A Method for the Selection of Exploration Areas for Unconformity Uranium Deposits

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• 作者：DeVerle P. Harris ; Gerard Zaluski and James Marlatt
• 关键词：Unconformity uranium environments ; Bayesian belief network ; analog areas ; modeling U3O8 discoveries ; stochastic price process ; risk ; adjusted value ; portfolio of exploration areas ; optimum allocation of exploration
• 刊名：Natural Resources Research
• 出版年：2009
• 出版时间：June, 2009
• 年：2009
• 卷：18
• 期：2
• 页码：109-136
• 全文大小：863.4 KB

文摘

The method we propose employs two analyses: (1) exploration simulation and risk valuation and (2) portfolio optimization. The first analysis, implemented by the investment worth system (IWS), uses Monte Carlo simulation to integrate a wide spectrum of uncertain and varied components to a relative frequency histogram for net present value of the exploration investment, which is converted to a risk-adjusted value (RAV). Iterative rerunning of the IWS enables the mapping of the relationship of RAV to magnitude of exploration expenditure, X. The second major analysis uses RAV vs. X maps to identify that subset (portfolio) of areas that maximizes the RAV of the firm’s multiyear exploration budget. The IWS, which is demonstrated numerically, consists of six components based on the geologic description of a hypothetical basin and project area (PA) and a mix of hypothetical and actual conditions of an unidentified area. The geology is quantified and processed by Bayesian belief networks to produce the geology-based inputs required by the IWS. An exploration investment of $60 M produced a highly skewed distribution of net present value (NPV), having mean and median values of $60 M produced a highly skewed distribution of net present value (NPV), having mean and median values of 4,160 M and $139 M, respectively. For hypothetical mining firm Minex, the RAV of the exploration investment of $139 M, respectively. For hypothetical mining firm Minex, the RAV of the exploration investment of 60 M is only $110.7 M. An RAV that is less than 3 % of mean NPV reflects the aversion by Minex to risk as well as the magnitude of risk implicit to the highly skewed NPV distribution and the probability of 0.45 for capital loss. Potential benefits of initiating exploration of a portfolio of areas, as contrasted with one area, include increased marginal productivity of exploration as well as reduced probability for nondiscovery. For an exogenously determined multiyear exploration budget, a conceptual framework for portfolio optimization is developed based on marginal RAV exploration products for candidate PAs. PORTFOLIO, a software developed to implement optimization, allocates exploration to PAs so that the RAV of the exploration budget is maximized. Moreover, PORTFOLIO provides a means to examine the impact of magnitude of budget on the composition of the exploration portfolio and the optimum allocation of exploration to PAs that comprise the portfolio. Using fictitious data for five PAs, a numerical demonstration is provided of the use of PORTFOLIO to identify those PAs that comprise the optimum exploration portfolio and to optimally allocate the multiyear budget across portfolio PAs.