Mining Project Finance Modeling

Mining Project Finance Modeling Course Content

Build a mining project financial model from scratch. Develop a best-practice financial model and optimize it for both debt and equity investors for a project finance mining deal.

Learn from industry leaders and ivy league professors either in-person at a public session, on-site at your offices or campus, online, or with blended learning – combining online and in-person sessions.

Mining Project Finance Modeling In-House

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Pre-course material
  • Course requirements and overview
  • Excel functions required
  • Shortcuts, named ranges, and data validation
  • Best practice principles
  • Best practice – flags and accounts
  • Impact of leverage on a project finance deal
Project finance introduction
  • Introduction to project finance
  • Typical investment structures
  • Tax and legal implications
  • Overall timeline and cashflow relationships
  • Major contracts and risk vs reward
  • Roles of different parties in the deal
Project finance term loans
  • Impact of leverage on a deal
  • Types of lenders and their mindset
  • Appropriate discount rates and interest repayments
  • Principal repayment options
  • Debt service cover ratio (DSCR)
  • Sculpting and sizing debt
  • Cash sweeps & mandatory repayments
  • Loan life cover ratio (LLCR)
  • Reserve life cover ratio (RLCR)
  • Understanding a Facility Agreement
Project operations
  • Project lifecycle from PFS to financial close
  • Common mining operations and various products including
    • Strip ratios, ore vs waste
    • Mine reserves
    • Mining and milling processes and financial calculations
    • Calculate grades, recoveries, and yields
    • Stockpiles for high and low-grade materials
  • Inflation calculations
  • Understanding:
    • Off-take Agreements
    • O&M Agreements
Project cashflows
  • Selling product
    • Spot markets
    • Hedging (forwards, puts, calls)
    • Off-take
  • Costs
    • Mining
    • Processing
    • General and administrative
    • Transport and insurance
    • Deferred costs
  • Working capital
  • Foreign exchange risk and exposure
Waterfall and cashflow summary
  • Typical waterfall structure vs cashflow statement
  • Accounting vs cash issues
  • Global differences in calculating the waterfall
  • Accounts required and the role of the administrative agent
  • Develop cashflow forecasts for different reserve levels and price forecasts or financial structure
  • Develop upside and downside scenarios and sensitivities with data tables
Debt service reserve account (DSRA)
  • Requirement of (and implementation of) a DSRA
  • Impact of the DSRA on debt ratios
  • The debt service facility as an alternative
  • Develop model checks to ensure compliance with loan documents
Construction phase
  • EPC vs EPCM contracts in mining
  • Review of construction term sheet
  • Completion testing required
  • Value added tax challenges and solutions
  • Sources and uses
  • Model construction costs and understand funding challenge
  • Calculate total funding required
  • Discuss alternative drawdown orders
Depreciation and tax
  • Straight line, reducing balance, life of mine, and MACRS depreciation
  • Model from EBITDA to EBT
  • Thin capitalization constraints on tax deductibility
  • Tax losses carried forward
  • State and local taxes
  • What happens when tax is ahead of CADS
  • International tax considerations (i.e. WHT, tax treaties)
  • Complete post tax valuations
  • Returns required for lenders, equity, and developers
  • Cap rate compression and the value in selling your project, calculating terminal values
  • Adding subordinated debt to increase returns (and risk) or for funding shortfalls
  • Valuation comparables
  • Real vs nominal valuations
Core outputs
  • Comparison of accounting and tax depreciation
  • Developing an income statement and balance sheet
  • Converting quarterly calculations to annual outputs
  • Calculating working capital and stockpile inventory
  • Add deferred taxes to your model
  • Outputs required for an investment decision
  • C1-C3 cash costs
Modeling quality checks
  • File structures, version control, sign-off protocols for a deal model
  • Data books
  • Tracking changes in Excel models
  • 15 model checks required
  • How do I review a model?
Optimizing a deal model
  • Solve the price required to achieve a hurdle rate
  • Size the debt required in operations and construction
  • Introduction to VBA for project finance
  • Running scenarios with VBA
  • Simplifying alternatives to avoid VBA
  • Summary of core risks with analysis

  • Inhouse – this course can be customized to address the unique challenges that your team or organization face.
  • Mining course is not currently available online

Due to the large volume of content available, the course is suitable for all-levels – there is something for everyone.

  • Analysts, associates & vice presidents at banks, funds, investors, developers, and operating entities looking to standardize approaches to modeling or solve new problems
  • More senior participants changing careers or looking to up their skill-set
  • Students wishing to enter the mining  sector or about to start new roles – get ahead of your competition now

  • Pivotal180 is focused exclusively on teaching. Institutional and human capacity building is not a side business.
  • Senior practitioners with real experience lead Pivotal180 training courses
  • Our understanding is from practical transactional experience, not from reading about it or hearing about it from senior people on our team
  • We have trained top advisors, developers, lenders, and funds across the world.
  • We tailor our courses more than anyone else in the market, to meet your needs
  • Our blended solution of instructor led and online training includes 12 months of access to our online courses

  • Course completion certificate.

  • Basic knowledge of, and access to Excel
  • Computer/Laptop (two monitors is preferrable)
  • Power cord