Conceptual Economic Evaluation of a Copper Mine in North Korea

Abstract

In this technical note, a conceptual economic evaluation was performed on the ○○ copper mine in North Korea. The scenario was designed with conservative assumptions about economic factors in order to make allowances for the availability and uncertainty of input data. The results of the evaluation show that the ○○ mine project has a considerably high investment value, with 38% internal rate of return (IRR) and US$ 131,700,000 net present value (NPV), at a 25% discount rate. A sensitivity analysis was also performed for the major economic factors, using a range of 25% for the lower and upper bounds. The economic factors considered, in order of priority, were metal price, ore grade, capital expenditures (CAPEX), and operating expenditures (OPEX). This research was conducted based on several assumptions about economic factors due to the lack of data. Accordingly, there may exist a high level of inherent uncertainty. Therefore, the results of this study can be used as preliminary data for the development of mineral resources in North Korea, but they are not suitable to be directly used for investment purposes. This research needs to be complemented with applicable field data to improve reliability of the results.