St. Petersburg State University (Russia):

Petrov S. V., Ph. D. in Geology, Associate Professor, petrov64@mail.ru

National Research University Higher School of Economics — Saint Petersburg (Russia):

Kotlyarov I. D., Ph. D. in Еconomics, MS of Geology, Associate Professor

Laboratory of the Study of raw materials ltd (Russia):

Katsnelson A. B., Bachelor of Geology, Geologist

Arctic Geological Exploration ltd (Russia):

Sen’ M. S., Chief Economist, Manager of Projects

The present paper contains an analysis of problems of valuation of mineral resources in ground. The authors propose a simple tool that allows a fast and simple valuation of a gold deposit at different stages of geological exploration. In addition, this method can be used to estimate the share of mineral reserves and resources into total capitalization of a mining company. The method is based on analysis of empirical data (real purchase of reserves of gold and other metals by Polymetal International plc). The statistical analysis shows that the price of gold in ground (Measured) is 3,2 USD/g (or 8,7 % of price of gold at LME at the date of transaction). The gold in ground costs 0,7 USD/g (2,8 %) (Indicated), and 0,35 USD/g (0,7 %) (Inferred). A comparison of real prices of gold in ground with forecasted ones shows a high degree of correspondence (R = 0,78). The main error in the equation used for forecasts is generated by non-inclusion of geographical, infrastructural and asset factors. Implementation of this method for three examples of purchase of reserves of gold by Polyus Gold, OAO «Vysochayshiy» (GV Gold) and transactions of Polymetal International plc that took place earlier also shows a high degree of correspondence.

The authors are grateful to N. G. Shatkov (LLC RJC) for the constructive criticism and advice.

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