The Study On The Evaluation Of Mining Rights Value Based On Real Options Theory

This paper regarding the mining right value assessment this center subject applied real options theory,which is the newest theory in economics, study assessment method of mining right evaluating, to provide the new mentality and the method for the mining right value assessment. The research content of the paper is as follows:In value assessment of mining right, because the mining activity is filled with many uncertainty, such as the minerals price becomes uncertainly, which is affected by the market changing and the influence factor of supply and demand, the mine reservation becomes uncertainly because that is unable to verify accurately indefinite and so on, caused the value assessment of mining right also is filled with uncertainty, thus make the mining right have the option characteristic. The mining right is one kind of American call real options, in view of the fact that the mining right will provide the mining man the future right to invest and develop mine, and the mining right could be transferred or the hiried legally, which is so same as stock option. And according to the providing stipulation of mining or prospecting permission lisence (mining right qualifications) may know the mining right is the American call option. The value of the mining right should be the price of the call option of mining right, that is because this price enables the mining company have the choosing right to develop the mining. In fact, the mining right also includes other investments and the non-investment option, this kind of option also includes the time option, such as the option of acceleration or detention investment.At present, all kinds of the value assessment method of mining right formed domestically and foreign, which the DCF method is in the leading status, are actually lack of consideration to the uncertainty of mining activity, and the selection of discount rate is difficult, the forecasting of the cash flow is not exact as well as cannot reflect flexibility of mining right man, and so on. Thus cannot scientifically carry on the evaluation to the mining right value. The real options theory may solve the economic evaluation problem of project with big uncertainty, and the major characteristic of mining right is the big uncertainty. Therefore, the real options theory could be used for the study of the evaluation to the mining right value.On base of the real options pricing theory ,this paper through the establishment of the assessment fundamental model of mining right value and the limitation analysis, expand the fundamental model development to the binary tree tree model to evaluate the mining right value, then has carried on the contrastive analysis of two kind of models through examples. Regarding the mining right projects which has many real options, the latter option is produced on the base of preceding option. Because each option is related, its value constituted a mutual influenced value chain, which cannot carry on the independent evaluation to each option, should be regarded as a compound option. Because the mining right project has the intriguing interaction between all kinds of real options, its value does not have the additivity. Applies the value assessment model of the mining right which is established by compound option theory, conforms much more to multi-option characteristic of the mining right. The simulation calculating example indicated that the evaluating model, based on the compound option theory, is effective.When carries on the evaluation to the mining right , the model parameter's determination has enormous influence to the evaluation results of the mining right value, on the base of analysis to the principle of assessment parameter determination of the mining right value, carries on the mathematical quantification to the mining right characteristic, and classifies its parameter, discussed the determinating method of minerals price with the Markovian theory,then discuss the other parameters determination method of the the evaluation of the mining right value.This paper use the evaluating method of mining right value, which is based on the real options theory,to evaluate the mining right project,the results indicated that the theory and method which is proposed in this paper is scientific.