Project Appraisal and Financing Projects

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					Mineral Project
Appraisal and
Finance
22 - 26 February 2010



A 5-day programme for professionals
involved in the appraisal, financing and
development of mining projects.
Modular options available.

Registration includes pre-course access to
e-learning and a course demonstration licence
for IC-MinEval software.




       Organised by the School of Professional Development
Background                                                   Pre-course e-learning
Securing finance for mineral projects (whether equity or     To enable registered delegates to derive maximum
debt) requires all the relevant technical, operational,      benefit from the live sessions, an internet url, user name
permitting and financial components to be presented in       and password will be supplied prior to the course
an integrated and transparent manner. For projects to be     providing access to a Virtual Learning Environment
able to secure equity funding and mining finance, they       (VLE) designed for the programme. All the course
normally require the inclusion of a resource that can be     material covered in the live sessions will be available
placed into one of the internationally recognised systems    here prior to the start of the course, together with
of classification. To take a resource into the reserve       important course information, including joining
category requires the development of a pre-feasibility or    instructions. It will also enable participants to post details
full technical feasibility study. This would expect to add   about themselves and be involved in post course follow-
significant value to a project, which might otherwise        up.
comprise mainly exploration potential as it permits the
generation of a discounted cash flow financial model.        For a limited period, participants will be able to access an
Where, through sensitivity analysis, the NPV and IRR         EduMine e-Learning module through the VLE. This gives
generated can be shown to be robust, this not only           an introduction to modelling project finance and covers
enhances the valuation of the project for the equity         the critical issues associated with the debt financing of
market, it can also be used to secure project finance.       mining projects. To access the e-learning module, the
                                                             consent of delegates is required to forward their e-mail
Course Aim and Structure                                     addresses to EduMine. The details are used only to
The aim of the course is to provide a comprehensive          activate logins and will not be shared with any other
guide to understanding the main factors involved in          parties.
securing the financial support for mining projects through
equity, debt, or entering into a joint venture. This         IC-MinEval
involves addressing the underlying technical principles,     Use will be made in the workshop sessions of the IC-
applying these to mineral projects and demonstrating         MinEval software provided by IC-FinEval, an Excel™-
how these influence the financial modelling.                 based spreadsheet programme automating all stages
                                                             required to produce models for a wide range of mineral
Particular attention will be given to the treatment of key   projects. IC-MinEval produces a Balance Sheet, and
independent variables, such as grade and metal price,        Profit and Loss account from the cash flows, with tax
dependent variables, such as grade-tonnage                   provisions linked to the Profit and Loss Account. The cost
relationships, and the way these influence the rate of       of debt is calculated, as is the weighted average cost of
mining, associated operating and capital costs, and the      capital and the cost of equity. Output modules include the
optimisation of the NPV of a project. Real options that      base case discount cash flows, as well as key financial
impact on the valuation of a mineral asset will be           ratios and performance indicators such as NPV, IRR
considered. Operational issues that investors consider       payback and maximum cash exposure. Sensitivity
essential to developing a successful project will be         analysis can be undertaken on key variables.
addressed, including the role of permitting and
environmental compliance. The structure of joint             The functionality of IC-MinEval will be delivered over the
ventures and the role of tax models in enhancing the         internet through the Software as a Service (SAAS)
features of a mineral project will be outlined.              system with InfoMine (http://software.infomine.com/)
                                                             Delegates will be expected to have their own laptop
The course is structured in two sections. The focus of       computers available and will be provided with wireless
days one and two is on technical appraisal issues, and       access to the College's internet. They will need to have
that of days three to five is on quantitative finance        administrative rights for their laptops, as there will be the
aspects. While not facilitating the development of a         need to install ActiveX to access the system. Delegates
balanced overview, attendance on either module               will be given access to SaaS a few days before the start
separately is possible.                                      of the course. (Delegates with AppleMac and Firefox
                                                             internet browsers may need some support.) Delegates
                                                             all have access to the functionality of IC-MinEval through
                                                             SaaS for a further four weeks after the course. Access
           Comments from previous course
                                                             beyond that will be available on subscriptions.
                   participants:
"Good opportunity to discuss key issues with the experts."
                                                             Who Should Attend?
                                                             This course will be of particular interest to all
"Course was both stimulating and of great practical          professionals who are involved in the funding of minerals
 benefit."                                                   projects. They might be working for financial institutions
                                                             as mining analysts, fund and asset managers, or
"A thoroughly professional course presented by extremely     securities and corporate finance investment bankers.
 well qualified and knowledgeable lecturers."                They might be working for junior mining companies
                                                             preparing business cases, or for development aid
"Enjoyable, interesting and valuable."                       officials and other specialists involved in the appraisal,
                                                             financing and development of mining projects.
"Very helpful indeed."                                       Authoritative reviews of key disciplines will be of interest
                                                             to industrially based geologists and engineers.
"Thanks to everyone involved. An excellent course - I will
 definitely encourage people to attend."
                                                             Previous courses have received wide international
"Excellent course. I feel I have greatly benefited from      participation from major mining and finance corporations,
 clear, concise explanations behind the 'myths' of           providing an opportunity to bring together professionals
  mineral processing and engineering mining."                from more than fifty different countries.
                                  COURSE PROGRAMME


