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By J. Y. Murdoch

TAXATION has become a major item in the operation of Canadian mines, and, as such, merits our most serious consideration. I feel it was a splendid idea for the Institute to set aside this time for a frank discussion of this important subject, and believe great benefit will result from a better understanding of the methods and underlying principles involved. Mining, as a great national industry, may quite properly be called upon to pay its fair share of the cost of running the country; and there is no tendency on our part to avoid this responsibility. There is, however, a very definite demand that the proportion be just, and fairly and sensibly applied. I believe that Mr. C. G. Williams, Secretary of the Canadian Metal Mining Association, and others, are giving details of the various Provincial and Dominion regulati6ns, so I shall not touch on that phase of the situation. However, there are some important factors to which I should like very briefly to call your attention. The first is the vital need for stability. As you all know, a considerable period must elapse between the preliminary stages of any mining venture and the time when it comes to production-or is finally abandoned as un-profitable. These early days are fraught with many unavoidable uncertainties. If, to these natural hazards, the apprehension of instability of governmental action be added, the risk becomes so great that capital seeks other and safer fields for investment, and many otherwise promising projects are thus discarded. There probably never has been a time in recent years when so much money was seeking investment as now. Under favourable conditions, the development of our great mineral resources would be a natural and attractive outlet for this money. The amount of taxation which the mining industry can properly absorb is of the utmost importance at this time, and it might be well to consider this question in its relation to the economic stability of our country, for it cannot be too greatly emphasized that direct taxation is only one item in the net return which our governments derive from the mining industry. Indeed, the many indirect benefits are so manifest that it would seem almost unnecessary to enumerate them! We almost invariably think of mine taxation as a direct company tax-overlooking the fact that sales tax, customs duties, acreage tax, income tax on mine dividends, foreign shareholders' dividend tax, and others, must all be taken into consideration. It would seem that the economic value of non-ferrous metal mining in Canada is not sufficiently understood and appreciated.

Jan 1, 1935

By Heribert F. Broicher

By the very nature of mineral deposits the quality of the raw material generally fluctuates and should be known for optimum processing. Early classification, for example, of limestone into road-metal grade or lime grade or of run-of-mine ores into high grade, low grade and waste as well as information for blending or for dosage of reagents are prerequisite for economic processing. Non-contact, real-time and on-line rock identification or assessment of quality parameters can be realised by introducing the analysis of laser-induced fluorescence (LIF) into the mining industry. LIF analysis is an optical method evaluating the basically known photoluminescence properties of matter, however, extending the application into hitherto unimagined fields by use of high-energy pulsed lasers and time-resolved analysis of fluorescence in the ultra-violet, the visible and near-infrared domains of light. LIF analysers and test work in a limestone quarry and a cement plant in Germany as well as in an iron ore mine in Sweden are described. First results of test work are available and proof this technology to be promissing.

May 1, 2002

By Renaud Adams, Vladimir Salatic

"The El Mochito Mine located in Honduras, Central America, has produced lead, zinc and silver in concentrates since the 1950s. The paper discusses changes made in both lead and zinc circuits to reduce costs while maintaining production during the recent period of low metal prices.The intent of this paper is to show that sometimes thinking “outside the box” is beneficial for progress. Also, in striving for better metallurgical results we should not forget the basics of flotation. Sometimes the latest trends may not be applicable to the ore we are treating and may not meet the operating cost constraints.A major beneficial impact on El Mochito metallurgy was achieved when the overall grind was coarsened, eliminating the significant percentage of slimes. Switching from two parallel twostage grinding circuits to one circuit with three-stage series grinding has resulted in a significant reduction in power and steel consumption. With minor layout/reagent modifications, both lead and zinc circuits gained not only in retention time but as well in producing better grade products.Of course, the challenges are still there; they exist and only with the full support of operational data collection and metallurgical laboratory investigation success can come. That is why, we as professionals, can never stop in trying to make the most of what we have.INTRODUCTIONThe El Mochito Mine is owned by American Pacific Honduras S.A. de C.V. (AMPAC) a subsidiary of Breakwater Resources Ltd. Of Toronto, Canada. The mine is located in western Honduras, approximately 220 kilometers northwest of the capital city, Tegucigalpa and 90 kilometers south of the country’s second largest city, San Pedro Sula. The mine began operating in 1948 and to date has produced more than 19 million tonnes grading 240 g/t Ag, 3.5% Pb and 7.4% Zn. Production in 2005 was 700,190 tonnes grading 87 g/t Ag, 1.85% Pb and 6.61% Zn.Decreasing metal content in the ore followed by the lowest zinc price on the market in the last 15 years (see Figure 1) has reduced the cash flow and endangered to stop the operation."

