Subject Outline

This subject provides students with a working knowledge of the issues and calculations involved when analysing and valuing a mining project or mining company. The characteristics of the Australian mining industry are examined before focusing on the technical determination of inputs into the valuation. This involves analysing the costs of mining and mineral processing stages. Students will work through a case study which is a practical demonstration of how a mining project is evaluated. Other financing alternatives are also explored.

2008 Availability

Trimester 2

Study Modes

Lectures and distance education

Assessment Method and Weighting

• Assignment 40%
• Examination 60%

Resource Requirements

• Calculator
• Internet access
• Microsoft® Excel

• Financial Markets and Economics (C1)
• Financial Analysis and Valuation (C2)
• Applied Valuation (E102)

Learning Outcomes
On successful completion of this subject students will be able to:

• outline the basic geological processes that lead to the formation of mineral and hydrocarbon deposits
• explain the basic techniques of ore extraction and mineral processing and assess the impact of various methods on the cost structure of an operation
• outline the structure of the commodities market and describe the various supply and demand factors that impact upon the pricing of mineral commodities
• evaluate the feasibility of a mining project
• prepare an earnings model to forecast future company earnings
• apply valuation techniques to listed mining companies.

Nil.

Content

• Geology and exploration
• Mining methods
• Mineral processing and extractive metallurgy
• Data, valuation and modelling
• Legislative issues
• Case study: reserves, project definition and project cash flows
• The oil and gas industry
• Mineral markets and pricing
• Share evaluation