Value Tracking From a Financial Perspective

The professional geologist or engineer on a mining operation has a particular view of their operation. This is based on the factors of the operation that have a direct impact on the daily work program of the professional, such as production rates and grades. The view that would be taken by a financier who is called upon to support the project may be somewhat different. The value of the operation to the financier is in its ability to generate surplus cash for its owners and thus repay the debts to the financiers, with as low risks profile as possible. A number of tools are used to test the sensitivity of the project to variations in the key cost/revenue drivers. The Financier may call on a team of technical specialists to assist with the assessment of the cash flow and risk profile and to monitor the development of the project. The ability to offset this risk, as all projects have some degree of risk, may be a key factor in determining the level of financial support to be offered.