EME 460
Geo-Resources Evaluation and Investment Analysis

EME 460 Syllabus


Geo-Resources Evaluation and Investment Analysis - Summer 2024

This syllabus is divided into several sections. You can read it sequentially by scrolling down the length of the document or by clicking on any of the links below to “jump” to a specific section. It is essential that you read the entire document as well as material covered in the course orientation. Together, these serve as our course "contract."


Zhongzang He, Department of Energy and Mineral Engineering, The Pennsylvania State University.

Office Hours: If you would like to schedule a meeting, please send an email and we will coordinate a workable time. Also, I encourage you to write your question in discussion forums first (it might be other students' question as well) and also read the discussion forums regularly. You might be able to find your answer or other helpful materials there.

Course Communication and Discussion Forum: I would strongly recommend you to read the Discussion Forum frequently and participate (it has 2 extra points). If you have any question and can’t find the answer in the Discussion Forum, try to post it there, first. We monitor the Discussion Forum and respond to posts there. Your questions and answers might be very helpful for other students. Please DO NOT discuss any quiz question and solution directly in the Discussion Forum.

Email: Please try the Discussion Forum first and see if you can find your answer there. You can contact your instructor. Always send correspondence to All Course Faculty to ensure that any course assistants also receive the note.

The lecturer will read and respond to email and discussion forums at least once per day during the work week (Monday through Friday). You may see the lecturer online occasionally on the weekends! If you have a question regarding a writing assignment due at 11:55 any evening, the lecturer must receive your question via Canvas email no later than noon Eastern Time on that day. Queries sent after noon, Eastern Time on the date an assignment is due may not be responded to, so please don't procrastinate!

Course Overview

Description: The objective of the course is to ensure students learn the techniques used in geo-resource project evaluation, discounted cash flow, interest rate, tax consideration and uncertainty and risks in engineering project evaluation. Some introductory knowledge about mineral reserve estimation, risk management and geostatistics, and mine feasibility will be covered.

About EME 460

The course will train students to apply cost engineering methodology for geo-resources including minerals, oil, natural gas and coal. Students will apply present value, rate-of-return analysis, and cost engineering methodologies to evaluate engineering projects involving geo-resource exploration and production. Students will learn and are expected to be able to perform oil, natural gas, and mineral reserve estimations and evaluate production decline characteristics using geometric and geo-statistical methods. They will also learn about uncertainty and risk management as they apply to engineering project evaluations involving geo-resources. The course will be offered in fall and spring semesters and is intended for students with at least fifth-semester standing.

When you successfully complete this course, you will be prepared to apply:

  1. Microsoft Excel (or other spreadsheet programs) to your assessment and calculations;
  2. economic and engineering evaluation of geo-resources extractive projects;
  3. the meaning of the cash flow in production driven projects;
  4. present value, rate of return analysis and break-even analysis;
  5. economic indicators: growth rate of return, present value ratios, pay back;
  6. decision making in non-mutually exclusive and mutually exclusive projects;
  7. cost estimation and engineering economy concepts applied to geo-resources extractive projects;
  8. economic sensitivity analysis;
  9. risk management and commodity price forecasting;
  10. escalated and constant dollars;
  11. depreciation, depletion, amortization and after-tax cash flow.

Please note that learning Microsoft Excel (or other spreadsheet programs such as Google Spreadsheet) is an important objective in this course.

Course Format

EME 460 will be conducted on the World Wide Web (www.e-education.psu.edu/eme460), and some reading material will be assigned in Canvas. There will be no set class meeting times, but you will be required to complete quizzes. Doing the assignments is the way you will learn the materials in each lesson. The class will consist of materials available online, including lectures, power point presentation and videos. The content of this course is divided into 12 lessons. Each lesson will be completed in approximately 1 week (subject to change). Your grade will be evaluated based on your performance on quizzes, mid-term exam, and final exam.

What I expect of you:

On average, most students spend 10 hours per week preparing the quiz for each lesson. Your workload may be more or less depending on your study habits.

I have tried to make this the most effective and convenient educational experience possible. The Internet may still be a novel learning environment for you, but in one sense it is no different from a traditional college class: how much and how well you learn is ultimately up to you. You will succeed if you are diligent about keeping up with the class schedule and if you take advantage of opportunities to communicate with me and with your fellow students.

Specific learning objectives for each lesson and project are detailed within each lesson. The class schedule is published below.

