Real options decision framework: Strategic operating policies for open pit mine planning

摘要: This paper presents a first approach towards the development of dynamics decision-making tool (DDMT) for open pit mine planning projects. In this paper, decision framework, so-called real option framework (RODF), is developed based on real-options with practical applicability to mining investment project. Four strategic operating options namely, deferral options, maintain expand and shutdown are assumed operations. We illustrated proposed methods hypothetical gold mine. The standard discounted cash flow (DCF) method was carried out analyze project values without options. valuation (ROV) calculated used system (SD) modeling solve problems discrete-event simulations were simulate potential findings that investors prone lose an opportunity invest if relying traditional DCF-NPV rules as they suggest accepting only NPV greater than zero. However, results obtained from has value investor across different time horizons. insight it paramount importance find optimal exercise option. It indicated such may yield higher base case (DCF-NPV) because risks can be hedged, whereas also offer additional operators. extra-additional captured through managerial flexibility.