From the results obtained we can conclude that: 1. Risk-return trade-off. The project, as shown, does not exceed the classic threshold of expected NPV > 0, nor P(NPV>0) >= 50%. The negative median and the mode near -60MM indicate that most scenarios resulted in a loss. 2. What improvement would we need for a probabilistic "go" decision? • For P (NPV >0) ≅ 50%, the median would have to be shifted by +- US $ 33MM (Approx.). • For P(NPV>0) ≅ 60%, it is to improve the NPV by ≅ U $ 55MM (Through CAPEX/OPEX reduction, metallurgical recovery improvements, price optimization (hedging) or discount rate. • Upside exists, but with low probability: only 10.8% of runs exceed US$100 million, and above US$150 million it is 5.3%. 3. High risk of loss: 63.3% of simulations give an NPV < 0; only 36.7% are positive. 4. The recommendation to the board was that the project presented a lot of risk and that it was not advisable to make an investment. CONCLUSIONS 1. Monte Carlo simulation allows replacing “a single outcome” with a “complete distribution of outcomes”. Monte Carlo simulation, on the other hand, produces thousands of possible NPV values, showing: • The entire distribution of results • Probabilities of loss or gain. • Extremes in queues (Successes or Failures) Making the evaluation probabilistic, not deterministic, which is much more realistic in mining where the variability of prices, grades, recoveries, costs and CAPEX is high. 2. It allows for the explicit quantification of project risk, enabling the following questions to be answered:
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