Required & Suggested Course Materials

Required: Stermole, F.J., Stermole, J.M. (2014) Economic Evaluation and Investment Decision Methods, 14 edition. Lakewood, Colorado: Investment Evaluations Co. (12 or 14 edition also work), ISBN-10: 0991194101 | ISBN-13: 978-0991194100

  • The 12th or 14th edition may also work, but I will assign the reading materials according to the 13th edition.
  • Please get your textbook before the end of the 1st week.
  • There are 2 copies of the 13th edition of the textbook in the EMS library reserved for 2 hour reading.

All other materials needed for this course are presented online through our course website and in Canvas. In order to access all materials, you need to have an active Penn State Access Account user ID and password (used to access the online course resources). If you have any questions about obtaining or activating your Penn State Access Account, please contact the ITS Help Desk.

Assistance with textbooks

Penn State honors and values the socioeconomic diversity of our students. If you require assistance with the costs of textbooks for this course, contact the Office of Student Care and Advocacy, 120 Boucke Building, 863-4926. For additional needs related to socioeconomic status, please visit Students United Against Poverty and Project Cahir.

Assignments and Grading

Student performance will be evaluated based on following,

  • 9 Homework Assignments (drop the lowest grade): 20%
  • 10 Quizzes (drop the lowest grade): 15%
  • 1 Mid-term Examination: 25%
  • 1 Final Examination: 25%
  • Course project: 15%
  • Discussion forum participation (potential 2% extra credit)

Final Exam

This course may require you to take exams using certain proctoring software that uses your computer’s webcam or other technology to monitor and/or record your activity during exams. The proctoring software may be listening to you, monitoring your computer screen, viewing you and your surroundings, recording and storing any and all activity (including visual and audio recordings) during the proctoring process. By enrolling in this course, you consent to the use of the proctoring software selected by your instructor, including but not limited to any audio and/or visual monitoring which may be recorded. Please contact your instructor with any questions..

Late Work Policy

All assignments not submitted by the deadline will lose 25% of the total value for each day they are late. Late day 1 begins 1 minute after the stated due date and time, and each additional day starts 24 hours later. So, for example, if an assignment due on Thursday at 5:00pm is submitted at 6:23pm on the following Friday, the maximum grade on that assignment will be 50% of the total number of points available.

Discussion forum participation

One of the features of this course is the existence of a discussion forum. You can always ask your questions in the discussion forum first (it might be another student's question, as well!) or reply to other posts. You will be graded (2 extra points) at the end of the term on the quantity and quality of your contributions to the discussion forum. 

Students must take the quiz individually. The system will track IPs and Timings of your quizzes submission to discourage any kind of collaboration during quizzes.

Quizzes include essay type question and they must be submitted online via Canvas.

The deadline for taking each quiz will be given at the beginning of each lesson.

Please check emails (messages in Canvas and your PSU email) from the lecturer....emails will give you more details about time to take quizzes and how to submit your assignments.

I will use the Canvas Grades so you can keep track of your grades. You can see your grades by accessing your course section in Canvas and clicking on the Grades option from the menu on the left.

Grades will be based on the following percentage (this percentage is based on the total possible points earned by the student):

Grading Scale
Grade Percent
A 93 – 100%
A- 90 – 92.9%
B+ 87 – 89.9%
B 83 – 86.9%
B- 80 – 82.9%
C+ 77 – 79.9%
C 70 – 76.9%
D 60.0 – 69.9%
F < 60.0%

EME 460 Course Schedule

imagePrintable Schedule

Below, you will find a summary of the primary learning activities for this course and the associated time frames.

