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By Thomas V. Fame, William E. Porter

"As geological and mining conditions become more complex, and as overall mining economics become more marginal, short- and long-range decision-making regarding multiple-seam surface mining becomes more difficult. The decision-making problem involves a study of economics, cut-off grades and ratios, equipment capabilities, sequencing and selective mining practices.This paper is concerned primarily with multiple-seam mining of bituminous coal. The research has led to the development of an economic decision-making model for use as a day-to-day tool to aid mine operators and pit geologists to decide what and how to mine.The model is designed as an aid for feasibility decision-making in multiple-scam situations and for situations where selective mining is needed or desired. In effect, a simulation of the feasibility and preliminary mine planning phases has been developed. The model is divided into four separate segments: decision-making, simulated mining, cost calculations and the determination of the discounted cash flow return on investment."

Jan 1, 2014

By W. A. Forbes

OUR present-day geological surveys show that 36 of our States are underlain with bituminous coal, covering a total area of 496,709 square miles. The North American continent possesses 69 per cent of the world's coal reserves, with the United States alone having an estimated 55 per cent. The American coal reserves, in tons, are calculated to he about 3,500,000,000,000 tons, of which we have exhausted about 1 to 1 1/2 per cent. If this coal were mined at the rate of the 1918 production-a record output of 579;000,000 tons-it would not be depleted for 4,000 years. The more easily accessible and high-grade coals would obviously be consumed much before this; some estimates are 100 years. The natural progress of the nation's industries up to 1910 encouraged on every hand the development of new mines, especially where cheap and easy access to coal measures was coupled with short hauls to the consumer. Over-development resulted, which is perhaps today one of the fundamental causes for the many difficulties faced by the coal industry, which is highly competitive; about 70 per cent of the production cost is labor. Salient statistics for 1930, recently issued by the U. S. Bureau of Mines, follow:

Jan 1, 1932

Economic Sustainable Power for Mineral Processing

Sep 13, 2010

By Joseph E. Pogue

NEW economic forces are at work in the petroleum industry.. In order to visualize these forces and clearly see their bearing on the producer, refiner and marketer, it is necessary to see in perspective the economic evolution of the business. For several decades prior to 1913 the outstanding feature of the petroleum industry was a trend toward integration, culminating in a huge combine, the Standard Oil Co. An important aspect of this integrative trend, however, was its concentration on the combination aid control of refining and marketing, leaving crude oil production, for the most part, to the exigencies. of small-unit competition. It is a noteworthy coincidence that during this era the law of oil and gas was formulated and applied, whereby these substances had to be reduced to possession to establish ownership; and the forces of competition in crude oil production were thereby intensified. It was to the interest of an industry, safeguarded in its control of manufacturing and markets, to have supply stimulated by legal convention as well as by individual initiative in order that the growing demand could be met without interruption. And so over-production of crude oil during this era was no handicap, but rather an aid, to the progress of the industry.

Jan 1, 1929

By Bedrand L. Johnson

THE phosphate-rock industry is built upon natural deposits of rocks and minerals in which the element phosphorus is present as a phoshate. The term ?phosphate rock? is a general one, applied to certain rocks of different degrees of consolidation and of diverese origin, charater and occurrence, composed of intimate mixtures of several phosphate minerals, largely submicrocrystalline, usually calcium phosphates, in commerical quantities, with various impurities. This term includes phosphatized limestones, sandstone, shales, and igneous rocks; nodular phosphates ; residual weathered phosphatic limestones ; vein phosphates ; and phosphatic sediments, both consolidated and unconsolidated.