D AY 1          22 F EBRUARY 2010 - T ECHNICAL A PPRAISAL


08.15 - 08.45   Registration
08.45 - 09.00   Welcome and Profile of Participants
09.00 - 10.00   Feasibility Studies. Role of a prefeasibility study. Scope of a full technical       D. Buchanan
                feasibility. Role in raising equity. Role in securing debt finance. Independent
                reviews.
10.00 - 11.00   Resource Estimation I. Sampling practice and principles of uncertainty. Spatial      D. Buchanan
                control of sampling and concepts of geological continuity. Grade and volume
                estimates. Determination of optimum sampling density. Block modelling.
                Cut-off grades and ore body modelling. Grade tonnage analysis. Reserve and
                resource definitions.
11.00 - 11.30   Break
11.30 - 13.00   Mine Planning. Mining block model creation. Pit design and optimisation. Use of      D. Buchanan
                Micromine software.
                Sampling on the scale of mining. Proven and probable categories in operating
                mines. Metal reconciliation from in situ resource estimation to metal produced.
13.00 - 14.00   Lunch
14.00 - 15.30   Resource Estimation II. Methods of ore reserve estimation. Semivariograms.                A. Korre
                Kriging and the determination of block estimates and associated estimation variance.
15.30 - 15.45   Break
15.45 - 17.15   Surface Mining. Concept of ore production as a system. The choice between                T. Shaw
                surface and underground mining. Surface mining methods. Economic considerations.
                Advantages and disadvantages.




D AY 2          23 F EBRUARY 2010 - T ECHNICAL A PPRAISAL

09.00 - 10.30   Underground Mining. Methods employed based on different ore types. Access                T. Shaw
                to deposits. Ore breakage and transportation. Ventilation and safety. Ground control.
                Surveying, power distribution and drainage.
10.30 - 11.00   Break
11.00 - 12.30   Mineral Processing. The central role of mineralogy in effective mineral processing.     J. Cilliers
                Comminution. Liberation. Physical and chemical separation processes. Solid-liquid
                separation. Waste disposal.
12:30 - 13.30   Lunch
13.30 - 14.45   Extractive Metallurgy - Copper and Aluminium. Illustration of extractive metallurgy     J. Cilliers
                through the hydrometallurgy and pyrometallurgy of copper ores. Oxide versus sulphide
                ores. Flash smelting, converting and electro-refining. Heap, tank and in-situ leaching.
                Solvent extraction and electrowinning. Production of aluminium from bauxite via the
                Bayer and Hall-Heroult processes.
14.45 - 15:15   Break
15:15 - 16.45   Extractive Metallurgy - Gold. Cyanide leaching. Gold recovery by CIP/CIL and            J. Cilliers
                electro-winning.
D AY 3          24 F EBRUARY 2010 - Q UANTITATIVE F INANCE
09.00 - 10.00   Operating Costs. Relationship between costs and scale of mining. Mining             D.Buchanan
                dilution and recovery.
                Contract mining. Organisational structure. Mining schedule. Fixed and variable
                costs (power, labour and consumables).
10.00 - 11.00   Financial Modelling. Discounted cash flows. Time value of money. Discount           D.Buchanan
                rates. Indicators of economic viability (NPV, IRR and payback). Maximum cash
                exposure. Sensitivity analysis. Rate of production, effect of changing cut-off grade
                and optimisation of NPV.
11.00 - 11.30   Break
11.30 - 13.00   Workshop. DCF exercise based on annuity tables. Review of spreadsheet-            D. Buchanan
                based solution.
13.00 - 14.00   Lunch
14.00 - 15.30   Demonstration of IC-MinEval. Case history of gold operation. Setting up            D. Buchanan
                base case.
15.30 - 16.00   Break
16.00 - 17.00   Funding Options for Junior Companies. Sources of equity finance. IPO               D. Buchanan
                and AIM. Valuation of projects. Role of joint ventures. Case histories of South
                African projects.


