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Risk and Value Analysis

Major Initiatives

Designing a Progressive Risk and Value ‘Dashboard’ for Explorers, Project Developers & Mining Companies

Western Australia

Mineral explorers, project developers and emerging mining companies face a host of business challenges characterised by a combination of risk-types and value-drivers. This project aims to develop a framework for estimating, tracking and communicating a company’s progress against stage-gated, standardised, value and risk trajectories for different mineral commodities.

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Improving Mining Tax Administration Frameworks In Africa

Africa

Many West African countries face a challenge in relation to their capacity to collect mineral revenues aligned to contractual agreements, setting the stage for the use of mineral revenues for sustainable development. Improved revenue collection would entail identification and strengthening of administrative capacity to implement various tax instruments, followed by the establishment of effective and coordinated, physical and financial control systems for the two key institutions managing the mining sector i.e. the Ministries in charge of Finance and Mining.

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Modelling of the MRRT Impact on Iron Ore Mines

Canberra, Australian Capital Territory

The initial proposal for the introduction of a Resource Super Profit Tax (RSPT) first and then of the currently debated Mineral Resource Rent Tax (MRRT) created a critical need for rigorous and independent modelling of their financial impact at the project level. The CET has undertaken to carry out such modelling in the case of small to mid-size iron ore mines and to publish the relevant results and policy advice.

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Practical Real Option Models and Evaluation Methodologies for Optimisation of Exploration and Development Investment Decisions

Perth, Western Australia

Investment decisions in the resource industry have traditionally been dominated by deterministic Discounted Cash Flow (DCF) criteria of value. These do not capture the dynamic real option value (ROV) of managerial flexibility created through project design and/or contractual arrangements or inherent in the natural characteristics of mineral and petroleum resources.

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WA_In3D

Western Australia

The WA_In3D project will reduce geological risk by building 3D models constrained by the complete geological database, providing a vastly expanded predictive capacity. These new methodologies will provide for integrated inversion, incorporating uncertainties in exploration datasets using geological misfit functions. This will allow sensitivity analyses to be applied to models to prioritise targets for future data acquisition, further reducing exploration risk.

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Research Projects

A multidisciplinary approach to generating exploration targeting hypotheses for copper deposits by combining geoscience, business strategy, mineral economic and sustainable development inputs

Perth, Australia

This research is developing a methodology to combine economic, sustainable development and other uncertain non-technical factors with economic geology inputs to improve high-level exploration targeting strategy within the copper mining industry.

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Advancing evaluation practices for long-life mining projects

Perth, Australia

How to evaluate long-life mining projects in a manner that is compliant with the company’s value proposition is a challenge.

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Can the Initial Public Offering (IPO) model fund effective minerals exploration in Australia?

Perth, Australia

2012 recorded the some of the lowest numbers of ASX listings and amounts of Australian IPO capital raised in recent years.

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Mitigating the Risk of a ‘Rise and Stall’ for the Australian Gold Industry

Australia

The Australian gold industry is at a crossroads. Exploration companies are facing not only the technical challenges of seeking out gold deposits beneath cover – but also face great difficulty in accessing sufficient risk capital in order to continue a meaningful exploration effort. Gold projects face stringent development hurdles at a time of volatile prices and escalating construction costs – with new Australian gold projects, for example, competing for skilled labour against both the giant LNG projects and the burgeoning iron ore sector.

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Modelling future potential mine site rehabilitation liability

Western Australia

A research project designed to improve forecasting of potential future mine site rehabilitation liability.

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