The argument for a "bare bones" base case

This paper examines the concept of a "bare bones" base case in the economic evaluation of a mineral property. This is the case that the banks like to see, and the paper examines why. The expression "bare bones" refers to a ca sh flow evaluation based on constant metal prices, constant dollars, no inf lation, no debt no interest, on a project basis and after tax. The paper lo oks individually at the impact of the various assumptions that go into an e valuation, and shows how these can be combined to show an exciting result t hat may nor really exist. An example of an embellished case (the kind that one frequently sees when p rojects are being promoted) is developed and the cumulative impact is analy zed to show the actual project underneath. The paper also points out some a reas to watch for overly optimistic assumptions such as prices, margins, an d debt.