Net Present Value (NPV)

Calculating Net Present Value (NPV) is a procedure which can be used to calculate the profitability of a mining project over the long-term. NPV is defined as the difference between the present value of future revenues and the present value of future costs.

If the result of the NPV calculation is either zero or negative, then the costs are either equal to, or greater than, the expected returns, and mining is not profitable. If the result of the NPV calculation is greater than zero, then the mining project is viable.