r = 8.0% + (10 − IC) × 0.8%, a 4-parameter linear approximation that surfaces a single risk-adjusted discount rate per province for screening-grade analysis. This framework publishes the asset-level computational decomposition that sits beside it: six additive components — risk-free rate, country risk, commodity volatility, asset stage, disputed tenure, post-settlement durability — that together decompose the discount-rate question at deposit-by-deposit resolution. The framework does not replace §10.5. The §10.5 platform convention remains the production discount rate wired into the data layer; this framework is the methodology surface where institutional users can read how an asset-specific rate is built up from its components, and where the worked examples expose the categorical-state inputs that single-rate methodology necessarily compresses.
Risk-adjusted rate = rf + πc + πv + πs + πt + πd + πp
The seven components decompose the discount-rate question into a risk-free anchor plus six additive premia, each addressing a distinct risk class an institutional capital allocator weighs at the asset level:
| Component | What it captures | Tag class |
|---|---|---|
rf | Risk-free anchor — 10-year US Treasury benchmark | Sourced (FRED) |
πc | Country risk premium — derived from §07 IC composite for the asset's operating jurisdiction | Derived (with upstream Sourced/Pending IC) |
πv | Commodity-volatility premium — derived from 5-year monthly returns σ on the primary commodity | Derived (LME/COMEX/SHFE) |
πs | Asset-stage premium — categorical per development stage (operating / construction / development / exploration) | Sourced (NI 43-101 / equivalent) |
πt | Disputed-tenure premium — categorical per tenure-contestation state of the operating vehicle | Sourced (ICSID / court / operator disclosure) |
πd | Post-settlement durability premium — categorical per settlement-framework durability state | Sourced (settlement disclosure / gazette / permit record) |
πp | Policy-perception premium (bankability overlay) — re-captures the Fraser Policy-Perception risk the §07 IC composite routes through TI/RGI; driven by the asset jurisdiction's Fraser PPI, not the blended IC | Derived convention (with upstream Sourced/Pending PPI) |
The framework is asset-specific by construction. Where a deposit's operating jurisdiction differs from its province's composite IC (e.g. a multi-country province where the asset sits in one of the constituent countries), πc uses the country-component of the composite rather than the composite itself.
10-year US Treasury benchmark, quarter-end of most recent quarter. Sourced from FRED API or equivalent primary source. Updated quarterly. v1.1.2 reference value: 4.5% (Q1 2026).
Derived from Methodology v1.1 §07 Table 4 IC composite for the province in which the asset operates, applying the conversion in §3.1 below. For multi-country provinces with composite IC, the asset-specific premium uses the country-weighted component matching the asset's actual operating jurisdiction. Where the IC component derives from a Fraser 2025 IAI value carrying the Pending Fraser PDF back-check tag (per v1.1 §07), the resulting πc inherits Pending state pending Fraser back-check completion. CPI-proxy IC components are Sourced and do not inherit Pending.
Derived from 5-year price-history analysis of the asset's primary commodity. Standard deviation of monthly returns over a 60-month rolling window, computed against public price archive (LME / COMEX / SHFE / LBMA per commodity). Conversion to discount-rate premium per §3.2 below. Where the asset carries material by-product credits, the primary-commodity σ is used; multi-commodity volatility weighting deferred to v1.3.
Categorical adjustment per asset development stage. Sourced to NI 43-101, S-K 1300, JORC, or equivalent technical reporting that establishes asset stage. Conversion per §3.3 below.
Categorical adjustment per the tenure-contestation state of the operating vehicle. Sourced to ICSID / arbitral-institution case record, court record, or operator-disclosed dispute filings. Conversion per §3.4 below. State transitions (e.g. arbitration progressing from procedural-orders to substantive-rulings; multi-claim contestation resolving to single-operator clarity) trigger audit log entries per §10.9.
Categorical adjustment per the durability state of a settlement framework. Sourced to settlement disclosure, gazette publication, arbitration-withdrawal record, or permit-renewal record. Conversion per §3.5 below. Distinct from πt: πt captures cost while the operating-vehicle question is unresolved; πd captures cost after a settlement framework has been executed but before it has demonstrated multi-year durability. The methodological distinction is published in §4 below.
