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By Carl L. Renzoni

INTRODUCTION This paper defines equity as the issuance of a permanent interest in the business on a broadly distributed basis. As such, it excludes the issuance of equity to either a merchant bank or to another corporation. Nearly twenty years ago the equity markets were very simple: The instruments used were primarily common shares, convertible debentures or convertible preferred shares. Another equity-type option often used, especially by junior companies, was the sale of joint venture interests. Issue sizes were generally in the order of $25 - $100 million and issues were syndicated primarily in North America and Europe by one or two investment dealers. Mining corporations today benefit from a market with much more depth. Issues are syndicated by dealers on a truly international basis, and issue sizes now often range up to $300 million. Moreover, dealers are now willing to take significant risk in buying the issues for redistribution. This discussion of trends in equity markets will encompass: 1) common shares 2) warrants to buy common shares 3) convertible debentures 4) commodity backed instruments A review follows of events that affect the mining industry and investment dealers as they have a bearing on the equity markets for the metal producers. FACTORS AFFECTING THE MINING INDUSTRY The current business cycle, up to October 1987, had been characterised by a buoyant stock market and depressed base metal prices. Mining companies entered this period with weak balance sheets and little prospect of cash flows meeting capital needs. The issuance of equity and the sale of assets were used extensively to reduce debt to manageable levels. During this period, the relative high price for gold, and more important, the very high earnings and cash flow multiples afforded to gold producers, caused companies to target gold as the only game in town. The need for capital to acquire and develop gold properties prompted an unprecedented volume of equity issues. (Burns Fry led or co-managed over $1 billion of mining equity issues per year during this period). This high demand for equity capital by the industry prompted an increase in the use of equity instruments, such as commodity backed instruments. In addition, government tax incentive programs in Canada, such as flow-through shares, allowed smaller companies to raise significantly more equity than would otherwise have been possible. Over $1 billion in flow-through equity was raised in 1987 alone. The abundance of flow-through capital in Canada made it easy to form a new company. One flow-through share fund developed a system of providing the working capital required for a company to be eligible to receive flow-through share capital so that an entrepreneur required only a mining property to get started. Many new companies were formed and several flourished in a buoyant stock market environment to the point that market capitalizations grew to $100 million or more. The current period is in stark contrast to that before October 1987. The equity markets are generally available to the resource industry only on a window basis and only for senior companies and for special situations. The industry is benefitting from buoyant metal prices, and bankers are anxious to provide debt capital. Investment dealers previously processing several equity issues

Jan 1, 1990

By M. S. Azun

I do not at all agree with the basic points of the author's conclusion. The use of lognormal or normal model to respond to the attribute distribution function should be carefully questioned. If fitting a distribution function of regionalized variables is the main purpose, one may employ one of certain well-known families of distributions, such as Tukey's lambda functions. For instance, the distribution function of gold assay values studied by Krige (Krige, 1978) may fit the lognormal model well, but one should not exclude that the basic idea of using the distribution function of observed data is to have insight of the physical mechanism that gives rise to the regionalized variables. In Applied Geostatistics, there are many examples considering only lognormal or normal model for the distribution function of geostatistical data even if the observed distribution function has more than one mode. Of course, using lognormal or normal model always brings easy computation for the statistical properties of attribute under investigation. Still, I object to adopting any of those models without having any "statistical inference." As seen from the author's paper, lognormal and normal model produce the same average grade (0.746% copper) and almost the same sample variance. Therefore, which model explains the probabilistic behavior of ore deposit is always an important question that should be replied by the geostatistician using not the common sense but the statistical and probabilistic methods. For kriging procedures, such as linear kriging, one should describe either second order stationary properties or bivariate properties of regionalized variables. Second order properties, such as correlogram function or semivariogram function, are the inputs of the so-called kriging equations. Selecting one of any useable models for the observed second order properties, such as spherical model, is not easy since the models are not based on the correlations structure of the regionalized variables. How those models being used in Applied Geostatistics can be distinguished is another important problem. One may develop many fitting models to respond to the observed second order properties of regionalized variables. However, I suggest that the model should be based on the probabilistic behavior of geologic process. The author used spherical model for copper, wolfram, and silver grades from isotropic sector (Fig. 2, 4, 3b) and exponential model for silver grades obtained along raises in isotropic sector (Fig. 3a). It seems that those semivariograms given in Fig. 3b for isotropic sector and Fig. 4 may be described by the random model implying that regionalized variables do belong to renewal process (Azun, 1983). If I knew the total number of data points used in estimation, may prove that my conclusion is correct. Recalling the test for the first order sample correlogram value, the test procedure is introduced such that the independence is rejected if [Ir(1) I > Za/2 N1/2] where Za/2 is the a/2 percentile of standard normal random variable and N is the total number of samples used in estimation (Azun, 1983). For the other observed semivariogram functions I suggest the author might try to use the so-called "Markovian model" describing not only the correlation structure of regionalized variables, but also the physical mechanism that produces the regionalized variables. The Markovian model for correlogram function is, [p (h) = T 1ih , h>1 ,] The Markovian model for the other second order properties of ReV are also derived. [T veß], in the above equation, show, for example, structural change and mineralizational variation in a considered deposit, respectively (Azun, 1983). In selecting any model, it is not easy to search for the "best" response to the observed second order properties of ReV's. The Markovian model, based on a theoretical understanding of underlying mechanism, gives more information about the occurrence of regionalized variables and respond to all properties. Random model and the so-called hole effect structure can be easily defined as a special form of the Markovian model (Azun, 1983). An estimation of any second order properties of regionalized variables may be computed through (N-1) lag. However, the dependency between the regionalized variables may be deemed to have "died out" after the so-called stationarity width (range). In practice, the estimation is carried out through 25% of the total number samples available. Therefore, the large fluctuations around the zero level and variance for correlogram or covariogram function and semivariogram function, respectively, cannot be observed. Since the number of pairs involved in the estimation of higher second order properties is small, the estimation variance at those lags is large. There is no need to show higher order estimated second order properties. After using one of any kriging procedure for block estimation, the distribution function of average grades has the same mean as the drilling sample grades but

