Munich Personal RePEc Archive

Simulation Framework for Economic Modeling of Mineral Resources

Bell, Peter (2018): Simulation Framework for Economic Modeling of Mineral Resources.

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Abstract

This paper describes an approach to include uncertainty over the commodity price when modelling the economic attributes of a mine plan for a mineral resource. The approach starts with a method to generate price paths from a broad historical set to establish a set of price paths, where the NPV is calculated for each path to generate a distribution for the NPV. It goes on to describes how to use this distribution to compare different mine plans in a manner that is similar to stress testing.

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