Expanding the use of real options in the mining industry

The Fields Institute

Toronto, Ontario

February 11 to 13, 2019

Real option methods have been on the fringe of investment decision-making in the mining industry for the last 30 years. However, the industry has never really accepted real options as a useful extension to the static cash flow methods that are commonly used for investment decision-making. This presentation repositions real options as a dynamic cash flow modelling method with multiple strategic capital management applications across a mining company. It considers how dynamic cash flow modelling mitigates the limitations of static analysis and improves the quality of information supporting an investment decision. A case study then illustrates how real option methods can be used to improve the understanding of the value influences and risk exposures underlying a staged mine design. 

If you would like Michael Samis to present at your next conference or host a workshop, please fill in the form below or call 416-527-3421.

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