Jan 1, 1986

By M. S. Azun

M.S. Azun I have many objections to the content of the author's paper. Before discussing it, however, I would like to repeat the property of semivariogram function. Second order stationary properties of regionalized variables (ReV's) such as semivariogram function ?(h) are perfectly known in geostatistics. Also, the kriging equations in the language of mathematical statistics using second order stationary properties are well understood. However, the way to use the sample (estimated) semivariogram function in any one of the kriging procedures is vague. The sample semivariogram function is given as follows: [1 N-hy*(h) = 2(N h) i21 {Xi-Xi+h}Z, h=0, 1, N-1] where N is the total number of samples, Xi is the sample value at the i - th location, X i+h is the sample value at the i +h - th location, and h is the distance among the samples. An estimation variance of sample semivariogram function of first lag is smaller than that of higher order lag. The theoretical semivariogram function reaches the variance of samples asymptotically. But this is not easily observable because of the larger variation involved in the estimate of semivariogram function. In general, an estimation procedure is done for h = 0, 1, 2,…., up to the greatest integer less than N/2, even though sample semivariogram function can be computable through N-1. After estimating semivariogram function, the critical question of how to model sample semivariogram function arises. As seen in the above equation, sample semivariogram function is discrete and can be smoothed by the model being selected. Therefore, modeling of sample semivariogram function is the most important step in geostatistics. It not only smoothes a discrete function but also affects the results of the kriging procedure. When the only aim is to model the semivariogram function, which is the basic point of the author's paper, one can employ any fitting techniques, such as curve fitting, or any ar¬bitrary functions, which are called submodels in the paper. The term "arbitrary function" is used rather than "submodel" because there is no basic understanding of developing them. The author suggests that the sum of those submodels can also be used for the modeling of sample semivariogram function. The combination of any arbitrary functions brings many problems instead of giving an insight of the domain structure considered. The author used two arbitrary functions and the nugget effect in response to sample semivariogram function (Fig. 10). For the same example, he stated that the parameters involved in the mixed arbitrary function model can be accepted when the discrepancy between sample semivariogram function and the model is small visually. For verifying the fitting behavior of any selected model, one should not be contented with the visual satisfactory. Some statistical measure such as goodness of fit has to be used. The author's practice is no more than an exercise in curve fitting without any fundamental understanding or conceptualization of the underlying physical mechanism. Furthermore, the selection of any model is not an easy task if the purpose is the search for the "best" response to the observed second order properties of ReV's. I suggest that the Markovian model (Azun, 1983), on the basis of a theoretical understanding of underlying mechanism, which gives more information about the occurrence of regionalized variables, is used to respond all properties of ReV's. There are a lot of problems for modeling of onedimensional sample semivariogram function. Thus, it is not appropriate to go to higher order dimensional sample semivariogram function modeling. In the meantime, I would recommend that one can connect the values of standardized sample semivariogram function rather than simple values of semivariogram function in the two-dimensional estimation. The standardized values can be computed in dividing the semivariogram function value by the number of sample pairs involved in each lag regardless of the directions. In conclusion, geostatistics is an interdisciplinary area in mining that uses the principles of mathematical statistics. Thus, it should not violate any probabilistic and statistical rules. When Matheron was developing the theory of geostatistical study in the early years of geostatistics, many mining people had a reservation accepting the geostatistical tools. However, this does not mean that we, the geostatisticians, might try to convince those people using some "strange" tools or rules as some authors implied (Baafi and Kim, 1984). Instead, we have to develop and explain the geostatistical tools staying only in the framework of statistical concepts and properties. ? References Azun, M.S., 1983, "Stochastic Process Modeling of Spatially Distributed Geostatistical Data," Columbia University, Ph.D. Thesis. Baafi, E.Y., and Kim, Y.C., 1984, "Discussion - Comparison of Different Ore Reserve Estimation Methods Using Conditional Simulation," Mining Engineering, Vol. 36, No. 3, p. 280. Reply by J.M. Rendu The interactive method proposed by Rendu allows practitioners to develop semivariogram models that take into account not only the numerical information obtained by sampling, but also highly significant additional information that often cannot be quantified. The geology of the deposit - including hypotheses concerning its genesis, sampling methods, assaying methods, and mathematical methods used to calculate the semivariograms - all have an influence on the numerical results obtained and on how these results should be interpreted. If all the information concerning the spatial distribution of values in a mineral deposit was contained in the sample values, it could be argued that statistical techniques alone would produce optimum models. However, this is rarely, if ever, the case. Methods that allow the user to take into account his experience and his geologic understanding of the deposit should not be rejected for the sake of theoretical statistical purity. ?

