Mining Ore Valuation by Real Option Under Uncertainty and Risk


M.D. Viera

The purpose of the study is to show, through real cases of companies in Chile, the different problems concerning valuing or economically appraising a mining ore resource with the traditional techniques. The study demonstrates that, with the risk analysis and real options theory application, one could determine the most probable value for a mining resource or mining business, and the risks cover of uncertainty scenarios. The study discusses different methods and criteria employed in the ore resource evaluation or mining assets. It also shows a comparative analysis of the different methods in order to explain various distortions, errors, risks and imprecisions of each of them. the companies are becoming aware of the risks' importance and the impact they have on the commercial value and resource estimation models. Now, the real options are the techniques that somehow make it possible to value and control the risk cover of the business. The company valuation could help respond questions like: ? How much is my business worth? ? How much has the investment profitability of my business been? What could be done to improve this profitability and create value?
Mots Clés: valuation, resource estimation, Chile