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By James S. Falcone

Soluble sodium silicate materials have well known applications in flotation for desliming, selective depression and corrosion control. Recent advances in the understanding of the complex polymeric nature of silicate solutions using NMR spectroscopy, combined with our studies of the effects of polymeric silicate anions on metal ion activities in solution, oxide mineral surface charges and surfactant adsorption on clays are related to beneficiation processes. The results of these studies indicate the sodium silicates can be used to cause a solution chemistry and particle surface charge characteristics favorable to enhanced effectiveness in typical ore beneficiation systems.

Jan 1, 1981

By Klaus Grebe

Recent investigations by Mannesmann Research have shown that disintegration of sinter with widely varying quality levels is subject to a much more complex set of influences than was previously assumed. It was confirmed that disintegration at temperatures between 300 and 600 °C is triggered by the degradation of hematite. The specific tendency of hematite to disintegrate is, however, not constant: sinters containing the same amount of hematite can show widely differing disintegration tendencies depending upon structural homogeneity, porosity and gangue quantity. Especially sinters with heterogeneous structures transmit stress to the hematite phase and this favours disintegration. Another factor is the brittleness of the glassy silicate phase, which can be influenced even by small modifications of minor gangue constituents.

Jan 1, 1981

By Peter C. Badgley

Three tectonic provinces within the Cordilleran System, are analyzed in terms of tectonic framework. (1) Precambrian terrain of North-Central Colorado; (2) The Pacific Northwest; and (3) The San Andreas-Garlock fault system and associated features. In each case a close relation- ship is seen to exist between: (I) Arcuate mountain development; (2) Precambrian basement fabric; (3) Major fault patterns; and (4) Major mineral occurrences. The arcuate trends developed when the basement was still mobile. Later competent deformation rejuvenated pre-existing lines of weakness. Because of the pre-existing arcuate framework, the rejuvenated faults frequently act as conjugate shears (strike-slip faults) flanking the old arcs. The conjugate shears intersect to form wedge- shaped plates. When such plates move forward along boundary strike-slip faults in response to post basement orogenic forces, new secondary fracture systems are generated in the country rock flanking the advancing wedge. The apex regions of the wedges are particularly favorable for detailed exploration.

Jan 1, 1959

By J. Hahn

Modern high-performance disc filters such as the BoVac Disc Filter have set new standards in applications where large capacities of solids, liquids and air have to be managed through the filters. These disc filters have an enormous hydraulic capacity. For applications in mineral processing - with a special focus on tailings – which typically have high solids throughputs but low filtrate and air flows, this capacity can be used to expand the filtration area while maintaining the benefits of very good cake discharge even with thin cakes (4-5 mm) and a high filter speed. Research work over the last century has proven that increasing the filter area should be achieved by increasing the disc diameter. Because adding more discs leads to big problems with the cake discharge. However, as the disc diameter increases, the filter segments become longer and heavier. A suitable compromise was therefore found by doing both. The result is the first vacuum disc filter that offers significantly more than 300 m² of filtration area, but has no more than 6 discs.

Feb 1, 2023

By William O. Rasmussen

Exploration requires processing highly varying kinds and amounts of geologic information. Successful discovery dictates that this be done quickly with maximum confidence. Most phases of exploration are more or less applicable to computer reduction on a routine basis. The use of digital computers to reduce raw data into interpretable form, lets the exploration geophysicist concentrate on interpretation and presentation, and to consistently apply more sophisticated and comprehensive analytical techniques, not practical before. In applying these concepts for the past several years, various efficient programs have evolved which provide more complete evaluation of all data including the pro- vision for more unique solutions. This has resulted in greater refinement and ability to select the most advantageous drill sites in a minimum time at a minimum cost or, in rejecting as soon as possible a project on which additional effort is no longer justified. Practical examples of computer applications in magnetics (air and ground), induced polarization and resistivity are discussed.

Jan 1, 1969

By Goran Mathisson

In several investigations the correlation has been studied between the fuel consumption and the reducibility of the charged material in the zone of indirect reduction in the blast furnace (1, 2, 3, 4, 5). It has been found that increased reducibility allows greater gas utilization which accordingly lowers the fuel consumption. In direct reduction units this relation has not yet been fully established partly owing to the lack of accurate test methods and experience with different materials as regards reducibility. However, since the production rate in a direct reduction unit is closely related to the time required to reach high degrees of reduction, the reducibility must be regarded as one of the most important properties of the material.