Jan 1, 1986

By D. L. Blakeman, Trimble. J. W., S. W. Banning

Noranda's Grey Eagle mine and mill, in the Siskiyou Mountains of northern California, began shakedown operations in the late fall and early winter of 1982. This paper describes some of the unique features in mineralogy, milling, and water treatment operation at Grey Eagle. In addition, major start-up problems in the mill and water treatment plant are discussed along with measures taken to correct these problems.

Jan 1, 1986

By Dean S. Rogers

The conventional role of exploration, development and grade control is examined in this paper within the context of the many and varied types of gold occurrences which are found at the Dome Mine. The account endeavours to trace the development of the total ore evaluation process, from diamond drilling through the exploration and drifting stage, to the stope development and planning phase of the operation, with an emphasis on sampling techniques and assaying procedure. The concept of ore reserve calculations is developed and the practice of grade control is described. In summary, the role of the geological, the engineering and the mining department is presented in relation to the contribution each has to make in the evaluation and exploitation of ore from one of the world's classic Archean gold deposits.

Jan 1, 1985

By Michael Bradbury

INTRODUCTION A major change in financing exports in recent years has been the decreased importance of subsidized export credits, following the commitment of the OECD countries to eliminate the subsidy element. Subsidized export credit rates are now often more expensive than market rates as the financing for exporters has decreased in volume and importance. The forfait market, in recognition of this decreasing importance, provides a rapidly expanding source of nonrecource finance for exporters. The following is a step by step guide to what it is, how it works, its benefits and problems. WHAT IS FORFAITING? Forfaiting is not new. It has been used in Europe for about 25 years to provide export finance for both capital goods and commodities without recourse to the exporter. Although long the preserve of exporters in Germany, and more lately Italy, forfaiting is now used increasingly by exporters in Great Britain, the United States, Canada and Scandinavia. It is a fairly simple operation with easy straight-forward documentation. The transaction involves the purchase by the forfaiting bank of a bill of exchange or a series of bills without recourse to the exporter. These bills will have been drawn by the exporter, accepted by the importer, and will usually bear the unconditional guarantee of the importer's bank. They are normally drawn payable at intervals during the credit period agreed between importer and exporter and are purchased at a discount by the forfaiter. The exporter thus obtains his cash payment and the importer receives his credit period. The forfaiter collects the amount of the bills as they mature directly from the importer. Credit periods vary, depending upon the type of goods and the country and commercial risk of the importer. The period is generally between one and five years with six monthly maturities. The usual forfait currencies are US dollars. Deutschmarks and Swiss francs and others, such as sterling, French francs, and the Scandinavian currencies are being used more frequently. CHOOSING FORFAITING Most types of financing require the continued involvement of the exporter in the financial side of the transaction during the credit period. Forfaiting has certain comparative advantages. In particular, it is possible to forfait 100 percent of the risk without recourse to the exporter, unlike government sponsored export finance schemes, where some retention of the risk by the exporter is required. In addition, exports from country sources do not present problems and forfaiting can also cover trade within the EEC. Other benefits for the exporter are: (a) The exporter's balance sheet is improved; debts are turned into cash thus improving the liquidity of the company and enhancing its cash flow. And there are no contingent liabilities for bills of exchange. (b) If the sales contract is in a foreign currency forfaiting removes the risk to the exporter of adverse movements in foreign exchange during the credit period. (c) Fluctuations in interest rates during the credit period can be ignored since in forfaiting the transaction is usually done on fixed interest rate terms on a discount basis. (d) The political and transfer risks are taken by the forfaiter. (e) The commercial risk is taken by the forfaiter. (f) The costs of administration and collection etc. during the credit period are removed.

