Vancouver: Discount Rates, Risk and Long-Life Projects – The RADR Paradox

September 27, 2016 all-day
Segal Graduate School of Business – Simon Fraser University
Room 4800
500 Granville Street, Vancouver

CIM MES Vancouver is pleased to present:

Lawrence Devon Smith

Principal Consultant, LDSA


who will deliver a presentation on:

Discount Rates, Risk and Long-Life Projects: The RADR Paradox


Abstract: The presentation examines industry practice regarding the development and use of discount rates for Discounted Cash Flow (DCF) evaluations. It examines the impact that discount rates have on project evaluations and raises questions about the use of risk adjusted discount rates (RADR) to assess risk in long-life projects. In particular it points out how the math in discounting actually achieves the opposite to what is expected in risk adjustments for capital and operating costs. A straightforward approach is proposed for addressing both time value of money and risks in DCF evaluations with respect to capital costs, operating costs, schedules, ramp-up, tonnes, grade, and price.


BIO: Lawrence Devon Smith (Larry) is Principal Consultant at LDSA and has been Director of Project Evaluations for Barrick Gold, Vale-Inco, and Rio Algom as well as SNC-Lavalin/Kilborn.

Larry is a mining engineer with over 40 years’ experience in project economic evaluations including scoping and optimization studies, pre-feasibility and feasibility studies, risk assessment, and due diligence. He has published a number of papers on these topics.

Larry teaches Mineral Economics as an adjunct professor at the University of Toronto, the Pontificia Universidad Catolica de Valparaiso in Chile, and Schulich Business School Mining MBA at York University. He has lectured at a number of universities and has given numerous in-house courses and workshops for lawyers, explorationists, financial and accounting professionals, and for First Nations groups.

Larry is on the executive of MES and CIM Toronto, has received the Robert Elver Award for Mineral Economics, is a CIM Distinguished Lecturer, and is a Fellow of CIM.


Tuesday, 27 September 2016
4:15 – 6:00 pm

Segal Graduate School of Business – Simon Fraser University
Room 4800, Fourth Floor
500 Granville Street, Vancouver, BC
(corner of Granville and W. Pender)

4:15 pm – Registration
4:30 pm – Presentation and Q&A
5:45 pm – Closing Remarks


Seminar is complimentary and seats are limited. Register by Friday, September 23 to secure your place. Please RSVP by replying to if you are interested in attending. This is also an excellent networking opportunity and there is no charge to attend.


Thank you to our sponsor, Simon Fraser University’s Segal Graduate School of Business, for providing the space and their continued generous support!


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