IDEAS home Printed from https://ideas.repec.org/a/spr/minecn/v38y2025i3d10.1007_s13563-025-00532-8.html
   My bibliography  Save this article

A qualitative evaluation of the differences in risk/reward profiles for project finance in the development of a typical porphyry copper deposit compared with a typical diamondiferous kimberlite deposit

Author

Listed:
  • Alexander Cunningham

    (University of Dundee)

Abstract

Project finance is becoming an increasingly popular tool in the mining sector as miners look for more alternative methods of funding extraction projects. Unlike traditional corporate finance, project finance allows borrowers to isolate debt to a specific project and insulate related corporate entities from the risks associated with developing a new deposit. This makes the risk reward profile of the project paramount from both a borrowing and a lending perspective. This paper considers how risk/reward profiles are derived and constrained for a typical porphyry copper deposit (PCD) project and a typical diamondiferous kimberlite deposit (DKD) project. Feasibility in terms of risk and reward is analysed for the four main stages of each hypothetical project (deposit, construction, production, final market/sale of commodity). It is concluded that there is a notably more constrained risk/reward profile for a PCD deposit than a DKD deposit. Despite DKD projects having greater upside potential, project finance for a PCD deposit is considered safer and therefore more favourable from the perspective of a lender.

Suggested Citation

  • Alexander Cunningham, 2025. "A qualitative evaluation of the differences in risk/reward profiles for project finance in the development of a typical porphyry copper deposit compared with a typical diamondiferous kimberlite deposi," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 38(3), pages 741-758, September.
    • Handle: RePEc:spr:minecn:v:38:y:2025:i:3:d:10.1007_s13563-025-00532-8
    DOI: 10.1007/s13563-025-00532-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s13563-025-00532-8
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s13563-025-00532-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:minecn:v:38:y:2025:i:3:d:10.1007_s13563-025-00532-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.