Oct 27, 2010

Mining Valuation Part 4 of 5

Developing a basic DCF (Discounted Cash Flow Model). First we must estimate some iinputs

  • What you expect to be the commodity price in the future (best to use the prevailing market price just to be prudent).
  • What is your required rate of return on this investment given the various risks involved 
  • What are the companies cash costs and how will they change?
  • What does their production profile look like going into the future? What will be their long term growth rate?
Lets use Jaguar Mining again for simplicity sake.

Click on link titled Jaguar DCF for example


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