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By Robert B. Parsons

"This month, Tax Notes focuses on two features which can potentially ""dress up"" a new issue of common shares to make the shares more attractive to investors. Attaching warrants to a share issue is a relatively common practice, and recent years have seen an imaginative variety of different kinds of warrants, some of which can be subject to somewhat different tax treatment . A less common financing strategy which certainly deserves some consideration involves the possibility of utilizing ""Share Purchase Tax Credits "" in conjunction with a new share issue.IntroductionPrevious subjects covered in Tax Notes have dealt with flow-through shares and other tax angles which can make equity issues more appealing to potential investor s. Two other techniques which can add zest to a new stock issue involve the utilization of warrants and ""share purchase tax credits"" (or SPTCs). This article takes a brief look at the better known subject of warrants and the lesser known matter of SPTCs.Of course, this paper presents only a relatively general summary of the income tax implications of warrants and SPTCs, and is not intended to be a definitive commentary on all of the detailed and complex tax issues that might be relevant in the circumstances."

Jan 1, 1985

By John H. Puffer, Andreas H. Vassiliou

The Bemco mine area is within the Precambrian igneous and metamorphic rock terrain of the New Jersey Highlands province. Rocks In the area include a pyroxene granite, a hornblende granite, a quartz-oligoclase gneiss and a pegmatite and its host rock, a lens of amphibolite which becomes a sulfide-rich pyroxenite near the ore zone. The ore-bearing zone occurs along the hanging wall and foot-wall contact of the pegmatite which was emplaced discordantly into the amphibolite-pyroxenite.

Jan 1, 1985

By John C. Robison

INTRODUCTION Sensitivity analysis is a means of gauging the impact of individual risks on a financing. Key risks can occur in three time periods: - Feasibility, engineering and construction phase; - Start up phase (usually through completion); - Operating phase (post completion). If a company has agreed to cover these risks prior to completion, then less attention will be paid to the sensitivity of the project in the first two time periods. Since the operating phase of the project generates cash for both operations and debt service and generally does not begin until two to six years after the loan is signed, it is wise to look at scenarios other than the projected "base-case" scenario in order to determine the project's capability to operate successfully under a broad range of probable future events. Lenders are compensated at a fixed spread over their borrowing base and generally are not compensated if the project is successful beyond expectation. They are also subject to the loss of principal plus funding costs if the project performs below expectation. Because of this, lenders establish sensitivities around the parameters of conservative projections developed in the project feasibility studies and the cash flows resulting from these projections. The initial cash flow projections should demonstrate the project's ability to meet cash costs, debt service requirements (principal and interest), and still have sufficient cushion to cover contingencies such as strikes, price fluctuations, force majeur situations, etc. (See Schreiber, Chapter 10). The selection of the level of sensitivity analysis to be performed is the result of both objective criteria, including probabilistic analysis applied to the technical parameters, and, of equal importance, subjective criteria applied by the analysts, especially with regard to the economic and financial parameters impacting the project cash flows. RISK SENSITIVITY Assumptions used in the cash flow projections should be realistic. Risks identified by the lenders should be identified and cash flows prepared to assess whether these project risks are acceptable. Typical project risks include the following (see also Chapter 9): - Sufficient reserves - quantity and quality - Product price - Production level - Operating costs - Availability of energy and supplies - Transportation and infrastructure requirements and costs - Interest rate - Completion risks - Tax level - Political risks - Cost over-run risks - Operator experience - Management - Technological risks - Environmental permits and risks - Foreign exchange risks - Insurance coverage - Equity of sponsors - Inflation rate - Capital expenditure during project life In order to see the effect on the cash flow projections, each risk should be analyzed for its impact on the cash flow generating capacity of the project. Sensitivities can be examined to see if the resultant cash flow projection will meet the lenders minimum credit standards. 1.Reserve Sensitivity In general, lenders will not assume the reserve risk. However, it should also be noted that lenders receive loan proposals in which reserves range anywhere from proven to possible. Sensitivities are not generally run for various reserve levels and reserve estimates are either considered acceptable or not acceptable by the lenders.

Jan 1, 1985

By J. George Gregr

"This paper gives a brief review of grinding mills installation procedures with special emphasis on future maintenance. The importance of cooperation between the customer, construction contractor and manufacturer's representative is discussed, as well as the imparlance of complying with standards, specifications and the keeping comprehensive installation records.Fundamentals of mill maintenance are explained with the aim being to maximize the equipment availability and to minimize unscheduled downtime. The paper also includes development of wear items design, based on operating conditions, drive components and bearings, and how to keep large gears healthy thus eliminating surprise failures.Experience with installation of a large gear on a 34-foot diameter mill in Lornex and successful application of a computer program for the gear alignment on the mill are given.IntroductionSuccessful operation of a concentrator begins with the engineering of the project and continues through selecting the right equipment, its installation , start-up period, and ends with final tuning of the process. machinery and the human factor into an efficient and viable industrial complex.The following is a brief review of grinding mill installation procedures with special emphasis on future maintenance. Fundamentals of mill maintenance are discussed with the aim being to maximize the equipment availability and to minimize unscheduled downtime, with some specific points on key grinding mill components such as bearings and drives.Finally, the experience is recounted with the installation of a large ring gear on a 34-foot diameter mill at Lornex, and the successful application of a computer program for the gear alignment on the mill."

