Society abbreviation definitions are listed at bottom of page.
Ellis, Trevor R., "Mentoring Minerals Appraisers – Techniques for Success," presented at the SME-IIMA Annual Conference, Phoenix, Arizona, 21-24 February 2016.
Ellis, Trevor R., "Comparable Mineral Properties – Do They Exist for Market Value Appraisals?" Mining Engineering Vol. 68, No. 5, May 2016, pages 67-72, a peer reviewed technical paper. Available at OneMine.org.
This paper firstly reviews as background the historical meaning of a comparable property, with its perceived constraints, against real-world examples of transacted mineral properties that are adjusted to subject properties to provide market value indications. The advisory’s findings are then examined and evaluated as to whether they may influence and benefit the work of mineral property appraisers, particularly in situations where their sales comparison analyses may be challenged. The conclusion is that the combination of constraints that the advisory’s findings specify for use of the term “comparable” will for mineral properties be met infrequently or rarely. As a result, mineral property appraisers are advised to avoid using the terms comparable or “comp” when referring to transactions of mineral properties that they analyze to derive data for appraising the value of their subject mineral properties.
Ellis, Trevor R., "Comparable Mineral Properties – A Widening of Meaning for Appraisals," presented at the SME-CMA-IIMA 2015 Annual Conference, Denver, Colorado, 15-18 February 2015.
Ellis, Trevor R., "Appraisal of Mineral Property Conservation Easement Donations," presented at the SME-AIMA 2014 Annual Conference, Salt Lake City, Utah, 23-26 February 2014.
Ellis, Trevor R., "'If this deposit is worth that much, why hasn’t it already been mined out?', and Other Lessons for Minerals Appraisers," presented at the SME-AIMA 2013 Annual Conference, Denver, Colorado, 24-27 February 2013.
Ellis, Trevor R., "The Tortuous History of National and Global Mineral Valuation Standards Development – Why Has SME Become Involved Now?" presented at the SME-AIMA 2013 Annual Conference, Denver, Colorado, 24-27 February 2013.
Collins, Daniel L. and Ellis, Trevor R., "Discount Rate Selection Methods Applied in Appraisals of a Quarry Taken by Eminent Domain," presented at the SME-AIMA 2013 Annual Conference, Denver, Colorado, 24-27 February 2013.
Ellis, Trevor R., "Discount Rate Extraction from Transaction Analysis for Income Approach Valuation of Mineral Properties," presented at the SME-AIMA 2012 Annual Conference, Seattle, Washington, 19-22 February 2012.
Ellis, Trevor R., "A Review of the Many Cost Approach Methods for Minerals Valuation," presented at the SME-CMA-AIMA 2011 Annual Conference, Denver, Colorado, 28 February – 2 March 2011, SME Paper #11-156, 6 pages. Published in SME Transactions, 2011, Vol. 330, pages 557-562, a peer reviewed technical paper. Available at OneMine.org.
Ellis, Trevor R., "Sales Comparison Valuation of Development and Operating Stage Mineral Properties," presented at the SME-CMA-AIMA 2011 Annual Conference, Denver, Colorado, 28 February – 2 March 2011, SME Paper #11-151, 14 pages. First presented at Chilean Commission for Mining Industry Competencies’ Seminar on Valuation of Mineral Properties, Santiago, Chile, 25 October 2010. Published in Mining Engineering, Vol. 63, No. 4, April 2011, pages 89-104, a peer reviewed technical paper. Available at OneMine.org.
Here, common criticisms of the sales comparison approach by mineral appraisers are introduced. These are counterbalanced by raising some issues in the way the inputs for the income approach are usually derived by minerals appraisers and by review of some conspicuous examples of the much-too-common misuse or abuse of the income approach in market value mineral appraisals. Example transaction analyses and sales comparison analyses are used to demonstrate the author’s methodology for adjusting units of resource in his transaction adjustment tables. The examples are used as the basis for a discussion of ways to employ adjustments for operating economics and many other factors, while warning against the potential for double counting. The conclusions include a recommendation that minerals appraisers attempt to apply at least two of the three valuation approaches when appraising the market or fair value of development and operating stage mineral properties, the two being the sales comparison and income approaches.