Jan 1, 1985

By J. M. Mutmansky, T. K. Greer

This paper takes a look at the optimal velocity to be used in coal mine entries and determines a statistical relationship for optimal velocity that can be applied under current mining conditions. This relationship provides the optimal velocity for coal mine airways under variations in power cost, mining cost differential, airway friction factor, time value of money, airway lifespan, and quantity of air carried. This enables the ventilation engineer to make an easy, rapid determination of the optimal velocity for planning purposes.

Jan 1, 1985

Jan 1, 1985

By B. S. Taylor, J. D. Fraser, W. L. Chen

Steam coal quality is less stringent than metallurgical coal quality. Steam coal is prepared either by cleaning a full-size range of raw coal or cleaning coarse coal only, leaving the fine coal raw. The latter scheme is more cost competitive. It is particularly applicable to US eastern soft coal where low ash coal is concentrated in fine sizes. For raw coal size separation the Rotating Probability Screen, developed by the British Coal Board, may be used for easy change of raw coal separating size, and to avoid screen deck plugging when handling wet and clayey raw coals.

Jan 1, 1985

By John S. Brock

INTRODUCTION The Oxford Dictionary says that the word "promoter" has usually been used in an opprobrious sense since at least 1876. This popular image of mining promoters is of cigar-chomping shysters and Brooklyn-Bridge vendors, improving their standard of living with the aid of funds raised through the sale of stock to little old ladies. It is unfortunate that mining promoters are considered crooks until they can prove their integrity and honesty by finding a mine. A common rule of thumb states that for every 1,000 prospects, 100 come to be drilled, and one becomes a mine. However, it is also a statistic that there have been mining promotions, where money raised has gone elsewhere than into the ground; Junior exploration companies can be handy vehicles for unscrupulous financial activity. One must remember though that every stock exchange has had its share of sound mining promotions that, because of the one in 1,000 odds, have failed for legitimate reasons. The promoter must be able to rationalize the worth of a mineral discovery which, on an industry- average basis, probably cost more to find than the discounted value of its net return, which return is not an assured percentage of invested capital, and furthermore, is ultimately from a wasting asset. So, it is easy to understand why the promoter must constantly justify the credibility of his operation to his grubstakers during the course of the "five phases of exploration," those being (1) euphoria, (2) disillusionment, (3) search for the guilty, (4) punishment for the innocent, and (5) distinction for the uninvolved. The promoter with the exploration organization that does not have the benefit of positive cash flow, by definition for the sake of this article, works for a promotional outfit, a Junior Company, that must raise its exploration budget from a variety of sources. Promotion, as discussed here, will not entirely refer to the formation and operation of a joint- stock company but rather to the overall methods of raising risk capital for mineral exploration ventures from outside sources. THE NECESSITY OF PROMOTION In Canada, the publicly financed Junior Company has had an enviable record of mine-finding success. In the Province of British Columbia alone, the discovery of fifteen out of twenty-four mines has been as a result of the activity of the Junior Company (B. C. & Yukon Chamber of Mines, 1977). In the Province of Ontario, one research study indicated that between 1951 and 1974 the 'Juniors' spent only 28 percent of the total exploration funds but were responsible for 62 percent of all economic discoveries (Freyman, 1978). The reasons for the success of the Juniors are tied to a variety of factors, the main one being personal initiative based on incentive. In other words, the principals, or their employees have 'a piece of the action.' The smaller companies can operate faster and more efficiently than their larger counterparts. The Junior Company is also destined to take some bigger risks, the 'long shots,' many of which efforts by virtue of the Junior's perseverance coupled with a touch of 'ore is where you find it' philosophy, result in major discoveries. The individuals, syndicates, private and publicly financed Junior Companies, because of high costs of exploration and development, cannot hope to finance most mineral prospects all the way to production. Exceptions do exist, those being the lower capital cost, small, high-grade deposits. Private investors and publicly financed Junior companies, therefore, can usually afford to finance most exploration through the initial drill-testing stage. The major resource company will enter a mining deal with a Junior Company usually by way of option or joint venture agreement, and will finance to production to earn an equity in the prospect or the Junior Company or both. The conventional lending institutions, banks and government agencies, will usually only participate through loaning a portion of capital

