Monte Carlo simulation
Mining companies require significant funding to begin a project, and to obtain this financing, they must often turn to debt markets. Due to the substantial investment, it is essential that mining projects be evaluated in terms of economic viability. Mine management involves improving existing mine processes to reduce overall costs and maximize the Net Present Value (NPV) of a project. The purpose of any mine management team is to create value from a project to increase wealth for shareholders who have taken risk in investing their money into a project. In order to substantiate the economic evaluation of a project, they must determine the outcomes of risks taken in their mine planning.
- Lemelin, B. (2009). Mine Project Evaluation: A real Options Approach with Least-Squares Monte Carlo Simulations. Quebec City: University of Laval.