Ellis, Trevor R., "Sales Comparison Valuation of Development and Operating Stage Minerals Properties," presented at the Chilean Commission for Mining Industry Competencies' Seminar on Valuation of Mineral Properties, Santiago, Chile, 25 October 2010.
Ellis, Trevor R., "A Review of the International Accounting Standards Board's Extractive Activities Draft Discussion Paper," presented at the SME 2010 Annual Conference, Phoenix, Arizona, 28 February – 3 March 2010.
Ellis, Trevor R., "Current Status and Direction of International Standards in the USA and Globally," presented at the SME-CMA 2009 Annual Conference, Denver, Colorado, 23-25 February 2009.
Ellis, Trevor R., "Market Valuation of a Major Gold-Copper Property in Venezuela using the International Valuation Standards and Worldwide Value Indicators," special speaker presentation at the AGH – University of Science and Technology, Cracow, Poland, 3 March 2008.
The client requested that the valuation abide by both the International Valuation Standards and the USA’s standards. Due to the world-class nature of the gold deposit and the global nature of potential buyers, gold property transactions in many countries were analysed. Ten transactions were adjusted in the sales comparison adjustment grid for operating cost, country risk, and many other factors. Market discount rate information was extracted from transactions for selection of the discount rate to be used in net present value calculations. Probabilities were applied to development scenarios in conjunction with the adjacent gold property. The Stock Market Entity Value Extraction method was also used. The estimates of value derived from the various methods were reconciled to develop the concluding opinion of market value of the Las Brisas concessions.
Ellis, Trevor R., "Development of the International Valuation Standards Committee's Best Practice Guidelines for Valuations in the Extractive Industries," presented at the International Mining Forum 2008, Szczyrk, Poland, 25-29 February 2008. Published in International Mining Forum 2008: Economic Evaluation and Risk Analysis of Mining Projects, Taylor & Francis, pages 15-18, a peer reviewed technical paper.
Ellis, Trevor R., "International Trends in Standards and Regulations for Valuation of Mining Industry Properties and Projects," presented at the International Mining Forum 2008, Szczyrk, Poland, 25-29 February 2008. Published in: International Mining Forum 2008: Economic Evaluation and Risk Analysis of Mining Projects, Taylor & Francis, pages 1-7, a peer reviewed technical paper.
Ellis, Trevor R., "International Trends in Valuation of Mineral Projects – Standards and Regulations," presented at the China Mining 2007 Conference, Beijing, China, 13-15 November 2007. Presentation slides published in China Mining 2007 Conference Proceedings, pages 134-139.
In 1995, The Australasian Institute of Mining and Metallurgy released its first edition of The VALMIN Code. This focused more on standards for technical assessment of mineral projects than valuation. The Canadian Institute of Mining and Metallurgy's CIMVal Standards, published in 2003, is the first set of mineral valuation standards to incorporate the three approaches to value of the Generally Accepted Valuation Principles (GAVP) -Cost, Sales Comparison, and Income Approaches -for market valuation.
The International Valuation Standards Committee (IVSC) published the First Edition of the International Valuation Standards (IVSs) in 1985. The IVSC is a Non-Government Organisation (NGO) member of the United Nations, having been granted Roster status with the United Nations Economic and Social Council in 1985 for consultation on valuation matters. The Seventh Edition of the IVSs, published in 2005, for the first time included a set of valuation standards specifically for valuation of minerals and petroleum industry assets. This set of standards, now in the Eighth Edition of the IVSs, is designed for worldwide use, and draws upon the full set of IVSs to provide comprehensive GAVP-based standards for market and non-market valuations of all asset types within these industries. The IVSC is now finalizing a valuation best practice technical document for the extractive industries, to supplement its standards.
This paper focuses on the implementation of valuation standards within the extractive industries by government agencies, financial regulators, and businesses, while advising on avoidance of conflicts of international and national standards. It also addresses the severe shortage of extractive industries valuers who are educated and certified in the application of the GAVP to minerals and petroleum industry assets, and their licensing problems for working across borders.
