Financial Modeling for Mining

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.

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.

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.

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 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.

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.

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.

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 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.

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 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 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.