Bankability-layer overlay that re-introduces the policy-perception risk the §07 IC composite deliberately routes through the TI/RGI governance pillars rather than the Fraser input. Per the v1.6.8 country-band ruling a jurisdiction's composite IC carries its blended Fraser Investment Attractiveness Index (IAI), which combines mineral potential with policy perception; for a high-mineral-potential / low-policy jurisdiction — the DRC being the extreme case, IAI 57.46 against a Policy Perception Index of ~18 — the IAI-derived base rate and πc systematically under-price policy risk. πp corrects exactly that asymmetry at the cost of capital, driven by the Fraser Policy Perception Index (PPI) of the asset's operating jurisdiction, not the blended composite. It is not double-counting with πc: πc reflects the composite IC (which dilutes policy risk by construction), while πp surfaces the diluted policy component a project-finance lender prices separately. The platform country-risk band is unchanged — πp lives only in the bankability discount rate. Conversion per §3.6.
πc = (10 − ICasset-jurisdiction) × 1.0%
Linear conversion preserving §07 Table 4 ordering at the discount-rate level. IC 10 (best Fraser jurisdiction) → πc = 0.0%. IC 5 (median African Fraser) → πc = 5.0%. IC 0 (worst) → πc = 10.0%.
r = 8.0% + (10 − IC) × 0.8%). This framework uses 1.0% per IC point for asset-level decomposition, producing approximately 1–2 percentage points higher rates than the §10.5 convention on the same IC value across the IC 1–9 span. The two coefficients are not in conflict — the §10.5 0.8% is a smoother screening approximation suited to province-level surfacing, and the framework's 1.0% reflects the sharper differentiation appropriate to asset-level institutional decomposition. Both produce results within the same 10–17% institutional-grade range observed across the African asset set. Coefficient alignment between the two conventions is named as a v1.3 editorial item; pending alignment, the §10.5 convention remains the production discount rate wired into the data layer per the v1.0.46 platform convention.
For CPI-proxy IC values carrying an upward band per the §04 v1.1 calibration (±2.14 IC-scale points), the asset-specific country risk premium uses the IC point estimate; the band is preserved in the IC source attribution but does not propagate to a discount-rate band in v1.1.2. Calibrated band-to-discount-rate propagation is committed to v1.3 development per §10.8 deferral item 2.
| 5-year monthly σ | πv | Typical commodities |
|---|---|---|
| < 5% | +0.5% | — |
| 5–10% | +1.0% | Phosphate |
| 10–15% | +1.5% | Cu, Au, Pt, Fe ore (typical band) |
| 15–20% | +2.0% | Ni, Zn, Pd (cycle-dependent) |
| > 20% | +2.5% | Li, Co (recent cycles), Sn |
Cu, Au, Pt typically fall in the 10–15% band. Li, Co, Ni have shown 15–25% bands in recent cycles. Iron ore typically 8–12%. Multi-commodity volatility weighting for by-product-credit assets deferred to v1.3.
| Development stage | πs | Source |
|---|---|---|
| Operating (post-FID, in production) | −1.0% | NI 43-101 / annual report / S-K 1300 |
| Construction (post-FID, pre-first-production) | 0.0% | NI 43-101 / FS / Form 6-K equivalent |
| Development (PFS-stage, pre-FID) | +1.0% | PFS or DFS published |
| Exploration (pre-PFS) | +2.5% | Scoping / resource declaration |
| Tenure-contestation state | πt |
|---|---|
| Clean tenure (no contestation) | 0.0% |
| Minor regulatory question / consultative stage (e.g. ongoing mining-code consultation affecting fiscal terms but not licence validity) | +1.0% |
| Material tenure question, pre-arbitration (e.g. licence revocation challenged in domestic courts) | +2.0% |
| Active international arbitration, substantive rulings pending (e.g. ICSID procedural orders in place; substantive outcome not yet ruled) | +3.0% |
| Active multi-claim contestation, no clear resolution timeline (multiple parallel claimants; arbitration suspended or open-ended; framework agreements with conditional counterparties) | +5.0% |
The premium captures the discount-rate cost institutional capital allocators apply to assets where the operating vehicle is contested. It is a single-rate approximation; probability-weighted multi-pathway NPV as supplementary methodology for disputed-tenure assets is named in §10.8 deferral item 7 and remains v1.3 forward-state.