Ellis, Trevor R., "Cost Approach for Mineral Property Valuation," presented at the SME-CMA 2007 Annual Conference, Denver, Colorado, 25-28 February 2007.
Ellis, Trevor R., "The International Valuation and Financial Reporting Standards – Their Content and Effect on Us," presented at the Geological Society of Nevada Symposium, Reno, Nevada, 15-18 May 2005. Published in Symposium 2005: Window to the World, Geological Society of Nevada, Reno, Nevada, 2005, pages 1297-1302, a peer reviewed technical paper.
Ellis, Trevor R., "Implementation of the International Valuation Standards," presented at the SME 2005 Annual Conference, Salt Lake City, Utah, 28 February – 2 March 2005, SME Paper #05-093, 4 pages. Published in Mining Engineering, Vol. 58, No. 2, February 2006, pages 62-64, a peer reviewed technical paper.
Ellis, Trevor R., "Violations of Market Value Standards with the Income Approach," presented at the SME 2005 Annual Conference, Salt Lake City, Utah, 28 February – 2 March 2005.
Ellis, Trevor R., "New Dawn for Minerals Appraisers?" presented at the SME 2005 Annual Conference, Salt Lake City, Utah, 28 February – 2 March 2005.
Ellis, Trevor R., "History and Future of Minerals and Petroleum Valuation Standards Development Internationally," presented at the SME 2004 Annual Conference, Denver, Colorado, 23-25 February 2004.
Ellis, Trevor R., "Philosophy and Application of the International Valuation Standards for Minerals and Petroleum," The Professional Geologist, AIPG, Vol. 41, No. 1, January-February 2004, pages 14-19. Presented at the SME 2004 Annual Conference, Denver, Colorado, 23-25 February 2004, SME Paper #04-133.
Ellis, Trevor R., "International Perspective on U.S. Minerals Appraisal Standards Development," presented at the SME 2003 Annual Conference, Cincinnati, Ohio, 24-26 February 2003, SME Paper #03-109, 5 pages. Revised version published in Mining Engineering, Vol. 56, No. 3, March 2004, pages 44-48, a peer reviewed technical paper.
Ellis, Trevor R., "The Extractive Industries Addition to the International Valuation Standards," presented at The Centre for Advanced Property Economics' Minerals Appraisal Symposium, Denver, Colorado, 1-3 October 2003.
Ellis, Trevor R., "The U.S. Mineral Property Valuation Patchwork of Regulations and Standards," Mineral Property Valuation Proceedings – Papers presented at Mining Millennium 2000, CIM, Toronto, Canada, 8 March 2000, pages 25-40. Revised version in CIM Bulletin, Vol. 95, No. 1059, March 2002, pages 110-118, a peer reviewed technical paper.
Since 1981, the Securities and Exchange Commission has prohibited U.S. listed companies from reporting quantitative estimates of mineralization and the value of mineralization, other than proven and probable reserves. This results in the minerals appraiser (valuator) working with a shortage of data in his everyday work, both on the subject property and in sales analysis.
Between 1989 and 1995, all 50 states and essentially all federal agencies adopted the Uniform Standards of Professional Appraisal Practice (USPAP) for real property appraisals (valuations). The major national appraisal societies also require their members to abide by USPAP. A significant portion of minerals appraisals must now follow these standards. This paper will discuss the content of USPAP. It provides a very good framework for the valuation of a minerals property or a mine, both as real property and as a business. However, the credentialing standards for real property appraisers are now prohibitive for minerals appraisers.
Ellis, Trevor R., "Reporting Standards – The USA Experience: Achieving True Globalization – Problems and Solutions," presented at the Council of Mining and Metallurgical Institutions' Congress 2002, Cairns, Australia, 27-28 May 2002, and to International Mining Professionals Society's Annual Conference, Denver, Colorado, 21 May 2002. Published in CMMI Congress 2002 – International Codes, Technology and Sustainability for the Minerals Industry, AusIMM, Melbourne, Australia, PS No 3/2002, pages 67-77, a peer reviewed technical paper. Updated versions in the international journal, Minerals & Energy – Raw Material Report, Vol. 17, No. 3, 2002, pages 15-31, and CIM Bulletin, Vol 96, No. 1067, January 2003, pages 37-48.
