Glossary · Economics
NPV, IRR, and payback
The three headline economic metrics from a PEA/PFS/FS — Net Present Value, Internal Rate of Return, time to recover initial capex.
NPV (Net Present Value) discounts the projected after-tax cash flows of the mine plan to today at a stated discount rate (typically 5% or 8%) and subtracts initial capex. IRR (Internal Rate of Return) is the discount rate at which NPV = 0. Payback is the time until cumulative cash flow recovers initial capex. NPV and IRR are quoted at a stated commodity price; sensitivity tables show how the metrics flex with price. Higher NPV/IRR and shorter payback = better economics.