How the OreScore valuation model works

Calculation chain

OreScore follows five steps: 1. Market snapshot → market capitalisation and enterprise value. 2. Resource inventory → contained metal and the in-ground screen. 3. Build & operate → annual free cash flow, mine life, ramp, capital and asset NPV. 4. Risk lens → risked NPV. 5. Scenario results → ownership, corporate items and balance-sheet adjustments, equity NAV and NAV per share. Optional resource tiers add extra mine life; inventory-only assets contribute a separate pipeline value.

Bear, base and bull rerun the price-dependent resource screen and steps 3–5 using each scenario's prices, production and capital assumptions.

Every number is in US$ millions unless stated. Production is in koz (gold, silver) or kt (copper) per year. Shares are in millions. Prices and costs are per ounce or per pound.

Market snapshot

Market capitalisation = share price × basic shares outstanding.

Enterprise value = market capitalisation + debt − cash + other liabilities.

These change price-to-NAV, EV multiples and upside. They never change an asset NPV.

Debt, cash and other liabilities count only once entered, and an explicit 0 counts. Until then, enterprise value, NAV and Model value stay hidden.

Resource inventory

Contained metal = tonnes × grade × unit constant (0.0321507 for g/t → Moz; 22.0462 for % → Mlb), unless you type the contained amount directly.

The in-ground screen multiplies contained metal by scenario price, recovery, payability, ownership and a category weight (reserves 78%, M&I 58%, inferred 28%). In legacy single-mine saves, a fixed per-row price can override the scenario price in both the resource screen and reserve-AuEq calculation; clear it to use scenario prices.

The screen ignores costs, capital, tax and time, so treat it as a quick comparison of how the market values each unit of metal, not as a valuation.

Resources affect the DCF only through the + M&I and + Inferred tiers (section 8). With the default P&P tier, the DCF uses only the mine plan you entered.

Annual FCF

Revenue = gold koz × gold price ÷ 1,000 + silver koz × silver price ÷ 1,000 + copper kt × 2.20462 × copper price + by-product credits. Every term is × the scenario production multiplier.

Operating cost = each commodity's production × its unit cost (cash cost or AISC), same multiplier.

Royalty = revenue × royalty %.

Sustaining capex = entered value × production multiplier × capex multiplier. It is set to zero when any producing commodity uses AISC, because AISC already contains it.

Pre-tax cash flow = revenue − royalty − operating cost − sustaining capex.

Tax = pre-tax cash flow × tax %, only when pre-tax cash flow is positive.

To reflect depreciation, enter an effective tax rate (the study's life-of-mine tax ÷ operating margin). A discount rate cannot capture tax shields.

Annual FCF = pre-tax cash flow − tax. This steady-state value is scaled by each year's ramp or schedule factor in the DCF.

In a multi-asset model, Model value / share uses attributable annual FCF from producing assets, summed across all complete current-producing DCF assets (start offset 0), less corporate G&A. Inventory-only and pre-production assets are excluded.

If you enter throughput, head grade and recovery but not production, production is derived. Gold/silver: Mt × g/t × recovery × 1,000 ÷ 31.1035 = koz. Copper: Mt × % × recovery × 10 = kt. Derived output applies plant recovery, not payability.

Asset NPV

Year factor = min(1, year ÷ ramp-up years), or your production schedule factor for that year.

Asset NPV = Σ FCF × year factor ÷ (1 + r)^year over the mine life, − initial capex × capex multiplier × (1 + contingency), − closure ÷ (1 + r)^life, − the present value of any growth capex charged each year.

Initial capex falls at year 0, so it is not discounted.

A start offset delays the whole asset. NPV ÷ (1 + r)^offset, so the first operating cash flow lands in year offset + 1.

Each asset uses its own discount rate. A producer at 5% and a frontier project at 10% can sit in the same company.

IRR is shown only for a single asset with no start offset, growth capex, custom schedule, corporate G&A or active resource extension. Otherwise, read each asset's NPV. IRR also requires positive initial capex, finite cash flows with exactly one sign change, and a reliably bracketed solution; otherwise the output is hidden with its reason.

Risk lens

Risk factor = execution probability × (1 − execution risk ÷ 200) × (1 − average of metallurgy, permitting, funding, jurisdiction and social risk ÷ 200).

Risked NPV = NPV × risk factor when NPV is positive. A negative NPV passes through unchanged.

For positive NPV, moving execution risk from 0 to 100 halves value; with the other four technical risks at zero, moving one of the five from 0 to 100 cuts risked value by 10%, and all five at 100 halve it. Execution probability scales value one-for-one.

