Mining
Mining Sector Primer
A guide to mining equity analysis. Covers AISC, NAV valuation, cost curves, royalty & streaming models, and includes gold mine worked examples.
2026 Edition · data as of June 2026
- pages
- 44
- sections
- 15
- model sheets
- 12
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The full primer
£25 / ~$32
- 44 pages, 15 sections
- Worked examples and applied cases
- 2026 Edition, data as of June 2026
Excel model
Valuation template
£45 / ~$58
- 12 sheets (.xlsx)
- Runs the primer's worked valuations live
PDF + Excel model Best value
Both files together
£59 / ~$76
- The 44-page primer
- The 12-sheet Excel model
- £70 bought separately · £11 less
Complete Mining Library
All three Mining industries: three primers, three Excel models (Mining, Royalty & Streaming, and Steel & Bulk).
Inside the primer
The 15-section contents, a worked valuation page, and the Excel dashboard.
Contents
- 01 How Operating Miners Make Money
- 02 Listed Mining Company Types
- 03 The Mining Lifecycle and Resource Ladder
- 04 Commodity Segments and Sub-Markets
- 05 Revenue Drivers: Generic Build
- 06 Cost Structure: AISC and the Cost Curve
- 07 Valuation Frameworks
- 08 Worked Example: Gold Mine DCF
- 09 Worked Example: Portfolio NAV
- 10 Applied Cases: Producing Seniors
- 11 Applied Cases: Skeena and Snowline
- 12 Key Metrics and Screening
- 13 Royalty and Streaming Contrast
- 14 Risks, Benchmarks and Jurisdiction Case Study
- 15 Glossary and Cheat Sheet
Worked examples and applied cases · 44 pages · 15 sections · 2 worked NAVs
The Excel model
Educational material. This primer and its model are not investment advice or a recommendation to buy or sell any security, and they are not personalised. Worked valuations use illustrative calibrations, not fair-value estimates for any company.
Operating miners earn margin on payable metal. Place a miner in the wrong cost quartile and the multiple you pay is wrong. Volume comes from tonnes, grade, recovery and payability. Revenue runs off the long-term price deck used in NAV, not spot, and cost is AISC for gold or C1 plus sustaining spend for copper. Mines deplete as they produce, so reserve life and replacement sit beside cost-quartile placement. A single peer multiple does not travel across producers, developers and explorers; lifecycle stage decides whether the right tool is portfolio NAV, stage-gated EV/NAV, or EV per resource ounce.
Mining valuation benchmarks by lifecycle stage
The multiple the market pays depends on how much risk is left between the ore and the cash. These are the ranges the primer uses, read against a NAV built at stated long-term prices.
| Stage | Method | Typical range | What sets the position |
|---|---|---|---|
| Producer | P/NAV | 0.8-1.1x; 1.1-1.4x with low AISC and Tier-1 assets | Cost quartile, jurisdiction, reserve life |
| Commissioning / ramp-up | EV/NAV on risked NAV | 0.7-0.9x | Whether the plant reaches design output |
| Construction | EV/NAV on risked NAV | 0.5-0.7x | Capex overruns and schedule slip |
| Feasibility study | EV/NAV on risked NAV | 0.3-0.5x | Permitting and financing still ahead |
| Explorer (PEA or earlier) | EV per resource ounce, EV/(M&I+I) | Against the junior mean, ~US$87/oz (RBC Capital Markets, 150+ companies) | Grade, jurisdiction, metallurgy |
Every NAV band assumes the mine cash flows were discounted at the right rate for the jurisdiction: 5-7% for a producing mine in Tier 1 (Canada, Australia, USA), 8-10% in Tier 2, 10-12% in Tier 3 and 12-15% in Tier 4. Below 0.8x a producer usually carries stress, jurisdiction risk or a NAV the market does not believe. For senior gold producers in strong gold years, trailing free cash flow yield runs 3-7%.
Worked example: a mining NAV valuation
Take a hypothetical producer with one Tier-1 gold mine holding 2.90 Moz of reserves, mined over 13 years. The primer builds the mine's cash flows year by year at $3,500/oz gold and discounts them at 6.0%, which values the mine at $2,543 million. NAV adds the corporate layer; the cash, debt, overhead and share count below are illustrative.
| Step | Amount |
|---|---|
| Mine NPV (13-year schedule, 6.0%) | $2,543M |
| Plus cash | +$200M |
| Less debt | -$300M |
| Less PV of corporate G&A ($20M/yr rising 2.5%, 13 years at 8.0%) | -$179M |
| Equity NAV | $2,264M |
| NAV per share (300M shares) | $7.55 |
| P/NAV at an illustrative $8.00 share price | 1.06x |
At 1.06x the shares sit in the 0.8-1.1x band for a credible NAV. Now move the same mine to a Tier-2 jurisdiction. The rate rises to 9.0%, mine NPV falls to $2,172 million and NAV per share to $6.31, so the same $8.00 price becomes 1.27x, a premium multiple with nothing changed at the mine. The jurisdiction call lives in the discount rate, and a peer multiple that ignores it compares different things.
