A special case of the npv approach, known as the Hotelling valuation principle (see Miller and Upton, 1985 ), avoids the diYculties of forecasting future net revenues and then discounting them back to the present. This approach makes the strong and generally unrealistic assumption that the unit value of a resource grows at exactly the same rate as the appropriate discount rate. In the above example, this would imply that the unit value of the gold resource would grow at the dis- count rate of 10 percent per year; that is, the unit value would be $10 in the first year, $11 in the next year, $ in the following year, and.
