Investment Banking: Mining Finance

An introduction to mining project and corporate finance

What you'll learn
Understanding the phases of the life cycle of a mine from early mineral exploration to closure;
Understanding the key priorities and milestones management would need to focus on at each state of a mine’s life cycle;
Understanding the medium and long term strategic objectives of mine management with regards to risk mitigation and company growth.
Be able to identify the appropriate sources of funding for each stage of a mine’s life;
Understand the basic pros and cons of each method of financing;
Understand the concept of structural and contractual subordination;
Know what is meant by seniority of funding with respect to the ordinary course of business and in a liquidation scenario (cashflow waterfall)
Understand the benefits and drawbacks to project financing;
Appreciate deal structuring considerations of project financing transaction with regards to borrowers, guarantors, security structures, and secured assets;
Be able to identify the various stakeholders within a project, and how they work together;
Know how to structure a Gantt chart for the optimal timing of a project financing, and appreciate how different workstreams can be performed simultaneously;
Understand the difference between project financing and corporate financing;
Know the main corporate facility types used in a company’s capital structure;
Understand the main risk factors to consider when judging whether a corporate client is a credible borrower or not;
Be able to interpret a mining cost curve;
Understand what the key issues are when analyzing a company’s historical performance and forecasts;
Requirements
Basic knowledge of Microsoft Excel
Description
The mining industry presents unique challenges to stakeholders in unlocking value, ensuring sustainability, and in leaving behind a positive legacy. This requires great depth and precision in planning, and co-ordination of various stakeholders both before and during the implementation of a mining project. For this reason clients need to know whether their projects are fundable, who to approach for financing for their projects, and specifically, which funders would be willing to step in, and at which phase of the project. Clients also need to know how manage the various moving parts inherent in the financing of mining related ventures every step of the way. Effective planning and preparation can only take place when built upon the foundation of knowledge.This course is ideal for fast-tracking industry professionals in front office roles - teaching them to identify lucrative funding opportunities to sell to their principals. It is also well suited to middle-office professionals, teaching them how to assess the risks of such funding opportunities. The course is aimed at new entrant and intermediate-level professionals, and will sharpen the analytical and commercial skills of participants, thereby enabling them to contribute to the successful financing of greenfield and brownfield mining ventures.The Mining Finance course blends theoretical principles with real industry insights. It is specifically geared towards individuals directly involved in the financing of mining projects. The bottom-up nature of the course is designed to provide a holistic journey, from the initial risk assessment, to the overall structuring of the financing package. This will allow participants to structure tailor-made financing packages bespoke to the unique needs of clients they are presented with.

Overview

Section 1: Introduction

Lecture 1 Welcome to Mining Finance

Lecture 2 The Mining Life Cycle

Section 2: Funding Sources and Capital Structures

Lecture 3 Introduction

Lecture 4 Equity Funding

Lecture 5 Streaming, Royalty, and Prepayment Arrangements

Lecture 6 Debt

Lecture 7 The Optimal Capital Structure

Lecture 8 The Cashflow Waterfall

Lecture 9 Summary and Recap

Section 3: Project Finance

Lecture 10 Introduction

Lecture 11 Typical Structure of a Project Financing Transaction

Lecture 12 Security

Lecture 13 Types of Security Interest

Lecture 14 Important Parties in a Project Financing

Lecture 15 Summary and Recap

Section 4: Corporate Financing

Lecture 16 Introduction

Lecture 17 Types of Corporate Facilities

Lecture 18 Asset-Based Financing

Lecture 19 Export Credit Agencies

Lecture 20 Corporate Financial Analysis

Lecture 21 Summary and Recap

Lecture 22 Bonus Lesson: Alternatives to DCF Valuation

Section 5: Financial Covenants

Lecture 23 Financial Covenants

Section 6: Financial Modelling for Mining Companies - Masterclass

Lecture 24 Introduction and Useful Hotkeys

Lecture 25 Profitability Drivers and Economic Assumptions

Lecture 26 Internal Profitability Drivers

Lecture 27 Building the Model from Scratch

Lecture 28 Process Flow (Putting the Links Together)

Lecture 29 Tax

Lecture 30 Working Capital

Lecture 31 Debt

Lecture 32 Accounting Statements

Lecture 33 Cashflow Model

Lecture 34 Graphs - Part 1

Lecture 35 Graphs - Part 2

Lecture 36 Graphs - Part 3

Lecture 37 Data Summary and Useful Functions

Lecture 38 Data Tables

Lecture 39 Goal-seek and Breakeven Analysis

Lecture 40 ABC Mining Model Debt Tab Part 1

Lecture 41 ABC Mining Model Debt Tab Part 2

Lecture 42 ABC Mining Model Debt Tab Part 3

Lecture 43 Breakeven Analysis Copper Price

Section 7: Risk Assessment

Lecture 44 Credit Assessment Intro

Lecture 45 The Preparation of Termsheets

Lecture 46 Risk Assessment

Lecture 47 Sources of Information

Lecture 48 Hedging

Lecture 49 Forwards, Futures and Options

Lecture 50 Deal Pricing

Lecture 51 Contents of a Credit Paper

Lecture 52 Executive Summary

Lecture 53 Transaction Summary Part 1 (Abridged Termsheet)

Lecture 54 Transaction Summary Part 2

Lecture 55 Transaction Summary Part 3

Lecture 56 Company Description

Lecture 57 Deal Structure

Lecture 58 Financial Analysis Part 1

Lecture 59 Financial Analysis Part 2

Lecture 60 Financial Model Forecasts Part 1

Lecture 61 Financial Model Forecasts Part 2 Covenants

Lecture 62 Stress Testing

Lecture 63 Peer Comparison

Lecture 64 Risks and Mitigants

Lecture 65 Rating and LGD

Lecture 66 Value Proposition

Lecture 67 Credit Thesis

Section 8: Congratulations on Completing the Course!!

Lecture 68 Bonus Lecture

Analysts and investors wishing to obtain a deeper appreciation for project financing concepts, with particular attention to mining and minerals;,Beginner investment bankers looking to accelerate their growth in the field of investment banking project finance;,Employees of mining companies wishing to broaden their knowledge of raising debt funding for their companies;,Mining professionals with chemical or engineering training, wishing to expand their knowledge into the disciplines of raising funding and debt finance in particular;