Jan 1, 1979

By A. R. Negele

Kaolin-based pigments are the most widely used pigments in the paper industry. Several types are available and include standard hydrous, delaminated, calcined, chemically-structured, and most recently, composite pigments. Within each category, a spectrum of products is available to satisfy the application requirements of paper producers. The paper industry has a broad range of applications including fillers in woodfree and groundwood-containing papers, pigmented size press applications, ultra-lightweight and lightweight coated papers, coated merchant papers, cast coated papers and coated paperboard. Each application has its own set of performance criteria and suppliers must work with mills to identify appropriate product(s) to fulfill these requirements.

Jan 1, 1993

"Hecla Limited has been investigating the potential benefits of using a Spendrup/Compact Filter Technic (CFT) diesel filtration system to remove diesel particulate matter (DPM) from the mine atmosphere to optimize use of the available air. The National Institute for Occupational Safety and Health (NIOSH) has evaluated the scrubber efficiency for dust and DPM which is to be presented in another report. This paper reports on a new mining application of a carbon particulate sensor’s ability to continuously monitor long-term mine DPM levels in conjunction with the scrubber evaluation. Magee Scientific is the manufacturer of the Aethalometer®, a continuous black carbon monitor which has been used extensively in worldwide ambient air quality monitoring networks. Two Aethalometers were used at the mine to assess their potential to continuously track underground DPM levels. In this first underground mine application, the Aethalometers were used to continually monitor black carbon (BC) in the intake and exhaust of the CFT scrubber system. Results showed that an off-the-shelf Model AE33 Aethalometer could continually track underground BC levels for extended periods of time over the course of the six-week trial. Data at the scrubber intake over 14 days of testing showed that DPM filtration would be required less than half of the time to maintain BC levels below 50 µg/m3. If the Aethalometer BC data output were “smart coupled” to control a 200-HP in-mine scrubber, significant electrical cost savings would be realized. INTRODUCTION Mine ventilation airflow quantities are calculated to maintain a safe and healthy environment for miners. Dilution of diesel particulate matter (DPM) is often a key factor used to determine the required quantities of ventilation air (Bugarski et al. 2011). DPM emissions and exposure levels are highly variable depending on mine schedules and activities (Janisko & Noll 2010); however, lacking technology to continuously monitor levels, mine ventilation systems are often over-designed in order to handle worst-case scenarios to ensure that DPM levels are maintained at or below regulatory limits. As mines go deeper it becomes more difficult to supply air, and the development of new shafts for air is not economically feasible (Basu et al. 2008). Cleaning and reuse of available air then becomes an attractive option to maintain good air quality."

Jan 1, 2016

By L. Alagha, J. L. Corchado-Albelo

To address the U.S. Department of Energy’s critical minerals strategies regarding rare earth elements (REE) in the U.S.A. This study evaluated apatite-rich mine tailing from the historic Pea Ridge Iron Mine (PR) for possible enrichment of REE by the froth flotation process. Comprehensive characterization studies were performed on the tailing samples to quantify the REE content, identify the REEbearing minerals and their liberation behavior. The aforementioned characterization studies were: x-ray fluorescence analysis (XRF), inductively coupled plasma mass spectrometry (ICP-MS), and TESCAN’s Integrated Mineral Analysis (TIMA). The ICP-MS analysis showed that the concentrations of heavy-REE and light-REE were 8000 ppm and 3000 ppm, respectively. TIMA showed that monazite was the major REE-bearing mineral. Additionally, it was shown that monazite and other REE-bearing minerals were strongly locked within larger apatite grains. Findings from the characterization studies suggested that REE could be enriched using phosphate minerals’ direct froth flotation process. Flotation feasibility tests were performed using selected organic and inorganic iron oxides’ depressants, including polyacrylamide (PAM), in-house synthesized hybrid polyacrylamide (HyPAM), chitosan, sodium silicates, and corn starch. Results showed that the depressant’s efficiency at pH 9 was in the following order: HyPAM > chitosan > PAM > sodium metasilicate > corn starch. Zeta potential studies on the selected depressants indicated that chitosan had the highest adsorption on magnetite’s surface at pH 7. Therefore, additional batch flotation experiments using chitosan as an iron oxides depressant were conducted as a function of chitosan dosage. Results indicated that the highest P2O5 recovery of 55% and grade of 28 wt.% were obtained at 150g/t of chitosan. However, the concentrate’s highest total REE enrichment of 1.07% was achieved at a 200 g/t dosage of chitosan. The low enrichment of REE highlighted the complex mineralogy of the PR tailings and the need to implement additional beneficiation strategies before and after the froth flotation process.

