This article will help walk you through the capabilities of the financial analysis feature of Evaluate and the proper procedure for its’ use.
Navigate to the Analysis tab in the top section of your project on Evaluate.
There are two sub-sections: Sensitivity and Monte Carlo:
Sensitivity allows you to investigate how susceptible your project’s economics are to variations in the following:
- Capital costs, Operating Costs, Grade, Price and Mill Recovery
- Evaluate allows you to select a parameter and enter a minimum and maximum value and/or deviation for the parameter.
- The application determines the impact of those variations on project economics; especially valuable when the true values of one or all the 5 key parameters are unknown. This may guide you on where you focus your effort while you continue to explore the project potential.
- To operate: choose parameters from the lists of Commodities and cost related items, set the min/max deviation and select Run Sensitivity.
- You can review and download the data to share and look at later.
Monte Carlo allows you to do an analysis on the risk factors of your project. This form is used by the application as an effective way for account for uncertainties in the five parameters mentioned above that cannot be reliably predicted.
- These factors include Project Capital Costs, Project Operating Costs, Price, Grade and Mill Recovery.
- Evaluate preselected these parameters for Risk Analysis – it performs multiple iterations that fully tests all combinations of parameters displayed in your project.
- The program calculates the Net Present Value, Pay-Back Period, Internal Rate of Return and Sum of the Cash Flows.
- The results can be analyzed statistically, and the min/max/mean values can be determined. Adjust deviations for parameters using the sliders or manually enter your range. Select “Run Monte Carlo” to proceed.
- Monte Carlo risk analysis results are reported by phase and by default, the application displays the results for your project’s Net Present Value. You may select other options from the dropdown menu.
- The application displays the number of times the result of an iteration fell within the range of the indicated “Sum of Cash Flow” values. It also provides probability and cumulative probability that your project’s Sum of Cash Flows will fall within the noted range. This same data is presented in table format.
- Please note that you may hover your cursor over a data point to see the attributes associated with them.
We encourage you to use these tools for your project evaluation as you might discover more information on where to focus your labour, whether it be a reassessment of the resource, an exploration program aimed at increasing the measured grade or focusing on better defining mill recovery to decrease the risk associated with an untested feed mineralogy.