This chapter discusses general procedures that apply to almost any industry when making investment decisions. The investment decision on a mining project is based on certain basic principles underlying all such decisions, but mining projects require special procedures for project analysis. Since mining is a high-risk industry, an investment decision must take into account not only the projected financial returns but also the risk that these returns may not be realized or may not be sufficient to warrant the investment. Risk assessment for a prospective investment determines the nature and degree of risk in terms of the probabilities of a variety of possible outcomes. Each stage in the development of a mine is subject to special types of risk which call for risk management, including assessment of success probability and measures for limiting risk.