Limestone Mining: Reserves And Valuation (7d20c219-7f5f-418b-9d7b-9266842432c5)

When John F. Kennedy made this statement, I am sure he was not thinking about the valuation of limestone reserves. However, it is certainly applicable. The objective of this paper is to demonstrate how the discomfort of thought (i.e., the analytical and methodical process performed by a reputable professional) builds the foundation for an opinion that provides assurance as to the value of a property. In its final form, a valuation is nothing more than an opinion. The credence of that opinion is directly proportional to the knowledge of the appraiser and the efforts and judgment extended in developing said opinion. Presented herein are the methodologies for formulating a defensible opinion. Before detailing the valuation process, an overview of the limestone industry is presented along with some historical parameters relating to the industry. Secondly, the most widely used valuation methodologies and a brief discussion of each are presented. Two case studies are then presented, which review actual valuation studies. The paper concludes with how the valuation process should be published in a report format that is defensible from a legal standpoint, bankable from a financial standpoint, and decipherable from a layman's standpoint.