Lecture Objectives

The objectives of this lecture are:

• To discuss the distinctive features of the mine
investment climate.

• To discuss the essence of Mineral Project

Evaluation (MPE).

• To present the course objectives and expected

outcomes

• To give the course outline and assessment

procedure.
• To present the course syllabus and recommended
reference material.

1
Lecture 1: Overview of Mineral Project Evaluation Slide 1
 Expected Outcome
At the end of the lecture, the student is
expected to:

• Appreciate the nature and scope of the course.

• Understand his or her input for better

understanding.

2
Lecture 1: Overview of Mineral Project Evaluation Slide 2
 Distinctive Features of the Mine
Investment Climate

The mine investment climate has the following

features, which distinguish it from other
manufacturing industries:
• High capital requirement;

• Long preproduction periods;

• High risk; and

• Non-renewable resource.

3
Lecture 1: Overview of Mineral Project Evaluation Slide 3
 Investment Analysis
Like all forms of business, an overall mining
investment analysis should involve three types of
analyses (Stermole, 1996), namely:

• Economic analysis;

• Financial analysis; and

• Intangible analysis.

4
Lecture 1: Overview of Mineral Project Evaluation Slide 4
 Definition of MPE

Mineral project evaluation is

the economic analysis by
which investment decision
is made with respect to
mineral projects.

5
Lecture 1: Overview of Mineral Project Evaluation Slide 5
 Course Aims
The aims of this course are:
• To prepare the student to become a good
professional engineer by equipping him or her
with the techniques and methods by which he or
she can evaluate the economic potential of
mineral projects.

• To equip the student with investment decision

skills so that he or she can make objective
investment decisions in his or her professional
life.

6
Lecture 1: Overview of Mineral Project Evaluation Slide 6
 Course Objectives
The objectives of this course are:
• To introduce the student to the economics of
mineral projects.

• To expose the student to the various methods of

estimating revenues, costs and profits associated
with mineral projects.

• To encourage the student to employ economic

evaluation techniques to make sound investment
decision.

7
Lecture 1: Overview of Mineral Project Evaluation Slide 7
 Expected Course Outcomes
At the end of the course, the student is
expected to:
• Understand the economic evaluation
techniques used to evaluate mineral projects.

• Be able to evaluate mineral projects and

establish their economic effectiveness.

• Be able to establish how sensitive a mineral

project will be to changes in the economic
environment.

8
Lecture 1: Overview of Mineral Project Evaluation Slide 8
 Course Outline
The course is designed to cover the following
areas:

• Time Value of Money

• Estimation of Revenue and Costs
• Capital Allowance and Mine Taxation
• Financial Analysis
• Investment Decision Analysis
• Cash Flow, Sensitivity and Risk Analyses

9
Lecture 1: Overview of Mineral Project Evaluation Slide 9
 Course Presentation
• The course is presented through lectures, tutorials
and activities supported with handouts, computers
and visual aids.

• The tutorial will be in the form of problem solving

and discussions and will constitute an integral part
of each lecture. In this way, application of economic
evaluation methods can be directly demonstrated.

• The student can best understand and appreciate the

subject by attending all lectures and tutorials, by
practising, reading references and handouts and by
completing all assignments and course work on
schedule.
10
Lecture 1: Overview of Mineral Project Evaluation Slide 10
 Course Assessment
Student Assessment:
Two forms of student assessment are designed, namely:

(i) Continuous assessment; and

(ii) Examination.

Lecturer Assessment:

(i) Questionnaire
(ii) suggestions

11
Lecture 1: Overview of Mineral Project Evaluation Slide 11
 Semester Schedule
Week Date Official Activity Mon Tues
1 16-Aug Lectures begin Lect 1 -Intro
2 23-Aug Sat - Matriculation Lect 2 - Time Value of Money Solutions to ques
3 30-Aug Lect 2 - Time Value of Money Solution to ques
4 06-Sep Lect 3 - Costs & Revenue Estimation Quiz on Lect 2
5 13-Sep Lect 4 - Mine Taxation & Allowances
6 20-Sep Lect 5 - Financial Analysis Lect 6
7 27-Sep Lect 6 - Investment Decision Criteria 3rd Quiz on Lect 5
8 04-Oct Lect 7 - Cashflow Analysis Lect 7 Cashflow
9 11-Oct Lect 7 - Sensitivity & Risk Analyses Group Assignment
10 18-Oct Presentation of Group Assignment
11 25-Oct Exams Overview
12 1-Nov Evaluation of
13 8-Nov Lecturers
14 15-Nov Exams
15 22-Nov Exams
16 29-Nov Exams

12
Lecture 1: Overview of Mineral Project Evaluation Slide 12