Valuation of mineral properties which do not contain exploitable reserves

"This geological engineering method is based on jour main characteristics of mineral properties, viz; location: inclusion of valuable mineralization; inclusion of geophysical and/or geochemical targets; and inclusion of geological targets. These are subdivided into a total of 19 subcategories, which are used to determine the value of the property.The nineteen subcategories are prioritized and assigned relative value factors from 1.3 to 10. Value of each mineral claim unit is determined by applying the appropriate subcategory factors to a base value of $400per 16.2 hectare unit. Property value is calculated by totalling the values of such individual claim-units.The boundary between ore grade and sub-ore grade must be estimated for each property under valuation, thereby making the method sensitive to mineral commodity prices.A clear and disciplined sequence of decisions based on personal experience forms the basis of this method. The method utilizes all factors normally used to value a mineral property.IntroductionIt is generally accepted in the exploration industry that valuation of exploration properties is a subjective rather than objective process (Roscoe, 1986; Lawrence, 1988; Lawrence, 1989; Woodcock, 1985), and that it is greatly influenced by the experience and qualifications of the person who is doing the valuation. However, the significantly low degree of objectivity in mineral property valuation at this point in time invites effort to achieve a more quantitative engineering basis.Value of a mineral property depends basically upon metal prices, recoverable grades, mining and metallurgical practices, commodity supply and demand , and political-economic conditions, all of which vary with time. Therefore, any valuation is valid for only that point in time when it is made. Mineral deposits can decrease as well as increase in technical value with time."