Stephens Valuation and Consultancy Pty Ltd


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05-11-2015 
"Liability limited by a scheme approved under Professional Standards Legislation."

Celebrating our New Trade Mark
2012 
www.quarryvaluations.com has now been registered as a Trade Mark. We thank all the people who look at the website and who have given it its high profile reputation as without YOU we would not have achieved this status. Keep looking.

 

See our latest article on Quarry Capitalisation Rates.

 

Celebrating 25 years in Real Estate

 

We now have over 250 fully analysed quarry sales and lease transactions throughout Australia and New Zealand. We hold details of over 50 lease transactions, so if you need a lease renewal, then give us a call.


Keep coming back for more updates shortly.


See www.quarrysalesaustralia.com for quarries for sale and lease.


We were No 1 for Quarry Valuations worldwide on Google and Yahoo and many other search engines from 2009 to 2011 and hope to keep it that way for 2012. Thanks for looking and making us the most popular quarry related site worldwide.


We also do Expert Witness valuations so give us a call to see if we can assist.

Archive
06-12-2011 
Rod Stephens has produced two thesis reports namely The definition of the word Minerals in relation to the UK Extractive Industry and The Valuation of Long Term Interests  A case study of the acquisition of WMCs Olympic Dam Mine by BHP Billiton (Distinction). These reports can be made available on request for selected parties only. Terms and Conditions apply.

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Archive

 

 

 

 

    Quarry Valuations  

 
 
Extractive and Quarry Industry

 

The Australian extractive industry is dominated by 3 main companies namely Holcim (formerly Cemex), Hanson (part of Heidelburg Cement Group) and Boral. It is considered that these companies control approximately 75% of the market for construction materials, pre mixed concrete and cement. Other major listed operators include Adelaide Brighton, with more diversified companies such as Fletcher Building also playing a role and with private companies such as Barro Group, Buckeridge Group, and several other major independants having strong impacts within regionalised markets.

 

The valuation of quarry assets requires expertise in a number of disciplines that include geology, mining rights, planning, valuation, environmental issues, business valuation, plant and machinery, infrastructure and market analyses. There are few independent valuers who have expertise and experience in all of these disciplines. 
 

In the first instance you cannot value a quarry without having any geological understanding, and this is the first requirement prior to considering other elements. Without the resource, then there would not be an opportunity. Following on from this then if there is a resource, then it must also have planning and there must also be a market demand for that resource. The resource ownership may be vested in the State and there may also be a surface land owner which further complicates the valuation process. A clear understanding of the various rights to ownership needs to be established to provide an accurate valuation. The conditions of the Planning consent can have a significant impact on any valuation. Often environmental constraints within a planning consent can involve capital costs that need to be reflected over the life of the operation. The processing operation also needs to be assessed to consider the capability of the plant to produce the right products for the market. Other important factors involve the location of the quarry to the market, the capacity of the market, the level of competition and the pricing structure of the products. All of these factors will determine the level of output which in turn has one of the main impacts on the value of the quarry.

 
We believe that we are the only quarry valuers in Australia that provide market sales and lease evidence within our valuation reports. This is often a requirement of the Australian Property Institute for particular valuations, and recipients of valuation reports should be very weary of any quarry valuations that do not provide market evidence, as unless the values can be supported with recent market data, then they could be tantamount to guesswork. Any valuer that does not provide supporting sales and lease evidence within their reports, may not understand the local market. We analyse every transaction to derive an equivalent market royalty for use within our valuations. We have an extensive data base of market sales and leases for quarries throughout all States in Australia and parts of New Zealand and are continually compiling additional market evidence as we carry out valuations. As a consequence we consider our valuations to be the most accurate and up to date and fully reflect the current market circumstances.
 

Valuation and consultancy advice is available for a range of asset classes within the extractive and quarrying industry and we would be happy to discuss your requirements.

 
 
 

Some Key Factors required to perform a Quarry Valuation

 

Geology

  • Understanding of Geology, faults, fissures, overthrows, nature of deposit etc
  • Interpretation of boreholes, trenches, material testing, and product structure
  • Extent of Overburden and costs of removal and storage
  • Evaluation of reserves into proved, probable and possible

 

Services

  • Provision and availability of services to the site
  • Sterilisation of resources by the provision of services

 

Legal

  • Ownership of the surface land for access to the minerals (Intangible Assets)
  • Ownership of the minerals (Tangible Assets)
  • Planning Consent to extract, Zoning and other Local Government constraints
  • Environmental Impact Assessment and EPA licensing.  Pollution Control
  • Easements, restrictions, covenants, wayleaves, caveats and other legal constraints
  • Native Title and Water Management issues
  • Restoration, Rehabilitation, After Care.  Liabilities, costs or benefits
  • Royalties, minimum or certain rents, site rents

 

Economic Factors

  • Overview of the Australian extractive, cement and pre mixed concrete markets
  • Overview of State extractive, cement and pre mixed concrete markets
  • Relationship to housing market trends and population changes
  • State of the national, regional and local economy
  • Nature and number of competition within a given area.  Market share
  • Size of the market and pricing policy.  Market Capacity
  • Niche products that operate in a regionalised or national market

 

Processing Operation

  • Winning, working, crushing, grinding, screening.  Types of plant, machinery and equipment
  • Market output, capacity, obsolescence, constraints to expansion, product mix
  • The market output will derive the Life of Mine / Quarry

Risk Management

  • Capital Asset Pricing Model.  CAPM
  • Weighted Average Cost of Capital.  WACC
  • Strengths, Weaknesses, Opportunities, Threats.  SWOT
  • Monte Carlo Simulation 
 
Valuation Methodology
  • Sales comparison.  Sales often requires valuer judgement
  • Income Approach.  If property is leased then this can provide good evidence
  • Cost Approach.  Can provide evidence of value
  • Capitalisation of royalties, Discounted cash flow, Summation method
 

 www.quarryvaluations.com is a Registered Trade Mark


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