Harry Loudon Pty Ltd - Economic Modelling for Mining Projects

HARRY LOUDON PTY LTD
ECONOMIC MODELLING AND EVALUATION

Harry Loudon has prepared financial models and economic assessments for many propective mining projects. He had undertaken this work directly for mining industry clients and indirectly as a sub-consultant to engineering companies (such as Kvaerner Metals) and others. His projects include:

Coal Mine Purchases, Pan Australian Mining
Murrin Murrin Nickel Project, Anaconda Nickel (for Kvaerner Metals)
Ilmenite Project, Monto Minerals (for Kvaerner Metals)
Tampakan Copper Project, WMC (for Kvaerner Metals)
Kideco Coal Mine Upgrade Project, Indonesia (for Kvaerner Metals)
Siguiri Gold Project, Africa (for Davy John Brown)
Hail Creek and Valeria Mines, Pacific Coal (for Davy John Brown)
Coal Tenders, Queensland Electricity Corporation (for Davy John Brown)
Ensham Coal Project, Ensham Resources (with BHP Engineering)
Nickel Mine, Indonesia, PJ Matheson Resources Consulting
Galilee Basin Methane Gas Project, Qld State Development ( JV with DJB)
Townsville Stainless Steel Project, Dallhold Nickel Management

The sections in a typical financial model for a Mining Project are as follows:

Model Section

1. Production Statistics

Overburden Removal
Ore Mined
ROM Stockpiles
Ore Processed
Plant Performance
Product Stockpiles
Product Transported to Port
Port Stockpiles
Product Shipped

2. Operating Costs and Unit Operating Costs

Overburden Removal
Mining
Rehabilitation
Material Handling
Ore Processing
Infrastructure and Transport Costs
Environmental Costs
Administration and Tech Services Costs
Other (e.g. Royalty, Head Office))

3 Capital Costs

Mining Lease and Land Purchase
Exploration
Mining Equipment
Processing Plant
Infrastructure and Services
Working Capital (pre-production, stores, etc)
Other

4. Sales Revenues

Selling Schedule (by product type)
Selling Prices
Revenue Calculations

5. Financial Issues

Income Tax Review
Depreciation Schedules
Tax Calculations
Creditors/Debtors

6. Cash Flow Summary and Economic Evaluation

(100% Equity Case ONLY)

Escalation Rates or Indices
Exchange Rates
Revenues Received
Expenses Paid
Capital Expenditure Schedule
Total Project Cash Flows
Net Present Value (NPV)
Internal Rate of Return (IRR)

7. Summary, Sensitivity Tables and Graphs

Summary of Key Data and sensitivity of NPV and IRR to key economic variables (for each project scenario)

Prepared By

Mining Engineer
Mining Engineer
Mining Engineer
Process Engineer
Process Engineer
Process Engineer
Process Engineer
Process Engineer
Process Engineer

Mining Engineer
Mining Engineer
Mining Engineer
Process Engineer
Process Engineer
Infrastructure Engineer
Environmental Engineer
Project Manager/Client
Project Manager/Client

Project Manager/Client
Geologist
Mining Engineer
Process Engineer
Infrastructure Engineer
Project Manager/Client
Project Manager/Client

Marketing Consultant
Marketing Consultant
Project Analyst

Tax Advisor
Project Analyst
Project Analyst
Project Analyst

Project Analyst
Project Analyst
Project Analyst
Project Analyst
Project Analyst
Project Analyst
Project Analyst
Project Analyst

Project Analyst

It should be noted that in a full Project Feasibility Study, the financial model also includes sections for project financing (debt and equity), finance and interest costs, "after finance" cash flow summaries and financial evaluations, and Profit and Loss Statements and Balance Sheets.

Contact Harry Loudon to discuss your particular requirements. I would be happy to respond with a Proposal to assist you evaluating the financial viability of your Project.