Jan 1, 1985

By Willard C. Lacy

Rather than attempting to present a summary of the many and highly varied papers that have been presented at this symposium on sampling and grade control, I will attempt to extract the general philosophy of analysis and approach, and attempt to identify the trend of future developments. First, the term "sampling" is used with its broadest connotations. A sample consists of a representative portion of a larger mass, and must represent the mass not only in the grade of contained metals or minerals, but also in all other respects in terms of mineralogy and mineral quality (1, 5), deleterious materials, recoverability of economic components, physical behavior, geophysical response (I), and even archaeological and environmental aspects (7, 11). The sample must be taken from a locality and in such a manner and quantity that it is representative of the larger rock mass. This calls for complete and accurate geological control and an understanding of the nature and distribution of the contained chemical and physical elements and a record of the effectiveness of the different sampling methods. Second, value of a given mass of ore material is based upon its profitability - the difference between recoverable value and costs to achieve recovery, beneficiation and sale. There is a strong movement in mining geology control toward more complete analysis in determining cutoff grades and in grade control, as illustrated by the kriging of metallurgical recovery factors as well as grade at the Mercur Mine (8). To achieve a "profit- ability factor" as a guide for economic mining practice requires further integration of: 1) the value of contained metal or mineral, 2) percentage recovery of values, 3) dilution of ore with waste rock, 4) addition to, or loss of value as a consequence of by-product materials or deleterious components, 5) cost of producing a saleable product plus mini- mum profit to justify the effort (cutoff), and 6) cost of land restoration (7, 11). All these parameters vary with the rock type, rock structure, mineralogy, depth, geometry, mining and metallurgical methods, but they must be sampled and analyzed if sampling and grade control are to reflect profitability. A wide variety of deposits has been presented at this symposium; each deposit with its own problems and special solutions. Deposits containing high unit-value components, e.g. precious metals and diamonds, present special problems in the obtaining of accurate samples and generally require statistical analysis control methods or may disregard or modify occasional high or occasional low values, based upon experience (12 ) Grade control may be accurate for the long term but may vary for the short term. Bulk sampling is always essential. Deposits containing metals or minerals with low unit value are very sensitive to transport costs, and they are often very sensitive to small amounts of deleterious components or differences in physical or chemical behavior. Problems of sampling and grade control change with the genetic type of deposit, with the stage of deposit development and with the size of the information base. Precious metal epithermal deposits (2, 6, 8), because of rapid vertical zonation and erratic lateral distribution of values, have always been difficult to evaluate and maintain grade control and ore reserves. On the other hand, evaluation and grade control are relatively easy in bulk-low- grade deposits (4, 13). However, these deposits generally have a low margin of profit and are sensitive to mining and beneficiaton costs, price fluctuations and political costs. Industrial mineral deposits (5) often must be evaluated on the basis of their behavior, rather than by chemical analysis. Environmental impact generally increases with the scale of the operation, but certain elements or minerals have especially high impact effects (7, 11). In the exploration phase there is no production control of sampling procedures and careful geological observations are particularly essential. The greatest number of problems is related to the oxidized outcrop where the chemical environment of the ore body has changed and the contained values may have been enriched, depleted or values left unchanged (2, 6). Present evidence suggests that gold values may be very mobile under certain conditions (2, 6) and stable under others. Everything must be sampled in detail. Principal values and by-product or deleterious elements may vary dependent upon their position within the soil profile. Such factors as geomorphic position, erosion rate, vegetation, climate, etc., may affect the interpretation (1, 3). During the development phase it is equally easy to overtest, to have "paralysis by analysis," as to undertest (3, 6). Bulk samplng and testing are

