Mining Project Finance Modeling

Course content

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

Overview

Build a project finance model from scratch considering typical constraints faced in the mining sector.

Course Outcome

Learn best practice modeling by doing

Understand project finance concepts and mining operations

Optimize a model to achieve requirements of all investors

Prepare professional outputs for decision making

Course Previews

What is Project Finance

Requirements of DSRA

DSCR Sculpting

OUR BLENDED LEARNING COMBINING IN-CLASS AND ONLINE MATERIAL ENSURES WE TEACH MORE AND YOU LEARN MORE. 5 DAYS OF MATERIAL IS CONDENSED INTO 3 DAYS + ONLINE CONTENT.

Course name More Info Location Start Date Cost Register
Mining Project Finance Modelling More Info Self Paced Available Soon USD 800 Register
Mining Project Finance Modelling More Info Live Streaming Coming Soon USD 3,200 Register

Contact us for on-site or on-campus pricing and options.

The cost of the online course will be credited to you if you join a public session within 12 months of purchase.

Discounts provided off the full course prices.

  • Students and non-profits are eligible for a discount of 50% (no other discounts may be added to this).  Online course price for students and non profits is $400 and public sessions $2,000.
  • Other discounts
    • Group booking of 3 or more people – 15%  Price per person for online group bookings is $680 and public sessions $3,400
    • Early bird (public sessions only ) if book 8 weeks before the course – 10%. Price per person $3,600.
  • 12 months access to our online material, including concept videos with transcriptions, lecture slides, downloadable spreadsheet examples.
  • A complete step-by-step model walk-through, and access to discussion forums for ongoing questions’.
  • Subscription can be extended annually post the first 12 months for $100 per annum.
  • Lunch, tea & coffee at the venue (public session participants only).
  • Membership to the Pivotal180 alumni network.
  • Course completion certificate.

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
Section Overview
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
  • 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

Pre-requisites

Basic knowledge of Excel only

Equipment Required

Area Items Needed
Online Course

Computer, 2 screens preferable, Microsoft Excel

Public Session

Laptop & Power cord

Public courses run from 9am – 5.30pm at a location to be confirmed post registration

Range Amount
>4 weeks before the course Full Refund
1-4 weeks before the course 50% Refund
<1 week before the course No Refund

Get in touch to discuss our training or advisory services