| Settlement-durability state | πd |
|---|---|
| Clean — no settlement history | 0.0% |
| Settlement >5 years sustained (multi-cycle durability demonstrated) | +0.5% |
| Settlement 1–5 years sustained | +1.0% |
| Settlement <12 months executed (durability window active; first major durability tests pending) | +2.0% |
| Settlement contested in implementation (partial unwind or fresh dispute on terms) | +3.0% |
The premium captures the discount-rate cost during the post-settlement monitoring window — the period after contestation resolves but before the resolution framework demonstrates multi-year durability. Single-rate approximation; probability-weighted structural-settlement-durability modelling is named in §10.8 deferral item 8 and remains v1.3 forward-state.
| Fraser Policy Perception Index (asset jurisdiction) | πp |
|---|---|
| PPI ≥ 75 — low policy risk | +0.0% |
| PPI 60–74 — moderate | +0.5% |
| PPI 45–59 — elevated | +1.0% |
| PPI 30–44 — high | +2.0% |
| PPI < 30 — severe | +3.0% to +4.0% (midpoint +3.5%) |
The two components capture methodologically distinct risk types applicable in different temporal phases of state–investor recalibration cycles:
πt captures cost while the operating-vehicle question is unresolved; resolves to 0% when contestation resolves.πd captures cost after contestation resolves but before the resolution framework has demonstrated multi-year durability; resolves toward 0% as the settlement sustains over time.Temporal sequence. A typical state–investor recalibration cycle moves through:
| Phase | πt | πd |
|---|---|---|
| Contestation phase | > 0 | 0 |
| Settlement execution | transitions to 0 | 0 → > 0 |
| Durability window (active) | 0 | > 0 |
| Sustained durability (multi-year) | 0 | decaying toward 0 |
Aggregate cost relationship. The two components are not generally additive on the same asset in the same temporal phase. An asset is typically either in contestation (πt > 0, πd = 0) or in a durability window (πt = 0, πd > 0), not both. The Manono Lithium District worked example below illustrates the first regime; the Loulo-Gounkoto worked example illustrates the second.
State-classification trigger discipline. Movement between πt states or between the πt and πd regimes requires an audit log entry per §10.9. Settlement-execution events (e.g. ICSID claim withdrawal, gazette publication of settlement decree, permit renewal completing) are the transition triggers between regimes.
Three worked examples illustrate framework application across three distinct asset states: clean tenure with no settlement history, active multi-claim contestation, and post-arbitration settlement within durability window.
Asset state: Operating supermajor; clean tenure; no settlement history. Operator: Ivanhoe Mines + Zijin Mining (39.6% each) + DRC state (20%).
| Component | Value | Derivation |
|---|---|---|
rf | +4.5% | 10-year US Treasury Q1 2026 (FRED) — Sourced |
πc | +6.5% | Lufilian Arc DRC component, asset-specific (not composite); inherits Pending state from v1.1 §07 Table 4 Fraser 2025 IAI ~58 rank-confirmed-bracket — Derived [Pending Fraser PDF back-check] |
πv | +1.5% | Cu 5-year monthly σ in 10–15% band per §3.2 — Derived |
πs | −1.0% | Operating asset per §3.3; Sourced to Ivanhoe NI 43-101 effective 31 Dec 2025 |
πt | 0.0% | Clean tenure per §3.4 — no contestation |
πd | 0.0% | No settlement history per §3.5 |
Risk-adjusted rate = 4.5% + 6.5% + 1.5% − 1.0% + 0.0% + 0.0% = 11.5% [Derived; Pending Fraser PDF back-check propagation from πc]
Substituting an 11.5% institutional-grade discount rate for the 8% operator/qualified-persons rate compresses NPV by approximately 35–45% on long-duration cash flow profiles — a structural property of DCF rather than an operator-specific result.
Asset state: Disputed tenure — active multi-claim contestation with no clear resolution timeline. AVZ ICSID arbitration ARB/23/20 procedural posture per public case record; Manono Lithium SAS (Zijin / Cominière) holding operating-vehicle position at NE block per Sept 2024 permit awards; KoBold Metals framework agreement (announced July 2025); CATH conditional funding (referenced Jan 2026). No commercial relationship between Afrimintel and any party named.
