WHY ACCOUNTING FOR UNCERTAINTY AND RISK CAN IMPROVE FINAL DECISION-MAKING IN STRATEGIC OPEN PIT MINE EVALUATION
The objective of this paper is two-fold:
Here a new mine evaluation framework, the integrated valuation/ optimisation framework (named IVOF), is introduced as an alternative tool for mine project evaluation where uncertainty and risk are incorporated in the evaluation process.
- First, it will show what problems can arise when single estimated values are substituted for a distribution of values when evaluating an open pit mine project in the face of uncertainty.
- Secondly, it will show how the ability to deal with uncertainty and risk in mine project evaluation can have a significant impact on the owners’ and stakeholders’ investment decision-making.