Jan 1, 1985

By Stephen G. Wright

Jan 1, 1985

By Anthony Tuke

Members of the Society of Mining Engineers may well regard it as rather unusual that a paper on this subject is being presented by someone whose first taste of mining came at the age of 60 or so - someone who last heard of cathodes and anodes in 1938. On the other hand, the title does refer to the financing of a mine and at least I can claim to have spent all my business life since the war until 1981 in the world of banking, though this inevitably means that I have been used to looking at these and other problems through what you might regard as the wrong end of the telescope. The lending of money, and more particularly the provision of finance for commerce and industry, is the central job of a banker and I have been involved in this in various ways over many years, but regrettably only very marginally in the world of mining. As you will see from what follows, the rather specialised form of finance which RTZ required was, to my regret, not provided by the British banking community since the great majority of the finance came from American banks and, to a lesser extent, from German banks. I am most indebted to Mr. Roy Wright for a great deal of the nuts and bolts in this paper. He was one of the three central figures in the growth and expansion of RTZ during the 1950's and 1960's and was right at the centre of the negotiations with bankers, with governments and with many others. The going, as you will see, was far from easy. The essential basis for the financing of each of the RTZ group's mining projects was a firm long-term sales contract for sufficient of the output of the particular mine to produce the cash flow necessary to service the loans. Wherever possible, loans were raised in the same currency as the sales contracts were made. Each sales contract was designed to give the customer the product he wanted with a long-term assurance of supply and at the same time to give the bankers the protection they required. Thus the marketing concept and the financing concept for a particular mine formed one overall plan, and talks with the customers and the bankers were conducted in parallel until a satisfactory marketing/financial package was agreed in principle. Preliminary talks were begun soon after the discovery of a potentially viable orebody. As confidence about a discovery increased, customers were persuaded to enter into contingent sales contracts before the very detailed and costly business of the economic and technical feasibility study of the mine was launched; such a study might cost 10% or more of the estimated total capital cost. At the same time provisional understandings were reached with the bankers. The contingent sales contracts usually gave a period of grace of eighteen months to two years, during which time the decision whether or not to continue with the mine had to be made. This decision rested mainly on the result of the feasibility study and also on coming to a firm agreement with the bankers. If all went well and the mine went ahead, then the contingent sales contracts became firm, but they fell away if the decision was negative. The Company was fortunate that during the whole period when its major mines were being developed, world trade was increasing rapidly and Japan was becoming a dominant industrial power. The Japanese supported many of the mines, including Hamersley Iron Ore, Lornex Copper, Bougainville Copper to name a few, with the basic long-term sales contracts that enabled their development. The Germans supported Palabora and to a lesser extent Bougainville. The mines were financed as individual projects generally with a loan/equity ratio of about 65/35, without legal recourse to RTZ for the loans. RTZ was, however, responsible for providing any capital overruns required to bring the mines into commercial operations. Nevertheless, the RTZ management regarded itself as morally responsible to the lenders because, Palabora aside, the sales contracts had either a fixed selling price (like Hamersley), an indexed price (like the Elliot Lake Uranium Mines and Mary Kathleen), or a floor price (as in Lornex, Bougainville and Rossing). Thus the Company believed that any financial failure would have been due to poor management or technical

