Case study 06 / Mining, early-stage gold
A gold target was too early to value the usual way. Honeycomb priced it as an option.
A buyer held an early-stage gold target sitting behind a flagship asset in the same pipeline. A standard valuation would have mispriced it, so Honeycomb valued it as the right to drill later if the flagship proved the ground.
What Honeycomb did
Valued it as an option
Rather than force a single NPV onto thin data, Honeycomb priced the right to drill later, contingent on the flagship validating the structure.
Set grade against tonnage
The high-grade target added grade where the lead asset offered bulk tonnage, making the package stronger together than either asset alone.
Sequenced the capital
Spend was released only if the flagship hit first, turning a speculative line item into a capped-downside bet.
The shift
An option to drill later
Before: A forced NPV on thin data
Funded only if the flagship's first phase hits
Before: Funded alongside the flagship
Part of a combined 3.8 Moz package
Before: Priced on its own
Outcome
With downside capped and drilling tied to the flagship's results, the buyer could size the bet properly instead of guessing at a number the data could not support.
An anonymised example of work done with Honeycomb. Figures describe this case and are not a general performance guarantee.
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