Mar 2, 2022

By R. Xiong, A. K. Fallaw, G. Wang, L. R. Moore, S. Dobson, J. Gu

"INTRODUCTION The Central District of the Florida phosphate industry is located in southwest Polk and southeast Hillsborough Counties, with the Southern Extension lying in western Hardee, eastern Manatee and northwest De Soto Counties. (Lawver, 1983) Figure 1 shows the major phosphate formations in Florida. Almost all Florida phosphate production has been in the Central district with additional production from a mine in the Northern District. The Central District is comprised of the Bone Valley Deposit, a relatively thin layer of high grade ore which has been the main source of phosphate mining for decades, and the Hawthorn formation, a thick but low grade formation which covers most of peninsular Florida. (Lawver, 1983) Florida phosphate producers use the Crago process where calcium phosphate is floated with anionic, fatty acid type collectors followed by cationic reverse flotation of silica with amine type collectors. The phosphate matrix is put through various size separation techniques to obtain a typical -28 Mesh (< 700 µm) particle size for fine flotation and a -16 mesh (< 1190 µm) to +28 mesh (> 700 µm) particle size for coarse flotation. In some cases this coarse fraction can be sent to shipping as an intermediate product. The +16 mesh (>1190 µm) to – ¾“ (19 mm) fraction is sent to shipping as a final product called pebble. Figure 2 demonstrates a simplified diagram of the mining and processing of calcium phosphate (matrix) through a Central Florida mine. Particle size and mineralogy are important considerations in the Crago process for two main reasons, the mass of the particle and the particle surface area. Both of which are dependent on the coordination of the anionic collector to available Ca2+ sites on the minerals’ surface. The increased surface area, and available Ca2+, of the smaller apatite particles will allow for more fatty acid molecules to coordinate than the larger particles, with a lower availability of Ca2+. So, the larger particle would require more collector to be introduced in the system to sufficiently cover the apatite particles to produce a surface sufficiently hydrophobic to attach to air bubbles allowing flotation to occur. (Guan, 2009) The Bone Valley deposit has very favorable flotation characteristics when compared to other mining ores around the world. The matrix of the Bone Valley is relatively high grade, BPL (Bone Phosphate in Lime) values typically range from 6-18%, BPL recoveries, from such a matrix, can often be achieved above 85+% with fatty acid based collectors dosed below 1 #/ton. As mentioned, the sizing is an important step as there is also high grade apatite in the +16 mesh (1mm) that is screened to a final product grade, 60-65% BPL. The lack of quartz in the larger size fraction has allowed the Central District to produce high quality, low cost phosphate product, called pebble, through effective screening with no further beneficiation. (Guan, 2009)"

Jan 1, 2015

By N. Edmonson

The demand for sulfur divides into two major categories: agricultural and industrial. Most of the agricultural demand is related to the production of phosphate fertilizer products. Industrial demand is derived from the demands for a large number of products and is related to a variety of industrial processes, no one of which characterizes it in a simple way.

Jan 1, 1994

By Zhe Wang, Tichang Sun, Yongqiang Zhao, Zhengyao Li

Coal-based reduction followed by magnetic separation is a promising technology for processing refractory iron ores. Analysis of the size distribution of metallic iron particles is an effective approach for exploring the mechanisms of coal-based reduction. As metallic iron particles exhibit very complex shapes compared with nature ores, approaches for measuring and characterising metallic iron particles still remain unclear. In this study, the size of metallic iron particles was measured and characterised using manual point-counting by optical microscopy technics and image analysis. The effects of CaF2 as an additive on behaviour of the particle size distribution (i.e. mean size and cumulative frequency distribution) were also determined. Results indicate that CaF2 had a significant effect on the growth of metallic iron particles. When the CaF2 dosage increased from 0 to 8%, the mean size according to the area method increased from 9.03 to 16.28 μm, while the promotion effect gradually weakened and generated many fine metallic iron particles when the CaF2 dosage exceeded 8%. An increase in CaF2 dosage also led to cumulative distribution curves gradually shifting to the right mainly because F− can break the crystal structure of each phase during the carbothermic reduction of titanomagnetite and reduce the stability of the lattice structure, thus reducing the melting point and accelerating the growth of metallic iron grains. Compared to different measuring methods, the area method is a more suitable approach for measuring and characterising the size of metallic iron particles.

