ABSTRACT
This chapter summarizes the basic concepts of cost forecasting. Cost estimation involves forecasting the level of capital and operating costs for the project. The error of cost estimates may range from as high as plus or minus forty percent in order of magnitude estimates to as low as plus or minus three percent on detailed cost estimates. A cost forecast is a forecast of physical conditions including all geologic, mining, mineralogic, and metallurgical variables that are unknown or uncertain in the venture. Cost studies evaluate exploration or development programs, or engineering designs, in economic terms. The output of the system is a series of computer printouts including a master summary of labor dollars, material dollars, and a total project cost. In the United States, the American Association of Cost Engineers publishes annually a transactions volume from their annual meeting, a cost engineers' notebook, and a bimonthly magazine.