In March 1999, the US-based Society for Mining, Metallurgy and Exploration (SME) released an update of its 1991 guidelines for definitions to be used in reporting of Mineral Resources, Reserves and Exploration Information, closely abiding by the 1997 CMMI recommendations. However, without SEC recognition, reporting under the SME and CMMI definitions is effectively barred for US companies.
The SEC intends to adopt the International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB). This will occur within just a few years, when the convergence project for development of the IFRS has reached a satisfactory point. The US is the largest financial supporter and participator in IASB. The Extractive Industries Standard of the IFRS will likely terminate Industry Guide 7. However, the effect of this international replacement will likely be equally restrictive. This could possibly neutralise the benefit of a CMMI-based global reporting standard.
SME, the US society encompassing the widest range of mining industry professionals, does not have a Code of Ethics. It has no mechanism for requiring members to abide by a professional standard. SME is presently looking into possible solutions for this deficiency. US-based professional societies that do have a binding Code of Ethics, generally cater to a single profession, and are not just mining industry related. The American Institute of Professional Geologists (AIPG) and the American Institute of Minerals Appraisers (AIMA) are examples. The SME is considering creating a subsidiary body with an enforceable Code of Ethics.
To support a CMMI-based global reporting standard, competent persons will need to work across international borders. A standardised mechanism for qualifying and registering competent persons will be needed. National rules and laws must allow competent persons to easily enter countries to perform their work.
State issued licenses are increasingly required for much of the work performed in the US mining industry by engineers, geologists and minerals appraisers (valuers). Such licenses are not required by the SEC for Reserve reporting in the US, may not be required for valuation of mineral properties under certain circumstances, and except for real property valuer licenses, they generally do not have a binding code of conduct. However, state licensing of professionals forms a substantial and increasing barrier to interstate trade in professional services, and can be a prohibitive barrier to professionals from outside the US. Any rationalisation of this confusing patchwork of regulations confronting US minerals industry practitioners will only occur as part of larger, national change, hopefully aimed at compliance with international standards and protocols.
The US does not have a valuation standard aimed specifically at the mining industry. The Uniform Standards of Professional Appraisal Practice, the national valuation standards, often must be applied to mineral property valuation, but contains no specific instructions for minerals. The author has campaigned against development of minerals valuation standards proposed by US minerals institutes. Instead he encourages the mining industry worldwide to place its support behind the initiative of the International Valuation Standards Committee (IVSC) to include an extractive industries section in its International Valuation Standards (IVS). This should provide a global set of valuation standards for the mining and petroleum industry within two years. This addition to IVS will provide essential valuation standards reference support for the extractive industries financial reporting standard of the International Accounting Standards Board.
The IVS has achieved a high level of acceptance in the developed and lesser developed countries of the world. It provides a comprehensive framework of Generally Accepted Valuation Principles for the valuation profession internationally, for valuation of all property or asset types. IVSC is effectively a sister organisation to IASB. The IASB's International Financial Reporting Standards (IFRS), previously known as the International Accounting Standards (IAS), reference and quote IVS in some instructions for determination of fair value. IVSC is a Non-Governmental Organisation (NGO) member of the United Nations and maintains liaison with many important international economic, accounting and financial agencies, such as the OECD, IMF and WTO.
Ellis, Trevor R., "Mineral Property Valuation Standards – A US Perspective: Marching with the International Valuation and International Financial Reporting Standards," presented at the South African Institute of Mining and Metallurgy's Valuation Code Colloquium, Johannesburg, South Africa, 19-20 March 2002; in Valuation of Mineral Projects and Properties: an African Perspective, SAIMM, Johannesburg, South Africa, 2002, 17 pages. Also published in The Professional Geologist, AIPG, Vol. 39, No. 5, May 2002, pages 5-13.