Jan 1, 1985

By N. R. MacMillan

INTRODUCTION The Bullmoose Coal Project is part of a major development in northeastern British Columbia which comprises a new rail line, a new townsite, powerline, highway, the upgrading of the Canadian National Railway's main line, a new coal port at Prince Rupert and two new coal mines, the Bullmoose mine and the Quintette mine. The total investment by all parties is estimated to be in excess of $2.6 billion and made up approximately as follows : [Table No. 1 $ Millions - Quintette Coal Limited 950 Teck-Bullmoose Coal Inc. 275 Canadian National Railway Company 800 6 British Columbia Railway Company Port at Prince Rupert 280 Townsite, Roads 6- Power ] The new infrastructure is intended to serve not only the Bullmoose and Quintette coal projects but also eventually a number of other coal properties in northeastern British Columbia. The Bullmoose project is structured on a joint venture basis as follows : [Table No. 2 Teck Corporation 51% Lornex Mining Corporation Ltd. 39% Nissho Iwai Coal Development 1 0% (Canada) Ltd. -- 100% ] The mine has a capacity of 2.3 million tonnes of clean coal per year. In the initial years 1.7 million tonnes will be metallurgical coal and 0.6 million tonnes thermal coal. After the first three years of operations the annual production of metallurgical coal will increase to an average of approximately 2.1 million tonnes and the production of thermal coal will decrease to an average of approximately 0.2 million tonnes. At this level of 2.3 million tonnes annual production, the Bullmoose mine has sufficient reserves for at least 26 years of production. History Brameda Resources Ltd. commenced coal exploration in the Bullmoose-Sukunka area in 1969. Teck obtained an option on the Bullmoose coal licences in 1970 and started surface exploration and diamond drilling in 1971. Teck earned a 50% interest in the property, and thereafter expenses were jointly financed by Teck and Brameda. In 1981 Brameda merged with Teck making Teck the sole owner. The initial phase of the exploration program, which was completed in 1975, included 7,200 meters of diamond drilling in 35 holes. During 1976 and 1977, detailed exploration and test work were carried out on the South Fork and West Fork areas where multiple seams close to surfaces indicated the potential for large tonnages of strippable coal. In those two years, work included road construction, detailed mapping and trenching to outline the coal seam traces at the surface, 6,300 meters of diamond drilling in 80 holes, and 300 meters of underground bulk sampling from seven adits. Washability tests and analysis work were carried out on the drill cores and adit samples, and pilot plant washability studies were undertaken. In 1978 and 1979 Teck engineers prepared open pit mining plans and production schedules and Kaiser Engineering was retained to prepare a layout of the plant preparation facility. A feasibility study prepared by Teck's engineering group in January 1982 was the base document used by the Lenders in assessing the technical and economic viability of the project. Property Location The property lies some 650 kilometers northeast of Vancouver, and 87 kilometers south by road from the village of Chetwynd. The Sukunka property (British Petroleum) adjoins to the north, the Mount Spieker property (Ranger Oil Option) adjoins to the east, and the Quintette property is located to the southeast.

Jan 1, 1985

By Robert T. DeGavre

INTRODUCTION The $645 million financing for Inco Ltd's Soroako nickel project in Indonesia not only represents a significant human achievement but also there are certain important lessons that can be derived from Inco's experience in financing the project. The paper will not present a technical assessment of the project since Inco Ltd. submitted a series of papers on this subject at the international Laterite Symposium as part of the 108th Annual Meeting of the AIME in February 1979. BRIEF HISTORY OF THE SOROAKO PROJECT Table 1 summarizes the milestones achieved in the Soroako project and its financing. Exploration Phase A contract of Work was signed on July 27, 1968 by the Republic of Indonesia and F.T. International Nickel Indonesia (P.T. Inco) covering an extensive area of over 25,000 square miles on the two southeastern arms of the island of Sulawesi. The Contract provides that P.T. Inco has the sole responsibility for financing the project and determining the terms on which the financing should be obtained, that P.T. Inco has the right to receive and hold outside of Indonesia foreign exchange revenues and to freely dispose of such revenues, and that Indonesians have the right to purchase up to 20% of the equity of P.T. Inco over a period following start of production. P.T. Inco began field investigations in the Contract Area in August 1968. Preliminary reconnaissance sampling with portable drills broadly outlined areas of favorable laterite terrain which were then systematically sampled on surveyed grids. By early 1971 sufficient exploration work had been completed to indicate that the laterite deposits near Soroako could sustain a major nickel-producing plant (figure 1). Pilot plant studies in 1970 and 1971 at Inco's research station in Port Colborne, Ontario, using two bulk samples of Soroako ore material, also confirmed that the ore could be upgraded and treated for the recovery of its metal values. Feasibility Phase Encouraged by the results of its exploration program and pilot-plant work, Inco Ltd. commissioned Toyo Engineering Company of Japan in August 1971 to prepare a capital cost estimate for a relatively small nickel project called "Stage I". Stage I was to be a single-line pyrometallurqical process plant with an annual capacity of approximately 15,000 metric tons of nickel contained in 75% nickel sulphide matte (see Figure 2). Electric power was to be supplied by a thermal power station. It is important to recognize that Inco's strategy was to develop the Soroako ore deposits in several stages: first, construct a small project to gain experience and to reduce the initial capital outlay and then later expand in one or more steps to a much larger project to achieve maximum economies. The strategy reflected both Inco's financial position in 1971 as its sales and earning dropped sharply and the difficulties previously experienced by Inco in trying to launch in the late 1960's very large "greenfield" nickel projects in New Caledonia and Guatemala. Toyo's Project Development Study was completed. in January 1972. Based upon Toyo's cost estimate for physical facilities, Inco estimated the total capital cost of Stage I to be $115 million. For the next several months, Inco ran numerous in-house financial feasibility studies, using as inputs Toyo's cost estimate and the results of its exploration and pilot plant programs. In September 1972, Inco completed a project feasibility study which was based upon a capital cost estimate of $135 million. The feasibility study was immediately made available to potential partners and lenders. Partner Negotiations The Japanese nickel market had from the outset been central to Inco's planning for the Soroako project. That market had been growing dramatically at rates in excess of 20% per annum during the 1950's and 1960's. Japan had established, for rational security and other reasons, a domestic

