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Reconciling AISC to Mineral Property Valuations

Author(s): 
Grant Malensek
Date: 
Tuesday, April 26, 2016
First presented: 
Current Trends in Mining Finance 2016
Type: 
Presentation
Category: 
Project Evaluation
 
 
Since establishing formal guidelines in 2013, the World Gold Council’s (WGC) All-In Sustaining Cost (AISC) has been an important metric for comparing costs per payable metal unit sold for gold mining companies. However, it should not be a surprise that there are many interpretations of AISC, even with explicit WGC guidelines. While AISC is used by the investment community in ranking current producers, it is also often quoted by companies in valuations for mineral projects not yet in production. However, such technical-economic valuations using accepted best practices (as seen in NI 43-101 technical reports) are invariably in conflict with several aspects of the AISC guidelines. This presentation attempts to highlight the discrepancies between AISC guidelines and standard technical-economic valuations. To this end, for mineral project valuations not yet in production, SRK advocates a “Total Cash Cost” concept which reports costs per payable metal unit sold during life of mine commercial operations. 
 
This presentation was most recently given at the 2016 Denver Gold Forum. Click here to watch the full video.

 

Feature Author

Grant Malensek, Professional Engineer/Geoscientist photo  
Grant Malensek
Principal Mineral Economist

Grant Malensek is a Professional Engineer/Geoscientist specializing in economic modeling and evaluation of mining projects with over 20 years of business experience in financial analysis, project management and business development. He is able to leverage both technical and financial skill sets to coordinate with functional teams to ensure inputs used in economic and business models are based on current assumptions between groups.

   

 

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