Jan 1, 2007

By A. A. Paoli

The selection of a mining plant for carrying on development work presents many problems distinct in themselves, and affected by various local factors. In this paper, the writer proposes outlining and discussing in some detail the chief factors governing the economic selection of such plants. This will be followed by an enumeration of the underground and surface plant required for carrying on several hypothetical exploratory and mining operations. Where it is impossible or not convenient to obtain hydro-electric power, and where wood for fuel is scarce, we now find oil engines being used. A 100 h.p. oil engine, such as would be required to operate a three-drill air compressor, consumes approximately five Imperial gallons of fuel-oil per hour at full load. On the basis of a 60 per cent load factor, this gives, for eight hours' operation, a probable actual consumption of twenty-four Imperial gallons.

Jan 1, 1929

This paper aims to increase our understanding about existing capacity-building approaches and their implications for obtaining a social license to operate in the mining industry. The notion of ?capacity building? is gaining increasing currency in the mining sector in developing countries due to a rapid rise in the globalisation of mining operations. Capacity-building is conceived here as a process that lasts after the mine-cycle, intended to provide local mining communities with tangible skills and knowledge to gain meaningful employment in mining or other industries relevant for the local economy. Building community capacity to understand and effectively respond to these transformations is vital for obtaining a social license to operate, as it promotes sustainable and locally relevant development. Accountability mechanisms such as global norms and international standards increasingly highlight the need to build capacity among stakeholders, particularly among local communities adjacent to mining operations. International frameworks and mining companies have embraced the notion of capacity-building as a driver to assist corporate social and operational performance. However, this narrow understanding of capacity-building through the prism of corporate social responsibility and ?best practice? is preventing the industry from meaningfully impacting communities and maintaining a social license to operate. This latter notion is being widely embedded across multiple industry sectors, as a social and economic reward from mining companies to compensate communities for natural resource extraction and gain social acceptance. Although both concepts are widely recognised in the minerals industry, insufficient attention has been paid to the implications of applying a top-down (mining-orientated) or a bottom-up (community-orientated) capacity-building approach for obtaining a social license to operate, or indeed how these two concepts are linked and applied in practice. At times, communities lack the necessary capacities in the form of education and skills to deal with mining-led livelihood transformations. This is preventing both mining companies and communities from forging sustainable livelihoods and responding to mining-led livelihood transformations, a situation that is creating discontent among communities and reducing the possibility of obtaining and renewing a social license to operate for the industry. Based on a review of current scholarly debates, accountability mechanisms in the mining industry and fieldwork findings in Colombia, this paper will contribute to an understanding of the implications of existing capacity-building approaches that support a social license to operate.

Aug 1, 2013

By K. J. R. Ford, Botz. M. M.

Porphyry copper ores are frequently a source of low-grade gold ore, but gold in these ores is often associated with significant levels of cyanide-soluble copper. Cyanide leaching of such ores increases flowsheet complexity and operating costs, and requires thorough planning to satisfy environmental requirements for tailings disposal and mine closure. This paper presents a review of the chemistry of cyanide leaching of gold-copper porphyry ores, carbon adsorption phenomena and means of removing base metals from leach solution. The primary economic drivers behind the processing of such complex ores are also analyzed.