Risked NAV needs all seven risk inputs entered. Unentered risks are not treated as zero risk.

From assets to NAV per share

Attributable risked NPV = risked NPV × ownership, for each DCF asset.

Corporate G&A PV = annual G&A discounted at the corporate rate over the production-weighted average asset life (schedule factors summed, plus extension years), rounded up. The horizon has a minimum of one year, excludes start offsets, and weights asset lives by attributable annual AuEq at stored operating prices where available, otherwise scenario prices. It is optional; leaving it blank changes nothing.

Risk-adjusted equity NAV = Σ attributable risked NPV + cash − debt − other liabilities + other assets − corporate G&A PV.

Risk-adjusted NAV per share = equity NAV ÷ fully diluted shares.

NAV upside (%) = (NAV per share ÷ share price − 1) × 100.

Price / NAV = share price ÷ NAV per share (fully diluted). Unadjusted Price / NAV = share price ÷ (unadjusted equity NAV ÷ fully diluted shares).

Company NAV requires at least one complete DCF asset and every DCF asset complete; equity and per-share outputs also require their capital-structure and share-count inputs. DCF completeness requires mine life, initial capex, discount rate, production, a unit cost for each active commodity, a positive scenario price and all seven risk inputs.

Resource tiers

P&P (default): the DCF uses your mine plan only.

+ M&I: eligible M&I ounces × the M&I conversion weight (default 50%) become extra years at steady-state output. Eligible means gold-equivalent, after recovery, payability and ownership, and net of reserves when M&I is reported inclusive. Exclude from resource screen hides a row from the resource screen totals and value-per-ounce. It still counts toward + M&I / + Inferred extension and pipeline value.

+ Inferred: also adds inferred ounces × the inferred weight (default 20%).

Extension years = converted AuEq ounces divided by scenario-scaled annual AuEq production of gold and any mode-eligible silver/copper, using scenario metal-price ratios and consistent ounce units; an included metal need not itself contribute positive converted inventory. Extension is capped at 15 years by default. A silver or copper co-product qualifies for conversion only when its production and unit cost are explicitly recorded; throughput-derived production alone does not satisfy the production-entry check. Closure moves to the extended end of life, growth capex continues through the extension, and optional conversion capital equals the US$/converted-oz rate × converted AuEq Moz × scenario capex multiplier, in US$ millions, discounted to the year after base mine life before any start offset.

• IRR is hidden while an extension is active.

Discounting makes late ounces worth far less than today's ounces, so the tier switch usually moves NAV by much less than the ounce count suggests.

Switching back to P&P restores the original result exactly.

Inventory-only and pipeline

An asset without defensible economics can be kept in inventory-only mode. It contributes nothing to equity NAV, and a "Partial portfolio NAV" flag says its value is unknown, not zero.

Pipeline value = (study NPV × ownership if entered, otherwise attributable contained AuEq × US$150 per P&P oz, US$60 per M&I oz, US$20 per inferred oz) × the asset's risk factor. Rows excluded from the resource screen still count toward pipeline value. It needs the asset's seven risk inputs entered. A negative study NPV is not reduced.

It is reported separately as "NAV including pipeline", so core NAV stays tied to mine plans.

Scenarios

Each scenario sets gold, silver and copper prices, a production multiplier and a capex multiplier. Every asset is recalculated with them.

Read the spread, not the midpoint. If the investment case works only in the bull case, the prices and capital in that case are the thesis.

Optional funding & dilution: Aris example

Funding & dilution is a separate Gold analysis below the Bear, Base and Bull Scenario results. Its inputs start blank. Funding required and a positive raise price activate it; the original NAV per share, Model value per share, P/NAV and IRR remain untouched.

Funding suggestion = max(0, attributable initial capex including contingency + attributable growth capex for non-producing DCF assets − cash). Producing and inventory-only assets are excluded. The Aris four-asset example suggests US$1,035.592M, but that suggestion is not applied. Single-mine models have no production-status field and use their entered build cost for this suggestion only.

For illustration, enter US$1,000M funding, 100% equity, a 10% raise discount and 5% issue costs. At the example's US$17.35 share price, accepting the price suggestion sets the raise price to US$15.615. Discount is a suggestion tool, not a second adjustment to the entered raise price.

Equity raised = 1,000 × 100% = US$1,000M. New shares = 1,000 ÷ 15.615 = 64.040986M. Existing fully diluted shares are 209.4M, so pro-forma shares are 273.440986M and dilution is 64.040986 ÷ 209.4 × 100 = 30.583088%.