D AY 4           25 F EBRUARY 2010 - Q UANTITATIVE F INANCE
09.00 - 11.00   Real Option Analysis. The use of financial models in real option analysis in     C. Worcester
                mining projects.
11.00 - 11.30   Break
11.00 - 12.00   Project Finance. Capital Asset Pricing Model. Relationship between cost of        D. Buchanan
                debt, taxation, Balance Sheet, Profit and Loss account and cash flow.
                Calculating the cost of debt and equity. Determining the weighted average
                cost of capital and optimum level of gearing.
12.00 - 13.00   Analysis of Risk and Uncertainty. Treatment of multivariant systems.             D. Buchanan
                Application to Monte Carlo simulation techniques.
13.00 - 14.00   Lunch
14.00 - 15.30   Financial Products. Forwards, futures and options. Interest rate swaps.               M. Davis
                Credit derivatives. Pricing methodologies. Black - Scholes formula and applications.
15.30 - 15.45   Break
15.45 - 17.00   Use of Options. Survey of world metal markets and application of options in           M. Davis
                project finance.


D AY 5           26 F EBRUARY 2010 - Q UANTITATIVE F INANCE
09.00 - 09.30    Tax and Company Structure. Tax models. Taxation agreements. Carry                  D. Buchanan
                 forward provisions. EPT. Royalties. Depreciation allowances. Management
                 accounts and audits.
09.30 - 10.30    Scenario Analysis. Workshop sessions. Base Metal project. Negotiating an           D. Buchanan
                 off-take agreement and linked finance for a project that produces a polymetallic
                 concentrate.
10.30 - 11.00    Break
11.00 - 13.00    Scenario Analysis. Workshop sessions. Base Metal project. Multipartner             D. Buchanan
                 scenario analysis - determining relative return for different stakeholders as a
                 function of investment contribution.
13.00 - 14.00    Lunch
14.00 - 15.30    Scenario Analysis. Workshop sessions. PGE, Coal, Diamonds andIron Ore              D. Buchanan
                 projects
15.30 - 16.15    Environmental Review. Site visits. Impact assessment. Baseline conditions,         D. Buchanan
                 impacts and mitigation. Management and monitoring
                                          THE PRESENTERS
Professor Dennis Buchanan
Emeritus Professor of Mining Geology and Senior Research Fellow, Imperial College London
Professor Buchanan's current research interest lies in addressing the underlying
technical principles applying to mineral projects and demonstrating how these influence financial modelling. He is
founder and Chairman of the Imperial Innovations Ltd company, IC-FinEval Ltd, which provides financial evaluation,
risk assessment and decision making software. He has 28 years experience of teaching mining geology, mineral
exploration and mineral project appraisal, and is responsible for the MSc in Metals and Energy Finance. This is a
joint degree between the Department of Earth Science and Engineering and the Tanaka Business School at Imperial
College London. Professor Buchanan has worked as a Mining Geologist in both gold and platinum mines in South
Africa and has wide experience as a consultant to industry, as an expert witness and in running short courses for
industry.

Professor Mark Davis
Professor of Mathematics, Imperial College London
Mark Davis is a member of the Mathematical Finance group at the Department of Mathematics, Imperial College
London. The group runs PhD and MSc programmes which feature substantial interaction with the financial services
industry in London. Mark's own research is concerned with option pricing models, credit risk and portfolio
optimization. Prior to joining the College in 2000, Mark led a research group at the investment bank Tokyo-Mitsubishi
International, with activities including several aspects of project finance.


Professor Jan Cilliers
Professor of Mineral Processing, Imperial College London.
Professor Cilliers was appointed to the Chair of Mineral Processing in 2005. His research interests include the
interaction between mineral processing and metal extraction, and he has undertaken pioneering work in the
modelling and design of mineral flotation techniques based on froth physics. He has published more than 50 papers
on froth flotation and foam systems modelling and measurement and also holds patents in froth characterisation and
manipulation methods. In addition to his academic career he has an MBA and has worked with Rio Tinto, Anglo
American and Tech Cominco as a consultant. He has particular expertise in optimising mineral separations to
maximise revenue and increase resource sustainability.