Jan 1, 2011

By K. M. Tompson, R. L. Armstrong, C. I. Godwin

"Tungsten skarn deposits on the Clea property in the Selwyn Mountains, Y. T., are related genetically to a quartz monzonite stock, about 500 metres in diameter at the surface. Lower Paleozoic sedimentary rocks are metamorphosed for a distance of 3 km from the stock. Tungsten-bearing skarn mineralization within the altered sedimentary rocks is of two types: sulphide-rich pods and calc-silicate beds. The most significant scheelite concentration is in calc-silicate beds near or adjacent to the quartz monzonite stock. Discordant K-Ar and Rb-Sr isotopic dates indicate that the stock is probably of early Late Cretaceous age, 94 Ma or slightly older, and that it cooled slowly. High initial 87Srl86Sr ratios and disequilibrium relationships between K-jeldspar phenocrysts and groundmass minerals in the porphyritic phase of the granitic rock , and between different granitic rock specimens, indicate contamination of crystallizing magma by old sialic continental crust which extends westward under the Selwyn Basin.This study is significant to regional tungsten exploration. Granitic rocks associated with tungsten deposits, in this part of the Canadian Cordillera at least, appear to have specific isotope characteristics that indicate they were generated at a specific time and in a particular way.IntroductionThe Clea tungsten skarn property (Fig. I) is owned by Canex Placer Limited, and lies in the Selwyn Mountains (Bostock, 1948) near the eastern margin of the Selwyn Basin (Wheeler and Gabrielse, 1972), Yukon Territory. The property covers a 20-square-mile area centered near latitude 62°47 ' north and longitude 129°52' west, and is accessible by helicopter. An airstrip and the terminus of a summer-use gravel road at MacMillan Pass, Yukon, are about 20 miles to the northnorthwest.This paper deals mainly with the geochronemetry of granitic rocks from a stock associated with tungsten mineralization on the Clea property. We show that these rocks have specific characteristics that not only define the genesis of this stock, but also have significance for regional tungsten exploration around plutons in the Canadian Cordillera."

Jan 1, 1980

By A. Eltringham

Operations downstream of mining and beneficiation are still being subjected to increasing scrutiny as highly capitalized projects have been either slow to achieve their targets or have actually failed to do so. Leaching and smelting projects have fundamentally high calls on capital and technology as reaction rates are increased and the capture and disposal of unwanted products are subjected to greater restrictions. Separating value from waste inherently becomes riskier as the purification of the desired product imposes greater demands on the process to produce benign wastes. When we superimpose on the chemistry of the project severe predictions of throughput rates, that bring in facets of manufacturing, we are introducing complexities that the records show are not handled well. This paper discusses some of the more common challenges that operators face and what methods are available and are likely to be successful in preventing the loss of value as projects are brought on-stream. This thinking needs to start much earlier and at greater intensity than our industry has normally chosen to employ.

Jan 1, 2011

By T. Holmes, J. Middlemiss

"Agnico-Eagle (AE) has been operating their Kittila Mine in Northern Finland since 2008. The mine has experienced considerable ore flow problems with ratholing, bridging and freezing in their mill feed bin since start up. In the first winter of operation, the entire central portion of the contents of the cylindrical flat-bottomed 2000 tonne mill feed bin froze. Flow was erratic and could only be achieved through small diameter ratholes. To maintain a reasonable, albeit limited, feed to the mill, the bin had to be kept less than ½ full and a portable steam generator was brought in to melt the frozen agglomerates that frequently blocked the outlets. The combination of limited surge capacity and frequent outages required the crushing plant to operate 24/7 and resulted in inconsistent production levels and high operating costs.AE had planned to expand the processing plant to increase throughput by about 30% when they transitioned from open pit to underground ore. These plans presented an opportunity to improve the material handling.To avoid the problems experienced with the original mill feed bin, AE enlisted Jenike & Johanson Ltd. (J&J) to test samples of the ore, and based on the measured flow properties to provide design recommendations to ensure that the new mill feed bin would operate reliably. The new 2000 tonne expanded flow mill feed bin and apron feeder were installed in 2014 and are now supplying almost 93% of the total mill feed with the remaining coming from the original bin.IntroductionIn early 2009, AE engaged J&J to visit their then recently opened Kittila mine and mill in Northern Finland (Figure 1). Over the first half-year of operation, production had been restricted in the ore handling and storage system by flow problems such as ratholing, bridging and freezing including blockages of chutes and hoppers as a result of frozen fines buildup and large frozen agglomerates. AE wanted to increase production in the existing open pit mine and mill feed operation and also wanted to avoid similar ore handling problems when they commissioned the new underground mining system under development at that time."

