A five-day Technical and Financial Evaluation of Mineral Projects (TechFin) course aimed at professionals involved in mining finance and the evaluation of mining projects will be held between September 15 and 19 at Wits Business School – the postgraduate business school of the University of the Witwatersrand (Wits).

The course is delivered through Wits’ Executive Education programme and hosted in conjunction with science and engineering-based institution Imperial College London. It aims to develop strategic approaches for evaluating projects at the prefeasibility stage with the objective of enabling attendees to establish an independent valuation of mineral projects.

The course also aims to cover the underlying accountancy, financial and technical prin-ciples that apply to mineral projects and to demonstrate how these influence the way a financial model is constructed.

Imperial College London Department of Earth Science and Engineering’s Professor Dennis Buchanan, who is also the TechFin course director, says particular attention will be given to the treatment of the key inde- pendent variables, such as grade, and depend- ent variables, such as grade-tonnage relation-ships and the way these influence the rate of mining, associated costs and optimisation of the net present value of a project.

“The distinction between technical appraisal and financial engineering will also be addressed and the reason why discounted cash flow models need to be integrated correctly into financial accounts explained. This will be linked to concepts of shareholder value and the role of gearing to maintain an efficient balance sheet,” he notes.

Buchanan tells Mining Weekly that the TechFin course, which is limited to 25 dele-gates, has been running up to twice a year for almost a decade and is consistently over-subscribed.

He adds that it attracts a wide range of professionals from the operating and new business development divisions of mining groups, investment banks and technical consultancies and is of interest to professionals active in mineral exploration, development and production, and also those in the financial community involved in offering services and providing funding options for the minerals industry.

Buchanan notes that, in the last five years, a significant number of attendees linked to black economic-empowerment (BEE) projects have attended the course.

He believes TechFin provides the tools to answer the simple questions an investor taking an equity stake based on a negotiated cost of a stakeholding would ask.

One of the crucial issues in funding any mineral project where a major stakeholder is likely to have a free carry, such as in BEE projects, is to recognise that “the pie has a finite size”.

The Mining Charter has set a target of 26% black ownership of South Africa’s mining assets by 2014 and, unless the promoter recovers the full initial costs of the develop-ment and generates a meaningful return on the investment, the project will not proceed.