IVRM Services

Recognize the Value and Risk of Future Possibilities with IVRM Analysis

Investment decision-making in the mining industry is complex because of high levels of technical and financial market uncertainty, drawn-out investment horizons, competing design choices, alternative financing, and layered government participation. At SCM Decisions, we know the complexity of investment decision-making in the mining industry from long experience. Our professionals are uniquely qualified to help you break down an investment opportunity to better understand how these factors weave together to generate value and distribute risk between investment stakeholders.

We use Integrated Valuation and Risk Modelling (IVRM) techniques to make sense of industry complexity. IVRM is an investment analysis framework combining concepts from:

  • Finance theory
  • Statistical analysis
  • Decision analytics
  • Risk management

to allow investment decision-makers to move beyond a singular future view to a dynamic mining financial risk modelling analysis that considers their investment across a wide range of future possibilities.

Our IVRM services help clients pull apart a wide range of strategic capital management problems such as the comparison of alternative project development strategies, innovative financing structures, and project financing risk analysis so that they can better understand the value and risk trade-offs between competing investment choices.

We are based in Toronto, Canada, and work with mining clients globally.

SCMDecisions

Project evaluation

Mining projects are inherently difficult to analyze, given the design, financing, and operating choices available to a project developer.

Integrated Valuation and Risk Modelling (IVRM) can show the value and risk trade-offs between competing design and capital investment choices that are simply not apparent with static cash flow analysis.

We build a dynamic financial risk model to help you assess the value and risk exposure of:

  • Your development pipeline
  • The choice between front-loaded and staged capital development plans
  • Understand the trade-offs associated with moving from open pit to underground operations
  • Recognize the potential opportunity linked to marginal satellite resources
  • Many other real option investment decisions
SCMDecisions
SCMDecisions

Project finance and taxation

The varied and contingent nature of project finance and taxation can shift value and risk in a manner that is difficult for static cash flow models to fully anticipate.

With IVRM, we build a dynamic mining financial risk model to pull apart a multi-layered financing and taxation package to show who gets what across a wide range of future business environments. Our models combine a return calculation with a project financing risk analysis, so our clients can ensure a consistent risk-return relationship between financing sources.   

We have the skills and experience to help you make sense of:

  • Senior and mezzanine debt
  • Dilution from loan covenant breach
  • Variable rate streams
  • Sliding-scale royalties
  • Forward sale agreements
  • Convertible debt
  • Senior and mezzanine debt
  • Dilution from loan covenant breach
  • Variable rate streams
  • Sliding-scale royalties
  • Forward sale agreements
  • Many other tailored financing arrangements
  • Warrants and options
  • Windfall taxes
  • Profit-sharing agreements
  • Offtake agreements
  • Many other tailored financing arrangements
  • Convertible debt
  • Warrants and options
  • Windfall taxes
  • Profit-sharing agreements
  • Offtake agreements

Economic analysis for NI43-101 Reports

NI43-101 reports are public disclosure documents used by public mining companies traded on Canadian stock exchanges to provide resource and reserve updates to their investors.

These updates may require an analysis to demonstrate the economic viability of a resource or reserve. IVRM can extend an NI43-101 economic analysis to provide meaningful information about the value and risk of future investment choices such as staged investment schedules and the transition between open pit and underground operations.

We can help with a NI43-101 economic analysis and take responsibility for this work.

SCMDecisions
SCMDecisions

Professional development

Our team has given many professional development courses discussing real options, alternative finance, and country risk, and project financing risk analysis during the past twenty years to government departments, corporate development and engineering teams, and public audiences at university mining programs.

We can provide training in a range of formats from lunch-and-learns discussing the latest IVRM ideas to training and coaching programs building internal IVRM skill sets.

Visit our courses page for more information about upcoming public IVRM and dynamic cash flow modelling courses.