Jan 1, 2017

By Mark Rebagliati, John Payne, Jim Oliver

Abstract-The Campo Morado precious-metal-bearing, volcanogenic massive sulfide deposits occur in a lower Cretaceous, bimodal, calc-alkaline volcanic sequence in a major northerly trending belt in the Guerrero Terrane in northeastern Guerrero, Mexico. During upper Cretaceous to Early Tertiary greenschist-facies regional metamorphism, the rocks were deformed strongly into a northeast-verging fold-and-thrust belt. Three later stages of weak deformation were dominated, respectively, by kink folds, broad warps, and extensional faults. Most deposits occur in the upper part of a sequence of felsic flows and heterolithic volcanoclastic rocks or at its contact with overlying chert and argillite-sandstone. The Reforma and El Rey massive sulfide deposits are on the overturned limb of a major, thrusted anticline, and the Naranjo and El Largo massive sulfide deposits are to the south on the upright limb of the same major fold. The La Lucha and San Rafael massive sulfide occurrences are in an upper plate to the southwest which was thrusted over the plate containing the Naranjo and El Largo deposits. In several of the deposits, Au, Ag, Zn, and Pb are concentrated near the stratigraphic top, and Cu is concentrated near the stratigraphic base. Major minerals are pyrite, quartz, ankerite, sphalerite, chalcopyrite, and galena. Minor minerals are tennantite-freibergite, arsenopyrite, and pyrrhotite. Gold and Ag occur in argentian gold, and Ag also occurs in tennantite-freibergite. The cumulative inferred resource of massive sulfide for the Reforma, Naranjo, El Rey, and El Largo deposits exceeds 30 Mt, with the latter two deposits incompletely delineated. Underlying pyrite-quartz stockwork zones contain chalcopyrite, chlorite, and sphalerite. Hydrothermal alteration minerals in the stratigraphic footwall are pyrite, quartz, chlorite, ferroan dolomite, and ankerite. In the stratigraphic hangingwall, hydrothermal alteration minerals are sericite, calcite-dolomite, and lesser clay minerals and quartz. The deposits belong to a low-sulfidation, volcanogenic massive sulfide system formed in a subaqueous environment, and are of the bimodal, siliciclastic type.

