Open Pit Mine Financial Model

Allow a potential miner to see visually and numerically (annual basis) what their possible financial position would look like when starting up an open-pit mining operation.

Letlhakane diamond mine in Botswana.
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Video Tutorial:

*Updated to have better logic for IRR and ROI calculations, added a DCF analysis, and updated instructions for ore value per tonne calculations. Also updated dynamic referencing for cost inputs.

This financial model takes into account all the general capital costs, employee wages, and supplies required to operate an open-pit mine and sets them against possible revenue so you can see what annual cash flow/break even scenarios look like.

One of the more unique features implemented was allowing the user to enter a % breakdown of what they expect their tonne makeup to look like by ore. For example, you can enter that 40% is expected to be gravel, 40% clay, and 20% rock salt. All of the different ore types have been priced out at a value per tonne and dynamically represent themselves in annual revenue based on your assumptions. Those values can then be updated as-needed.

Return Metrics:
– IRR
– Total/Net Cash Return (% and $)
– Break Even Year

You will also see visuals to let you get a more clear picture of where the costs are coming from and how the cash flow balance changes over time based on the pro-forma cash flows.

This is a great way to get a clear picture of the costs it takes to implement an open-pit mine and from there it will be useful to see what kind of revenue you need to get in order to turn a profit. All costs are dynamic and you can adjust them based on what you find in your specific scenario.

The financing option is now available. This will let the user put a % of the total startup costs financed by a loan and see how that debt service effects the cash flows/returns/IRR. You can also set all the loan parameters.

Notes and sources will be given on the full version only.

 

Reviews

  • Avatar Open Pit Mining model

    I find the model useful in my analysis of copper mining project. The only issue am asking is out of ore extracted from the ground, we plan to sell only copper at the moment although the tested sample shows the existence of some gold, aluminum, and traces of other minerals, therefore the Mine&Ore sheet will not add up to 100%, will this affect my Proforma?! I look forward to your DCF model for a financial institution, if available!!

    In summary, the Open Pit mining model meets my expectations!!

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    • Thank you for giving a review of this product. As for your question, what you would need to have is the following: Just populate column C with a % if it is to be sold, so in your case, just populate the copper row with a % and leave the rest blank. It is ok if it doesn't add up to 100%.

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