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Mineral assets consistently trade at market values greater than their discounted cash flow (DCF) values. One explanation is that DCF analysis does not and cannot incorporate the asset value generated by asset management under uncertainty. This paper surveys the attempts to empirically quantify...
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We reformulate the "Hotelling valuation principle" to take into account the special production characteristics of hard-rock minerals. The data requirements of the revised model are still parsimonious, but the resultant valuations are some 40% below those produced by the Hotelling valuation...
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