Jan 1, 1997

By Mark Rebagliati, John Payne, Jim Oliver

The Campo Morado precious-metal-bearing, volcanogenic massive sul?de deposits occurin a lower Cretaceous, bimodal, calc-alkaline volcanic sequence in a major northerly trending belt inthe Guerrero Terrane in northeastern Guerrero, Mexico. During upper Cretaceous to Early Tertiary greenschist-facies regional metamorphism, the rocks were deformed strongly into a northeast-verging fold-and-thrust belt. Three later stages of weak deformation were dominated, respectively, by kink folds, broad warps, and extensional faults. Most deposits occur in the upper part of a sequence of felsic ?ows and heterolithic volcanoclastic rocks or at its contact with overlying chert and argillite-sand-stone. The Reforma and El Rey massive sul?de deposits are on the overturned limb of a major, thrusted anticline, and the Naranjo and El Largo massive sul?de deposits are to the south on the upright limb of the same major fold. The La Lucha and San Rafael massive sul?de occurrences are in an upper plate to the southwest which was thrusted over the plate containing the Naranjo and El Largo deposits. In several of the deposits, Au, Ag, Zn, and Pb are concentrated near the stratigraphic top, andCu is concentrated near the stratigraphic base. Major minerals are pyrite, quartz, ankerite, sphalerite,chalcopyrite, and galena. Minor minerals are tennantite-freibergite, arsenopyrite, and pyrrhotite. Goldand Ag occur in argentian gold, and Ag also occurs in tennantite-freibergite. The cumulative inferred resource of massive sul?de for the Reforma, Naranjo, El Rey, and El Largo deposits exceeds 30 Mt, with the latter two deposits incompletely delineated. Underlying pyrite-quartz stockwork zones contain chalcopyrite, chlorite, and sphalerite. Hydrothermal alteration minerals in the stratigraphic foot-wall are pyrite, quartz, chlorite, ferroan dolomite, and ankerite. In the stratigraphic hangingwall, hydrothermal alteration minerals are sericite, calcite-dolomite, and lesser clay minerals and quartz. The deposits belong to a low-sul?dation, volcanogenic massive sul?de system formed in a subaqueous environment, and are of the bimodal, siliciclastic type.

Jan 1, 1997

By T. Y. Chong, J. A. Folinsbee, M. Fullam

PJV Dome Mine has used some form of gravity concentration since start of milling operation in 1909 to recover free milling gold. Amalgamation and conventional jigs were first used and were replaced with the Knelson Concentrators in 1993. The Knelson concentrates produced were upgraded on a conventional shaking table prior to smelting and refining into gold bullion. In May 2002, a comprehensive review of the latest gravity recovery technology led to a piloting campaign aimed at further improving gravity recovery. The Knelson concentrates, subjected to intensive cyanide leaching in an Acacia pilot plant, were found to be amenable to intensive cyanide leaching with over 98% of the gold being dissolved within 24 hours. An Acacia Intensive Leach Reactor was successfully installed and commissioned in December 2002, to replace the shaking table. his paper describes pilot scale testing, installation, commissioning and optimization of the Acacia Intensive Leach Reactor. Also, the economic impacts on down stream processes are highlighted.

Jan 1, 2005

"Horizontal grinding mills have been used in the mining industry for more than a century, and due to their operational and maintenance simplicity they remain a widely used technology for various stages of comminution. The relative ‘efficiency’ of horizontal grinding mills compared to other comminution equipment is often debated, and efforts to improve the energy efficiency of these mills is an on-going area of attention for process engineers.The discharge arrangement design affects the material transport characteristics within a horizontal grinding mill. Material transport plays a significant role on efficiency of horizontal grinding mills. The magnitude of benefits that can be achieved with efficient material transport in AG/SAG mills has been demonstrated in a Greenfield milling operation at Mirabela Mineração’s SantaRita Nickel operation in Brazil. This grinding circuit was commissioned in October 2009, which was designed as a typical SABC circuit to grind 4.6 mtpa (575tph) to produce a P80 of 125um with 10-12% ball charge in SAG mill. The nameplate design capacity has been achieved in few days in ABC circuit without grinding media in SAG mill, and has been operating in ABC mode. The through has gradually increased to an average of 800 tph and recently 7% ball charge has been introduced to increase the throughput to +900tph.This paper investigates improved material transport using Outotec’s TPL™ (Turbo Pulp Lifter) technology and the opportunities this technology presents when designing horizontal grinding mills. Operational data, with particular reference to energy and throughput optimization, is presented."