The International Valuation Standards (IVS) of the International Valuation Standards Committee (IVSC) have achieved a high level of acceptance in the developed and lesser developed countries of the world since release of the 2000 edition. IVS provides a comprehensive framework of Generally Accepted Valuation Principles for the Valuation profession internationally, for valuation of all property or asset types, including real property, personal property, businesses and financial interests. IVSC is effectively a sister organisation to the International Accounting Standards Board (IASB). The International Accounting Standards (IAS) references and quotes IVS in some instructions for determination of Fair Value. IVSC is a Non-Governmental Organisation (NGO) member of the United Nations and maintains liaison with many important international economic, accounting and financial agencies, such as the OECD, IMF and WTO.
In February 2001, IVSC convened an Extractive Industries Task Force to respond to minerals and petroleum valuation issues raised during the planned development of an International Accounting Standard for the extractive industries. The author led the task force in developing IVSC's initial input to the IASB. IVSC has proposed reconvening the Extractive Industries Task Force in 2002 to rapidly draft a mining and petroleum section for inclusion in IVS, with particular attention given to addressing IASB concerns. The Task Force will likely expand its membership, and draw from the principles included in The AusIMM's VALMIN Code and the Canadian CIMVal Standard now being finalised.
IVSC hopes to have the draft extractive industries section ready by the end of 2002 for distribution in the next edition of IVS as an Exposure Draft for public comment. The section will be concise, since it will be a supplement to the existing valuation framework supplied by IVS, addressing only the essential elements that are specific to minerals and petroleum valuation. The author proposes that the Council of Mining and Metallurgical Institutions (CMMI) then consider developing supplementary guidance and qualifications requirements, with that document incorporating IVS by reference. The mining institutes of individual countries should then adopt IVS and CMMI's supplementary document by reference. They could supplement those with their own document containing guidance unique to their country's situation, and incorporate their own binding instructions and enforcement provisions.
This paper provides the author's preliminary suggestions of how extractive industries guidance should be incorporated into the IVS. It concludes by recommending that SAIMM avoid the difficult, lengthy and contentious process of developing its own valuation code, and instead adopt the IVS and put its full support behind IVSC's development of an extractive industries section for the IVS. It can then adopt a standard that will have the highest level of international recognition and distribution.
Ellis, Trevor R., "Recent Developments in International Valuation Standards," presented at the SME 2002 Annual Conference, Phoenix, Arizona, 25-27 February 2002, SME Paper #02-168, 5 pages. Revised version published in SME Transactions, 2002, Vol. 312, pages 148-152, a peer reviewed technical paper.
Ellis, Trevor R., "US Views on Valuation Methodology," presented at the VALMIN 2001 Conference, Sydney, Australia, 25-26 October 2001; VALMIN '01 – Mineral Asset Valuation Issues 2001, AusIMM, Carlton, Victoria 2001, PS No 5/01, pages 1-23, a peer reviewed technical paper. Also published in The Professional Geologist, AIPG, June-August 2002, as a 3-part series.
This paper outlines why the author believes it is now the right time to review and enhance The Australasian Institute of Mining and Metallurgy's (AusIMM's) VALMIN Code (1998) for its use globally. For this to occur, he contends that the Code would need to undergo dramatic restructuring to abide by the Generally Accepted Valuation Principles expressed in the International Valuation Standards (IVS) of the International Valuation Standards Committee (IVSC) and the US Uniform Standards of Professional Appraisal Practice (USPAP), especially since the US is the world's biggest market economy. To achieve this aim, the author recommends that an international team of mineral valuation experts be assembled by the IVSC, using the existing cooperative framework, to work on developing a comprehensive addition to the IVS for the Minerals (including petroleum) Industry, that recognises the special characteristics of mineral assets.
USPAP was introduced in 1987 as the US national set of Standards for Valuation of all types of properties and businesses, and is updated annually. Mineral property valuations for use by banks and the Federal Government must comply with USPAP, despite it containing no instructions specific to the minerals industry. Valuations of mineral properties for use by companies in litigation must now generally comply with USPAP to be considered credible evidence. USPAP's main principles closely match those expressed in IVS. It has separate Standards for the Valuation of Real Property (such as a mineral property), Business and Intangibles (such as a mining company and its financing), and Personal Property (such as mining equipment). Its Real Property valuation Standards require that for a Complete Appraisal all three valuation Approaches (Sales Comparison, Income and Cost) be used wherever reasonably possible, then be reconciled. Market Value must be based on the Highest and Best Use of the property. A set of rules provides a framework for the process of the Valuation development, while a second set of rules provides the framework for the content of the Valuation Report.
