Need of Mining Valuation and it’s Approaches

Mines industry is one of the major sectors, which leads to the development of the country. Valuation process helps the mining industry to manage its activities and to evaluate the new market opportunity availability. A complete valuation also enables the business in making an appropriate investment decision overall leading to a profitable outcome. Operating an mining industry needs a big investment and it involves more risk factors like feasibility risk, price risk, exploration risk, management risk and trading risk. So it is mandatory for a mining sector to get the valuation done and to avoid the above-mentioned risk factors.

Mining industry valuation is not an easy chore, as it involves numerous technical concerns. The mining valuation team with in-depth knowledge and great expertise in the industry provides an appropriate technical mining valuation services and helps to tackle geological assessment, mineral resource estimation, mine planning, ore reserves & scheduling, feasibility studies, valuation & due diligence and also provide advisory on commodities. The mining sector is valuated using various analyses like Discounted Cash Flow, Price to Earnings Ratio and Enterprise Value to EBITDA Ratio.

Discounted Cash Flow evaluate the future cash flow and subtracting it with the current operating costs provides the discount rate which assist the mining sector to valuate the available investment opportunity.

Price to Earning Ratio analysis is done to evaluate the ratio of market price per share to earning per share.

Enterprise Value to EBITDA Ratio analysis assist the company to estimate its value divided by earnings before interest, tax, depreciation and amortization (EBITDA)


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