Should discounted cash flow projections for the determination of fair market value be based solely on proven and probable reserves?

摘要

As a valuator and SME member, I view Ross D. Lawrence's position as based on unproven and faulty assumptions made with regard to the pragmatic evidence presented in his paper. Moreover, his call for the inclusion of all mineral resources in discounted cash flow valuations is redundant, if not irrelevant, as there are procedures that already take all classes of mineralization into consideration for valuation purposes. In my experience as a valuator, I find that Canadian securities regulators are more than accommodating in allowing any valuations of mineral properties to be based on cash flow calculations. In other business areas, the same regulators usually reject discounted cash flow valuations of projects or businesses with no operating history. Instead, the regulators prefer valuations to be based on other transactions tested in the marketplace.