Jan 1, 1944

By Sean Cassady, Jason Liu, Sanja Zlatanic, Taehyun Moon, Chris Devery

"For the Hollywood International Airport Runway Expansion Project at Fort Lauderdale, Florida, the structural fire durability analysis was completed for a series of tunnels formed by roadway and railroad cells located under the runway structure. A systematic design approach was developed to mitigate structural damage during a fire event and arrive at a practical method to structural fire engineering that is compliant to NFPA 502. To ensure the NFPA 502 requirements are satisfied, the performance based approach was implemented and the engineering analyses were performed for the adopted design fire event. The analyses considered the facility’s unique features including its fire safety systems to determine applicable design fire curves for structural durability analyses. The paper also outlines the process of defining the project specific fire curves for a specific design fire scenario and summarizes the results of heat transfer and structural fire durability analyses. This approach was aimed to assist the owner and Authority Having Jurisdiction to achieve practical decisions to the tunnel facility fireproofing.INTRODUCTIONFort Lauderdale–Hollywood International Airport (FLL) in Broward County, Florida is a major hub facility serving more than 23 million passengers annually. As part of the Airport Expansion Program, the South Runway (9R-27L) Expansion project aimed to meet ever increasing service demands via an increase to runway lengths. This necessitated the placement of one of the reconstructed runways on bridge structures over the existing U.S. Route 1 (US 1), a major north–south U.S. Highway that serves the East Coast of the United States, and the Florida East Coast (FEC) Railway, thus effectively creating multiple tunnel cells beneath the subject runway. For this project, HNTB suggested a tunnel fire damage mitigation system that would protect the runway major structural elements from the design fire event that may happen within the tunnel cells. This paper addresses the issues related to the fire event originating within the tunnel encompassing the US1 highway only, and deals with requirements of NFPA 502 [5] exclusively. Therefore, while approaching the structural fire protection issues for the specific tunnel cells beneath the runway structure, the requirements of the American National Standard NFPA 502 (Standard for Road Tunnels, Bridges, and Other Limited Access Highways, 2008 edition) were followed. Per this standard, regardless of tunnel length, all primary structural concrete and steel elements shall be protected in order to:"

Jan 1, 2016

By Seppo Lähteenmäki, Pertti Koivistoinen, Jaakko Levanaho

"This paper describes the benefits and disadvantages of fully autogenous grinding when compared to grinding with steel grinding media. The study is a real case study based on a low tonnage, high grade mining project in a remote location in a developing country. The study compares the capital and operating costs of using either SAG mill, Ball mill, Crusher (SABC) or fully autogenous (AG) grinding circuits and produces an economical analysis of the project for both options. The economics have been developed for the overall project, including mining, processing, environmental and the infrastructure as well as for the additional cost of constructing a fully autogenous grinding circuit instead of the original plan of a SAG Mill, Ball Mill circuit.The paper also describes the development of the autogenous grinding circuit at Outokumpu Oy, Pyhäsalmi mine. This experience was used to design the autogenous grinding circuit for the case study. Pyhäsalmi Concentrator has over 30 years of experience in operating autogenous grinding circuits and therefore provides a sound base for the new circuit design.INTRODUCTIONGrinding of ore using steel grinding media is currently the most commonly used method in the mining industry. Autogenous grinding, ore replaces iron media, is also common especially in Europe and Africa. Iron ore industry in North America uses autogenous grinding in primary and/or secondary stages extensively. In gold, copper and other base metal industries, autogenous grinding is not as common, although there are operations where pebble grinding is or has been used in the secondary grinding stage. There are many variations of autogenous grinding in use in the mining industry. These variations include different mill sizes, mill length to diameter ratios, ore lump sizes, screening and pebble crushing configurations."

Jan 1, 2000

By C. L. HUNTZINGER

THE mine here described is in the Witbank district, a coal area of the Transvaal, about 100 miles north- east of Johannesburg. and is owned by the Witbank Colliery, Ltd. The plant has a capacity of 4000 tons per eight hours, and prepares five sizes of coal. The coal seam lies at a depth of about 200 ft. below the surface, and is reached by an inclined shaft sunk at an angle of 18° with the horizontal. Although the thickness of the coal seam varies from 10 to 14 ft. or more, only about a 7-ft. bench is mined. Mining is by the hord and pillar system. Bords are driven 18 ft. wide, with pillars measuring 18 ft. square. The mine is laid out into four sections, each sewed by a main haulage way from the shaft. Arc-wall machines are used for cutting the coal. but all loading is done by hand. Native labor is employed under the supervision of white miners, who do the required blasting. The workings are practically free from gas and water, and very little timber is needed.

Jan 1, 1931

By Pfeifer H. C, Nicacio P. A D

Sinter has been used as part of the metallic charge in large-scale blast furnaces for many years with the well-known benefits in terms of productivity and fuel consumption. However, because of the high investment in a conventional sinter plant, small blast furnaces and the associated integrated mini steel plants have not taken the advantages of using sinter. Recently KTS Korf Tecnologia Siderurgica, a division of Mannesmann Demag Ltda in Brazil, has developed a mini sinter plant for which the investment is compatible with small blast furnaces. Consequently, it is of great interest to evaluate the economical impact of using sinter in such small-scale integrated steel plants. In order to compare two alternatives, ie 100 per cent ore and 70 per cent sinter in the blast furnace burden, mass and heat balances for the entire operation from sinter plant through the blast furnace and EOF-based melting shop, were performed to evaluate the final production cost of the liquid steel. It was found that, depending on the sinter feed price, substantial savings can be obtained with the use of sinter.

Jan 1, 1999

By Victor Azbe

Introduction Lime enters our daily life in many ways. Our building, chemical, agricultural, sanitary, and industrial endeavours depend on it to such a great extent that it could probably be called the most important inorganic chemical, and the extent to which it is used might be considered an index of industrial development. Industrial limes vary greatly in quality, due to internal structure and other characteristics. They may be good or bad, sensitive or slow to react. While improper manufacture may not greatly alter the appearance of the lime, it may affect its properties considerably and thus its suitability in the many processes in which lime is used. In some of the processes, one kind of lime is wanted, in others another. While the nature of the stone from which it is made has much to do with whether a lime is suitable or not, its burning and hydration are the crux of the matter. Up to not so many years ago, the knowledge of lime burning was rather imperfect and it is only relatively recently that its manufacture is approaching the state of a higher industrial art. This slow development was in part due to lime manufacture being scattered among many small concerns who, independently, either lacked the inclination or could not afford to strive for a higher technical development.

Jan 1, 1946

By Victor Azbe

Azbe System of Controlled Calcination To obtain good and cheap lime there are certain fundamental requirements that need to be satisfied. These are : (1) Proper combustion of fuel and steady supply of heat to the kiln. (2) Proper heat distribution in the kiln. (3) Uniform drawing of lime through the several shaft sections. (4) Complete cooling of the lime and recovery of the heat. (5) Temperature control of the hot zone by economical means. (6) Ample draft to obtain high capacity. (7) Arrangements to facilitate operation. Figure 17 shows diagrammatically one of the smaller kilns, intended for large stone. Such a kiln can be supplied with gas from a centrally located automatic gas producer, or, as shown, from an integral producer located snugly against the kiln. These producers make very good gas and have a gasification capacity of either 10 or 15 tons of coal a day. The producers have water-sealed ash pits, a rather thick fuel bed that is conducive to the making of high-CO gas, and are under forced draft. No steam is used. Clinkering is prevented by admixing some spent gas from the kiln with the air. Coal feeding is from a coal bunker through spouts into the hoppers over the producer. This is done, at proper intervals, by manual operation of slides, but it is planned to install mechanical feeders. Central mechanical gas producers have the advantage of requiring little labour, but the blowing of soot is a problem, as also is the proper distribution of the gas among several kilns. In the case of integral gas producers, soot from the centre burner is blown back into the producer to be burned, and the supply of gas to the kiln is controlled by regulation of air to the producer. In large plants, the mechanical producer may be preferable, but in small ones, the integral producer is cheaper, better, and more reliable. The kiln shown in Figure 17 is suitable for both systems of gas supply. It will be noticed that there are no side gas burners. All gas enters the kiln through the centre burner in a manner that permits any desired amount of gas to be directed to any of the kiln sections by the aid of regulating slides.

Jan 1, 1946

Develop a simple and economical technique for determining the absolute stresses and the change of stress on the surface of roofs, floors, or walls in miners. Approach Use a commercially-available, permissible, Whittemore-type gage to determine the stress at the surface of a mine opening and to monitor any stress changes that might take place. How It Works The following equipment is used: ? One steel templet (for laying out a 60° rosette on the: rock surface). See first photograph. ? One 3/8-inch rock drill bit for drilling holes for the rosette pins. ? Six stainless-steel rosette pins. ? One Whittemore-type mechanical strain gage. ? One drill (not shown). ? Epoxy for cementing the rosette pins. ? Tape to hold the pins while the epoxy sets. The following procedure is used to determine the absolute stress on the rock surface. 1) Spot the location of the rosette pins with the templet. 2) Drill the pin holes and set the pins with epoxy cement. 3) Measure and record the distance between the pins across three diameters of the rosette with a 10-inch Whittemore-type gage. See diagram. 4) Drill a 1 1/2-inch diameter hole in the center of the

Jan 1, 1981

By D. Mohan

Soft to medium dense silty and clayey soils are found in many parts of India and conventional friction piles have normally been used for foundations of high rise buildings and other structures on such soils. The author investigated the use of Bored Compaction Piles and these have been used on these soils achieving substantial economies in cost over conventional friction piles. Similarly highly expansive clays, commonly known as Indian Black Cotton Soils occupy about 20 percent of the Indian land area. Short bored underreamed piles have been developed for such soils and a very large construction of various types of buildings and other structures have come up on such piles over the last thirty years in various parts of the country. The paper describes investigations leading to the design and development of both these type of foundations.

Jan 1, 1989

By Peter Broad

"Extracting any metal, especially specialty metals and rare earth elements, requires an in-depth analysis of the costs and potential revenue as well as a due diligence study of other stakeholder interests. Rare earth projects are generally in the billion dollar US range or above, and thus failure to accurately predict any loss of revenue caused by impurities within the product or additional effluent treatment costs can destroy an otherwise viable study. Two prime sources of input impurity are considered: impurities in the material feed and from reagents. The effect of these impurities factor on both the product (in reduced revenue) and on residual “tailings” that may incur additional unforeseen costs.INTRODUCTION“Truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident” – Arthur SchopenhauerThe era of unscoped, unbudgeted construction ended about 150 years ago. Today’s engineer must design with confidence; but do so amidst proprietary secrets and unfamiliar pollutants, which present a myriad of interesting challenges. Is it possible to build a viable rare earth plant to a realistic budget, without destroying that which we cherish? Some see this as contradictory but in reality it is the only viable option.WHEN GOOD PROJECTS FAILWithout rare earths the Copenhagen agreement might be null and void. Running a wind turbine with a 30 tonne conventional magnet requires some hefty engineering and prohibitive investment. Despite their ‘Green metal’ applications, production of rare earths have created environmental nightmares, as Folger stated in 2011 when visiting Baotou, or has Jaing Mainheng who has been quoted by Ambrose Evans-Pritchard 6 Jan 2013. This comment is not a criticism of China; the details are from a 2012 white paper published by the Chinese Government that initiated a $6 billion environmental clean-up. Nor is China unique; other plants have had problems as well. There were toxic leaks in the 1990s from Mountain Pass, and the Mitsubishi Bukit Merah Plant (built in Malaysia in 1958) required a $100 million clean-up."

Jan 1, 2016

By Ellsworth Daggett

THE ore smelted in the Winnamuck furnace during the year 1872 consisted, for the most part, of oxidized ores from the Winnamuck mine, only sixty tons of outside ore (from the Spanish mine) having been smelted. The latter, like the principal Winnamuck ore, was oxidized or so-called carbonate ore. There was mixed with these oxidized ores three hundred to four hundred tons, or 7 to 10 per cent. of galena, some of which was mined with the oxidized ore, while a part was mined separately from the lower portion of the mine, and afterwards mixed with the ore, with a view of preventing the formation of deposits of metallic iron in the furnaces. The average assay in silver of all the ore handled was 51.46 oz. per ton, most of it existing as chloride of silver. The lead contents were 34.98 per cent., all, or nearly all, in the form of carbonate of lead. The relative amount of silver is not at all constant, the best silver ore often being poorest in lead. The predominant gangue was silica, several determinations of which have been made on representative samples, yielding in three such samples 26, 38, and 58 per cent. silica, the latter test being ore containing but little lead. The average contents in silica are about 35 per cent., with 6 to 7 per cent. sesquioxide of iron, and small quantities of alumina and lime. Mechanically, the ore was very fine, and so thoroughly disintegrated that it presented few distin¬guishing characteristics, rendering sorting or separating of ore from waste difficult, and often impracticable. Experiments on a small scale have been tried, with a view to separate the silica by washing; but these were unsuccessful, as the finest slime, requiring a long time to settle in still water, contained a large amount of silver; and on a careful sizing and washing of the sands and coarser parts, the silver contents were found to be less dependent upon specific gravity

Jan 1, 1874

By Bell I. F

In 1985, ZC Mines (now Pasminco South) had been unprofitable for some years due to a combination of high operating costs, low metal prices, low head grade and an aging and inadequate mining infrastructure. However, the resource of metal in the ground was still of world class, even after some 80 years of mining. A major study, which was to be of two years duration, was therefore commenced to establish a practical and profitable long term mining strategy and to cost the infrastructure options needed for its support and thus form the justification for a capital expenditure program to take the mine profitably into the 21st century and its second century of operation. This paper discusses the rationale behind the methodology adopted and the nature of the results achieved in one aspect of the study - the determination of the mineable resource and the relationship between the head grade/quantity of the economically mineable resource and the variables of cut-off grade, cost structure, annual production rate and metal prices/exchange rates. The basis of the study was the designing of some 5000 scopes to mine out the entire resource for a range of cut- off grades and the assembly of the detailed physical data thus obtained in a stope-by-stope data base for financial and other analysis. Those scopes which were shown to be economically mineable were then scheduled for two optimum annual production/cut-off grade/metal price combinations to provide life-of-mine cost and value of production cash flows.

Jan 1, 1992

By Sidney A. Swensrud

About a year ago, I attempted in a general way to trace the origin and development of some of the marketing problems of the petroleum industry, and to describe certain trends which it then seemed possible to foresee. To summarize briefly, it was pointed out that the consumption of gasoline, after increasing for more than a decade at an almost unbelievable rate, was slowing down, but that the two factors which determine the supply of gasoline —-namely, the production of crude oil and the percentage of gasoline derived therefrom—were tending steadily to mount. It was suggested that, while the increase in gasoline outlets began with and probably was justified at the start by the rapidly increasing demand, long after all reasonable requirements as to number of outlets had been met the number continued to increase—if anything, at a still more rapid rate—because by that time the overproduction of crude had begun to exert an impelling urge upon the owners of that crude to seek assured outlets for it in the form of gasoline. As more and more companies became integrated all the way from crude oil to marketing, there took place an ever-increasing competition among them, not only for the existing outlets but for new ones. The wide margin between wholesale cost and retail price, which is characteristic of the early stages of most new industries, persisted in the oil industry longer than in most industries, for various reasons. The existence of that wide margin provided in large measure the means of attracting new outlets, for as the gallonage per outlet declined with the increasing number of outlets, competing companies simply offered the dealers a larger part of the total margin. The very nature of competition suggests that such a process would continue until practically all of the available margin was thus given away, and such was clearly the tendency. It was a system that in turn produced increasing marketing expense per gallon on account of the diluted gallonage per outlet; this increased expense might seem to have provided a justification for continuing wide margins. Economics, like its parent, nature, however, progresses by mutations and so began to throw out new types of marketers, in the form of tank-car service stations, cut-price jobbers, and the like—heretics or

Jan 1, 1932

By H. J. Struth

In these trying times of proration and low oil prices, it is decidedly necessary for all branches of the petroleum industry to accord full recognition to the economic phenomena that contribute to its varying state of welfare. Perhaps no other single factor has a more important bearing upon the general oil situation than the supply and demand of gasoline. Year after year, the records have shown that the degree of prosperity or depression accompanying the industry's developments has been to a large extent influenced by the degree of balance maintamed between the supply and demand of gasoline. More and more it is being realized within the industry that equilibrium between the supply and demand of gasoline forms the basic structure of crude and product market values and, consequently, the deciding factor in the financial results of the industry as a whole. The influence of the gasoline situation upon the market and financial structure of the petroleum industry was effectively demonstrated during 1930, when excess accumulation of gasoline undermined not only the refined oil market but the crude market as well. In fact, it was a top-heavy gasoline situation that defeated the realization of benefits that might have accrued from an otherwise favorable statistical position in the producing branch of the industry. Indicative of this is the fact that crude oil production was curtailed to the extent of 98,323,000 bbl. last year, while refinery runs to stills were maintained at an excessive rate until late in the year, creating an excess gasoline production of 6,663,000 bbl. above actual requirements. Nevertheless, the movement to curtail refinery operations during the closing months of the year prevented a far worse situation, although it came too late to turn the ebbing momentum of the general oil market. Despite the severe depression of the market values that accompanied 1930 developments, it can be said that the results attained during the closing months of the year, in the direction of production control, marked a decisive turn in the industry's economic affairs. In fact, a review of the oil situation from every angle points definitely to a better general understanding and recognition of the workings of the economic law of supply and demand. As a result, the year closed with crude production in

Jan 1, 1931

By A. B. Bowman

The 1963 Jackling Award lecturer describes the founding of Banner Mining Co. and its trials and tribulations before becoming an established firm. Such aspects as geological description of Banner mining areas, history of exploration and production, areas of present interest to the company and research work conducted by the company are included. Several years ago a wealthy Chinese business friend of mine purchased an interest in a proposed oil well to be drilled a great distance from his home. A few months later it came in as a producer and proved to be a huge success and materially added to his resources. I asked him why a man of his wealth should be so lucky in a venture outside his sphere of knowledge when most people of modest means never seemed to get ahead. His answer was, "Fat Hoy takes a chance." Even though this was his answer, I knew from my association with him that there were other tempering considerations which Mr. Hoy applied before making up his mind to enter any transaction. First, he was a cautious individual. He was also a great believer in details and insisted on knowing everything possible about a situation, and finally, he was what we call a very solid individual with good basic instincts and judgment. This philosophy of Mr. Hoy may be applied to most any business but especially to those engaged in a search for natural resources such as mining where great risks are involved. This article concerns events in the history and growth of Banner Mining Co., with which I have been associated for 27 years in capacities from mine surveyor to vice president. Mr. Hoy's philosophy has played a significant role in the exploration projects of this company over the years, but what is more important, the officers, directors, and controlling interests in Banner have been aggressive in their search for ore reserves. THE BIRTH OF BANNER Banner Mining Company was incorporated in September 1935 by a group of Oklahoma and Texas oil men for the purpose of exploring and developing the Bonney-Manilla mines at Lordsburg, N.M. These properties had a history of intermittent production since the first ore discoveries as far back as 1870. Most of the production from the district has come from four mines, namely, the Eighty-Five, the Atwood, the Bonney-Manilla, and the Misers Chest. The last two are now owned by Banner Mining. The Eighty-Five mine operated between 1885 and 1931, and production totalled 1,494,287 tons averaging 0.11 oz of gold per ton, 1.23 oz of silver per ton, and 2.80% copper. The vein extended for a distance of about 3000 ft northeast and was mined to a depth of 1650 ft. The Atwood mine, adjoining the Eighty-Five mine, to date has been of lesser importance as a producer, but it has been operating for several years producing high silica flux ores for a smelter. Production totalled 352,828 tons up to January 1, 1962 From the Bonney-Manilla and Misers Chest mines, owned by Banner, production through 1961 totalled 2,006,343 tons with an average grade as mined of 0.0192 oz of gold per ton, 0.760 oz of silver per ton and 2.63% copper. Banner built a 150-tpd flotation mill in 1936 after almost a year of development on the 600 level of the Bonney mine. After less than one year's operation, it became apparent that the 150-tpd rate was not sufficient to make a reasonable profit due to the marginal grade ores. The low tenor of the ore, mainly chalco-pyrite in a highly siliceous gangue, made mandatory the close control of costs in order to make ends meet. A 300-tpd unit was added to the mill in 1937, and it is still the operating unit today. The clean sulfides presented no problems in milling. A metallurgist doing research on it at the time stated that the copper minerals seemed to have a built-in desire to float. Mill recovery of copper throughout the 27 years of operation has averaged 96.23%. A PERIOD OF FORCED GROWTH World War II brought many hardships to Banner. Labor and supply shortages caused drastic curtailment in development work. Rapidly rising costs far outdistanced any relief from pegged prices which we received from Government agencies. Finally, a branch of the Government asked us to stop all devel-

Jan 1, 1963

By L. D. Clark

Pay-out, the ratio of capital expenditure to annual cash return can be very revealing when employed to gage the merits of a proposed mining venture. It is a quantity, numerically but not physically equal to a factor, by which cash return may be discounted to equal required investment. The fewer the pay-out years, the greater the average annual earning power of the project. Considerable material has been written in the past about the most important and difficult problem mining management faces in evaluation of a property: the optimum production rate for the venture. What daily capacity should be adopted for the proposed operation that it may be the most rewarding to those underwriting it? H.C. Hoover has said, "The most important objective is the least cost per ton mined; and minimum working costs can only be gained by the most intensive production." Theoretically and practically, the quicker the ore is removed, the more profitable should be the venture because of the saving in fixed charges, the consequent lower unit costs and the interest unearned by the profit from the unmined ore. Yet, such performance will be tempered by policy and a restraint imposed by the ratio of capital expenditure to annual cash return. * The 'Annual net profit after taxes but including depreciation and depletion allowances. former will be based upon an analysis of the economic climate anticipated, with its many ramifications including the demand for the product, prices, tax laws, the conduct of labor and related wage scales. The variables and intangibles involved in estimating the optimum production rate for a mine do not readily lend themselves to mathematical relationships or equations and the problem can become complex indeed. The more readily applicable and relatively faster appraisal method will be used which, in addition to being reasonably adequate in most cases, will serve as a guide, should a more expanded and detailed estimate be desired. The first question is what is company policy with respect to the rate of investment return? This will depend on that significant period of time referred to as the pay-out, which can be defined as the estimated interval during which capital investment is returned through application of annual cash return to its recovery. Expressed another way, it is the ratio of capital expenditure to the annual cash return. For example, if the capital investment is $C and the annual cash return is $A (after Federal tax), then $C/$A = the pay-out period in years. That is to say, if $C = $1,500,000 and $A = $214,000, then which is the mathematical expression for the period of time it takes to recover the funds originally invested in a mining enterprise. The relationship yp = $C/$A can be useful — an expression which requires only the significant tern yp to be fixed; in other words, the long range investment policy. For what is the pay-out period but an expression of that policy in terms of the speed, within practical limits, with which an individual or company may want to recover capital expenditure? A policy by which pay-out will be fixed is imperative. This ratio must lie within relatively narrow limits governed by what is economically feasible. It cannot be too low, rendering the ratio impractical or absurd, nor too great, delaying the return of capital for reinvestment beyond a commensurate interval. What pay-out will govern this policy? Federal corporate taxes would seem to present the best measure. Consider mining in Canada where new mines are exempt from Federal income tax for 3½ yr from date of first production. This exemption expressly allows The Act states: "A corporation . . . i s not required to include the profits . . . for the period of 36 months commencing with the day on which the mine came into production in reasonable commercial quantites." a company to recover capital expenditure during the early stages of production. With such an incentive, it is logical to strive for as much capital redemption as possible during this period. Thus, 3½ yr would be a major contribution to the pay-out in Canada. Furthermore, it generally takes from 1½ to 3 yr to develop

Jan 1, 1963