“Marginal Gold” in Antam’s business perspective is defined as a reserve of contained gold of less than 1 million oz, which will not be developed as a “stand-alone project”. Mineral project economic evaluation-“NPV/cash flow simulation” is determined by profile of production, grade, and cost (Capex and Opex), recovery of process, also market price among other determinants; all of which vary over time, necessitating the re-evaluation of the company’s strategic concepts and guidelines as applied towards its marginal resources, in order to reflect the current market conditions. This paper represents the application of Discounted Cash Flow (DCF) method, which is widely used for mineral property valuation and decision-making. The sensitivity analysis conducted on the financial model identifies the price of gold, together with the gold head grade as the most significant variables to the operation.
The results of model simulation shows that Arinem prospect is projected give economic benefit to be developed as a “stand-alone project” (thereby being viewed as a marginally opportunity).
Keywords: marginal gold reserves, Discounted Cash Flow
PT. Antam Tbk Jl. Tb. Simatupang No 1, Jakarta 12530