2003•Nonferrous MetalsRequires access
Application of Option Pricing Theory to Mining Investment Evaluation
Zhang Neng-fu
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Abstract
The process of the decision and management of the investment on mining projects with the Option Pricing Method is described The uncertainties in the projects are fully considered in the option pricing theory and measure The manager can make the decision on the investments of projects by use of the market information as possible, therefore the decision will be consonant with the situation of the mine enterprise, and excellent results are achieved The Option Pricing Method is the evaluation measure with a great future on the investment of mining projects, even though the partial derivative equation of random function should be solved, and the process is complicated in its application