What Is The Value Of This Industrial Mineral Property?

Appraisal of industrial minerals beneath privately owned land requires a different approach and mindset from valuation of base and precious metals or energy minerals, and from valuation of government-owned mineral lands. First, is it the value of inground minerals or of mining rights that is being sought? Second, value to whom, the mining company, a potential investor, the mineral landowner, a lending institution, the property tax assessor, or a condemnor? Third, how should mineral value be apportioned between the land and mineral owner, and a mining company with limited years of lease-hold interest? These and many other questions must be addressed before a valuation method and Discount Rate are selected. For various reasons the Income Method is most often used, with Net Present Value calculations made for long term predicted mining income. Choice of an appropriate Discount Rate is critical.