Real Options in Mining

7 modules


Course Length
17 hours

Edumine Courses

07 Nov 2019



Traditional mining project appraisal—discounted cash flow (DCF)—typically involves the use of static variables that remain unchanged across project life and the use of a constant discount rate to account for risk, which ultimately provides a singular view of project value across time. Such a passive management approach is fast becoming outdated. Modern project appraisal should be dynamic and flexible to accommodate changing market conditions by constantly evaluating options to abandon, defer, open or expand a project while managing risk. This course introduces and explores modern project appraisal techniques with a view to increasing expected value.


This course focuses on the use of modern project appraisal techniques culminating in the introduction of real option valuation (ROV) applied to mining projects. While traditional project appraisal concepts form the basis for the modern approach discussed, the in-depth use of these remain beyond the scope of this course. It is recommended that participants complete the Introductory Mining Project Evaluationcourse (see Related Courses tab) for a full account and discussion of traditional project appraisal concepts.


  • Dr. Micah Nehring Ph.D.

  • Dr. Sean Shafiee Ph.D.


Duration 17 Hours
Access 90 Days
Category Financial
Level Specialize
Version Date June 29, 2016

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Course Content

Real Options in Mining consists of 8 viewing sessions with supporting figures, tables and examples, plus interactive course reviews. The concepts that are addressed in this course may not be easy to grasp at first and may require multiple revisions before a clear understanding is gained. Course participants are expected to thoroughly work through each example by hand (the aid of Microsoft Excel is encouraged) provided within the course. This may be time-consuming; however, it is integral and will ultimately allow a successful completion of the course reviews. Total course duration is equivalent to approximately 17 hours of viewing and exercise content.

Learning Outcomes

  • Recognize modern project appraisal techniques including the incorporation of risk and probability to generate an expected net present value (ENPV).

  • Identify the sensitivity of key project variables.

  • Use option theory and option pricing to apply real option valuation (ROV) to mining projects.

Recommended Background

  • A degree or diploma in geology, mining or related discipline.


By completing/passing this course, you will attain the certificate Edumine Certification

Learning Credits

Table of contents
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Module 1: Project Evaluation Under Uncertainty
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Knowledge Check Module 1: Project Evaluation Under Uncertainty
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Module 2: Sensitivity Analysis and Options in Mining Projects
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Knowledge Check Module 2: Sensitivity Analysis and Options in Mining Projects
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Module 3: Applied Real Option Valuation in Mining Projects
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Knowledge Check Module 3: Applied Real Option Valuation in Mining Projects
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Added over 1 year ago, by Raymond
I enjoyed the course it was challenging and had good material.
Added over 1 year ago, by William
Added over 3 years ago, by Anonymous
some of the example calculations contain typing errors
Added over 3 years ago, by Guy
The course lacks in detail to understand some of the fundamentals. I know that it meant for beginners. I have learned a lot from the course and it has raised my interest. There are various errors in the text, but that only forces one to do a little bit more digging

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