When the Federal Government is acquiring or exchanging land, the Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA) provides additional Real Property valuation guidelines to those of USPAP. Significant coverage of mineral properties is included. Lessons from Court rulings are the basis of much of the document, and they are used to instruct the valuer on preparation of the report for Court and how to present expert opinions. Primary reliance on the Sales Comparison Approach is emphasised for use in Court. Nevertheless, Minerals Industry valuation practitioners often view the application of UASFLA guidelines as being unfair to the holders of minerals assets and interests in them. Federal agencies that manage public land containing significant mineral and petroleum property specify the qualifications of the responsible Real Estate Appraiser (valuer).
The Securities and Exchange Commission (SEC) has valuation restrictions embedded in its mining industry reporting rules, Industry Guide 7. It generally limits the reporting of mineral deposit value to the value of Reserves only. Much of the document is now out-of-step, in the author's view, with internationally accepted Reserve-Resource reporting Standards and valuation best practice.
It is difficult to discuss valuation methodology without discussing regulation of qualifications. States in the US continue to increase the barriers to professionals attempting to work across state boundaries. This is in the guise of regulating professionals for the welfare of the public. All US States regulate engineers and Real Property valuers, and most regulate Geologists by State testing and licensing. Many US States have exemptions in their statutes for minerals or mining work. However, strict legal interpretation can make those exemptions much narrower than they first appear. A significant percentage of minerals industry professionals frequently ignore some of these restrictive rules, whether due to ignorance or perceived necessity. From the author's observations, strict interpretation of regulations often leaves the contract bidding to those who are merely qualified by licensing (and often of questionable competence), rather than to those with appropriate qualifications and demonstrable experience in mineral asset valuation.
Conflicting state and international pressures are now at play in the US. Licensing of professionals in general at the State level is fundamentally incompatible with the internationalisation of standards of professional practice and international agreements on trade in professional services. States rights advocates and professionals who benefit from state level guild-like protection, continue to promote the restrictive practice of State licensing. Any rationalisation of the patchwork of standards and regulations confronting the US minerals valuation practitioner will only occur as part of larger, national change, hopefully aimed at compliance with International standards and protocols.
Ellis, Trevor R., "U.S. and International Valuation Standards – The Future," presented at the SME 2001 Annual Conference, Denver, Colorado, 26-28 February 2001, SME Preprint #01-161, 10 pages. Revised as, "United States and International Valuation Standards – The Future," SME Transactions, 2002, Vol. 312, pages 141-147, a peer reviewed technical paper.
Some important international trade agreements are driving actions to free the trade in professional services. In July 2000, an international workshop was held to initiate discussion on minimum qualifications for appraisers to work internationally. Pressure for uniform minimum qualifications and rules for professionals internationally will continue to build. The U.S. is historically among the slowest countries to implement such initiatives, with its state level licensure barriers having the potential to cause some of its professionals to be stranded in an international backwater.
Structural change is needed in Australia's VALMIN Code to remove conflict with the latest International Valuation Standards. The mineral valuation standards developers of Australia, Canada and the U.S. should work jointly on updating VALMIN for global use.
Ellis, Trevor R., "Funding Dangers Posed by Extractive Industries International Accounting Standard," Denver, Colorado, March 2001, 8 pages.
In November 2000, the Extractive Industries Steering Committee of the International Accounting Standards Committee (IASC) released an Issues Paper seeking replies by 30 June 2001. Based on the responses received, the committee is scheduled to develop an accounting standard for the mining and petroleum industries for release in the fourth quarter of 2002 as part of IAS.
The tentative views expressed by the IASC steering committee have a deja vu resemblance to the U.S. Securities and Exchange Commission's perspective expressed in its highly restrictive and antiquated Industry Guide 7. The question of whether to allow quantitative reporting of resources that are not reserves, as supplemental information, appears to have only barely remained on the edge of the table for discussion. The possibility of reporting an estimate of the current value of any category of such resources did not even reach the table. Disclosure of the current value of reserves would be restricted to a supplemental information section. If the standard is finalized with this perspective, the restriction to an historic cost accounting basis for reserves and resources will greatly handicap the financial abilities of the mining and petroleum industries relative to other industries allowed current value accounting of assets.