Jan 1, 2013

By R. Marleau, R. Assad, J. Dugas

"A study of the geological features of known occurrences of mineralization in Gaspe is the basis for a classification. Nickel, chromite, asbestos and some copper are pre-or syn-Taconic, whereas the most important deposits are tied to granitic post-Taconic stocks. Most occurrences are clearly related to igneous rocks: nickel, chromium and asbestos to Ordovician serpentinite; copper to volcanic rocks of different ages; and copper, zinc and lead to acidic intrusions with apparent zoning. Some lead-zinc deposits lying between the Grande Greve and York Lake formations are stratigraphically controlled. Some occurrences are tied to faults; e.g., the nickel-copper mineralization along the North Grand Pabos fault. Northerly-trending transverse structures appear to coincide with the Gaspe Copper, Mount McGerrigle (Tabletop) granite and Lemieux dome areas of mineralization. JEAN DUGAS, after graduating"

Jan 1, 1969

By Charles Camsell

Few persons ever stop to consider how vital an influence minerals, and especially metals, have had upon human history, how they have affected the every-day life of the individual or how at different periods they have altered the course of nations and determined their progress. Students and writers of history have dealt very fully with political history and have given us a great deal of detail about the careers and policies of kings, parliaments and nations, but frequently have not touched the economic causes that have been the real forces influencing the development and carrying out of these policies. So far as minerals are concerned there is no single work from which one can get a concise and consecutive account of the growth in the use of minerals, nor of the diverse ways in which the. geographical distribution, the .search for, the development and the use of mineral resources have affected human progress from the beginning of man's history. The reason for this is quite plain, and when one takes a little time to think of it he begins to appreciate the magnitude of the job and he will realize that the story of minerals and mineral resources touches a tremendous range of human activity, not only of mining .and metallurgy, but the whole field of agricultural and industrial growth, of exploration and colonization, transportation and commerce, monetary system, commercial policy, in short, almost every phase of economic life.

Jan 1, 1926

By André Vien, Pedro Gonzalez, Julio Palomino, Rob Perry

"In many mineral processing plants ore is reclaimed from a stockpile using multiple feeders. The discharge from these feeders is combined onto a single conveyor from which total tonnage is measured. Typically, operators set feeder output ratios to adjust the proportion of total tonnage drawn from each feeder. From a process control perspective, this system is not easy to control because the response time of each feeder depends on the distance from the feeder to the weightometer. This paper proposes a simple and elegant process control strategy to manage feeder ratio changes and the associated long and varying process dead-times. Changes in feeder speed are delayed and filtered to compensate for transport delays between feeders. The strategy was evaluated by simulation and installed on a mill feed system.ResumenEn numerosas plantas procesadoras de minerales, el mineral es extraido desde una pila de almacenamiento usando varios alimentadores. La descarga de estos alimentadores es recibida por zinica correa transportadora, en la cual se mide el tonelaje total. Comzinmente, los operadores colocan un valor determinado en cada controlador de razdn para ajustar la proporcidn del tonelaje total extraido por los alimentadores. Desde el punto de vista del control automatic0 de procesos, este sistema es dijkil de manejar debido a que el tiempo de respuesta de cada alimentador depende de la distancia de este respecto a la ubicacidn del pesdmetro. Este trabajo, propone una estrategia de control, simple y elegante, para compensar los cambios de razdn a cada alimentador y los tiempos muertos del proceso largos y variables. Los cambios en la velocidad de los alimentadores son retardadas y filtradas para compensar los retardos del transporte entre alimentadores. La estrategia fue evaluada por simulacidn, instalada y probada en un sistema de alimentacidn a molino."

