (Dynamic DCF) and Real Option (RO) methods to value and assess the risk of mining investments.  It has three objectives:

Description:

Investment decision-making and risk management in the mining industry are becoming increasingly complex because of:

  • Increased technical uncertainty due to the difficulty of finding new deposits and the decline in deposit quality,
  • Greater financial uncertainty linked to metal and energy prices,
  • The flexibility to actively manage project investment, and
  • Financing and taxation structures that distribute value and risk in a complex manner.

This complexity increases the difficulty of analyzing many mining investments in a manner that considers each investment’s unique structure and risk characteristics.  Unfortunately, the static cash flow models often used to support investment decisions have difficulty recognizing the contrasting characteristics of many mining investments.

Advances in finance theory and risk management allow mining professionals to improve their financial and risk analysis with dynamic cash flow models. These models improve investment analysis by dynamically describing uncertainty, recognizing unusual project features and flexibility, and assessing the value and risk-transfer effects of complex financing and taxation structures.

We’ll illustrate key concepts with a series of case studies involving:

  • How exploration creates value.
  • The hidden value benefit of long-life copper projects over multiple price cycles.
  • The possible value and risk benefits of staged development in comparison to frontloading capital investment.
  • How alternative finance may distribute value and risk in a surprising manner.
  • The impact of jurisdiction and development stage of each asset on the risk profile of an M&A transaction.

Join us to learn how financial and technical uncertainty, project structure, and financing structures influence the value and risk of mining investments.

Register Here