The author is the U.S. representative to the Extractive Industries Task Force of the International Valuation Standards Committee (IVSC), a sister organization to the International Accounting Standards Board (IASB), which replaced the IASC through restructuring in December 2000. The task force members are assisting the IVSC in developing its input to the IASB. The author seeks active minerals industry support and sponsorship for his and the task force's initiative to modify the outcome to an appropriate current value standard for the extractive industries, based on an international minerals valuation standard, the urgent development of which he expects the task force will need to undertake.
Ellis, Trevor R., "International Challenges will Confront State Licensure," The Professional Geologist, AIPG, Vol. 37, No. 11, December 2000, pages 10-13.
Ellis, Trevor R., and Abbott, David M., Jr., "Regulatory Trends in Mineral Property Valuation – an International Perspective," Valuation 2000 – Papers and Proceedings, sponsored by ASA, AI, and ASFMRA, July 2000, pages 27-41, a peer reviewed technical paper, for which Mr. Ellis received the award for 3rd best professional paper at the Valuation 2000 convention.
Ellis, Trevor R., "Appraisals of a Gold Property – A Case Study of Reserve Additions," 2000 Journal of the ASFMRA, American Society of Farm Managers and Rural Appraisers, Denver, Colorado, pages 44-53, a peer reviewed technical paper.
Ellis, Trevor R., "The Difference Between a Value Estimate and an Appraisal," presented at the SME Annual Conference, Salt Lake City, Utah, 28 February – 1 March 2000, SME Preprint #00-119, 15 pages. Also presented at the Denver Mining Club, Denver, Colorado, 3 August 2000. Revised version published as, "Difference between a value estimate and an appraisal," SME Transactions, 2001, Vol. 310, pages 25-35, a peer reviewed technical paper.
Ellis, Trevor R., "Lessons Learned about Standards from Applying both VALMIN and USPAP on a Complex Appraisal Project," presented at the SME Annual Conference, Salt Lake City, Utah, 28 February – 1 March 2000, SME Preprint #00-129, 9 pages. Revised and updated version published under the same title in SME Transactions, 2000, Vol. 308, pages 116-122, a peer reviewed technical paper.
Ellis, Trevor R., "Ethical Dilemmas Posed During a Mineral Project Appraisal," The Professional Geologist, AIPG, Vol. 37, No. 2, February 2000, Westminster, Colorado, pages 7-11, a peer reviewed technical paper. Presented as the Don Yardley Lecture, Mackay School of Mines, Department of Geological Sciences, University of Nevada, Reno, Nevada, 16 February 2001. Similar presentations presented to the AIPG Student Chapter, Colorado School of Mines, Golden, Colorado, 24 March 2000, and to the Denver Mining Club, Denver, Colorado, 1 June 2000.
Ellis, Trevor R., Abbott, David M., Jr., and Sandri, H. J., "Trends in the Regulation of Mineral Deposit Valuation," presented at the SME Annual Convention, Denver, Colorado, 1-3 March 1999, SME Preprint #99-29, 8 pages.
"Ethical Issues Confronted During an Appraisal Project Turning Sour," presented at the Annual Conference, Geological Society of America, Denver, Colorado, 25-28 October 1999. Similar papers under different titles presented to the AIPG Student Chapter, Colorado School of Mines, 24 March 2000, the Denver Mining Club, Denver, Colorado, 1 June 2000, and for the Don Yardley Lecture, Mackay School of Mines, Department of Geological Sciences, University of Nevada, Reno, Nevada, 16 February 2001.
1988 and Older
Ellis, Trevor R., "Application of Economic Risk Assessment to Hazardous Waste Remediation Projects," presented at the APCA Annual Conference, Dallas, Texas, 19-24 June 1988, Preprint 88-35.4, 13 pages.
