Research Article
Year 2019,
Volume: 3 Issue: 1, 39 - 50, 30.03.2019
Abstract
References
- REFERENCES
- Referans1 Abdel Sabour, S.A., Wood, G., 2009. Economic Evaluation of Gold Mining Projects: From Static Discounted Cash Flow to Real Options. In Corral, M.D., Earle, J.L. (Ed.), Gold Mining: Formation and Resource Estimation (91-109). Nova Science Publisher, Inc., 227p, New York.
- Referans2 Abdel Sabour, S.A., Dimitrakopoulos, R., 2011. Incorporating Geological and Market Uncertainties and Operational Flexibility into Open Pit Mine Design. Journal of Mining Science, 47(2), 191-201.
- Referans3 Aryafar, A., Giv, M.J., Motlagh, S.Z., 2011. Sensitivity Analysis of Investment in Sarbisheh Basalt-Andesite Mine, Birjand, Using of Monte Carlo Simulation. International Multidisciplinary Scientific GeoConferences, 1, 927.
- Referans4 Bastante, F.G., Taboada, J., Alejano, L., Alonso, E. 2008. Optimization Tools and Simulation Methods for Designing and Evaluating a Mining Operation. Stochastic Environmental Research and Risk Assessment, 22, 727-735.
- Referans5 Dehghani, H., Ataee-pour, M., 2012. Determination of the Effect of Operating Cost Uncertainty on Mining Project Evaluation. Resources Policy, (37), 109-117.
- Referans6 Hartman, H.L., Mutmansky, J.M., 2002. Introductory Mining Engineering. John Wiley & Sons, Inc., 570p, ABD.
- Referans7 Iloiu, M., Csiminga, D., 2009. Project Risk Evaluation Methods-Sensitivity Analysis. Annals of the University of Petroşani, 9, 33-38.
- Referans8 Kreuzer, O.P., Etheridge, M.A., Guj, P., McMahon, M.E., Holden, D.J., 2008. Linking Mineral Deposit Models to Quantitative Risk Analysis and Decision-Making in Exploration. Economic Geology, 103, 829-850.
- Referans9 Morley, C., Snowden, V., Day, D., 1999. Financial Impact of Resource/Reserve Uncertainty. The Journal of the South African Institute of Mining and Metallurgy, 293-301.
- Referans10 Oraee, K., Sayadi, A.R., Tavassoli, S.M.M., 2011. Economic Evaluation and Sensitivity-Risk Analysis Of Zarshuran Gold Mine Project, SME Annual Meeting.
- Referans11 Park Elektrik A.Ş. Jeoloji Raporu, 2012.
- Referans12 Park Elektrik A.Ş. İşletme Raporu, 2012.
- Referans1Pincock Allen and Holt Consulting Service, 2012. Mineral Project Evaluation. 115.
- Referans13 Simonsen, H., Perry, J., 1999. Risk Identification, Assessment and Management in the Mining and Metallurgical Industries. The Journal of the South African Institute of Mining and Metallurgy, 321-332.
- Referans14 Wei, J., Jian, Z., Jianglan, L., 2011. Mining Investment Risk Analysis Based on Monte Carlo Simulation. Management of e-Commerce and e-Government (ICMeCG), 2011 Fifth International Conference on pp. 72-75. Hubei.
Year 2019,
Volume: 3 Issue: 1, 39 - 50, 30.03.2019
Abstract
Mining investments are high-risky investments due to mineral deposit uncertainties. Therefore,
before any investment decision is given, an economic assessment should be performed and several risk
situations must be taken into consideration. In this study, it was examined whether or not an investment
made in a copper mine in Siirt, Turkey is economical by using Sensitivity Analysis and Monte Carlo
Simulation. The aim of this study is to construct cash flows for this copper mine with an average grade of
2.35% Cu and 39.821.000 tons reserve throughout 25 years for two different situations. In the first case, it
was assumed that the total investment amount will be covered by 100% equity, while in the second case the
total investment amount was assumed to be 30% equity and 70% bank loan. In the Sensitivity Analysis,
mineral processing and operating costs, the average grades and ore concentrate sale prices were evaluated
over optimistic and pessimistic forecasts. Changes in the net present value and internal rate of return were
examined without risk. Monte Carlo Simulation was run by using computer software program @Risk 6.0
and applied to investment criteria for this copper mine field. The analysis of the output modelling situations
where decisions were made under uncertainty gave reliable results by quantifying the degree of risk for this
mining project. Consequently, if the investment was provided with 100% equity, NPV was 136.369.150,7 $
and IRR was 32% with a discount rate of 15%, probably as likely to harm the project was about 0,018. If
the investment was provided with 30% equity, NPV was 111.742.245,4 $, IRR was 28% with a discount
rate of 15%, probably as likely to harm the project was about 0,05. In accordance with the results, the
investment can be said to be a profitable project in both assumptions.
