Evaluation of heap leaching economic indicators

The economic evaluation of the heap leaching project is an important part of the project feasibility study. Project economic evaluation includes microeconomic evaluation and macroeconomic evaluation. Microeconomic evaluation From the perspective of investors (or enterprises), according to the country's financial, taxation policies and market conditions, through the comparison of multiple programs, scientific analysis and calculation of the economic feasibility of the project, to examine the investment effect, to make a realistic The evaluation provides a scientific basis for project decision-making.

In the process of economic evaluation, we must follow the principles of economics, adopt appropriate evaluation indicators, and should also follow the evaluation procedures.

First, the time value of funds

The essence of this concept is: As the funds involved in the production and circulation, combined with the results of the labor force, the funds to add value. Therefore, in the technical and economic evaluation, people compare the costs or benefits of different time to the same time point to compare. The so-called time value of funds refers to the different values ​​of equal funds at different points in time. There are many methods for presenting the time value of funds. Commonly used are the present value comparison method (PW), the net present value method (NPV) and the net present value method (NPVR). Of the three commonly used methods, the net present value method is the most common. The net present value (NPV) is calculated as follows:

NPV=

Where, C _in , C _ou - the inflow and outflow of cash;

T-calculated years;

N-project service life;

I- Benchmark yield (discount rate, investment benefit rate).

It can be seen from the above formula that the basic meaning of the net present value is: the target rate of return i specified by the state or industry is the target, and then use this benchmark rate of return to convert the net cash flow of each year of the project to the first year of the implementation of the top. The algebraic sum of the present values. It can be seen that when we use the net present value method for project economic evaluation, the net present value of the project must be greater than or equal to zero. The greater the net present value, the better the project's benefits; vice versa, if the project's net present value is negative, the project does not have the ability to repay the debt, and therefore should not be built. It should be pointed out here that the calculation of the net present value method assumes a benchmark rate of return. For this reason, some developed countries have set corresponding national or industry standards. China has not yet issued clear national regulations, and all industries generally have an empirical data, the more the then bank lending rates linked benchmark rate of return that is not less than the prevailing bank lending rates.

Second, cost structure and cost structure

The cost component refers to the collection of various expenses for processing a certain product, and the cost structure refers to the proportional relationship of the components of each expense. Costs can be classified according to different economic properties. According to the current financial system, product costs are classified into the following cost items according to their economic use:

(1) Raw materials (raw materials + main materials + auxiliary materials)

(2) Fuel power (fuel + power used in the process)

(3) Wages and additional wages (welfare, bonuses and allowances)

(4) Loss of waste

(5) Workshop expenses

(6) Enterprise management fee

(7) Sales expenses

Workshop expenses refer to various management fees and business expenses incurred in the organization and management of workshop production, such as salary and bonus of management personnel, office expenses, water and electricity charges, heating costs, cooling costs, etc., as well as maintenance of workshops and equipment managed by the workshop. Fees, etc.

Enterprise management fees refer to various management fees, business expenses and other various expenses incurred in the organization and management of enterprise production. Includes non-operating expenses such as education and social welfare expenses.

The sales fee refers to the expenses incurred during the sales process of the product, such as advertising fees, order meeting fees, and after-sales service fees.

In technical economic analysis, costs are often divided into fixed costs and variable costs. Fixed costs refer to costs that are not related to the increase or decrease in the number of products, such as corporate loan interest, wages and benefits of retired employees. Variable cost refers to the cost of total cost changes as the output of the product changes, such as raw material costs, sales expenses, etc. It should be pointed out that fixed costs and variable costs have only a relative meaning, that is to say, they are meaningful in a given period of time when the yield changes are not large. When the output of the product changes a lot, the fixed cost will change accordingly.

Third, the process of economic evaluation

(1) Research and collection of information

The main data include heap leaching process test report, deposit geological data, economic materials in the region where the company is located, market conditions of raw material supply and product sales, financing of investment and related financial information, relevant economic policies and laws of the state and local governments. Wait.

(2) Basic data forecasting

On the basis of mastering the main data, make financial forecasts and then conduct cost-benefit analysis. At this stage, the following work is required:

1. Investment expenditure and total investment amount of each year during project construction, and formulate fund raising plan, including source of funds, amount, and interest.

2. Calculate the total cost of products for each year, including workshop costs, enterprise production costs, and sales costs.