Sep 18, 2020

By John T. Atkins

Utah International&apos;s Shirley Basin Mine is located in the Southeastern High Plains of Wyoming at an elevation of about 7,100 feet. The Shirley Basin area is a gently rolling semi-arid land. The uranium ore zone occurs at depths ranging from 270 to 350 feet below the surface. Overburden consists of poorly consolidated sandstones, siltstones, and clays. Underground mining was begun in 1960. Conditions were made difficult by high rates of water inflow and ground support problems. The development of a solution mining I or in-situ leaching technique allowed underground operation to be abandoned in 1964. Solution mining provided limited production from 1963 to July 1970. In January, 1969, large scale development of open-pit mining was begun. A 1,200 ton per day mill went "on stream" in March, 1971.

Jan 1, 1973

By Alice S. Allen, James Paone

SURFACE SUBSIDENCE IN MINING The consequences of subsidence are becoming progressively more serious as the consumption of an ever- increasing quantity of minerals conflicts with the needs of an expanding population for surface land area. The inevitable result will be an increase in the amount of land area on which undermining is restricted because surface subsidence must be prevented. Designation of land areas that may be undermined, provided that subsidence is controlled and kept within specified limits, also will increase. The decisions as to which land is to be used for urban, agricultural, or other purposes clearly involve considerations that go far beyond the scope of mining technology. Under the authority assigned to the US Bureau of Mines (USBM) by the Organic Act (May 16, 1910) and its succeeding amendments and pursuant regulations (30 U.S.C. 1-1 1 ), the Bureau conducts scientific and technologic investigations concerning mining and its related problems. Subsidence-control demonstrations that have been conducted under this authority include projects in Wyoming, West Virginia, Illinois, and the Pennsylvania anthracite region. The problenls for technology arc to devise methods for extracting minerals with controlled subsidence in varying geologic settings and for calculating or predicting the amount, extent, and characteristics of the subsidence that accompanies the extraction of our principal minerals mined by high-tonnage methods so that logical choices can be made from the possible alternative approaches. Where underground minerals and fuels are mined and removed, the voids that are created underground generate strong imbalanced stresses in the surrounding and overlying rock strata. The resulting readjustments in the rock masses may cause subsidence of the ground surface. Subsidence implies vertical collapse, because the most conspicuous component of movement is downward. However, the downward component is accompanied by differential horizontal strains that may be more damaging to man-made surface structure.; than the more apparent vertical displacements. SUBSIDENCE CONTROL The most widespread method of alleviating potential subsidence problems in undermined areas has been to backfill mine voids with mine refuse or some other in- expensive material that provides lateral support to the remaining mine pillars and vertical support to the mine roof and overburden. Most USBM backfilling work has been conducted jointly with the Pennsylvania Department of Environmental Resources in the anthracite region of northeastern Pennsylvania. These joint projects were conducted under the authority of the Anthracite Mine Drainage Control Act of July 15, 1955 (Public Law 84-162, as amended), and the Appalachian Regional Development Act of 1965 (Public Law 89-4. as amended). In addition to the Appalachian and mine-drainage projects, the Bureau has either conducted or participated in demonstration projects to develop the "pumped- slurry" method of backfilling mine voids. Three of these projects were conducted in Rock Springs, WY. The first was a field test of the pumped-slurry technique, conducted in 1970 under the combined participation of the City of Rock Springs, the US Department of Housing and Urban Development, the Dowell Div. of the Dow Chemical Co., and USBM (Candeub, Fleissig, 1971). The objective was to demonstrate that a large quantity of sand could be hydraulically injected under pressure through a single borehole, and that filling of the mine voids would be essentially complete. In the earlier "blind-flushing" methods, involving sluicing material through boreholes by gravity, quantities per injection hole ranged from 15 to 765 m3 (20 to 1000 cu yd), and the mine voids were only partially filled. In the first test of the pumped-slurry method, approximately 14 900 m (19,500 cu yd) of sand were injected success- fully through a single borehole. Subsequent information obtained through 43 monitoring boreholes indicated that mine voids below 11 330 m2 (2.8 acres) had been filled. As a result of the successful initial test of the pumped-slurry process, USBM conducted additional backfilling demonstration projects using the new technique. The first full-scale demonstration was carried out in the Green Ridge section of Scranton, PA, between 1972 and 1974. This project proved the feasibility of using the new hydraulic-injection technique to back- fill dry mine voids, as well as flooded voids, and it demonstrated that crushed anthracite refuse could be used as easily as sand in the process. Stabilization was pro- vided for about 202 300 m2 (50 acres) of Scranton, having a population of approximately 1000. Additional demonstration projects at Rock Springs, WY, between 1973 and 1975, resulted in the stabilization of about 364 200 m2 (90 acres). The work was necessary to preserve the physical and economic well- being of the city, because there have been numerous occurrences of subsidence during recent years. A demonstration project completed in 1976 in Rock Springs brought the total stabilized area in that city to 647 500 m2 (160 acres). At a cost of about $3,000,000, a population estimated at 7000 persons and property values exceeding $18,000,000 were protected. Presently. USBM is participating in subsidence- control projects involving backfilling in Pennsylvania, Illinois, and West Virginia. Eleven demonstration projects were in progress by USBM in 1977-eight in the Pennsylvania anthracite region and three in bituminous areas of West Virginia (one) and Illinois (two). The estimated total property value is over $100,500,000, and the total cost of the projects is expected to be nearly $20,000,000. The demonstration projects are designed to adapt the pumped-slurry technique to a variety of subsurface conditions, to increase efficiency, and to reduce costs.