Jan 1, 1985

By Daniel Connor, O&apos

The Cal-Sag Relief Sewer is a 2.6 m (8 ft 6 in.) diameter 9.1 km (5.7 mile) rock tunnel bored in dolomite for the Metropolitan Sanitary District of Greater Chicago. Included in the project are 18 shafts varying in depth free 70 m (230 ft) to 41 m (135 ft). This paper discusses how Healy/Vanessa reduced costs by eliminating conventional hand excavation by hoisting muck from a high production Robbins TBM (Tunnel Boring Machine) through small diameter drilled shafts and using a trailing rail-utility backup system.

Jan 1, 1985

By G. S. Derrickson, R. A. Golobic

Any type of agitation within a confined vessel is primarily concerned with two parameters: a level of agitation describing the homogeneity of the constituents (whether it be suspension or mixing), and the energy efficiency with which this level of agitation is accomplished. The following is an attempt to present a solution to the problem of adequately defining and optimizing these properties. A discussion is included of the application of good design practices to the determination of a mechanically efficient shape to the blade elements of the propeller. These practices, excluding several appropriate modifications, have been known, but not well understood, in aircraft fluid mechanics for a number of years. Having optimized the direct impartation of energy to the medium being agitated, attention is turned to one of the more perplexing phenomena of multi-phase systems - definition and prediction of agitation levels. The result of recent study and testing is a method of scaling that the authors believe provides a lucid understanding of governing physical parameters within the agitator itself, allowing one to scale up and down with confidence.

Jan 1, 1985

By Robert J. Willard

This chapter includes tables from 1983 that were not available in time for publication of the 1983 Minerals Yearbook, but does not include corresponding tables for 1984. The value of raw nonfuel minerals produced in the United States during 1984 was estimated at $23.2 billion, an increase of $2.1 billion over the value for 1983. This is the second consecutive year that the value has increased, and except for a decrease in 1982, the value for each year has increased since 1971, or 12 out of 13 years. In 1984, 16 out of 21 metal commodities increased in output while 5 metals decreased; 14 metals increased in value and 7 decreased. Of 46 nonmetal commodities. 37 increased in output while 7 decreased and 2 remained unchanged; 35 nonmetals increased in value and 11 decreased. These statistics are grounds for continuing the cautious economic optimism expressed in 1983. Despite the note of optimism, however, numerous problems plague the mining industry, weakening its stability and inhibiting its growth potential. The problems are a complex mix of international and domestic factors that have been building in the recent past, but have become even more troublesome in 1984.

Jan 1, 1985

By C. Allen Born

INTRODUCTION As the title of this paper suggests, the author does not believe that risk can be managed. Rather, the objective is to identify the risk which will be present in a given venture and assess the level of that risk which is acceptable. More often than not, the risk which is present is subject to little or no modification. After identifying and measuring the risk a corporation will decide to accept it and proceed in such a way that it will be less exposed, or it will decide not to proceed at all. The exercise for a corporation is different only in degree from everyday judgements made by average people in average situations. However, that word "degree" means that it is considerably more complex on the corporate level. There is good reason for the additional complexity of corporate risk evaluation. The variables influencing a company's decision can be more numerous and the penalties for miscalculation much greater than those normally encountered by an individual. It should be understood that no analysis of risk, certainly not one as brief as the following, can do more than touch on some of the high points. Before examining the sorts of risk which affect the development and operation of specific mines, let us consider the broader aspect of the term with which mining companies, and all other business corporations, must deal. Companies must determine their long-term objectives and strategies within the context of a constantly changing world. To plot their direction they must attempt to read the future by seeking answers to questions such as: How will society evolve? Which businesses will thrive? In which of these should we place our emphasis? If a company hopes to be around five or ten years from now it must make the attempt to answer such questions in order to judge the impact of changing patterns in the evolving business environment. Information is available to allow the lessons of the past to be projected on the future. We have data on birth rates, economic booms and busts, patterns of conflict within and between nations, drought and other forces of nature as well as individual events which cannot be predicted, but which over time, do seem to occur in regular cycles. Ultimately the question "where will we be and what will we be doing a decade from now?" must be answered by one or more senior people with responsibility for the company's future. The compilation and interpretation of hard data by competent support staff, can only be used up to a certain point in determining future corporate strategy since there will be alternative possible futures and a high degree of risk will always remain. At this point those elusive qualities of experience, instinct, and - "gut feeling" - become important factors in choosing a long-term corporate direction. The goals of a company have a significant bearing on its attitude towards risk. This in turn dictates the "hurdle rate of return on investment" which a project decision-maker will require. The hurdle rate is the minimum-discount-percentage-rate applied to forecast cash flows to give a present value of zero to the All-Equity-Funded Investor. The feasibility study for a project is a fundamental tool in the management of risk. An experienced team has an established and well-understood set of ground rules for the preparation and assembly of a feasibility study. The necessary degree of conservation is built in at all levels of study data and, if the project is technically feasible, the hurdle rate becomes a catch-all measure of risk in a base-case project cash flow.