Course Schedule
Lesson Objective Assignments
Orientation and Syllabus Learn the structure of EME460, an overview of Canvas, technical requirements, how to succeed in this course, and where to get course assistance if you need it. Please get a copy of the textbook before the end of the 1st week of class.
Review the syllabus.
Lesson 1: Investment Decision Making and Compound Interest Formulas Understand where the processes of investment decision-making.
Understand the definition of discounted cash flow analysis.
Understand how to apply the evaluation techniques in the mining and oil industry.
Enhance the understanding of present, annual, and future values.
Finish reading Chapter 1 of the textbook.
Go through Lesson 1.
Take Quiz 1, Homework 1.
Lesson 2: Present, Annual, and Future Value, Rate of Return and Break-even Analysis Understand nominal, period, and effective interest rates.
Understand the framework of break-even and rate of return analysis.
Use present, annual, future values, break-even, and rate of return to make investment decisions.
Finish reading Chapter 2 of the textbook.
Go through Lesson 2.
Take Quiz 2, Homework 2.
Lesson 3: Annual Percentage Rates, Salvage Value, Bond Investment and Financial Cost of Capital, NPV, B/C Ratio, Present Value Ratio Understand the Annual Percentage Rates as well as how to calculate it.
Be able to evaluate the value of a bond and understand the cash flow pattern of a bond.
Demonstrate the concept of financial cost and opportunity cost of capital.
Be able to evaluate a project(s) using Net Present Value, Benefit Cost Ratio, and Present Value Ratio.
Finish reading Chapter 3 of the textbook.
Go through Lesson 3.
Take Quiz 3, Homework 3.
Lesson 4: Mutually Exclusive and NON-Mutually Exclusive Project Analysis Understand an introduction of mutually exclusive projects.
Be able to use rate of return, net value, and ratios methods to analyze mutually exclusive projects.
Understand mutually exclusive projects producing income with unequal life and the handling of opportunity cost.
Understand how to conduct Incremental Analysis.
Understand how variable minimum rate of return with time can affect the project.
Finish reading Chapter 4 of the textbook.
Go through Lesson 4.
Take Quiz 4, Homework 4.
Lesson 5: Escalated and Constant Dollars Differentiate the factors to be considered in escalation and inflation.
Differentiate the factors to be considered in constant dollar and escalated dollar.
Understand how to conduct ROR and NPV analysis with escalated and constant dollar.
Be fluent with the equation to convert between escalated dollar ROR and constant dollar ROR.
Finish reading Chapter 5 of the textbook.
Go through Lesson 5.
Take Quiz 5, Homework 5.
Lesson 6: Uncertainty and Risk Analysis Understand how to conduct sensitivity analysis to analyze the effects of uncertainty.
Be able to conduct expected value analysis.
Understand the risk due to natural disasters.
Finish reading Chapter 6 of the textbook.
Go through Lesson 6.
Take Quiz 6, Homework 6.
Lesson 7: Depreciation and After-tax Cash Flow Understand how Before-Tax Cash Flow and After-Tax Cash Flow are calculated.
Be able to apply Straight Line, Declining Balance, and Declining Balance Switching to Straight Line methods for depreciation calculations.
Be familiar with modified accelerated cost recovery system (MACRS), Depletion, and Amortization.
Finish reading Chapter 7 of the textbook.
Go through Lesson 7.
Lesson 8: Income Tax and Cash Flow Analysis Be able to calculate individual and corporate income tax.
Be familiar with individual and corporate capital gains tax treatment.
Demonstrate tax treatment of investment terminal (salvage) value.
Be familiar with state tax considerations.
Distinguish between different types of tax credits.
Finish reading Chapter 8 of the textbook.
Go through Lesson 8.
Take Quiz 7, Homework 7.
Lesson 9: After-tax Decision Methods and Applications Conduct payback period analysis.
Distinguish sunk costs and opportunity costs in evaluation.
Conduct break-even analysis for after-tax cash flows.
Understand the philosophy of general replacement.
Be able to compare the economics of leasing versus purchasing, and operating versus capital leases.
Finish reading Chapter 9 and 10 of the textbook.
Go through Lesson 9.
Take Quiz 8 and 9, Homework 8.
Lesson 10: Evaluation Involving Borrowed Money Be able to conduct a leveraged investment analysis.
Be familiar with joint venture analysis.
Be able to analyze a land investment with leverage.
Understand the relationship between minimum rate of return and leverage.
Finish reading Chapter 11 of the textbook.
Go through Lesson 10.
Lesson 11: Course Project
Lesson 12: Personal Investments and Hedging Be able to distinguish between individual and business investment choices.
Be able to quantify the risk associated with the investment choice.
Be familiar with personal investment and hedging terminology.
Finish reading Chapter 12 of the textbook.
Go through Lesson 12.
Take Quiz 10, Homework 10.

A Note About Activities:

If you have a question regarding an activity due at 11:55 one evening, I must receive your question via Canvas email no later than noon Eastern Time on that day. Queries sent after noon, Eastern Time on the day an assignment is due may not be responded to, so please don't procrastinate!

Course Policies

Penn State Email Accounts

All official communications from the Penn State World Campus are sent to students' Penn State email accounts. Be sure to check your Penn State account regularly, or forward your Penn State email to your preferred email account, so you don't miss any important information.

Make-up Exams and Late assignments

Make-up exams will be given and late assignments accepted under the following circumstances: (1) if prearranged with the instructor; (2) if the result of a documented emergency; or (3) if documented illness (see PARTICIPATION AND ATTENDANCE SECTION below). The exam will be a zero unless these conditions are met. Other excuses are not valid.