Jan 1, 1985

By T. W. Turk, S. A. Sass

The engineering design features of the Mercur Gold Project crushing, grinding, carbon-in-leach, bullion, reagent, and tailings disposal areas will be discussed in this paper. It presents a project overview and flowsheet along with selected design alternatives. During the engineering phase, major equipment and other features were selected to optimize design within site location and environmental constraints. The project team organization and procedures were adopted to accommodate multiple optimization studies while maintaining a tight engineering schedule.

Jan 1, 1985

By L. J. Cabri

The calculation of metallurgical balances for precious metals is very dependent on a precise mineralogical understanding of the distribution of each element. Determination whether the precious metals occur as dilute solid solutions in major minerals is not always easy because of the relatively high levels of detection (9200-500 ppm) of the precious metals by the most common methods of in-situ analysis (e.g. electron microprobe). Particle Induced X-ray Emission (PIXE) analysis of sulfides from Izok Lake, N.W.T., Canada and from the Hilton mine, Mount Isa, Australia with a proton beam (proton microprobe) confirms solid solution of Ag in chalcopyrite from both deposits. In addition, chalcopyrite and sphalerite from Izok Lake both contain indium.

Jan 1, 1984

By S. C. Dhara

A process of solvent extraction and separation of platinum group metals (PGM) and gold using primary, secondary, tertiary, and quarternary organic amines has been briefly described. The effects of amine structures; the use of diluents; the principle of synergism and antisynergism in the mixed extractants; the oxidation states of metal ions are explained in the amine extraction process of precious metals.

Jan 1, 1984

By G. Hasenfus, M. Karmis, G. Goodman

Surf ace subsidence is rapidly becoming an important environmental consideration of active as well as abandoned mining operations. The damages attributed to this phenomenon have been witnessed in both rural and urban areas and include land settlement and fracturing, structural damages to surface buildings or facilities and disruption or contamination of ground water supplies. The problem of mining subsidence has gained considerable emphasis in the Appalachian coalfield. The increased mining activity over the past few years and the particular topographic conditions, lithologic and structural environment, mining methods and hydrological patterns are all factors which have contributed to specific subsidence characteristics in this region. The objective of this paper is to discuss and review the most widely accepted methods of subsidence prediction above longwall as well as partial extraction systems in Appalachia. These include an accurate and easy to apply empirical method, which has been developed entirely from field information pertaining to the Appalachian coalfield and incorporates both geometrical and geological information of the panel in question. The second method is a development of influence functions and is founded on the zone area approach. Both methods, originally derived for longwall mining, have been expanded to include room and pillar applications and have been widely used by the mining industry in the Appalachian coalfield.

Jan 1, 1984

By Mahesh C. Jha

Arsenical gold ores occur in many parts of the world, including numerous mines in Canada and the western United States. Free gold is often finely disseminated in the grains of sulfide minerals, arsenopyrite, pyrite, orpiment and realgar. Generally a sulfide concentrate is produced by flotation. Arsenical ores or concentrates are not amenable to direct cyanidation and therefore are considered refractory. A wide variety of roasting equipment and conditions have been used by the mills to remove arsenic and sulfur from these concentrates. The resulting calcine is easy to cyanide and gold is recovered from the cyanide solution by zinc dust cementation. Room-temperature potential-pH diagrams and high-temperature phasestability diagrams are presented to discuss the chemistry of the gold cyanidation, cementation, and roasting steps in the presence of arsenic. The environmental aspects of arsenic discharge are also included.

Jan 1, 1984