Segilola gold mine valuation using Monte Carlo simulation approach

Ugwuegbu, C. C.

doi:10.1007/s13563-013-0030-8

Cited by 7 publications

(1 citation statement)

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“…Nevertheless, according to [6], the traditional methods, which are calculated using cash flow, such as net present value (NPV), do not always capture the managerial complexity of an investment decision and underestimating the value generated by a project [7]. A large part of the papers address the static and deterministic version of the problem, i.e., the DCF method fails to capture the uncertainties of the input data, not proposing the consideration to the probability of variations occur in the performed projections [8][9].…”

Section: Introductionmentioning

confidence: 99%

Management of economic and financial risk of investments in assets for extraction of non-metallic mineral extracts

Martinez¹,

Batistela²,

Simões³

2021

Ingeniare. Rev. chil. ing.

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The investment projects evaluation in real assets is essential for decision making; however, undoubtedly, it is a process whose components have interdependent relationships, which generate uncertainties that can lead to the wrong acceptance or rejection of the investment. This study aimed to apply the Monte Carlo simulation to the risk incorporation into the economic and financial evaluation of an investment project in mineral assets under conditions of uncertainties, with a view to the obtained returns measurement. Thus, the evaluation was based on the projection of discounted cash flow, which allowed the adoption of methods commonly used to evaluate real assets that consider the time value of the money. The economicfinancial risk incorporation was performed using a stochastic and dynamic mathematical model, and the Monte Carlo method was used to generate values from probability distributions. The results showed that the investment project in mineral assets is economically feasible by adding value to investors.

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Section: Introductionmentioning

confidence: 99%