Technical Requirements

For this course, we recommend the minimum technical requirements outlined on the World Campus Technical Requirements page, including the requirements listed for same-time, synchronous communications. If you need technical assistance at any point during the course, please contact the IT Service Desk.

Internet Connection

Access to a reliable Internet connection is required for this course. A problem with your Internet access may not be used as an excuse for late, missing, or incomplete coursework. If you experience problems with your Internet connection while working on this course, it is your responsibility to find an alternative Internet access point, such as a public library or Wi-Fi ® hotspot.


This course must be viewed using the latest version of Firefox, Safari, Chrome, or Edge. Internet Explorer is not supported. If you use any other browser, or if you are not using the latest version of your browser, some pages containing equations may not render properly. In addition, javascript must be enabled for equations to render properly. If you have any issues with equations not rendering properly, please update your browser to the latest version or try using a different browser. If you need additional technical assistance at any point during the course, please contact the HelpDesk (for World Campus students) or the IT Service Desk (for students at all other campus locations).

Penn State E-mail Accounts

All official communications from Penn State are sent to students' Penn State e-mail accounts. Be sure to check your Penn State account regularly, or forward your Penn State e-mail to your preferred e-mail account, so you don't miss any important information.

Academic Integrity

Academic integrity is the pursuit of scholarly activity in an open, honest, and responsible manner. Academic integrity is a basic guiding principle for all academic activity at Pennsylvania State University, and all members of the University community are expected to act in accordance with this principle. 

According to Penn State policy  G-9: Academic Integrity, an academic integrity violation is “an intentional, unintentional, or attempted violation of course or assessment policies to gain an academic advantage or to advantage or disadvantage another student academically.” Unless your instructor tells you otherwise, you must complete all course work entirely on your own, using only sources that have been permitted by your instructor, and you may not assist other students with papers, quizzes, exams, or other assessments. If your instructor allows you to use ideas, images, or word phrases created by another person (e.g., from Course Hero or Chegg) or by generative technology, such as ChatGPT, you must identify their source. You may not submit false or fabricated information, use the same academic work for credit in multiple courses, or share instructional content. Students with questions about academic integrity should ask their instructor before submitting work.

Students facing allegations of academic misconduct may not drop/withdraw from the affected course unless they are cleared of wrongdoing (see G-9: Academic Integrity). Attempted drops will be prevented or reversed, and students will be expected to complete coursework and meet course deadlines. Students who are found responsible for academic integrity violations face academic outcomes, that can be severe, and put themselves at jeopardy for other outcomes which may include ineligibility for the Dean's List, pass/fail elections, and grade forgiveness. Students may also face consequences from their home/major program and/or The Schreyer Honors College.

Please also see Earth and Mineral Sciences Academic Integrity Procedures, which this course adopts. To learn more, see Penn State’s “Academic Integrity Training for Students.

Course Copyright

All course materials students receive or to which students have online access are protected by copyright laws. Students may use course materials and make copies for their own use as needed, but unauthorized distribution and/or uploading of materials without the instructor’s express permission is strictly prohibited. University Policy AD 40, the University Policy Recording of Classroom Activities and Note-Taking Services addresses this issue. Students who engage in the unauthorized distribution of copyrighted materials may be held in violation of the University’s Code of Conduct, and/or liable under Federal and State laws. For example, uploading completed labs, homework, or other assignments to any study site constitutes a violation of this policy.

Accommodations for Students with Disabilities

Penn State welcomes students with disabilities into the University's educational programs. Every Penn State campus has an office for students with disabilities. The Student Disability Resources (SDR) website provides the contact information for every Penn State campus. For further information, please visit the Student Disability Resources website.

To receive consideration for reasonable accommodations, you must contact the appropriate disability services office at the campus where you are officially enrolled, participate in an intake interview, and provide documentation. See Student Disability Resources: Applying for Services. If the documentation supports your request for reasonable accommodations, your campus’s disability services office will provide you with an accommodation letter. Please share this letter with your instructors and discuss the accommodations with them as early in your courses as possible. You must follow this process for every semester that you request accommodations.

Change in Normal Campus Operations

In case of weather-related delays or other emergency campus disruptions or closures at the University, this online course will proceed as planned. Your instructor will inform you if there are any extenuating circumstances regarding content or activity due dates in the course due to these delays or closures. If you are affected by a weather-related emergency, please contact your instructor at the earliest possible time to make special arrangements.