The primer shows the 13-year schedule behind the $2,543 million, re-runs it across gold prices and tier rates, and extends it to a three-mine portfolio. The Excel model does the same with your own inputs.
Which mining valuation method fits which company
| Company type | Primary method | Check with | Why |
|---|---|---|---|
| Producing senior | AISC quartile, then P/NAV | EV per reserve ounce; FCF yield | Cost decides who survives a downturn; the multiple then prices NAV quality |
| Mid-tier producer | AISC quartile and reserve life | P/NAV | Single-mine or regional scale, so a short reserve life can break the case |
| Developer | Stage-gated EV/NAV | Remaining capex against cash and debt | Build risk dominates until first production |
| Explorer | EV/(M&I+I) | Study stage | No reserves yet to support a NAV |
| Royalty or streaming company | P/NAV on contractual cash flow | Counterparty concentration | No mine operating costs, so producer screens do not transfer |
What the full primer adds
The primer builds those tools one on top of the next: issuer types and the resource ladder, the AISC and cost-curve language, then mine-level DCF rolled into sum-of-parts NAV. Two worked examples walk the method from first input to final number, a single gold mine DCF and a multi-mine portfolio NAV, before applied cases on producing seniors, the developer Skeena and the explorer Snowline. Screening closes with P/NAV bands, reserve screens, and the royalty and streaming contrast.
Free guides on the site unpack the individual cost, reserve and jurisdiction pieces so you can revise one concept without reopening the full PDF. The companion Excel model spans twelve sheets, from per-mine DCFs through to a screening dashboard, with deck-driven commodity prices, so swapping in a new producer rebuilds the whole NAV from the mine tabs up.
Sheets: Quick Start, Instructions, Assumptions, Mine 1, Mine 2, Mine 3, Consolidated, Reserves & Life, AISC Bridge, Cost Curve, Sensitivity, Dashboard.
Mining valuation: free guides
- What Is AISC? All-In Sustaining Cost Explained
- Gold Mining AISC Benchmarks 2026: Cost Rankings by Quartile
- AISC vs Cash Cost: What Gold Miners Include (and Hide)
- How to Calculate AISC from Mining Financial Statements
- What Is a Good AISC? How to Judge Gold Mining Costs
- AISC for Copper Mines: Cost Metrics and Benchmarks
- Copper Cost Curve: C1 Cash Costs of the Majors
- AISC for Silver Mines: Costs & By-Product Economics
- How to Value a Gold Mine: NAV and DCF Walkthrough
- How to Value a Copper Mine: NAV and the Copper Price
- Mining Discount Rates by Jurisdiction: A Reference Guide
Mining valuation FAQ
- How do you value a mining company?
- It depends on lifecycle stage. A producer is valued on net asset value (NAV): each mine's after-tax cash flows are discounted at a rate set by its jurisdiction, the mine values are summed, then cash is added and debt and the present value of corporate overhead are deducted. The share price divided by NAV per share gives P/NAV. A developer is valued as a fraction of risked NAV that rises as the build advances, and an explorer on enterprise value per resource ounce, because it has no reserves to support a NAV.
- What is a normal P/NAV for a gold producer?
- A credible portfolio NAV at stated long-term prices usually supports 0.8-1.1x. Low all-in sustaining cost (AISC), Tier-1 jurisdictions and reserve replacement push a producer into 1.1-1.4x. Below 0.8x usually reflects stress, jurisdiction risk or doubt about the NAV itself, and above 1.4x needs growth or copper optionality the NAV leaves out. Read the multiple only against a NAV built at a stated long-term price.
- What discount rate is used in a mining NAV?
- The rate follows jurisdiction. For a producing mine: 5-7% in Tier 1 (Canada, Australia, USA, Scandinavia), 8-10% in Tier 2 (Chile, Peru, Mexico, Brazil, Indonesia), 10-12% in Tier 3 (Ghana, Tanzania, Côte d'Ivoire, Zambia) and 12-15% in Tier 4 (DRC, Mali, Burkina Faso). Development-stage assets carry about two percentage points more.
- Why do mining developers trade below NAV?
- Years of permitting, financing and construction risk stand between a study and first production; discovery to production averages about 16.9 years for major mines. The market pays roughly 0.3-0.5x risked NAV at feasibility, 0.5-0.7x in construction and 0.7-0.9x through commissioning, closing the gap as each risk falls away.
- How are gold explorers valued?
- On enterprise value per measured, indicated and inferred ounce, written EV/(M&I+I), read against peers at a similar stage. The RBC Capital Markets mean across 150+ explorers and developers is about US$87/oz. The figure moves with the gold price, so compare explorers on the same date.
See this methodology applied to a real company:
Newmont (NEM) →