Metals and energy finance
16 - 20 November 2020
- Duration: 1 day, 2 days, 3 days or 5 days
1 day - £775
2 days - £1550
3 days - £2100
5 days - £3500
This course was successfully launched in November 2016. Given the design component it involves, financial engineering should be considered equal to conventional engineering. By adopting this complementary approach, financial models can be used to identify how and why timing is critical in optimizing return on investment and to demonstrate how financial engineering can enhance returns to investors.
Metals and Energy Finance capitalizes on this approach, and identifies and examines the investment opportunities offered across the extractive industry’s cycle, from exploration through evaluation, pre-production development, development and production.
The course is made up with four modules: (*two of which run in parallel)
This parallel module is devoted to the principles behind Cash Flow modelling for both mineral and petroleum projects and will be of benefit to professionals from financial services sectors who need to identify the investment opportunities that are being offered across the whole spectrum of the mining cycle. For delegates who are familiar with the principles behind Cash Flow modelling but are interested in the complementary concepts associated with quantitative finance then this parallel module might be more useful.
This parallel module provides a quick tour of the mathematical methods of quantitative finance and will be of use to those associated directly with the appraisal, financing, and developing of mining projects such as geologist and engineers with a technical orientation who require an overview of the Principles of Quantitative Finance. It is recommended that delegates who are not familiar with the principles behind Cash Flow modelling join the parallel module that covers the topic.
This module considers the links between the “accounting model” and the “economic model” and outlines the way in which cash flow information is constructed from basic project details and then to represent that information as a set of accounts.
The stages in the development of a mineral project are outlined in these modules against the corresponding supporting documentation that is needed. Use will be made of the IC-MinEval software, an Excel™-based spreadsheet programme automating all stages required to produce models for a wide range of mineral projects.
Participants will receive a formal Certificate of Attendance.
The aim of the course is to develop strategic approaches for evaluating projects at the prefeasibility stage. Delegates will be provided with the training needed to establish an independent valuation of mineral projects. The course also aims to cover the underlying accountancy, financial and technical principles which apply to mineral projects, and to demonstrate how these influence the way a financial model is constructed. Particular attention will be given to the treatment of the key independent variables, such as grade, and dependent variables, such as grade-tonnage relationships, and the way these influence the rate of mining, associated costs and optimisation of the net present value of a project. The distinction between technical appraisal and financial engineering will also be addressed and the reason why discounted cash flow models need to be integrated correctly into financial accounts explained. This will be linked to concepts of shareholder value and the role of gearing to maintain an efficient balance sheet.
Metals and Energy Finance book by Dennis Buchanan
A copy of the book Metals and Energy Finance will be provided as part of the course pack. Please click here to read a review of the book by Chris Worcester.
Who should attend?
The course will be of particular interest to all professionals involved in mining finance within the minerals industry and related financial services and investment communities. This includes those associated directly with the appraisal, financing, and developing of mining projects such as geologists and engineers with a technical orientation, as well as financial services sectors including mining analysts, fund and asset managers, brokers, investment bankers and accountants.
IC-MinEval and IC-CoalEval
In the workshop sessions use will be made in the workshop sessions of the IC-MinEval software, an Excel™-based spreadsheet programme automating all stages required to produce models for a wide range of mineral projects. The functionality of IC-MinEval will be delivered through the internet and delegates will be expected to have their own laptop computers available. They will need to have administrative rights and Excel on their laptops. Delegates will be given access to the functionality of IC-MinEval a few days before the start of the course and for one month after the course.
Participants will be able to retain digital copies of the spreadsheets that they generate during the course. It produces a Balance Sheet and Profit and Loss account from the cash flows, with tax provisions linked to the Profit and Loss account. Output modules include the base case discount cash flows, as well as key financial ratios and performance indicators such as NPV, IRR payback and maximum cash exposure. Sensitivity analysis can be undertaken on key variables.