In Ukraine, the subsoil belongs to the Ukrainian people: a quarry or deposit cannot be bought like a land plot. Extractive businesses are built on subsoil use rights granted through a special permit — and that permit is the principal asset of any mining company, defining the value of the entire business. The Kanzas company values subsoil use rights, quarries and mineral deposits — one of the few valuation practices in Ukraine with genuine expertise in this niche. Our team includes RICS- and TEGoVA (REV)-certified valuers.
The subsoil use permit as the company's core asset
A special subsoil use permit is issued by the State Service of Geology and Subsoil of Ukraine for a defined term and a specific subsoil area — for geological exploration or extraction. New permits are allocated predominantly through electronic auctions, and auction prices demonstrate the point clearly: the permit is an asset with a standalone market value that can exceed the value of the company's machinery and structures many times over.
Yet on the balance sheet of the permit holder this value is typically invisible — recorded, if at all, at the historical cost of obtaining the permit. As a property right of the permit holder, the subsoil use right has a value of its own, and an independent valuation makes that core asset visible: for a transaction, a lender, an investor or a court.
When a mineral rights valuation is needed
- acquisition or sale of an extractive business — in practice structured as a purchase of the corporate rights of the permit-holding company, with the permit value at the heart of the deal price;
- financing secured against mining assets;
- contribution of assets to capital and group restructuring;
- litigation — shareholder disputes, contractual claims, disputes over the permit itself;
- asset revaluation and IFRS reporting;
- attracting investors into deposit development.
For international investors entering or exiting Ukrainian extractive assets, we deliver reports that satisfy Ukrainian statutory requirements and read cleanly for international counsel, lenders and auditors.
What drives the value: reserves, output, permit term
The primary tool is the income approach — discounted cash flow over the permit term. The key inputs:
- mineral reserves per geological data and reserve approval protocols, by category of exploration maturity;
- planned and actual extraction volumes and the design capacity of the quarry;
- commodity prices — crushed stone, sand, granite, clay or other minerals — in the regional market;
- extraction costs: overburden removal, machinery, energy, logistics, royalty payments;
- the remaining permit term and the realism of its extension.
Auction results for permits over comparable subsoil areas provide an additional market benchmark that strengthens the conclusion.
Quarries and mineral deposits — producing and greenfield
We value both operating quarries with established extraction and sales, and greenfield deposits where extraction has not yet begun. These are different tasks: the former rests on actual cash flows, the latter on a development model reflecting capital expenditure and start-up risk. In both cases the valuation covers the full asset perimeter: subsoil rights, land rights over the site, mining equipment and infrastructure.
Documents and process
We work from the special permit and its annexes (the subsoil use agreement), geological information and reserve documentation, the mining allotment, financial statements and production data, and title documents for land and fixed assets. Subsoil valuation is bespoke expert work at the intersection of geology, mining engineering and finance; fee and deadline depend on the scale of the deposit and are fixed in the engagement contract.
FAQ
Can the permit be sold separately from the company? Free transfer of subsoil permits is restricted by Ukrainian law, so transactions are structured through the sale of the permit holder's corporate rights. We value both the subsoil use right as an asset and the company's shares as a whole.
Does an undeveloped deposit have value? Yes: value is driven by reserves, the permit term and the economics of future extraction. Greenfield sites are regularly transacted and pledged, and their valuation is a standard engagement for us.
Do you appraise US mineral rights? US mineral interests are real property interests, and their appraisal is subject to US state licensing, which we do not claim. Our practice covers Ukrainian subsoil use rights and mining assets, and business valuations of extractive companies under IVS for international clients.
Subsoil valuation is niche expertise, and we immerse ourselves in the specifics of each deposit and each client's situation. Your report will be delivered exactly on the agreed date and will withstand formal review and court scrutiny. Contact us by email or messenger.
