The Mining Valuation Handbook: Mining and Energy Valuation for Investors and Management

Equity markets have experienced turbulent times in recent years, particularly in resource valuations and commodity prices. In this international bestseller Victor Rudenno once again provides comprehensive, current information on mining and unravels some of the mystery surrounding the resources industry. Now in its fourth edition, The Mining Valuation Handbook will assist those in the mining industry seeking financial information, as well as people in finance looking for characteristics of the resources industry in an economic light. For the non-professional who is keen to invest in resource companies, this book will also help remove some of the mystique that often surrounds technical disciplines. Inside you will find: extensive commentary relevant to the mining industry valuation concepts worked examples and feasibility studies the role of resources and reserves commodity values and forecasting real option analysis extensive commodity profiles. The Mining Valuation Handbook is an essential addition to the libraries of astute investors and mining and financial analysts.

Acknowledgements ix Introduction xi 1 The resources industry 1 2 A quick guide to financials 13 3 Feasibility studies 21 4 Commodity values and forecasting 41 5 Resource project considerations 67 6 Classification of resources and reserves 97 7 Mining and hydrocarbon recovery 113 8 Indicative capital and operating costs 151 9 Hedging commodities and exchange rates 235 10 Taxation, depreciation, royalties and accounting standards 245 11 Valuation methodologies 265 12 Takeovers and fair value allocation 299 13 Quantifying the risk 317 14 Cutoff grade theory 329 15 Share price performance and real options 337 16 Impact of exploration, development and expansion 357 17 Determining the appropriate discount rate 381 18 Dealing with inflation 391 19 Agricola Mining — a hypothetical example 397 20 Commodity profiles 417 Appendix A: Sources of information 495 Appendix B: Australian Native Title 501 Appendix C: Royalty rates 505 Appendix D: Economic geology primer 517 Appendix E: Project details 523 Appendix F: Exchange rates and CPI 541 Appendix G: Continuous discounting and annuities 545 Appendix H: Abbreviations, conversions and energy factors 547 Glossary 555 Bibliography and references 593 Index 597

DR VICTOR RUDENNO holds a Bachelor of Mining Engineering, a Master of Commerce and a PhD in Mining Economics. He is a Senior Fellow of the Financial Services Institute of Australasia and a Fellow of the Australasian Institute of Mining and Metallurgy. Victor has worked for leading stockbrokers and investment banks and, for over 35 years, has been lecturing to university students, industry practitioners, investors and fund managers around the world. He consults to industry and government and can be contacted through www.revaluate.com.au .