Reporting Educational Equity Concerns

Penn State takes great pride in fostering a diverse and inclusive environment for students, faculty, and staff. Acts of intolerance, discrimination, or harassment due to age, ancestry, color, disability, gender, gender identity, national origin, race, religious belief, sexual orientation, or veteran status are not tolerated (Policy AD29 Statement on Intolerance) and can be reported through Educational Equity via Report Bias.

Counseling and Psychological Services

Many students at Penn State face personal challenges or have psychological needs that may interfere with their academic progress, social development, or emotional wellbeing.  The university offers a variety of confidential services to help you through difficult times, including individual and group counseling, crisis intervention, consultations, online chats, and mental health screenings.  These services are provided by staff who welcome all students and embrace a philosophy respectful of clients’ cultural and religious backgrounds, and sensitive to differences in race, ability, gender identity, and sexual orientation.  Services include the following: 

Counseling and Psychological Services at University Park  (CAPS): 814-863-0395
Counseling Services at Commonwealth Campuses
Penn State Crisis Line (24 hours/7 days/week): 877-229-6400
Crisis Text Line (24 hours/7 days/week): Text LIONS to 741741

Military Personnel

Veterans and currently serving military personnel and/or spouses with unique circumstances (e.g., upcoming deployments, drill/duty requirements, disabilities, VA appointments, etc.) are welcome and encouraged to communicate these, in advance if possible, to the instructor in the case that special arrangements need to be made.

Connect Online with Caution

Penn State is committed to educational access for all. Our students come from all walks of life and have diverse life experiences. As with any other online community, the lack of physical interaction in an online classroom can create a false sense of anonymity and security. While one can make new friends online, digital relationships can also be misleading. Good judgment and decision-making are critical when choosing to disclose personal information with others whom you do not know. 

Deferred Grades

If you are prevented from completing this course within the prescribed amount of time for reasons that are beyond your control, it is possible to have the grade deferred with the concurrence of the instructor, following Penn State Deferred Grade Policy 48-40. To seek a deferred grade, you must submit a written request (by e-mail or U.S. post) to the instructor describing the reason(s) for the request. Non-emergency permission for filing a deferred grade must be requested before the beginning of the final examination period.  It is up to the instructor to determine whether or not you will be permitted to receive a deferred grade. If permission is granted, you will work with the instructor to establish a communication plan and a clear schedule for completion within policy.  If, for any reason, the coursework for the deferred grade is not complete by the assigned time, a grade of "F" will be automatically entered on your transcript.


This course will be conducted entirely online. There will be no set class meeting times, but you will be required to complete weekly assignments with specific due dates. Many of the assignments are open for multiple days, so it is your responsibility to complete the work early if you plan to travel or participate in national holidays, religious observances, or university-approved activities.  If you need to request an exception due to a personal or medical emergency, contact the instructor directly as soon as you are able. Such requests will be considered on a case-by-case basis.

In EMS, inclusivity is one of our core values. We prioritize fostering a diverse and equitable community where each member knows they belong here and is inspired to succeed. We encourage everyone in our EMS community to be actively engaged in fostering this ideal, and all members of this class should contribute to a respectful, welcoming, and inclusive environment and interact with civility. Our commitment to inclusivity aligns with Penn State’s values and policies. 

To learn more, visit EMS Educational Equity.  Here, you will find information about the EMS ALLWE initiative, the Rainbow EMS Network, Anti-Racism, active ally-ship, bystander intervention, and more. The site also has resources for where to turn if you need assistance and links to University references.  Also, contact your EMS department’s Associate Head for DEI for more information about department initiatives. 

Mandated Reporting Statement

Penn State’s policies require me, as a faculty member, to share information about incidents of sex-based discrimination and harassment (discrimination, harassment, sexual harassment, sexual misconduct, dating violence, domestic violence, stalking, and retaliation) with Penn State’s Title IX coordinator or deputy coordinators, regardless of whether the incidents are stated to me in person or shared by students as part of their coursework. For more information regarding the University's policies and procedures for responding to reports of sexual or gender-based harassment or misconduct, please visit Penn State's Office of Sexual Misconduct Prevention & Response website.

Additionally, I am required to make a report on any reasonable suspicion of child abuse in accordance with the Pennsylvania Child Protective Services Law.


Please note that the specifics of this Course Syllabus can be changed at any time, and you will be responsible for abiding by any such changes. Changes to the syllabus shall be given to you in written (paper or electronic) form.