Jan 1, 1985

By J. D. Miller

Pilot-scale tests indicate that effec¬tive concentration of fine gold from Colorado River sands can be achieved by flotation with the air-sparged hydrocyclone. The fine sands (55% minus 400 mesh and 0.01 opt*) from gravity concen¬tration were processed with a 5-cm air-sparged hydrocyclone (capacity -1.0 tph dry solids). Concentrate grades as high as 5.0 opt were produced in a single stage at a recovery of 75.0%. The separation efficiency was significantly better than that achieved in conventional batch flotation experiments.

Jan 1, 1985

By L. Adler

A fairly complex analysis is required to select or evaluate a piece of excavating and bulk handling equipment for its performance. At present, there is little agreement as to what points should be considered, and even less on what procedure to follow. This paper provides both of these in a consistent and direct form. The analysis applies to all types and sizes of equipment. The importance of the equipment characteristics, job activities, and work conditions are stressed. Separate analytical stems are established in a flow chart for these. They are combined using suitability tests in: problem statement; natural conditions; suitability guidelines; appropriate equipment types; operational activities; encumbered space; geometric design; equipment sizing; failure and limits; performance and consumption; public policy checks; and costs and profitability. Public policy and economics receive emphasis towards the end. The procedure is iterative, containing distinct feedback loops. Specifying the steps and sequence provides a necessary structure which has long been overdue.

Jan 1, 1985

By O. Tranbarger

In aging tunnels, wall and roof deterioration can eventually result in defects that must be detected and repaired to maintain safe structural conditions. In investigating tunnel defect conditions, a specialized FM radar system was developed with a programmable VHF and UHF operating sweep range for optimizing the penetration and measurement capabilities. The new FM radar technology was tested in two aging brick-lined tunnels in New York City. Test results showed that FM radar signals could penetrate eight courses of water-saturated brick and that the original steel liner outside the tunnel walls was intact.

Jan 1, 1985

By Yosry Attia

Recent emphasis on environmental effects and costs of conventional mining processing, plus success in accelerating bacterial action, suggest that biotechnology be explored for gold ore processing. In our paper, the past experience with organisms in processing gold is reviewed. The use of microorganisms for liberation of gold from sulfide ores as a substitute for fine grinding is discussed. The possibility of accumulation of gold from solutions, such as cyanide solutions, is explored as a potential replacement for such processes, such as carbon-in-pulp or ion exchange. The improvement in engineering technology and kinetics needed to scale-up from laboratory experiments to production scale are outlined.

Jan 1, 1985

By Ward E. Kilby, Bruce I. Mcclymont

"Data from the South Fork Pit Area of the Bullmoose deposit in northeastern British Columbia are used to demonstrate the usefulness of microcomputers to the on-site geologist. The technique utilizes a series of digital surf aces in the form of a network of points to define various geologic parameters such as seam positions, topography and coal quality characteristics. Manual digitizing, kriging and combinations of these techniques are used to calculate these digital surfaces, the best method depending upon the type and quality of the data in question. Digital surfaces, each modelling a specific feature when combined and manipulated with the computer form a powerful tool, the deposit model. The resultant model, containing all the surfaces, is used to examine seam and inter-seam thicknesses, deposit volumetrics, seam quality characteristics and the adequacy of sampling.IntroductionCoal deposit modelling using computer-based techniques has become routine. However, a geologist working in the field, without access to mainframe or minicomputer, ha s considerable difficulty implementing these procedures. However, microcomputers, which are portable and inexpensive can handle exploration data, perform various geological analyses, and produce deposit models virtually at the same time as the data is being collected. For the on-site geologist this means that quick access to the results of such modelling could point out inadequacies in deposit definition and trends in coal quality deserving investigation."