Jan 1, 1982

By L. Martin, M. Raffaldi, M. Stepan, D. Benton

The Office of Mine Safety and Health Research, Spokane Mining Research Division, is continuing its high-energy, high-displacement testing of field-scale shotcrete panels. A test program was developed to determine the relationship between applied force, displacement and energy for both unreinforced and reinforced shotcrete panels. Reinforcement options consisted of synthetic macro-fibers, sprayed polyurea liners, chain-link mesh, welded-wire mesh and combinations of them. During testing, photogrammetry was used to measure the geometric changes of the panels, including volume changes and panel cracking. These measurements were correlated with the load and displacement data, allowing visual observation to be related to the applied force and displacement. The test results provide a comparison of the mechanical performance of the various panel types and can assist in interpreting the condition of installed surface support. Visual assessment of the loading cycle and strength capacity of shotcrete in underground excavations will improve mine safety by providing a means to better quantify the stability of installed shotcrete support.

Jan 1, 2016

By K. Biswas

In general, it cannot be assumed that the strength of coal pillars remains constant over long time periods. Field observations indicate that a coal seam, especially when it contains a parting layer, deteriorates over time, reducing load-bearing capacity of the pillars. This paper discusses a unique approach to determine the time dependent strength of coal pillars in the field. Three coal pillars that were developed 5, 15 and 50 years ago were chosen for the study. Holes were drilled in coal and parting layers in each pillar and the strength profiles were determined for each hole using the Borehole Penetrometer. The strength data were treated statistically to establish time dependent strength equations for different layers. The results can be used to help estimate the loss of pillar capacity over time.

Jan 1, 1999

By B. T. Stanley

Traditional methods of creating a water tight shaft liner involve the use of segmented or welded steel. When shafts are located in ground that exhibits extremely difficult conditions of high water inflow and hydraulic pressure, composite liners are often combined with ground freezing during construction. The authors were searching for a cost effective and more flexible solution to hydrostatic liners design than the traditional concrete/steel composite design used so far. Searching through new technologies developed for tunneling applications, sprayed on membranes systems seemed very promising but were not developed for the specific circumstances encountered in shaft sinking applications where ground freezing is involved. Even though freezing is a very effective technique, it creates adverse temperature conditions for the application of spray on membranes. In addition, application and hydrating cure times for those membranes products ranged between six to twenty-four hours under ideal conditions (usually temperatures well above freezing point), which eliminated them from consideration in a shaft sinking cycle. While researching different spray on membrane materials, it was discovered that Stirling Lloyd Polychem Ltd. has developed and proven a different membrane material for waterproofing liners in different tunneling applications. The characteristics of the membrane exceeds the pressure parameters encountered in frozen shaft sinking operations, and the chemical cure times were reduced to one hour per layer which worked well into the shaft sinking cycle times. More over their system included a quality control procedure that allowed insuring integrity of the membrane at application time, a very desirable feature for shaft liner construction. However, the frozen rock surface still presented an unknown in the cure time and stability equation. As all membrane products a shotcrete substrate is usually required prior to application. The hypothesis used by the author was to use this shotcrete layer, not only as a substrate, but also as a thermal insulation against the frozen rock and the membrane during both application and curing time. The authors knew from experience that shotcrete could be applied successfully over frozen rock. But the shotcrete temperature curve over time was unknown and no information were found in the available literature. Testing was required to determine whether a suitable mix of shotcrete could be applied to the frozen shaft wall to provide enough heat of hydration for a suitable period of time to create conditions suitable for membrane application and curing.

