Financial Modelling for Mining Projects - Training course

Learn the skills required to build an integrated financial model for a mining project in this hand-on training course – from essential Excel functionality to powerful commercial scenario analysis.

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 SMART financial modelling – Corality’s best practice methodology – and how it applies to the mining industry

• Review the visual representation of SMART 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

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

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: 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

• Build 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 Corality’s 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