For its Wednesday, April 25, 2018, meeting, the Toronto Discussion Group of CIM’s Management and Economics Society is pleased to welcome:
Associate Partner, EY
Principal, Control Risks
who will deliver a presentation on:
Putting Country Risk Front and Center in Corporate Strategy and Investment Decisions
Abstract: Mining companies often make substantial investments in foreign countries as part of the process of finding, developing and operating mining projects. In addition to financial and technical mining uncertainties, these investments are exposed to country risk or the possibility that the host country changes industry rules so that investment cash flows are different than expected. Recent examples of such host country actions include mining royalty and tax changes, punitive environmental or tax penalties, and downstream processing requirements. To account for country risk, mining companies often include an additional risk premium to the discount rate that they use to assess mining investments.
This presentation provides an overview of country risk in the mining industry and the strategies that companies can use to manage this exposure. We introduce a Country Risk Loss (CRL) model to explicitly recognize the investment impact of country risk and then use a case study to demonstrate how country risk premiums may lead companies to overestimate project investment returns, understate risk exposure, and miss meaningful insights about the risk trade-offs associated with country risk management strategies. In a time of unpredictable government industry actions, alternative approaches such as CRL models are needed to provide a richer framework in which to fully assess the risk / return / value trade-offs associated with a global investment portfolio.
BIO: Michael Samis is a mining engineer with more than 25 years of professional and research experience in the natural resource industries. He specializes in analyzing Strategic Capital Management problems for natural resource companies and valuing financial derivatives and contingent contracts at EY.
BIO: John Seddon is a Principal for Control Risks in Canada. He has extensive experience with multinational companies investing in emerging and frontier market risks. Since 2005, John has worked on-the-ground in more than 40 countries advising clients on strategies to manage integrity, political and security risks.
Please join us!
Wednesday, April 25, 2018
Refreshments at 4:15pm – Presentation at 4:35pm
Borden Ladner Gervais LLP
Bay Adelaide Centre, East Tower
22 Adelaide Street West, 34th floor, Toronto
Seminar is complimentary and seats are limited. Register by Monday, April 23, to secure your place. Please RSVP by replying to firstname.lastname@example.org if you are interested in attending. This is also an excellent networking opportunity. So we can best service all who are interested and able to join us at this upcoming event please register for it if you are confident that you are indeed able to attend it. Thank you for your interest and understanding.
Thank you to our sponsor, Borden Ladner Gervais LLP, for providing the space.
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