| Appraisers
are legally regulated under federal and state law by USPAP which considers three forms of
appraiser engagement by a client: appraisal, review, and consulting. Appraisal is the act
or process of estimating value and should be used whenever the appraiser could be
perceived as an independent and disinterested party. Review is the act or process of
critically studying a report prepared by another. Consulting is the act or process of
providing information, analysis of data, and recommendations or conclusions on diversified
problems, other than estimating value. Differentiation among these activities depends upon the
purpose and intended use of the results. USPAP recognizes two types of consulting
engagements: (1) performing an impartial consulting service as a disinterested third party
that responds to the client's stated objective, and (2) performing a consulting service
that is intended to facilitate the achievement of the client's objective. If third
parties, or the public, would reasonably perceive an appraiser to be acting as a
disinterested, objective third party, that is enough to bar the appraiser from acting as
an advocate for the client in that particular situation. If a person could be reasonably
perceived by others to be acting as a disinterested third party, then the assignment must
be performed with impartiality, objectivity, and independence. In either event the
appraiser must clearly disclose which role is being performed for the client.
USPAP identifies four defined activities
as consulting: market analysis, feasibility analysis, and cash flow/investment analysis.
Market Analysis: In conventional
real estate work, market analysis is the study of market conditions for a specific type of
property. In appraising mineral properties market analysis must be expanded to include the
markets for the mineral products that are expected to be produced from a mineral property.
Feasibility Analysis: Is a study
of the cost-benefit relationship of an economic endeavor.
Cash Flow Analysis: Is a study of
the anticipated movement of cash into and out of an investment and is closely related to
Cash Budget Analysis.
Investment Analysis: Is a study
that reflects the relationship between acquisition price and anticipated future benefits
of an investment.
Because USPAP defines any activity other
than an estimate of value as consulting some of the commonly performed mineral property or
mining business consulting services are:
Highest and Best Use Analysis:
v current/interim use. Physically Possible, Legally Permissible, Financially Feasible, and
Maximally Productive (optimal/satisficing)
Land Utilization:
Zoning Analysis:
Financing Analysis:
Accounting/Tax Analysis:
Securities Analysis:
Portfolio Analysis:
Mineral Economics Studies:
Mine Economic Studies:
Economic Change Analysis:
Breakeven Analysis:
Productivity Studies:
Availability/Utilization Analysis:
Competitive Position Studies:
Porter's 5-Forces
Transportation Studies:
Royalty, Joint Venture, or other
Interest Analysis:
Risk Analysis - Geologic, Technical,
Economic, Legal, Socio-Political:
Four Forces +
Mineral Resource/Reserve Estimation,
Review, or Audit:
General or Specific Due Diligence:
General or Specific Geological
Analyses:
Mining Geology
Discuss your mineral
property appraisal, mining business valuation, or other mineral industry
related concerns with Mineral Business Appraisal: Michael R.
Cartwright michael@minval.com
Five Claret Court, Reno, NV 89512-4744
Tel/Fax: 775-322-9028
Return to Mineral Business
Appraisal Home page
Back to What Minval Can Do For You
Next to Mineral Valuation Due Diligence
Mineral Business Appraisal Web Site Table of
Contents
|