Jan 1, 2000

By Brian Hart, Stamen Dimov

"The Time of Flight Secondary Ion Mass Spectrometer (ToF-SIMS) is unique in that it measures the outermost atomic layers of any material. The technique is particularly suited for determining surface chemical composition of mineral particles. It is most commonly used as a diagnostic tool to measure mineral surface chemical variability in plant and bench top flotation separation processes. Recently, research towards understanding the full capability of the instrument has resulted in the development of new diagnostic applications related to various Au extraction technologies and the development of the ToF-SIMS as a predictive tool for assessing the chemical reactivity of the ore.In this paper we will present a brief review of the ToF-SIMS technique with recent advances in instrumentation and methodologies including:•,?recent developments and advances towards a semi-quantitative approach to the evaluation of mineral surface modifiers (ex. Cu),•,?flotation case studies investigating activator, depressant and collector loading variability within a flotation process,•,?the recently developed chemical reactivity test which we believe has the potential to predict the behaviour of minerals in a flotation test in response to chemical transfer during grinding,•,recent applications for determination of surface Au preg-robbed in carbonaceous materials.A portion of this material has been recently presented at the COM 2009 meeting and at SIMS XVII (see Dimov et al 2009 and Hart et al, 2009).INTRODUCTIONIn flotation seperation surface chemistry is the principal determinant for selective separation of the various mineral phases (Ralston, 1994, Smart et al, 2003). Determination of this hydrophobic/hydrophilic balance by particle therefore requires correct identification and selection of the particular mineral phase(s) followed by a statistical analysis of the surface chemical characteristics of the particles with an estimation of the spread of values (Smart et al, 2003)."

Jan 1, 2010

By G. S. Crawford

Forecasts prepared by the B.C. Research Council for the National Harbours Board suggest that mineral shipments through B.C. Lower Mainland port facilities will increase more than four-fold, from 6 to about 25 million tons, during the decade 1965 to 1975. The longer term outlook is for a six-fold increase to about 35 million tons by 1985. In 1967, minerais accounted for more than one-third of the total deep-sea traffic tonnage, nearly as much as grain. By 1975, the minerals' share will be about half the total. The principal items are exports of potash from Saskatchewan, and of coal and sulphur from Alberta and British Columbia. Additional exports include copper and other mineral concentrates and propane. Imports are chiefly salt and phosphate rock. Coastal traffic in such items as cement, sand and grave!, and limestone totalled 3.3 mil-lion tons in 1967. They will continue to be of major importance, but do not have the spectacular growth potential of the deep-sea traffic.

Jan 1, 1968

By Stephen G. Downs

PCF?, or Penetrating Cone Fracture, is a propellant-based technique for rock excavation, which has significant potential for the mechanization of narrow-vein mining. The technique is currently being developed for use in the narrow-vein flat-dipping gold and platinum deposits in South Africa in conjunction with major mining companies. The technique is also applicable to steeply dipping vein deposits, such as those found in North America, Australia and elsewhere. The implementation of PCF? in South Africa to date is reviewed and plans for the introduction of PCF? excavation in other areas are highlighted.

Oct 1, 2001

By Karl J. C. Harries

"12.1. NO DEPRECIATION/GAAPAll calculations and computations relating to the Royalty shall be carried out in accordance with generally accepted accounting principles consistently applied to the extent that such principles are not inconsistent with the provisions of this Schedule and the agreement attached hereto, it being specifically agreed that nothing herein contained shall permit, or be construed to permit, the Operator to deduct any amount for depletion, depreciation, amortization or any deduction that represents a non-cash outlay.Comment: In cases like net profit royalties where recoupment of prior expenditures is permitted, care should be taken to avoid any implication that depreciation may also be taken. It is only logical and equitable that Property Owners should not be permitted an apparent ability to “double dip” with respect to deductions. A provision like this example should accomplish the task. It will be noted that the example specifically contemplates that the negotiated arrangements will prevail over any requirements of GAAP. Accordingly, if the parties agree to an unusual formula for recoupment, it will not be set aside to accommodate GAAP requirements. Under GAAP, revenues and expenditures are accounted for on an accrual basis. In addition, it specifically prohibits the taking of non-cash deductions, which is in keeping with the concept of recoupment.Although in some ways the example states the obvious and could be considered redundant, its presence, especially in provisions contemplating recoupment, makes it clear to the financial people that there may well be some variations from normal practices dictated by GAAP, while at the same time confirming the availability of GAAP to fill any voids.The accounting profession often makes the caveat that application of GAAP is an “art”, not a “science”. GAAP do not provide a cure-all and can create problems that will have to be addressed. For example, GAAP contemplate that asset costs are to be reduced by investment tax credits, which can cause a problem for a payor with more than one mine."

Jan 1, 2003