From everything I've studied the ROV hybrid model for our deposit is the right method.

Comparables and the discounted/NPV have to be mixed in. Then global conditions have to be accounted for. Country risk is increasing as a factor. Vertical integration is becoming the norm for companies that want to secure supply.

http://www.basinvest.ch/upload/pdf/Valuation_of_Metals_and_Mining_Companies.pdf

In general, before an extraction program can begin, Resources and Probable

Reserves must be “proven up” to the category of Proven Reserves, the most geologically

certain category. This requires additional cost - expenditure on drilling (information

gathering) at the site, which will make assets in the category of Resources and Probable

Reserves less valuable then Proven Reserves. There is a significant premium paid for

operating mines, where reserve and cost uncertainty has been reduced. According to

major gold property acquisitions during the 1990s, Proven and Probable Reserves are

valued at a 44% discount, Measured and Indicated Resources at an 83% discount, with no

value being attributed to Inferred Resources. The uncertainty surrounding the estimate of

extractable reserve is called reserve risk.

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Mining companies may also commence production from a deposit with only a

small amount of reserves, in the hope that additional reserves will be discovered as

mining proceeds. The Dome mine, owned by Placer Dome (and now Goldcorp) is a good

example: it has now been mined continuously for 88 years and it has never had more than

about 3 years mine life. As the mine has progressed underground, more of the vein has

been opened up for mining; consequently the life of the mine has been extended.

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