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By Jr. Winters

The United States continues to be the largest producer and consumer of copper in the world. Table 1 on the following page shows several production statistics for 1974, the most recent year which the non-communist world copper industry might consider a good year, and for 1976 and 1977. In 1974 an estimated 24 percent of the non-communist world's newly mined copper was mined in the United States, and. 87 to 89 percent of that was from the western porphyry coppers. In 1976 U. S. new mine production was down to 22 percent of the non-communist world's newly mined copper, and the percentage of U. S. new mine production supplied by the porphyry coppers had risen to 89 to 91 percent. In 1977 the statistics remained the same as in 1976. U. S. porphyry copper production represented about 65 percent of U. S. refined copper consumption in 1974, rose to 75 percent in 1976, and dropped back to 61 percent in 1977 as imports of foreign copper into the United States began to swell.

Jan 1, 1978

By David M. Koogler

If you are contemplating starting a small coal mining operation there is a good possi¬bility that you can not afford it. If you, have already started, you may be on the road to bankruptcy. If you are a small but well established operator you may be trading dollars, or even dissipating your capital, equipment and other assets. A bleak outlook? Yes! Meant to be discouraging? No! Just a reminder that, with todays costs of doing business, high interest rates, rapidly increasing costs and decreasing sales prices, a small businessman/miner had best watch closely or he will be mired in something worse than a soft bottom - namely a cash and credit shortage, and in too many instances In recent times, bankruptcy. We will not dwell on what happens once you are that far gone, though I could cite a good example. But, let us look at what should be done to avoid such a catastrophe.

Jan 1, 1981

By Barnett DW

Financial risk analysis provides the tools to examine the uncertainty of capital decisions in new mining ventures. This paper explores the methodology by which financial risks can be studied and quantified. The most commonly used risk evaluation methods, such as sensitivity analysis and discount rate adjustment, are presented as an introduction to a more comprehensive discussion of stochastic methods of discounted cash flow analysis using Monte Carlo sampling. The discussion is illustrated with examples of a stochastic discounted cash flow. The advantages of Monte Carlo sampling in risk analysis are discussed together with its problems, particularly those originating from the correlation amongst the variables that determine the economic output of a mining venture, and the difficulties created by insufficient data, imperfect knowledge and complexity. The paper also surveys the most commonly used software used in risk analysis.

Jan 1, 1994

By James H. Boettcher

In the second quarter of 1979, ASL Inc. inquired whether Crocker National Bank ("CNB") would provide $4 million in term loan financing to help ASL acquire the outstanding shares of the S&S Coal Company in West Virginia. ASL had, prior to approaching CNB, sought financing with the assistance of a financial advisor from a number of commercial banks without success. A summary of the initial terms requested by ASL is shown in Table I compared with the actual terms the transaction closed with. It is not difficult to note that the two sets of terms differ significantly. This is often the case when financing requests based on the expectations and vision of a mine developer are juxtaposed with more pragmatic requirements of a commercial bank. The "art" and fun of structuring financing plans for mining ventures (highly leveraged acquisitions or grass roots) comes in working with mine developers to arrive at a final financial structure that meets their objectives and constraints as well as those of the bank or other financial institution providing much of the financing. This article briefly describes the process we went through with ASL beginning with the terms they requested initially and ending with the ones on which the transaction was finally closed.

Jan 1, 1981

"Investment in diamond exploration has been declining over the past decade, in spite of positive long-term industry fundamentals and a growing interest in diamonds as an investment category. The lack of new significant discoveries in recent years has eroded investor confidence, yet no new discoveries are possible without investment in exploration. Junior ‘mine finders’ have been the hardest hit. Their agility, tenacity, and appetite for risk are not sufficient to attract the funding required, even at the greenfield stage. Developing new discoveries into mineral resources can be crippling without solid financial support. Junior incubators could play a crucial role, especially at the project evaluation stage – but where are they? Alternatives to traditional funding mechanisms have become available, many still untested in the junior diamond exploration space. Valuable lessons can be drawn from the past and used to inform emerging new strategies. IntroductionDiamonds are the ultimate expression of love. Their ancient and timeless allure continues to influence consumer emotions and behaviours across continents, cultures and age groups. Analysts are predicting a sustained supplydemand shortfall in the years ahead which will trend diamond prices generally upwards. With positive long-term industry fundamentals, one cannot help but wonder why funding for diamond exploration and development projects is so scarce.Investment in exploration across commodities – including diamonds – has been declining for a number of years, reaching a historic eleven-year low early in 2017. The lack of major diamond discoveries in recent years has done little to strengthen the case for investing in diamond projects, yet no new discoveries can be made without investment in exploration.Global estimates of known carats in the ground stand currently at 2.5 billion carats, which equates to around 18 years of production at current levels of 140 million carats (mct) per annum. Sustainable replenishment of depleting diamond resources is possible only through the development of new discoveries. This is what junior explorers are best at – but they need investors to fund their evaluation activities from early in the project development continuum."

