An option-value framework for valuing mining streams

Edward W. Fuller

Resources Policy, 2023, vol. 85, issue PA

Abstract: This paper introduces an option-value framework for valuing mining streams. A stream has the same economic characteristics as a portfolio of European call options. Since a stream can be replicated with a portfolio of European call options, the option-value approach to valuing streams is correct. At the same time, there are reasons to use a simpler alternative to the Black-Scholes Model. This paper provides a simple option-value equation for valuing streams.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:85:y:2023:i:pa:s0301420723005585

DOI: 10.1016/j.resourpol.2023.103847

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