Summary

This review describes national and international standards and procedures for valuation of mining and mineral projects. Listed are consultants that provide valuation services; this includes a list of valuators in South Africa, Australia, Canada and the United States. Described are the procedures that may be adopted to assess the value of mineral and mining assets, particularly those established by the International Valuation Standards Committee.

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INTRODUCTION

The downside of a luxury cruise to Mexico or Alaska is the pervasive tension of agoraphobia. Every well-appointed meal after a day on shore is dominated by discussions of the ugly ceramic pieces you did not buy lest you pay too much. Worse still is buying that hideous silver artifact and somebody else at the dinner table got something similar far cheaper by bargaining or going down a more secluded alley.

Agoraphobia is defined in the 14 January 2006 issue of the Economist as "fear of the marketplace." In a masterful article, we are told how business is constrained not by efficient market mechanisms, but by consumers who develop an aversion to markets: "Opportunities for choice may be interpreted as opportunities for mistakes, embarrassment, and regret." This inhibits financial activity or pushes it into distorted patterns.

For example, pity the mining company that bid on an orebody, won the bid, and then discovered they had paid twice the average bid-and well above the next highest bidder.

Pity the investors who put their life savings into an industrial mineral site valued at $300 million, only to discover that the stockpile is so remote and difficult to process that it is essentially worthless.