3. Calculate the sales volume and sales revenue of the products during the production period of the enterprise.

4. Profits and distribution of each year during the production period of the enterprise.

5. The amount and age of repayment of interest and interest.

6. Cash flow for each year after the construction of the enterprise and its commissioning.

(III) Preparation of financial forecast report

Such as cash flow statement, profit calculation table, financial balance sheet, etc.

(4) Conducting cost-benefit analysis

According to the main data in the report, the evaluation is based on the principle of cost-benefit analysis.

Fourth, economic evaluation indicators and judgment

Economic evaluation indicators are divided into static and dynamic. Static indicators generally have an intuitive and clear economic significance. The downside is that they do not consider the time factor of funds and cannot reflect the time value of funds. Therefore, according to the actual situation of the project, when the project is economically evaluated, the static indicator is used in conjunction with the dynamic indicator. For example, when using the static payback period (P _t ), it is generally used with dynamic indicators such as financial net present value or financial internal rate of return.

(1) Static investment payback period (P ₁ )

Refers to the time to recover all investment (including fixed asset investment and working capital) with the net benefit (including depreciation) of the project. Its expression is:

P ₁ = [cumulative net cash flow first positive year number]-1+

When P _{1 is} less than the national or industry-defined baseline payback period (P _e ), the project is acceptable. vice versa. The smaller the P _t , the better the economic effect of the project.

(2) Financial net present value (FNPV)

It is a dynamic indicator of the profitability of the project during the calculation period, based on the difference between the present value of the total income of the project and the value of the total expenditure. The net cash flow for each year is discounted to the sum of the initial values ​​at the first year of project construction at the benchmark rate of return. Its calculation formula is as follows:

FNPV= (1+i) ^{- t}

Where n-calculation period, or project service life;

I-base rate of return;

C _in , C _ou - cash inflows and outflows.

When FNPV ≥ 0, it means that the project can meet or exceed the benchmark rate of return during the calculation period, so the project is acceptable. If FNPV < 0, the item is not acceptable. The greater the financial net present value, the better the economic effect of the project.

(3) Financial internal rate of return (FIRR)

It refers to the discount rate of the cumulative discounted value of the net cash flow of the project during the calculation period equal to zero. It is an important dynamic indicator that is commonly used to reflect project profitability. Its calculation formula is as follows:

FNPV= t(1+FIRR) ^{- t} =0

The financial advancing yield, FIRR, indicates the efficiency of the project's unrecovered funds during the calculation period. It can be obtained by the trial and error method. If the obtained FIRR ≥ i indicates that the project profitability equals or exceeds the benchmark rate of return of the department or country, the project is acceptable.

V. Uncertainty analysis of heap leaching projects

In the economic evaluation of heap leaching technology, in addition to evaluating the evaluation indicators of the project, it is often necessary to analyze the uncertainty of some major factors to predict the economic effects of the project when these factors change or fluctuate. In uranium, gold, copper ore heap leach project, the main factors are the average grade of ore heap leaching rate or recovery, the annual ore processing capacity and so on. Product prices are an important consideration for many engineering projects, but for uranium and gold, they are currently acquired and priced by the state, and the factors of change are small, so they can be ignored. Uncertainty analysis has the following methods:

(1) Analysis of breakeven balance

The break-even analysis is a balance between the total production cost of the project and the annual sales revenue when the production reaches a certain level. Therefore, the break-even analysis is a capital preservation analysis. Through break-even analysis, you can observe how much risk the project can bear without losing money.

Due to total production cost = fixed cost + variable cost (strictly speaking, fixed cost and variable cost are relative concepts). When the scale of production changes, fixed costs may also change, otherwise it will not be able to adapt to changes in production scale. When the scale of production reaches a certain level, the variable cost may no longer rise linearly, and may become nonlinear. Therefore, in the break-even analysis, the following conditions are assumed:

1. Variable cost and product output are linear or proportional;

2. The fixed cost remains unchanged when the output of the product changes;

3. According to the data of the normal year, the products are fully sold;

4. The sales price of the product does not change with time in the production capacity range.

The breakeven point can be obtained by plotting, as shown in Figure 1.

