ABSTRACT
The value of mining companies are largely dependent on the value of their underlying assets and projects which predominantly reflect the value of their mineral deposits, assuming that deposits can be profitably exploited at some time in the future. The Cost Approach and subset of valuation methodologies are based on the theory that the sum of the capital expended on a mineral property, notably including the initial exploration expenditure, is correlated to the mining property’s value. The Market Approach is dependent on recent and applicable market transactions on comparable mineral properties. The approach takes into consideration of actual mineral property transaction values which the valuer then applies to the project being valued. The Income Approach, sometimes referred to as the Cash Flow Capitalisation Approach, and its valuation methodologies, are based on the notion that the value of a project can be ascertained by calculating the present value of future cash benefits expected to be generated by that project.
