Valuation of a Mineral Resources Deposit
Basic information
What is an estimation of a deposit commercial value?
In Ukraine, there is a concept of geological and economic evaluation of deposits. Its calculation procedure is regulated by the relevant normative documents, and it is performed after a certain stage of geological exploration work has been completed (see the section “exploration of deposits”).
This kind of an assessment is similar to the one existing in construction industry (when the cost of construction is calculated according to the State Construction Standards) and other industries. Although being necessary for much governmental regulatory and control institutions, the valuation of deposits according to regulatory documents, as a rule, does not reflect the real market value of your project.

years of experience
10
Qualified experts in the team
24
projects implemented
400+
Estimation of the deposit commercial value: what you need it for
In local estimation of a deposit commercial value is required for:
Taking sound decision about investing into the precise mining project. Everything can look quite attractive from the view of the data from the field prospecting, which was not performed by you, and from the State Commission of Ukraine on Mineral Resources protocol for fields having been explored in previous years at the expense of the state, the official technical and economic feasibility studies, the purchase of a special permit at an auction. However, taking into account that nowadays at least one million dollars is needed to develop even a small deposit, it is better to order an expert opinion from an independent professional company that is not somehow interested in receiving your investment and is able to determine the reliability of exploration data, the quality and quantity of the mineral in the specified subsoil area and, in general, the financial value of the project.
Such estimation is also required for execution of the agreements on sale and purchase of mining business, or deposit, or a legal person owning the special permit for subsoil usage.
Irrespective of the fact that the seller and the purchaser can independently determine the price of the deal, independent expert assessment of a deposit or titles to its usage allows to establish real market value of the sale and purchase object.
Independent assessment allows securing interests of the persons that the sale and purchase agreement can influence (shareholders, supervisory committee etc.), facilitating a good faith closure of the deal, ensuring that every participant of the deal is acting in the interests of his party and is aware of the market situation, real market value of the deposit, titles and rights or licenses – special permit to the subsoil plot or to the deposit, and value of such projects.
Obtaining loan financing, credit, or equity financing.
For the purpose of determining the initial value of shares during the privatization of the enterprise or during the sale of shares on the securities market.
As our practice shows, in most cases, the results of the inspection provide our clients with arguments that enable them to significantly reduce the initially offered price of the purchase of the business. Quite often, an objective data collected and analyzed during the inspection leads to refusal from acquisition of a particular deposit or mining business.