Capital Expenditure (CapEx)

The upfront cost of building the mine, before it produces anything.

Definition

The upfront costs required to build a mine, including equipment, infrastructure, and construction. CapEx is distinguished from operating costs (OpEx) and is a critical factor in project economics and financing requirements.

Why it matters

Capex is the number that decides whether a junior can realistically develop its own project. A company with a $60M market cap and a $900M capex is not going to build it — it is an acquisition candidate, and should be valued as one.

In practice

Compare capex against market capitalisation to see how much dilution or debt financing the project implies. Also watch for capex inflation between study stages, which has been severe across the sector.

See also

  • Operating Expenditure (OpEx) The ongoing costs to operate a mine, including labor, energy, consumables, and maintenance. OpEx is typically
  • Feasibility Study A comprehensive technical and economic study of a mineral project used to demonstrate whether the project is e
  • Net Present Value (NPV) The present value of future cash flows from a mining project, discounted at a specified rate (typically 5% for
  • Payback Period The time required for a mining project to recover its initial capital investment from net cash flows. Shorter

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