10940 (v.3) WASM Resource Sector Finance 601

Area:

WASM Mineral Economics Teaching Area

Credits:

12.5

Contact Hours:

16.0

Lecture:

4 x 4 Hours Weekly

Syllabus:

Concepts of Financial accounting and statements, cash flow models and discounted cash flow (DCF) analysis. Sources of Company Finance, Capital Investment Appraisal. To invest or not to invest? Time Value of Money, Discount Rates, Present Values, Risk andReturn, Risk Profiles of Assets, Capital Asset Pricing Model (CAPM), Capital Structure (Debt versus Equity). Does gearing level matter? Capital structure, tangible and intangible assets (market to book ratios), deprication policy. Real Options versus Financial Options. An introduction to Commodity Derivatives.

Unit Outcomes:

On successful completion of this unit, students will have- A basic understanding of the fundamental concepts and principles that influence investment and financing decisions and financial management in the mining sector. An elementary familiarity with financial accounting and an ability to interpret the financial performance of a firm from its financial statements and reports. The ability to appreciate the differences between a financial accounting and a cash view of the financial dynamics of a mining company/project. A familiarity with the concept of capital budgeting and a capability to carry out simple, 'back of envelope' numerical financial calculations and of constructing basic financial cash flow models of resources projects at the pre-feasibility stage for discounted cash flow (DCF) applications.

Text and references listed above are for your information only and current as of September 30, 2003. Please check with the unit coordinator for up-to-date information.

Unit References:

Torries, T.F. (1998), Evaluating mineral projects: applications and misconceptions. Society for Mining, Metallurgy and Exploration Inc. Peirson, Graham. et al. (2000), Business finance (seventh edition). Sydney, McGraw-Hill. Gentry, Donald W. and O'Neil, Thomas J. (1984), Mine investment analysis. Rudenno, Victor. (1998), The mining valuation handbook- Australian mining and energy valuation for investors and management. Elsternwick, Wrightbooks. The Australian master tax guide (2002), CCH Publications.

Unit Texts:

Extensive course notes.

Unit Assessment Breakdown:

Final examination 60%, Tutorial performance and class participation 40%. This is by grade/mark assessment.

Year	Location	Period	Internal	Area External	Central External
2004	Kalgoorlie Campus	Semester 2	Y
2004	Kalgoorlie Campus	Summer Period	Y