Project valuations based on elevated price assumptions in the absence of more reasonable scenarios to provide a more balanced view to the market is potentially damaging to the credibility of management teams, their consultants and the mining industry as a whole, London-based boutique investment dealer SP Angel said Thursday.
“We are seeing an increase in the use of what we feel are unreasonable assumptions for commodity prices. We do not wish to temper the enthusiasm of hard working and ambitious mining executives and their paid consultants, but we feel the industry would be better served through the public presentation of more conservative figures alongside their more aggressive assumptions,” analyst John Meyer said in the firm’s daily market commentary sent to clients.