Figure 1 breakeven chart

The drawing of the breakeven chart is as follows:

1. The horizontal axis represents the amount of metal obtained by heap leaching;

2. The sales revenue and production cost are represented by the vertical axis;

3. On the map, draw a line of total sales revenue and total cost with the amount of metal obtained, and the intersection of two straight lines, that is, the break-even point. Example: In a heap leaching project, the annual output of metal is 168kg, the fixed cost is 220,000 yuan, the annual variable cost is 320,000 yuan, and the sales income is 1.66 million yuan. For the break-even diagram, the guaranteed metal output is 28kg. .

The following problems can be seen from Figure 1:

1. In the case of the same break-even point, the higher the metal output, the more profit that can be realized or the less the loss; the smaller the metal output, the less profit or the loss.

2. In the case of constant annual output of metal, the lower the break-even point, the more profit or less the profit that can be obtained; the higher the break-even point, the more profit or loss the profit can be.

3. The break-even point depends on sales revenue and cost; in the case of constant sales income, the higher the total cost, the higher the break-even point, and the less likely it is. The lower the total cost, the lower the break-even point and the better. Therefore, it can be judged whether the heap leaching project can withstand the risk of a decrease in production. Factors such as a decrease in leaching rate or a small ore grade may affect the metal yield.

If the total cost curve and the sales revenue curve are non-linear, that is, they do not meet the assumptions of the above-mentioned break-even analysis, the respective curve equations can be established according to the actual parameters, and the break-even point can be obtained by solving the simultaneous equations. If there are other constraints, it is a nonlinear programming problem.

(B), sensitivity analysis

Sensitivity analysis is to analyze the main factors affecting the income to determine the range of changes in the net present value and internal rate of return of the project. Percentages are often used to indicate changes in a certain factor. For example, the change factor is grade, the ore grade is increased by 0.1%, the net present value is increased by 20,000 yuan, or the internal rate of return is increased by 2%. There is also a way of saying: "Let the net present value be zero, see how much a certain factor has to change", such as how to change the grade of the ore if the net present value is zero. This change value is often referred to as the profit and loss balance point or switch value, by which the "accept (yes)" scheme can be determined to be "rejected (no)"; or vice versa. The internal rate of return is also essentially a switch value.

Basic procedures for sensitivity analysis:

1. Determine the object of sensitivity analysis. According to the different characteristics and requirements of the project, the economic indicators that reflect the project's profitability and repayment ability are the strongest. As the object of sensitivity analysis, there are generally net present value and internal rate of return.

2. Analyze and identify the factors of sensitivity. For example, the ore cost, ore grade, shelf material price, peak concentration of leachate, heap leaching period, etc. in uranium and gold ore heap leaching projects may be different for different ore properties and different regions. Sensitivity factor.

3. Calculate the net present value and internal rate of return. In order to calculate the net present value and the internal rate of return, we must first determine a sensitivity factor and make other factors unchanged to calculate the net present value and internal rate of return. For example, if the grade changes by 2% and the other conditions are the same, the net present value and the internal rate of return are calculated. If there are several sensitive factors, it is necessary to determine a sensitivity factor, and then calculate the net present value and internal rate of return. , and so on, but the sensitivity factor should not be chosen too much.

4. Adjust the flow of funds. We know that the calculation of internal rate of return and net present value is based on financial analysis, and cash flow may vary with factors, sometimes one, and sometimes several. In order to calculate the internal rate of return and the net present value, the flow of funds must be adjusted before proceeding. When adjusting the flow of funds, the content of the project that causes changes in the flow of funds cannot be omitted.

Generally, when performing sensitive analysis, the discount rate can be calculated as 12% to calculate the net present value. If the net present value of the calculation result is greater than zero and the internal rate of return is higher than 12%, it indicates that the project can withstand the risk caused by the factor becoming unfavorable.

For example, a uranium mine heap leaching project has an investment of 1.55 million yuan, a design grade of 0.10%, a service life of 5 years, an annual profit of 521,700 yuan, and a sensitivity analysis when the grade changes by 0.01%. See the table below.

Table sensitivity table

As can be seen from the above table, when the grade of the project becomes 0.01% lower, the net present value is negative, indicating that the project cannot withstand the risk of a 0.01% reduction in grade.

This is just an example of a sensitivity analysis method. In fact, when the internal rate of return itself is less than 12%, it is not necessary to conduct a sensitivity analysis, and it can be concluded that the project cannot withstand the risk of a small grade.