Real Options: A Tool for Managing Technical Risk in a Mine Plan

Botin Gonzalez, Jose Antonio and Castillo, M.F. del and Guzman, R.R. and Smith, S.L. (2011). Real Options: A Tool for Managing Technical Risk in a Mine Plan. In: "SME Annual Meeting", 19/02/2012 - 22/02/2012, Seattle, EEUU.

Description

Title: Real Options: A Tool for Managing Technical Risk in a Mine Plan
Author/s:
  • Botin Gonzalez, Jose Antonio
  • Castillo, M.F. del
  • Guzman, R.R.
  • Smith, S.L.
Item Type: Presentation at Congress or Conference (Unspecified)
Event Title: SME Annual Meeting
Event Dates: 19/02/2012 - 22/02/2012
Event Location: Seattle, EEUU
Title of Book: SME Annual Meetings Preprints
Date: February 2011
Subjects:
Faculty: E.T.S.I. Minas (UPM)
Department: Explotación de Recursos Minerales y Obras Subterráneas [hasta 2014]
Creative Commons Licenses: Recognition - No derivative works - Non commercial

Full text

[img]
Preview
PDF - Requires a PDF viewer, such as GSview, Xpdf or Adobe Acrobat Reader
Download (625kB) | Preview

Abstract

NPV is a static measure of project value which does not discriminate between levels of internal and external risk in project valuation. Due to current investment project?s characteristics, a much more complex model is needed: one that includes the value of flexibility and the different risk levels associated with variables subject to uncertainty (price, costs, exchange rates, grade and tonnage of the deposits, cut off grade, among many others). Few of these variables present any correlation or can be treated uniformly. In this context, Real Option Valuation (ROV) arose more than a decade ago, as a mainly theoretical model with the potential for simultaneous calculation of the risk associated with such variables. This paper reviews the literature regarding the application of Real Options Valuation in mining, noting the prior focus on external risks, and presents a case study where ROV is applied to quantify risk associated to mine planning.

More information

Item ID: 11334
DC Identifier: http://oa.upm.es/11334/
OAI Identifier: oai:oa.upm.es:11334
Official URL: http://www.smenet.org/
Deposited by: Memoria Investigacion
Deposited on: 27 Jul 2012 08:47
Last Modified: 20 Apr 2016 19:26
  • Logo InvestigaM (UPM)
  • Logo GEOUP4
  • Logo Open Access
  • Open Access
  • Logo Sherpa/Romeo
    Check whether the anglo-saxon journal in which you have published an article allows you to also publish it under open access.
  • Logo Dulcinea
    Check whether the spanish journal in which you have published an article allows you to also publish it under open access.
  • Logo de Recolecta
  • Logo del Observatorio I+D+i UPM
  • Logo de OpenCourseWare UPM