Jan 1, 2012

By Barry D. Simmons

The Millenbach copper-zinc orebody is an ideal Canadian example of a stratabound base metal deposit in volcanic rocks. The mine, operated by Lake Dufault Divison, Falconbridge Copper Ltd. is located five miles north of the city of Noranda in northwestern Quebec. The deposit occurs within an Archean volcanic sequence which forms part of regional acidic volcanic center within the Abitibi greenstone belt. Preproduction ore reserves totalled 2,075,000 tons grading 3.5% copper, 3.6% zinc, 1.1 ounces per ton silver, and 0.02 ounces per ton gold. Stratabound lenses of massive sulphides together with underlying stringer sulphides are closely associated with a dome of quartz-feldspar porphyritic rhyolite approximately 3000 feet below surface. The paper describes the presently known geology of the deposit and includes documentation of sulphide mineralogy and textures as well as sulphide/ host rock relationships. The stratigraphy, petrography and chemistry of the volcanic host rocks are described with emphasis on the alteration intimately associated with the sulphide bodies. Although the volcanic stratigraphy is complex within the mine area, the presence of only low-grade metamorphism and the relative lack of structural deformation allow detailed interpretation of geological history. Presently recognized evidence strongly suggests that the sulphides were deposited at and near sea-floor, by hydrothermal solutions. The dome of porphyritic rhyolite appears to have been the most significant factor controlling sulphide localization.

Jan 1, 1975

By D. K. Dysinger

The U.S. Bureau of Mines investigated leaching of chalcopyrite with sulfuric acid-oxygen under conditions anticipated during in situ leaching. A central composite experimental design was chosen to study oxygen pressures of 150, 300, and 450 psi, leach temperatures of 35?, 65°, and 95° C, oxygen-to-chalcopyrite mass ratios of 0.5, 1.0, and 1.5, leach times of 8, 16, and 24 hours, initial acid strengths of 0.6, 1.2, and 1.8 g H2SO4/g chalcopyrite and pyrite to chalcopyrite mass ratios of 0, 1, and 2. The leaching kinetics were consistent with the shrinking core model. A quadratic response surface model was used to determine linear and interaction effects of the design factors on rate constants from Arrhenius correlations.

Jan 1, 1993

By B. Berhe, R. D. Lawrence, J. Hinzer

"The fortunes of mining companies and their implied value are tied to cycles - both economic and commodity – within which they operate. Hence the determination of appropriate future metal prices is one of the most critical factors faced by mineral valuators especially for advanced projects. Price, and hence revenue, is usually the most sensitive input to the valuation model. Empirical studies of past forecasts show that the success rate for commodity price forecasting is very poor. This paper explores various approaches and comments on their strengths and weaknesses. We conclude that careful evaluation of long-term metal prices is a key element and is hardly a luxury that can be left to simple averages or rules of thumb. INTRODUCTION Discounted Cash Flow (""DCF"") analysis, is well suited for the valuation of advanced mineral development assets, for which there are identified mineral resources and some form of economic assessment (Pre-Feasibility or Feasibility Study). The DCF method is also the most commonly used method for determining value for such assets. It provides a means of relating the magnitude of expected future cash flows from profits (or losses) to the magnitude of the initial cash flow (investment) needed for capital expenditures to purchase or to develop an asset for commercial production. The method proves useful in making investment decisions as it allows for the quantification of the Net Present Value (“NPV”), as well as the Internal Rate of Return (IRR) and Payback Period on initial investment capital. Valuation by its very nature is a forward-looking exercise. The DCF method attempts to estimate the NPV of expected future cash flows, by selecting factors that will likely affect future cash flow based on informed analysis. One of the most critical and sensitive factors is the determination of appropriate future commodity prices. “The variables that have the greatest impact on a DCF evaluation are the reserves, the metal prices, and the discount rate.”1 The determination of future commodity prices for valuation purpose or during M&A negotiations is a hotly contested issue. There are a number of analysts, institutions and specialized commercial data suppliers that provide both short and long-term commodities price forecasts. Also, the use of an aggregated mean for all available forecasts, or consensus forecasted prices for valuation purposes is not uncommon. The methods used in making forecasts for each forecaster may vary and in many cases may not be publically disclosed. Nonetheless, the aggregated mean of all forecasted commodity prices of reputed institutions is usually taken to “represent the market’s view of likely future commodity prices.”"

Jan 1, 2016