| Component | Value | Derivation |
|---|---|---|
rf | +4.5% | 10-year US Treasury Q1 2026 (FRED) — Sourced |
πc | +4.2% | Congo Craton DRC-anchored component per v1.1 §07; CPI-proxy IC band preserved — Derived |
πv | +2.5% | Li 5-year monthly σ in >20% band per §3.2 — Derived |
πs | +1.0% | Development stage (PFS-published, pre-FID under current operating-vehicle uncertainty) per §3.3 — Sourced |
πt | +5.0% | Active multi-claim contestation, no clear resolution timeline per §3.4 — Sourced to ICSID case record + operator filings |
πd | 0.0% | Dispute unresolved, not a settled framework per §3.5 |
Risk-adjusted rate = 4.5% + 4.2% + 2.5% + 1.0% + 5.0% + 0.0% = 17.2% [Derived]
Substituting a 17.2% institutional-grade rate for an 8% clean-tenure-equivalent operator rate compresses NPV by approximately 50–65% on Li-asset long-duration cash flow profile. The πt = +5.0% premium alone accounts for approximately 22–30 percentage points of that compression in isolation. Single-rate approximation; probability-weighted multi-pathway NPV may produce different cost depending on resolution-pathway probability weighting — v1.3 forward-state per §10.8 item 7.
Asset state: Post-arbitration settlement within active durability window. Barrick Mining Corporation 24 Nov 2025 settlement disclosure + Government of Mali settlement framework + Loulo permit-renewal record + ICSID claim-withdrawal record + Barrick 2026 production guidance per published terms. No commercial relationship between Afrimintel and any party named.
| Component | Value | Derivation |
|---|---|---|
rf | +4.5% | 10-year US Treasury Q1 2026 (FRED) — Sourced |
πc | +5.5% | West Africa Birimian Mali-anchored component per v1.1 §07; CPI-proxy IC derivation per §04 v1.1; TI CPI 2024 Mali score in 28–32 range; ±2.14 IC-scale-point band preserved per §3.1 — Derived [Sourced upstream — Transparency International CPI 2024] |
πv | +1.5% | Au 5-year monthly σ in 10–15% band per §3.2 — Derived |
πs | −1.0% | Operating asset — production resumed final days of 2025; 2026 guidance issued per §3.3 — Sourced to Barrick disclosures |
πt | 0.0% | Post-arbitration — ICSID claims withdrawn 24 Nov 2025 as part of settlement; tenure resolved per §3.4 |
πd | +2.0% | Settlement <12 months executed; durability window active; first major durability tests pending per §3.5 |
Risk-adjusted rate = 4.5% + 5.5% + 1.5% − 1.0% + 0.0% + 2.0% = 12.5% [Derived; CPI-proxy IC source-attribution band preserved per §3.1]
Substituting a 12.5% institutional-grade discount rate for an 8% operator-published rate compresses NPV by approximately 22–32% on Au-asset operating cash flow profile. The πd = +2.0% premium alone accounts for approximately 8–12 percentage points of that compression in isolation. Single-rate approximation; probability-weighted structural-settlement-durability modelling — sovereign-continuity event scenarios, mining-code interpretive-challenge scenarios, permit-renewal denial scenarios — may produce different cost depending on durability-probability calibration. v1.3 forward-state per §10.8 item 8.
The platform-screening convention published at Methodology §10.5 uses the 4-parameter linear approximation r = 8.0% + (10 − IC) × 0.8%. This is the discount-rate convention wired into the platform data layer (BANKABILITY_V1_0) and surfaced on case-study pages. It is the screening-grade rate institutional users see when they read a province-level dossier.
This framework publishes the asset-level decomposition that sits beside the §10.5 convention. The relationship is:
The two surfaces are not in conflict. The §10.5 convention is the production discount rate for the platform's bankability layer; the framework is the methodology layer that lets users read how a specific asset's rate decomposes if six-component analysis were applied. The §3.1 calibration note documents the coefficient difference honestly — alignment between the two conventions is a v1.3 editorial item.
For a province-level screening read, use §10.5. For asset-level institutional decomposition (e.g. modelling Manono's disputed-tenure premium as a distinct component, or Loulo-Gounkoto's post-settlement durability premium as separable from country risk), use this framework.
What this framework does at v1 publication:
What this framework does NOT do at v1 publication:
The publication of this framework triggers an audit log entry of type METHODOLOGY_SECTION_ADDITION, parented to the v1.1 publication entry. Future amendments to component definitions, conversion-table magnitudes, or worked-example state classifications require new audit log entries per Methodology v1.1 §06 protocol. State transitions on specific assets between πt states or between πt and πd regimes trigger asset-specific audit log entries per the §4 trigger discipline.