Net proceeds = 1,000 × (1 − 5%) = US$950M. Base risk-adjusted equity NAV is US$5,624.385318M. Funded base NAV/share = (5,624.385318 + 950) ÷ 273.440986 = US$24.043160, versus unchanged ordinary base NAV/share of US$26.859529. Change is −10.485549%; funded P/NAV is 17.35 ÷ 24.043160 = 0.721619×.

Bear funded NAV/share is US$16.480321 (−2.964125%, funded P/NAV 1.052771×); bull is US$31.605999 (−13.962908%, funded P/NAV 0.548946×). Ordinary Bear/Base/Bull NAV/share remains US$16.98 / US$26.86 / US$36.74 when rounded to two decimals.

The raise is assumed to happen today. Asset NPVs already deduct build capex, so net equity proceeds are added back once, without changing project cash flow. Non-equity financing is assumed to be debt but enters the NAV bridge only if you enter that new debt in the market snapshot.

Every suggestion is opt-in, including 100% equity and 5% issue costs. Blank equity share or issue costs, no funding, zero or negative raise price, absent fully diluted shares, or unavailable NAV give dashes. Negative funded NAV/share remains visible; percentage change needs positive original NAV/share and funded P/NAV needs positive funded NAV/share.

The Gold workbook adds blue optional input cells on Inputs and formula rows on Valuation, using the existing active-scenario selector (Inputs!B18) for Bear, Base or Bull. Its funding formulas match the app. No cash-flow, IRR or ordinary NAV formula is replaced.

How each input moves the result

Metal price: While pre-tax cash flow is positive, each year's change in FCF is approximately price change × payable production × scenario production multiplier × that year's ramp or schedule factor × (1 − royalty) × (1 − tax), converting koz to million ounces or copper kt to million pounds. Value is the discounted sum over the mine life. Low-margin mines move far more in percentage terms.

Unit cost (cash cost or AISC): A unit-cost rise reduces FCF by scenario-scaled payable production × the cost increase, using matching monetary units, reduced by the tax offset only while pre-tax cash flow is positive; each DCF year then applies its ramp or schedule factor. Choosing AISC removes the separate sustaining capex. AISC removes only sustaining capex. Don't re-enter royalty or G&A that the issuer's AISC already includes.

Production and the production multiplier: scale revenue and operating cost together. Value moves with the margin, not with revenue.

Mine life: An extra profitable operating year adds discounted cash flow; a loss-making year can reduce NAV, and closure timing also changes.

Ramp-up years and schedule: Slower ramps reduce the present value of positive operating cash flows, but can reduce early losses in a loss-making model.

Initial capex and contingency: Effective initial capex reduces year-zero asset NPV one-for-one before any start-offset discount, ownership and positive-NPV risk adjustment.

Growth capex: subtracted every year at its present value.

Closure: small effect for long-life mines, larger for short ones.

Discount rate: Higher rates reduce the present value of future positive cash flows; the direction of total NAV can differ for negative or mixed cash flows.

Start year: divides the whole asset NPV by (1 + r)^start.

Tax and royalty: tax cuts positive cash flow proportionally. Royalty cuts revenue, so it bites hardest on thin margins.

By-product credits: add to revenue, scaled by production. Do not use them with a cost already net of by-products.

Risk inputs: multiply positive NPVs only. Execution probability is the strongest single lever.

Ownership: scales the asset one-for-one.

Debt, cash, other liabilities, other assets: change equity NAV one-for-one. They never change an asset NPV.

Fully diluted shares: divide every per-share result.

Corporate G&A: subtracted once at company level. Optional, with no effect if skipped.

Resource tier and conversion weights: affect only DCF assets with resources assigned and the tier switched on. Capped by the extension limit.

Pipeline rates and study NPV: change only "NAV including pipeline".

Strip ratio, status and evidence labels: informational. They do not change the numbers.

Defaults, missing inputs and limits

Built-in fallbacks exist, such as the 8% rate, conversion weights, the 15-year cap and pipeline rates. Any output that needs an input you haven't entered stays hidden, with the reason, instead of using a fallback.

Optional inputs (G&A, growth capex, conversion capital, schedule, other assets) leave results unchanged when skipped.

The model is simplified: one steady-state cash flow scaled by year factors; tax without depreciation; no working capital, inflation or debt schedule; no grade changes beyond your schedule.

It is a transparent screening tool, not a feasibility study, and no output is a recommendation to buy or sell.