Risk Analysis in the Economic Evaluation of Mining Projects

The application of micro-informatics in the risk analysis of a mining project is something that has been analyzed and because of the interest there is in the utilization of these means of modern work, a lot of studies have been done in order to become familiar with these techniques.

Risk Analysis: The problem that we are going to be getting into in an economic level of absolute risk evaluation of a mining project is the one of the calculus of intrinsic worth or internal of the deposit that has been studied. This value is calculated starting from variables that are known in an uncertain way. It is in this way that the economic value would be uncertain and the project would be potentially risky. Appraisement is done while trying to identify the different internal factors and eventual interferences that could be included in the calculus of external factors such as inflation, change of exchange rate, etc.

The development of an analysis risk software must has a main objective to serve the potential users who are the mining business men and financial entities, especially the development and promotion, providing them with a modern work tool.

Some individuals have used a method of calculus that is probabilistic by using the method of Montecarlo and the simulations of the project follow along with these method.

The idea of this method was to model each aleatory variable such as the prices, the mineral reserves, the exploitation costs, and the amount of the investment etc. for a distribution where the medium, maximum and minimum amount is required.

This process that was put into a model and evaluated, as well as the variability of the economic mining parameters, uses the calculus of the Actual Net Value, Economic Debt Coverage Ratio, and the Financial Debt Coverage Ratio.

The final result of this method is a distribution of probabilities according the possible investment criteria with their medias of Actual Net Value and Debt Coverage Ratio according to the amount of simulations that have been chosen.