Economic and Financial Analysis

Owners and managers of mining and related operations are often required to place a value on their mining reserves and associated physical assets for various reasons, including:

• Sale or acquisition of operating companies and/or reserves
• Investment decisions
• Tax planning
• Reporting to the Securities and Exchange Commission
• Reporting to regulatory agencies
• Financing

As mining consultants, an economical analysis is performed for a specific time period and the values employed must be current, valid and supportable. Market and operating conditions prior to the subject period must be identified.

The engineer performing the economic analysis must be familiar with reserve transactions and possess the technical expertise required to determine a property value. For the protection of buyers and sellers, mining valuations and appraisals should be prepared by experienced independent professionals.

John T. Boyd Company mining consultants have the experience and knowledge to provide a proper valuation of undeveloped coal/mineral reserves and mining operations.

When operating companies and reserve owners wish to sell their holdings, BOYD assists in the preparation of sales brochures as well as participating in presentations to potential buyers.

In order to meet your needs and requirements, BOYD offers the following valuation-related services:

Asset Appraisals

• Mining equipment
• Mine facilities

Property Appraisals

• Discounted cash flow
• Comparable sales
• Royalty analysis

Sales Brochure Preparation

• Presentations to potential buyers

Seller-Buyer Negotiations

• Development of negotiating strategies
• Client representation

Due Diligence

• Detailed review of all aspects of the mine related transaction

Example Projects Include:

• Completed a detailed report on an operating company in the state of Indiana and prepared an information memorandum for submission to potential property buyers. By assignment, BOYD:
  
  
  • Reviewed coal sales contracts and contract mining agreements.
  • Confirmed reasonability of coal reserves and quality estimates.
  • Assessed current operating costs, future mine plans, and cost projections.
  • Reviewed environmental liabilities.
  • Valued the operation on a discounted cash flow of future earnings.
  
  
  
• Retained to assist in the sale of client’s coal holdings in the eastern US. Studied all aspects of the operation, prepared an independent report and offering memorandum, identified potential buyers, and established a controlled data room.



• Prepared a fixed asset appraisal of the combined assets of three participating coal companies. Developed present-day and liquidation values for the assets which included major production equipment and operating facilities such as coal preparation plants, shops, load-outs, portal facilities, coal handling facilities, etc.



• Retained by a financial client to independent review the internal studies prepared by mining and financial groups regarding the acquisition and consolidation of coal mining operations in Eastern United States. Our due diligence review included:
  
  
  • Coal reserve base estimates
  • Mine plans (on an individual mine-by-mine basis)
  • Forecast of coal sales
  • Five-year financial plans

    Based on our assessment, we modified available estimates and projections and provided our independent views and opinions.

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