Keywords
Mining Investment Uncertainty Risk Analysis Monte Carlo Simulation Method Sensitivity Analysis
References
- REFERENCES
- Referans1 Abdel Sabour, S.A., Wood, G., 2009. Economic Evaluation of Gold Mining Projects: From Static Discounted Cash Flow to Real Options. In Corral, M.D., Earle, J.L. (Ed.), Gold Mining: Formation and Resource Estimation (91-109). Nova Science Publisher, Inc., 227p, New York.
- Referans2 Abdel Sabour, S.A., Dimitrakopoulos, R., 2011. Incorporating Geological and Market Uncertainties and Operational Flexibility into Open Pit Mine Design. Journal of Mining Science, 47(2), 191-201.
- Referans3 Aryafar, A., Giv, M.J., Motlagh, S.Z., 2011. Sensitivity Analysis of Investment in Sarbisheh Basalt-Andesite Mine, Birjand, Using of Monte Carlo Simulation. International Multidisciplinary Scientific GeoConferences, 1, 927.
- Referans4 Bastante, F.G., Taboada, J., Alejano, L., Alonso, E. 2008. Optimization Tools and Simulation Methods for Designing and Evaluating a Mining Operation. Stochastic Environmental Research and Risk Assessment, 22, 727-735.
- Referans5 Dehghani, H., Ataee-pour, M., 2012. Determination of the Effect of Operating Cost Uncertainty on Mining Project Evaluation. Resources Policy, (37), 109-117.
- Referans6 Hartman, H.L., Mutmansky, J.M., 2002. Introductory Mining Engineering. John Wiley & Sons, Inc., 570p, ABD.
- Referans7 Iloiu, M., Csiminga, D., 2009. Project Risk Evaluation Methods-Sensitivity Analysis. Annals of the University of Petroşani, 9, 33-38.
- Referans8 Kreuzer, O.P., Etheridge, M.A., Guj, P., McMahon, M.E., Holden, D.J., 2008. Linking Mineral Deposit Models to Quantitative Risk Analysis and Decision-Making in Exploration. Economic Geology, 103, 829-850.
- Referans9 Morley, C., Snowden, V., Day, D., 1999. Financial Impact of Resource/Reserve Uncertainty. The Journal of the South African Institute of Mining and Metallurgy, 293-301.
- Referans10 Oraee, K., Sayadi, A.R., Tavassoli, S.M.M., 2011. Economic Evaluation and Sensitivity-Risk Analysis Of Zarshuran Gold Mine Project, SME Annual Meeting.
- Referans11 Park Elektrik A.Ş. Jeoloji Raporu, 2012.
- Referans12 Park Elektrik A.Ş. İşletme Raporu, 2012.
- Referans1Pincock Allen and Holt Consulting Service, 2012. Mineral Project Evaluation. 115.
- Referans13 Simonsen, H., Perry, J., 1999. Risk Identification, Assessment and Management in the Mining and Metallurgical Industries. The Journal of the South African Institute of Mining and Metallurgy, 321-332.
- Referans14 Wei, J., Jian, Z., Jianglan, L., 2011. Mining Investment Risk Analysis Based on Monte Carlo Simulation. Management of e-Commerce and e-Government (ICMeCG), 2011 Fifth International Conference on pp. 72-75. Hubei.
There are 16 citations in total.
Details
| Primary Language | English |
|---|---|
| Subjects | Geological Sciences and Engineering (Other) |
| Journal Section | Research Articles |
| Authors | |
| Publication Date | March 30, 2019 |
| Acceptance Date | March 5, 2019 |
| Published in Issue | Year 2019 Volume: 3 Issue: 1 |
