Financial Modeling for Mining

Explore the mine life cycle from exploration to closure, detailing resource estimates, economic studies, and risk reduction through pre feasibility and feasibility studies, amid price volatility and high capital intensity.

Explore the basics of geology behind mineral formation, including minerals, magma, tectonic plates, divergence, hydrothermal processes, and volcanogenic massive sulfide deposits (VMS) with copper, zinc, lead, and precious metals.

Review literature, maps, and claims to select targets and secure claims, then conduct ground and airborne reconnaissance, geophysical surveys, and drilling to test mineral prospects.

Learn to estimate resources using six 50 m drill holes, volume from area of influence, density, and grade to derive total tons and contained metal, with ore continuity considerations.

Explore how resources are classified as inferred, indicated, and measured, and how proven and probable reserves are economically mineable through feasibility studies under Canadian NI 43-101 and Australian code.

Learn open pit mining basics for ore near the surface, with pits up to a kilometer deep, strip ratio driving costs, and the cycle of drilling, blasting, loading, and transporting.

Explore underground mining basics, including shaft and ramp access and the room-and-pillar, sublevel stopping, and block caving methods, and examine cost drivers and the left-side cost curve.

Explore how base metals processing liberates valuable minerals through crushing and grinding, then separates them via flotation, yielding concentrates and waste tailings, with dewatering and water considerations.

Review concentrate sales terms with offsite smelters, including treatment and refining charges, penalties, and transport deductions. Calculate payable metals and net revenue to assess mining project feasibility.

Compare epc and epcm contracts in mining construction, detailing single-point responsibility, fixed-price turnkey epc with penalties and warranties, versus epcm's design and manage approach with sponsor risk and bankable mitigations.

Explore equity and debt financing for mining projects, including IPOs, private placements, nonrecourse project finance, and alternative streams like streaming, royalties, and offtake financing.

Examine the typical mining project finance structure, including a ring-fenced SPV, nonrecourse debt secured by SPV assets, and sponsor equity, along with risk factors and hedging considerations.

Identify and compare equity and debt sources for mining project finance, including sponsor equity, shareholder loans, equity bridge loans, banks, bonds, ECAs, and multilateral lenders.

Size debt in mining finance by linking cash flow available for debt service to debt size through the debt service coverage ratio, accounting for risk, tenor, and reserve requirements.

Model debt sizing in Excel for mining projects by linking debt service to the DCR and discounting with the debt rate, using NPV to find the maximum sustainable debt.

Understand the cash flow waterfall in project finance, where revenue funds operating costs, debt service, the debt service reserve account, the maintenance reserve account, and finally dividends under lender control.

Explore minimum debt structures in project finance, including balloon repayment, refinancing at years six, twelve, and eighteen, and the hard vs soft mini-perm structure with cash sweep and rate step-ups.

Learn to replace lengthy Excel formulas with calculation blocks that convert base rates into quarterly all-in rates, compute interest payments, and enhance clarity in mining financial modeling.

Learn to link inputs across worksheets in financial models using the equals sign, manage absolute and row anchoring, and use a paste link shortcut to preserve timing inputs.

Discover how to prevent daisy chains by using row anchored paste links across worksheets, instead of linking through the equal sign, improving navigation and traceability.

Explore placeholders in financial modeling to store temporary inputs on calculation sheets and later reallocate them to the input sheet, enabling progress when data is not yet available.

Master essential Excel shortcut keys for financial modeling, including navigation with ctrl page up/down, copy, paste, cut, and paste special; link creation, charting with F11, and formatting cues.

Explore anchoring in Excel to create robust financial models by mastering absolute references, dollar signs, and F4 shortcuts. See how widget price and quantity formulas stay correct across periods.

Explore how Excel stores dates as serial numbers and use the date, EDATE, and EOMONTH functions to forecast and align begin and end of periods in mining financial models.

Master the Excel if function for financial modeling, applying logical tests with and/or conditions to model project operation dates, where dates are treated as numbers.

Explore how to use VLOOKUP, LOOKUP, MATCH, and INDEX functions in Excel to extract inflation rates from a two-column table and build a horizontal time series.

Explore max and min functions in Excel using cash flow data to desegregate positive and negative values. Learn how to convert negatives to positives by multiplying by minus one.

Learn how the sumif function consolidates data and computes annual revenue from semiannual periods, and use it as a lookup to estimate asset retirement value and accumulated depreciation.

Model dates in the financial model by building a column counter and a column flag, then compute period beginnings, ends, days, and the financial year with if and end-of-month functions.

Model the financial close date flag and pre financial close date flag in the timeline using the close date and prior period end dates, with if and and formulas.

Model the construction period flag by calculating the planned end date from the financial close date and eighteen-month period, then adjust for early completion or delay using if and end.

Explore flexible timing in mining financial modeling by adjusting construction periods, calculating ahead or behind schedule with year frac, and producing periods during construction and a dynamic model start date.

Model three flags in a mining financial model: construction delay flag, completion flag, and operation start date flag, using planned end dates, delay periods, and financial period dates.

Learn to model operation flags in a mining model, including the operation period flag, period counter, last operation date flag, and post-operation flags using end-of-month calculations for a quarterly forecast.

Build a mining project timeline using pre-financial close, construction period, and delay flags with nested if logic and conditional formatting, then propagate timing across timing, operations, and financing worksheets.

Model high-grade and low-grade ore mining in a financial model by linking input data, operations period counters, and reserves balances, and compute contained gold and convert to troy ounces.

Model total earth moved by combining ore mined (high and low grade) with waste mined, using a strip ratio and lookup-based calculations from the input worksheet.

Model milling operations by calculating available capacity from the 150,000-ton maximum and ramp-up schedule, prioritizing high-grade ore to boost cash flow and NPV, with remaining capacity allocated to low grade.

Model high-grade and low-grade ore stockpiles, track opening and closing balances, and link inputs to compute the total stockpile and total ore milled.

Model and calculate the weighted average grade of ore stockpiles by combining contained gold opening balances with mined ore, accounting for high-grade ore and milling constraints.

Model gold production by calculating ore milling, recovery rates for high grade (95%) and low grade (92.5%), converting grams to troy ounces, and summing total gold produced.

Model the offtake revenue by setting a 5500 ounce contract with the off taker, representing 25 percent of total gold produced at max production, at 1850 per ounce.

Model spot revenue from the project by calculating spot volume and multiplying by the gold spot price under base and lender cases, then combine with offtake revenue for total revenue.

Model the escalation factor by converting the 1.5% annual CPI to a quarterly rate and applying it to operating costs, starting from project end via an if function.

Model drilling, blasting, grinding, and leaching costs with escalation factors, applying seven dollars per ton moved, fourteen dollars per ton milled, plus refining and royalty payments.

Model ongoing maintenance costs with a quarterly flag and mod function logic, escalate expenses, and assemble a total variable cost view including drill and blast, processing, fighting costs, and royalties.

Model fixed mining costs and a 95 percent reduction in the last three periods using a fixed cost reduction flag and a start date tied to timing and operation dates.