Jan 1, 1985

By Mark S. Sanders

This report discusses the development and testing of prototype gloves for underground mining work. An analysis of HSAC hand-finger injuries revealed three high-risk jobs: laborer, mechanic, and roof bolter. Laboratory tests of dexterity and protection were performed using six off-the-shelf gloves. Two prototype gloves were developed. Both were Kevlar-cotton blend knit gloves. One had polyvinyl "Ks" screened on the palm and fingers, and a hand pad sewn into the palm. The other prototype had the palm and fingers coated with a sol id layer of polyvinyl and had no hand pad. Field tests revealed that the solid-coated gloves were preferred by workers, but that the polyvinyl melted when working with hot drill steels.

Jan 1, 1985

This Bureau of Mines investigation addressed two primary issues of air velocity measurement in mines: the determination and use of correction factors, and the development of guidelines for the selection of a suitable site at which the measurements should be taken. Other facets of the investigation included a comparison of measurement methods and devices, and aircourse cross-sectional area measurement. The study consisted of theoretical, laboratory, and in-mine investigations. The measurement devices included in the experimental phase were vane anemometer, vortex shedding anemometer, a prototype thermoan-emometer, smoke tube, and oil of wintergreen sprayer. The measurement methods included single-point centerline, timed-point traverse, continuous traverse for the anemometers, and various distances and cloud positions for the smoke tube and oil of wintergreen devices. The study resulted in guidelines for measurement site selection that are applicable to most inmine situations. It also showed that the use of correction factors is problematic. There are many potential pit-falls and there are cogent arguments against using certain correction factors. However, generalized correction factors were developed that can be successfully applied in routine ventilation work, provided that their use is properly understood.

Jan 1, 1985

By James P. Bennett

The Bureau of Mines investigated the effect of refractory oxide additions, introduced in soluble form, on the high-temperature properties of 90- and 98-pct-MgO brick. Brick samples were soaked in solutions containing Al, Ca, Cr, Co, Fe, Mg, Mn, Mo, Ni, Si, Sr, Sn, Ti, or Zr ions. Additions to 98-pct-MgO brick did not generally result in statistically significant property improvements. Statistically significant improvements were noted in hot modulus of rupture (MOR), slag resistance, and spalling resistance of the 90-pct-MgO brick for additions of Al, Mg, or Sn. High-temperature performance of treated 90-pct-MgO refractories was equal to or approached that of 98-pct-MgO brick. The marked improvements due to tin were obtained with additions of only 1.14 wt pct Sn02.

Jan 1, 1985

By De Janti VP

The automation and centralized monitoring of longwall type underground mining is presently an important subject matter of research in France. The purposes are :to improve safety and working conditions to increase productivity.to improve efficiency in machine operation through continuous "health monitoring". to make winning possible in difficult seams.

Jan 1, 1985

By P. B. Barton, P. M. Bethke, R. O. Rye

Rhyolitic welded-tuff wallrocks of the epithermal base and precious metal veins of the Creede district were pervasively altered by the addition of more than two billion metric tons of potassium some 1.5-2 million years before mineralization. Sodium, calcium and magnesium were strongly depleted, yielding a nearly binary quartz + potassium feldspar assemblage containing as much as 13 weight percent K 0. This large-scale metasomatism, originally noted by Steven and Rattle (1965), took place progressively by initial alteration of plagioclase phenocrysts to orthoclase or microcline followed by alteration of the groundmass feldspar to orthoclase and gradual change of the sanidine phenocrysts to more Or-rich compositions. Oxygen isotope and chemical studies show that the metasomatism resulted from the interaction of the tuffs with deeply circulating heated ground water and suggest that the potassium metasomatism of rhyolitic rocks is the facies equivalent of propylitization of volcanic rocks of more basic composition.

Jan 1, 1985

By Remilton D, Raston GR

The low price of nickel which has prevailed since 1982 has dictated that unit production costs must be minimised. Early in the crisis, a decision was made within Western Mining Corporation to reduce unit costs by increased rates of production, not by a significant reduction in manpower. This paper details developments which have taken place at Kalgoorlie Nickel Smelter to enable the higher production rates to be achieved, or to increase energy efficiency. It is significant that most developments were achieved without the need for capital expenditure.

Jan 1, 1985

By Dean H. Ambrose

This Bureau of Mines publication summarizes the status of mine electrical equipment reliability research. Failure rate data were estimated from theoretical, laboratory, and field studies. Tables are presented listing reliability characteristics of molded-case circuit breakers, undervoltage relays, ground check monitors, cables, motors, and control circuitry. Application of failure rate data is shown in tables listing maintenance scheduling intervals of components and components that are most sensitive to the probability of hazardous voltages on power distribution systems in the mines. Complete, accurate, and appropriate failure rates on mine equipment are of the utmost importance for reliability evaluations.

Jan 1, 1985