Professor Tim Shaw
Emeritus Professor of Mining Engineering, Imperial College London
Professor Shaw was appointed to the Chair in Mining Engineering and as head of Department in 1980. Prior to that
he held an academic appointment at the Virginia Polytechnic Institute and State University. He had entered the
academic environment after a successful career in the South African mining industry where he had been Chief
Consulting Engineer with the Johannesburg Consolidated Investment Company and managing director of several of
their managed mining companies. He has extensive experience as a technical consultant, company director and in
contributing to short courses for industry.


Mr Chris Worcester
Director and Partner, DCM Structured Finance, London
Mr Worcester is currently Director and Partner of DCM Structured Finance, a corporate finance advisory boutique
focused on natural resources and, in particular, the mining industry. Previously, he was Executive Director and Acting
Global Head of Metals and Mining at WestLB. Prior to this, he held the position of Head of Financial Modelling and
Analysis at the Royal Bank of Scotland, and has worked at Barclays Capital within the Mining and Metals team.
During his career, Chris has worked on over 30 mining transactions.


Dr Anna Korre
Reader in Environmental Engineering, Imperial College London
Dr Korre has many years experience of academic research in environmental analysis and modelling related to the
mining and the oil and gas industries. She holds a PhD in Environmental Engineering from Imperial College London
where she currently lectures in geostatistics, environmental impact assessment and life cycle assessment. She also
acts as consultant in the fields of resource estimation and risk assessment.
                                                 General Information
O NLINE R EGISTRATION
To book a place on the course, please go to www.imperial.ac.uk/cpd/mpaf and click on online booking icon. If you have
any queries regarding your booking, please contact us on tel: +44(0)20 7594 6882 or by email cpd@imperial.ac.uk
Detailed joining instructions, including a map, will be sent to all participants 10-14 days prior to the commencement of
the course. Places on the course are limited, EARLY BOOKING IS ADVISED.

F EES
The full fee for the five day programme is £2625. The fee for registration for days one and two is £1250 and for days
three to five is £1725. The fee covers tuition, a comprehensive set of course notes, access to a pre-course e-learning
module, IC MinEval software demonstration licence, lunches and light refreshments but does not cover accommodation.
Please note all fees must be received before the course start date.

T EAM ATTENDANCE
A 20% discount on the course fee is available for the third and any subsequent applicants from the same organisation
who enrol together for the same duration.

V ENUE
The course will be held at Imperial College London, South Kensington, London. The College is located in a pleasant part
of London, close to Hyde Park, the Royal Albert Hall and world-renowned museums.

A CCOMMODATION
Single bedroom accommodation is available in local hotels within easy access to the College. Minimum cost of a room
with shower/bath will be in the region of £85 per night. This is additional to the course fee, and participants are
responsible for payment of their hotel bills. For further details and reservations, please contact:

Imperial College London Hotel booking Service
Accommodation Link
London SW7 2PG.
Tel: +44 (0)20 7594 9507/11; Fax: +44 (0)20 7594 9504/5;
Email: reservations@imperial.ac.uk
Information is available at: www.imperial.ac.uk/conferences

V ISAS
Overseas delegates requiring Visas for the UK are responsible for their application and should allow sufficient time for
the process to be completed.

C ANCELLATIONS
A 20% administration fee will be levied for cancellations made up to two weeks prior to the start of the course.
Cancellations thereafter will be liable to the loss of the full fee. Notice of cancellation must be given in writing by letter
or fax and action will be taken to recover, from the delegates or their employers, that proportion of the fee owing at the
time of cancellation.

Imperial College London reserves the right to cancel an advertised course at short notice. It will endeavour to provide
participants with as much notice as possible, but will not accept liability for costs incurred by participants or their
organisations for the cancellation of travel arrangements and/or accommodation reservations as a result of the course
being cancelled or postponed. If a course is cancelled, fees will be refunded in full. Imperial College London also
reserves the right to postpone or make such alterations to the content of a course as may be necessary.

Q UERIES
Further information regarding the technical content of the course should be directed to:
Professor Dennis Buchanan, Department of Earth Science & Engineering, Imperial College London, South
Kensington, London SW7 2AZ, UK.
Tel: +44 (0)20 7594 6440
Fax: +44 (0)20 7594 6464
Email: d.buchanan@imperial.ac.uk

Queries regarding registration and other administration matters should be directed to:
Stephanie O’Mahony, School of Professional Development, Imperial College London, Level 4, Sherfield Building, South
Kensington, London, SW7 2AZ, UK.
Tel: +44 (0)20 7594 6882
Fax: +44 (0)20 7594 6883
Email: cpd@imperial.ac.uk

Visit our website for up-to-date information on this programme and other courses:

www.imperial.ac.uk/cpd

				
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