Financial Modelling For Mining Projects

Mazars Financial Modelling

Financial Modelling For Mining Projects

Contact form Upcoming dates Course agenda

3 day duration

Our Financial Modelling for Mining Projects training course will assist you to progress your skills to efficiently develop, modify and analyse financial models for mining projects. Get the skills to develop robust financial models that can stand up to the scrutiny of any audience, from internal operations to bankers and JV partners.

Designed to appeal to Analysts, Managers, Senior Managers, Associate Directors and CFOs from natural resource companies (i.e., iron ore, gold, coal, diamonds), this training course covers topics such as the reserve life cover ratio (RLLR), sensitivity analysis, breakdown price analysis, funding mechanics, operational and investment metrics.

Financial modelling course: from blank Excel spreadsheet to full model

This course provides hands-on experience in how to go from a blank Excel workbook to a bankable cash flow model suitable for investment scenario evaluation. You will take part in an interactive discussion on how project finance bankers and investors would analyse your project. You will gain a deep understanding of the flexibility required in scenario analysis.

Financial Modelling for Mining Projects will enable you to

  • Master best practice techniques for financial modelling of mining projects to achieve flexibility and robustness
  • Build a flexible and powerful scenario manager to analyse your project’s sensitivity to key drivers
  • Prepare trusted analysis of commercial outputs tailored to investors and financiers, with a focus on valuation and risk
  • Develop flexible funding structures for analysis of project finance debt and other funding sources
  • Learn from Mazars professional modelling consultants’ powerful Excel shortcuts recommendations

Do you work with financial models in the mining sector?

If you are working in the mining sector and have frequent challenges with financial models, then this training course is for you. The training course content is suitable for anyone who needs to build, review or analyse project models within the mining sector, either for internal investments/operations/strategy, project finance transactions or greenfield development analysis.

We recommend an understanding of Excel, finance and the mining sector. It is expected that participants have a previous exposure to Excel in a financial modelling context, and foundation knowledge of investment concepts such as NPV and cash flows.

To see a full list of training courses go to the training schedule and see all the upcoming courses in your region.

The Online Resources section of our website contains a substantial collection of free downloads and tutorials in financial modelling, webinars and blogs. Covering essential topics include NPV modelling and analysis, debt service reserve accounts, terminal value modelling and Excel shortcuts PDF Download– you will have hours and hours of free learning.

Upcoming

Monday 15th July 2024

Perth, Asia-Pacific

Location: Date:

Course Agenda

Overview of the lifecycle of the model for a mining project, from PFS and BFS to financial close and operations:

  • Explore the different requirements in functionality and expectations from a technical model to a financial model for investment decision
  • Understand what financiers and investors look for when assessing a financial model during the investment, project finance or due diligence process
  • Identify typical pain points from a financial modelling perspective across the mine lifecycle

Master proven techniques for best practice modelling resulting in better models built faster:

  • Understand the 10 foundation principles of our best practice Financial Modelling methodology – and how it applies to the mining industry
  • Review the visual representation of our Financial Modelling methodology while highlighting good vs. bad modelling techniques using real-life examples
  • Master the art of consistency amongst your team in calculation techniques and presentation of outputs to drive trust and reliability in analysis and comparable analysis

Build a foundation structure of your financial model which is robust, flexible and scalable for future project developments:

  • Build a flexible timing structure in the financial model using appropriate date functions and binary flags – this is an essential modelling component for scalability and flexibility
  • Construct modularised units that form the building blocks of a professional model and ensures transparency and allows for rapid expansion or modification of the financial model
  • Establish key constants in the model using full scope of Excel range name function

Focus on the physical production of the mining project with a structured approach to physical assumptions and calculations:

  • Structure assumptions for Mine Reserves and Production (Mining, Milling, etc) in a flexible and transparent way for future flexibility
  • Develop essential modules including Stockpile Calculation, Grade Analysis, Levels and Yields and prepare for powerful sensitivity and scenario analysis
  • Understand the flow of physical calculations and how they interact with the full financial model

Comprehensive Revenue calculation functionality for your mining financial model:

  • Incorporate pricing path flexibility to analyse different views on future commodity pricing
  • Model hedging contracts and discuss how typical instruments can be incorporated
  • Develop a Scenario Manager in Excel to assess the impact on revenue of different production cases

Developed integrated financial statements into your financial model – a required step for comprehensive analysis:

  • Extend the Cashflow Waterfall functionality with integrated financial statements
  • Master the structured process of developing a balance sheet with no balancing items
  • Integrate integrity checks and logic assessment of the model workings to avoid errors

Project finance modelling: Understand the structure of cashflow waterfalls and the importance of 'seniority' of payments:

  • Cash Flow Available for Debt Service (“CFADS”) – expand the financial model to incorporate this fundamental line item for project finance analysis
  • Build transparent calculation steps to showcase the Cashflow Waterfall principles and cashflow available at every significant step
  • Understand the risk of Circular References in Excel and how these can best be avoided using clear logic and some simple rules

Project finance modelling: Incorporate debt analysis:

  • Structure financial modelling of term debt and annuity repayment from first principles for full transparency in analysis
  • Develop functionality for target Debt Service Coverage Ratio repayment for powerful project finance analysis
  • Discuss alternative debt repayment options (linear, bullet, etc) and how these are modelled in project finance

Mining specific calculations and output metrics:

  • Financial modelling of depreciation on a life-of-mine basis
  • Understand how a reserve life coverage ratio feeds into the credit process of a project finance bank
  • Account for the value of stockpile inventory
  • Calculate C1, C2 and C3 cost profiles

Project finance and investment modelling: Essential covenants and investment metrics:

  • Learn the importance of credit ratios and their purposes in analysis
  • Discuss commonly used ratios in project finance banking (DSCR, LLCR, PLCR, RLCR) from first principles for full transparency
  • Extract key metrics from ratios using a range of advanced Excel functions

Investment analysis modelling: Calculate financial returns understand the role of dividends policy:

  • Discuss the reason and impact of dividends policy on valuations of mining projects
  • Integrate internal rate of returns and NPV, understand role of the discount rate
  • Learn differences between NPV and XNPV functions and common errors in their application

Take control of robust and rapid sensitivity and scenario analysis through powerful Excel techniques:

  • Save time and deliver rapid analysis with our approach to scenario management in financial models
  • Use the Scenario Manager for dynamic integrity testing across all Scenarios – live at the same time
  • Build confidence in your analysis through pre-programmed combinations of model inputs

Use advanced Excel techniques for rapid and accurate multi-dimensional sensitivities:

  • Develop simple macros to avoid common circularities inherent in project finance calculations
  • Become familiar with the VBA environment and understand some core functionality
  • Discuss common errors when starting to develop macros and how to make common macros more efficient
  • Use VBA to control data tables so they do not adversely affect calculation speed

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