An economic risk assessment can be used for a number of purposes. it can be used to provide a realistic range of expected cost outcomes to the owners or principal responsible parties (PRP's) for the site. This allows for informed financial planning and decision making, while also averting the potential of large cost overruns at a later date in the project. The assessment also allows concerned parties to identify areas that may prove of greater liability than originally anticipated as the project progresses. It may also aid in the selection of options or approaches which will minimize some of the potential liability or uncertainty.
With an expected cost and net present value cost outcome at hand based upon probability analysis, settlements can be negotiated at an early stage with minor liable parties in order to simplify project management. For example, at one industrial waste contamination site presently in the early stages of remediation planning, the major responsible parties want to settle as soon as possible with more than 300 minor responsible parties in order to simplify project management. However, cost estimates for the remediation project range from below $40 million to close to $300 million. An economic risk assessment is being conducted to determine the mean cost estimate to be used for settlement negotiations.
There appears to be an increasing trend to have contractors negotiate a fixed price for their site remediation work, as compared to commonly used "cost plus" contracts. A fixed price passes much of the project risk onto the contractor. To quantify risks and uncertainties for their bids, contractors could use economic risk assessment techniques. Of a similar nature, major oil companies have used these techniques for at least 20 years to quantify risks and uncertainties in developing fixed bids for offshore petroleum leases. To minimize the time and cost involved in the assessment, it may be necessary to include only a few major risk or uncertainty items.
An economic risk assessment could also be used by the site owners or PRP's when evaluating fixed price bids from contractors for the remediation work. The assessment will provide a probability distribution curve for the range of remediation costs which can be expected. A bid falling near the low cost end of the distribution indicates that the contractor will absorb a lot of risk unless he is unexpectedly efficient. In deciding whether to accept the low cost bid, the financial strength of the contractor to absorb this risk can be evaluated. If the contractor's financial strength is inadequate, he may fail to complete the work, or attempt to cut corners in order to save costs.
Bryan, Rex C., and Ellis, Trevor R., "Economic Sensitivity Analysis Using Geostatistics," 17th Application of Computers and Operations Research in the Mineral Industry, SME-AIME, Litteton, Colorado, 1982, pages 101-108.
Ellis, Trevor R., "Appraisal of Sandstone-Type Uranium Prospects using Computer Modeling," presented at the 1979 the SME-AIME Annual Conference, New Orleans, Louisiana, 18-22 February 1979, SME Preprint #79-5, 5 pages.
Ellis, Trevor R., "Estimation of Minimum Specifications for Economically Explorable Sandstone-Type Uranium Deposits," Colorado School of Mines Quarterly, Vol. 74, No. 1, January 1979, 71 pages, a peer reviewed publication.
In this paper a method is developed for estimating the specifications of sandstone-type uranium deposits which will be the minimum that can meet a company's economic requirements for investment. The method is based on net present value analysis. From available cost data and deposit specifications for typical mines, the method involves calculating the uranium oxide selling price necessary for a mining project based on the deposit to achieve the company's required discounted cash flow rate of return on investment. The deposit is assumed to have been drilled to only a minor extent during exploration drilling. The range of deposits achieving the company's required discounted cash flow rate of return on investment at the selected selling price is then graphed. The graphs provide the complete range of deposits with the minimum required specifications. A FORTRAN computer program capable of accepting a wide variety of inputs was written by the author to perform the necessary calculations.
A major portion of the paper is devoted to discussion of the variations of costs with the depth and thickness of uranium ore deposits. A large amount of unpublished data was collected for this purpose. From this discussion is developed the use of an ore depth to thickness ratio for simplifying the method.
In developing this method, the author assumed that the deposits would be mined by either standard open pit or room and pillar underground techniques. In situ leaching is briefly discussed and some comparative data presented. However, a lack of comprehensive cost data for this latter technique prevented the method from being expanded to include it.
The accuracy of the results derived from the method is limited to a major extent by the accuracy of available cost data. The author therefore believes that the best procedure for application will be to calculate upper and lower limits for the minimum range of economic deposits. Deposits falling below the lower limit would be left immediately, those above the upper limit would be almost certain to prove viable, while the marginal deposits between the limits would warrant further prudent examination and evaluation.
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Abbreviations used above: