Assessment of mining enterprises and deposits has its own characteristics. An enterprise whose main activity is the development of a mineral deposit differs from other enterprises in that it does not purchase raw materials for the production of its products, but extracts it from the bowels of its own.
Like an ordinary plant, a mining company usually owns equipment, real estate, vehicles and other assets. The main difference in the composition of the assets of an ordinary and mining enterprise is a license to use a allocated subsurface site. It is the terms of this license that for the most part determine the scale of the mining enterprise’s business and its value.
When evaluating a mining enterprise, the conditions of a license for the right to use subsoil are analyzed and a model of cash flows of the enterprise for the selected forecast period is compiled.
When calculating potential volumes of mineral production in the estimated field, it must be taken into account that the explored reserves of the field are almost always heterogeneous, some of them must be taken into account with some adjustment when calculating the forecasted volume of production. In addition, reserves may vary in recoverability and some other parameters, which also must be taken into account when compiling forecast production volumes.
Another feature of the evaluation of deposits and mining enterprises is the duration of the forecast period. The field development process can take decades and licenses for the right to use subsoil are usually issued for a period of more than 10 years. Accordingly, it is necessary to take this feature of mining enterprises into account when determining the duration of the forecast period.