Feb 1, 2019

By Eric Low

Raising capital by issuing debt or equity is necessary in almost every corporation. In the field of corporate finance, the raising of capital is a heavily-studied topic. However, some of what is studied on this topic in corporate finance is not applicable in the mining industry. There are also many financing options that were created for the mining industry such as flow-through shares, prepaid forwards, and royalty sales. The cyclical nature of the industry makes the risk-return profile of financings more difficult to estimate than in other industries. Additionally, the methods used to assess firm value are different than other industries, as the values of orebodies are not included on balance sheets. For precious metals companies, which are a hedge against most other securities, there are additional complications with determining investor expectations and cost of equity. This thesis puts forth a decision-making framework to explain mine financing choices from the perspective of mining companies. The approach is threefold. First, all of the major equity and debt financing instruments available to mining companies are presented and analyzed. Each financing method is assessed on a wide range of criteria. Next, these concepts are applied in case studies of four companies: BHP Billiton, Barrick Gold, Teck Resources, and Noront Resources. For each company, the overall choice of financing methods is shown and analyzed. The effect of financing choices on the weighted average cost of capital (WACC) is calculated. The final section deals with case studies of individual mine finance decisions during the past two years.

May 1, 2011

By P. Klaus

"KfW IPEX-Bank is the commercial arm of KfW Bankengruppe, responsible for international project and export finance.KfW was one of the first banks in Germany to promulgate environmental guidelines for its commercial business activities. These guidelines were first made public in 2000 and updated for the second time in 2004. They now include specific reference not only to environmental but also to social concerns. The guidelines specify the procedures to be followed in assessing credit risks related to environmental or social hazards.The bank considers sustainability as an interdependent framework of economic, ecological and social factors. In its efforts to contribute to sustainable development worldwide the bank uses its influence as far as possible to improve a project’s performance if such improvement is deemed necessary."

Jan 1, 2005

By M. Götze, P. Eysel

Over the last years, the importance of the assessment of environmental and social aspects as well as of issues of good governance has increased significantly in mining finance. For this, international standards as well as internal guidelines of the banks and other involved institutions have been established and continuously improved. Considering these standards and regulations, the banks can influence the sustainability of mining projects - and they have done so in the past -, mainly by implementing certain provisions and covenants in the loan documentation, binding the financing to the mining company’s adherence to the agreed sustainability standards. However, there are limits to the banks’ influence due to the competitive environment with other available means of financing. Nevertheless, the experience of the last years has shown that the standards and regulations bound to the financing by the banks help to lead the mining industry towards more sustainable projects.

Jan 1, 2011

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 G. V. Campbell, O. T. Holdsworth, M. G. Nelson

A senior design project is required by all accredited mining engineering degree programs. Often referred to as the capstone of a student’s education, this project is expected to include all the important components of the preliminary economic assessment of a mineral prospect, including orebody modeling, grade and reserve estimation, selection of mining and processing methods, preliminary mine design, access and utilities, environmental compliance and reclamation, and financial analysis. Two of the authors (Campbell and Holdsworth) completed a senior project in 2021. They analyzed the Akie zinc deposit located in Canada. This paper summarizes the economic analysis portion of that project. The two primary objectives of this economic analysis were risk reduction and integration of economics and engineering. Addressing risk is important as risk is one of the primary concerns in mining investments. Risk reduction was the primary concern through the entirety of this economic analysis. Integration of financial analysis and engineering design was the first component of a risk reduction design. This allowed for financial and engineering design to be optimized in conjunction with one another. This produced benefits from both a financial and an engineering prospective. From a market, economic, and financial risk perspective, risk was reduced by forecasting multiple metal price scenarios, and then addressing the Akie project’s economic viability at each price point. Lastly, risk was address through consideration of nontraditional financing options. The project also sought to minimize financial and human capital risk, by proposing mutually beneficial cooperative social relationships and favorable work, schedules. Description of that work is not included in this paper.

Mar 2, 2022

By Barry S. Epstein

Financing the acquisition of a going coal mine operation has not had the exposure other finance-oriented projects have had. Therefore, C.I.T. feels that coal mining people and financial people should improve their understanding of the factors involved in this important type of acquisition. The discussion consists of two major subjects: analysis of the acquisition of the property, and sources and terms of funding the acquisition. Source and Terms of Funding There is a need to keep the competent medium-sized independent operator in the coal business, especially in these times of energy shortage. The creation of a resale market for coal mines encourages new investment in the coal mining business by medium-sized operators and their financial backers. Who provides debt and equity financing to acquire going coal mine operations and on what terms?

Jan 9, 1975

By Parker JB

The Channar Iron Ore Mining Project (the Project) is a joint venture involving the Hamersley Holdings group (Hamersley) and the China Metallurgical Import and Export Corporation (CMIEC). The Project represents the first new iron ore mine development in Australia since 1971/72 and is the first major overseas mining investment by the People's Republic of China (PRC). The Channar mine is being constructed in the Pilbara region of Western Australia and will operate for more than 20 years supplying the PRC with 200 M tonne of high grade iron ore. The Project is configured to take advantage of Hamersley's existing production and support facilities. The Joint Venturers will invest A$280 million to achieve an initial production rate of 3 M tonne/yr and an additional A$120 million over the next 8 years to achieve full capacity of 10 M tonne/yr. Financing the Project to meet the requirements of both Hamersley and CMIEC, with the dependance of the Project on Hamersley's infrastructure, and in a depressed iron ore market, required an innovative financial structure to be arranged in a limited period. This paper describes both the financial structure and its implementation, and draws a number of conclusions regarding the financing of resource projects.

Jan 1, 1989

By William L. Young

I think I should let you in on one of Canada's best-kept secrets, if you will promise not to tell it all over the place. Believe it or not, good, honest, enterprising capitalism is still alive and flourishing north of our common border, and I am living proof that capitalism is still working for the little guy. My personal story of mining development in Canada isn't all that rare -- you've probably heard something like it from other areas and other days several times -- but my case brings it up-to-date. I would like to Tell you briefly the history of Northumberland Mines Limited, a contemporary case of individual enterprise getting a mining operation underway. And if I can do it you probably can too.

Jan 1, 1981

By L. Clark

Despite near-record commodity prices, the mining industry continues to search for ways to maintain profits in these times of steadily increasing energy prices and steadily decreasing grades. The pressure is still on today’s miners to continuously improve their operations because they know that one day prices too will drop. Some, however, have seized the opportunity to employ systematic methods to reduce costs and increase the efficiency of their workforce and equipment. As a result, closer attention is being paid to scheduling and the value that could be added by defining the extraction sequence that maximizes the net present value [NPV] of a project. This paper will discuss the challenges faced by Newmont Mining Corporation [Newmont] at its operations and the application of sophisticated software tools and methods in its search of solutions to this problem.

Jan 1, 2007

By Julian Malnic

Various natural, commercial, engineering and operational factors govern the evolution of approaches taken in the exploration for Seafloor Massive Sulphides (SMS) and in delineating the resource. These stages are prerequisites to the proposed mining of SMS deposits. This paper presents and analyses these factors from the view of an SMS exploration company that is pioneering the exploration of this rich alternative source of zinc, copper and gold. Current exploration practices developed by Marine Scientific Research (MSR) workers for SMS deposits are expected to give way to industry-generated methods as the SMS exploration industry gathers momentum. The exploration process falls into three phases that are described below: Prospecting (locating targets), Indicating Resources, and Measuring Mineral Resources Considerable streamlining of the SMS exploration process will accelerate the rate of discovery. The economics of SMS mining are projected to be superior to comparable terrestrial mining operations in both operating cash cost and capital terms.

Jan 1, 2001

By Karen Munro

Importance of Aquatic Studies for Mining ?Aquatic habitat is usually the first area where a mine interacts with the ?real world? outside the mine footprint ?Water management is a key consideration for a mine?Effects on the aquatic environment often extend to wildlife and human uses ?There is a lot of regulatory focus on issues of water quality, fish and fish habitat

May 1, 2011

By Fernando J. A. S. Barriga

Exploration for active seafloor hydrothermal vent fields has been highly successful, and more than 300 such fields have been discovered to date. Some will most probably be mined, given their high metal grades (Cu, Zn, Au and others). However, the current practice detects active systems, and activity rates, not the size of the deposits. This strategy may leave undetected some of the best targets, for several reasons as follows: 1. Large hydrothermal plumes are a measure of dispersion of ore components, not of efficiency in the generation of orebodies; 2. Deposits formed a few hundred years (or more) before present will generally have ceased their activity and will not be detected by plume studies; 3. Deposits formed under a cover rock (up to a few meters of sediments, volcaniclastics, or the like) may exhibit only minor seafloor hydrothermal activity, possibly diffuse flow. Cover rocks will often host hanging wall rock alteration, expressed in geochemical and mineralogical haloes. It has been demonstrated in many instances, especially for deposits formed in the geological past, now exposed on land, that ore genesis under a cover rock is one of the most suitable processes for generating large massive sulfide deposits. One of the great challenges for submarine resource knowledge will be to develop adequate exploration strategies for sizeable orebodies, not necessarily hydrothermal vent fields, sometimes hidden under a cover rock.

Jan 1, 2011

By N Power, A D. Costar

There has been significant growth in mining and energy exploration in South Australia, which has identified new major potential opportunities. This sector generates significant economic value to the state and their support remains a priority for the state government. The delivery of this economic and associated community value to the state is dependent on the mining and energy sector being able to access reliable water supplies.The vast majority of priority areas for the mining and energy sectors are located in areas that have traditionally been of low priority from a water-use perspective and hence, data and knowledge levels are generally low.Recent studies have identified a potential increase in demand for water in the mining and energy sector for potential developments from approximately 40 GL to over 170 GL over the next ten years. The studies found that water and water infrastructure is the second highest proportion of planned infrastructure capital investment by resource companies. The South Australian GovernmentÆs Plan for Accelerating Exploration (PACE) initiative (PACE 2020), also identifies addressing the issues of location, use and management of South AustraliaÆs water resources as a key priority for the growth of the mining and energy sector.The Department of Environment, Water and Natural Resources (DEWNR) has developed the facilitating long-term outback water solution (FLOWS) initiative. DEWNR is currently undertaking a suite of programs to provide groundwater information at the regional scale to better target water supply options for mining and energy developments and community water supplies.The Goyder Institute for Water Research has leveraged significant research investment of $3 M to develop methodologies to interpret airborne geophysics to map groundwater sources.The FLOWS Initiative will provide key content for the PACE Water Program and will also assist in the development of water supplies for remote far north communities by identifying alternate groundwater sources to improve water supply security.This paper will discuss how developing an appropriate science and knowledge base will encourage and secure development where appropriate, enable prudent decision-making and policies regarding water allocation, accounting and licensing, whilst ensuring the protection of environmental assets.CITATION:Power, N and Costar, A D, 2013. Finding long-term outback water solutions, in Proceedings Water in Mining 2013 , pp 191-196 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 26, 2013

The population and the per capila consumption of mineral resources have both grown dramatically during the century past. It is argued that growth will continue through the century ahead but that the magnitudes of undiscovered resources are probably adequate to meet demands. The challenge that the mineral explorer of the future will face is finding deposits beneath several kilometres of barren rock.It is further argued that the principal challenge that society will face in the century ahead is the amelioration of environmental stress.

Jan 1, 1993

By R Lewis

Drill hole magnetometric resistivity (DHMMR) is a relatively recent addition to the explorationistsÆ suite of techniques for finding further resources in the vicinity of a drill hole. The method relies on gathering of an applied current into zones which are less resistive than the country rocks and it was first applied to exploration programs looking for weakly conductive sulphides, such as, for example, carbonate-hosted zinc deposits. More recently, it has been applied to a wider range of deposit styles, including highly conductive nickel sulphides. It has been found that the technique is capable of not only detecting mineralisation not seen by conventional electromagnetic (EM) techniques, but it can detect at a greater distance. Also, whilst EM is superior at defining tabular-shaped conductors, DHMMR may be more effective at finding cigar shaped sulphides. This paper presents a number of examples illustrating these findings.

Jan 1, 2000