Risk Course_Slides_Nov 2016 v2

By Dr. Luis Martinez Tipe

Uncertainty = Risk + Opportunity in Mine Planning

What is the effect of the ‘What if..?’ uncertainties on project economics/What are the best strategies to follow

Despite uncertainty being all about us, uncertainty is often denied....why?

One reason for suppression is clear: People do not like to be unsure and instead prefer to have everything sharply defined

There is still some reliance from decision makers in working with a given expected mine value number ..Why?

“the flaw of averages in mine project evaluation”

Mining imperative calls for new alternatives and tools to analyse and evaluate a mine operation in the face of uncertainty

Mining companies can’t just dabble at the edges by keep using

traditional processes and techniques which do not consider uncertainty.

General mine project simulation-optimisation framework

Mine Planning is a Non- Linear process

Quantifying the effect of the uncertainty in orebody modelling

Quantifying the effect of the uncertainty in metal prices

Uncertainty and risk in open pit mine planning and design (ultimate pit and production scheduling final limits)

Going beyond risk analysis

Sunday, 30 October 2016

So, What can we do to protect from uncertainty?How can we minimise risk and maximise opportunities…

Real options as tool to manage uncertainty in decision making

Silver project valuation – using DCF

Dynamic discounted cash flow and ENPV = NPV + ValOption

ValOption = $9.68 - $8.49 = $1.19

Silver project - real options analysis

Add value by identifying optimal strategies over time in the face of uncertainty

Shift of paradigm from numbers to

distribution of probabilities

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