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During the past decade, the miner-al industries have been faced with an increasing shortage of engineers. The point has now been reached where the shortage may be termed critical. This shortage may be attributed directly to declining enrollment in the mineral science programs offered by the universities on this continent. Although the reasons for declining enrollment are undoubtedly many, two major hypotheses may be postulated. The first is that high-school graduates are either unaware of the mineral industries and the opportunities in them or that they are aware of them but have somehow obtained a false image of their true nature. The second is that they are aware of the true nature of these industries and the opportunities they offer but find them exceedingly unattractive. The problem of dwindling enrollments has, in recent years, been subjected to a concerted attack by the industries and professions concerned. However, their efforts to date have been based essentially on the first hypothesis. Sufficient results are now available to suggest that either the methods of attack are inappropriate

Jan 1, 1965

By R. G. Burn

"A brief outline will be given of the concept of risk and its implications with regard to investment in exploration. The relationship between risk and decisions under uncertainty will be examined as a prelude to identifying those factors which contribute to exploration risks:consideration of the effects of corporate objectives (e.g. survival, expansion, diversification) on exploration strategy and ultimately on success or failure, exploration and mining as an investment (the relationship between risk and reward) and the desired return on investment; exploration odds, funding levels, staying power, financial exposure and the concept of gambler's ruin;origins of uncertainty in exploration decision-making-man-made risks and natural hazards; the nature of introduced constraints at each exploration decision stage and their effect on the rate of success;improving the chances of success and the invest reduction of risk through sound exploration strategy, effective project generation and efficient target detection capabilities."

Jan 1, 1984

By C. M. Campbell

Canadian newspapers from coast to coast, have been, for months, denouncing those articles entitled, "The Whisper of Death," which have been appearing in the Montreal Star. I have not read these articles as the newspapers do not print them; they just denounce them or class them as jokes. Apparently they think that they are not suitable for the ordinary Canadian to read. It appears, however, that the Star has said that unless we balance our budget, and that soon, we shall be bankrupt. That seems to me like common sense, though the Victoria Times says editorially that the Star claims will "shortly find a place in the joke column". In this editorial the Times quotes with much enthusiasm from the Quebec Telegraph. "Canada," says the Telegraph, "is all right. Her natural resources are so vast that no one need worry. Her future possibilities are limitless; her assets beyond figures". Does it not seem like the limit of nonsense for a country that is not paying its running expenses to make such pretensions? After fifty-five years of Confederation and much talk of national status we are still sponging on the mother country for our external defense; we still allow the hard pressed tax-payer in the old land to shoulder the entire burden. We even now refuse to accept able-bodied working-men from that small and overcrowded country and yet blatently talk of limitless resources.

Jan 1, 1923

By R. D. Brown

"AbstractIn order to raise the enormous amounts of capital which will be essential for the development of Canada's mineral and petroleum resources, this country's resource industry must be permitted to earn an acceptable rate of return. The existing tax regime, with its high rates, complexities and misdirected incentives, presents a serious obstacle to our resource industries in their development of Canada's immense , but increasingly lean, resources. Government tax and other policies are not the only cause of the crisis now facing the resource sector in Canada, but a reformed tax system, with stable and reasonable tax burdens, is required if Canada's resources of minerals, oil and natural gas are to continue to contribute in the future, as in the past, to our national well-being.An independent task force, organized under the auspices of the Canada West Foundation, has recently completed a wide -ranging report: on the future development of Canada's mineral, oil and gas resources. This five-volume report, completed after almost two years of research and study, concludes that Canada •is facing a major crisis •in the development of our resources, It states that unless corrective action is taken now, mineral production and exports could decline drastically after 1985, at the same time that Canada would face massive bills for imported oil because of inadequate and declining production.The task force, chaired by the author of this article, has put forward recommendations for a fundamental shift in both federal and provincial policies in order that Canada's mineral reserves can be developed in the national interest. This article consists of excerpts from the summary of the task force's report."

Jan 1, 1977

Overview ?Oil Sands Background ?Water Use in Surface Mining ?Tailings Disposal ?Water Balance for Surface Mining ?Implications of Emerging Regulations ?Water Management Framework ?Tailings Performance Criteria (Directive 074)

May 1, 2009

By N. Morrison, I. Holl, R. Welyhorsky, A. Hempstock

ABSTRACT: The Victor diamond mine is located in the James Bay lowlands, 90 km west of the First Nations village of Attawapiskat. The project was the first of its kind in northern Ontario. The process plant was designed to produce a 95 to 98% by weight diamond concentrate through three stages of comminution, dense medium separation, and proprietary X-ray technology for final recovery. The plant was commissioned over a period of six months, commencing prior to substantial completion of construction. Through effective planning of the commissioning phase, the Victor mine start-up was safely completed nine months ahead of schedule.

Jan 1, 2011

By G. Lyle

Since its inception CEMI (Centre for Excellence in Mining Innovation) has focused on facilitating innovative solutions to the mining industry in six strategic research areas; GeoRisk, ConstructMine, ValueMine, FindMine, SustainMine and MineTech (visit www.miningexcellence.ca for details). This paper focuses on CEMI?s largest project to date, Ventilation on Demand (VOD). Energy consumption in mines can account for upwards of 40% of a mines operating cost, with a significant portion of this been consumed by the ventilation requirements. VOD provides a significant opportunity to reduce overall mine ventilation requirements and subsequently energy costs, while potentially increasing mine productivity. CEMI is currently in year 2 of an assessment of VOD, focusing on the financial, physical and equipment viability of utilizing such systems in both new and existing mines. This two year program, to be completed by March 31, 2011, is designed to systematically assess such a system to determine if and when it could effectively be applied in underground mines. The paper will describe the process by which the project was initiated, the demonstration projects established to capture data, the means to interpret the data and the modelling developed to calibrate and predict ventilation system requirements.

Oct 1, 2010

By Steve Wilson, Bern Klein, Jeff Drozdiak, Stefan Nadolski, Andrew Bamber

"In the adaptation of high pressure grinding rolls (HPGRs) to hard-rock mining applications, circuit development has mainly focused on placing HPGRs in the role of tertiary crusher in the preparation of ball mill feed. In order to take advantage of the potential energy benefits associated with HPGR and stirred mill grinding technologies, work was done to investigate the potential of and resultant energy benefits of placing the HPGR in series with a high speed stirred mill in replacement of the conventional cone crusher / ball mill arrangement. The proposed circuit was designed to operate with two stages of HPGR grinding followed by high speed stirred milling.Using a pilot-scale HPGR unit inline with a 20 liter stirred mill, the design criteria, circuit arrangement and consequent comminution energy requirements for a circuit processing copper sulphide ore from Teck Resources’s Mesaba Copper project were determined. These results were then compared to two other circuits, an HPGR / ball mill circuit and a conventional crusher / ball mill circuit processing the same ore.The testwork indicated at a proof-of-concept level that the HPGR / stirred mill circuit could potentially be appropriate for this duty and further work on the concept is merited. While the results indicate that the HPGR component of the circuit was more energy efficient than conventional cone crushing, the energy efficiency of the stirred mill was found to be lower than that of a comparable ball mill undertaking the same duty. However, increased energy efficiency of the stirred mill portion of the circuit is possible with further optimization and further work on the concept is indicated."

Jan 1, 2010

By Art Carino

"The McClean Lake operation is located in the Eastern Shore of the Athabasca Basin in northern Saskatchewan some 700-air kilometers north of Saskatoon. It is operated by Cogema Resources Inc., the major share holder of the joint venture consisting of Cogema Resources Inc., Denison Mines Limited and OURD, a consortium of Japanese utilities.The JEB mill is the first uranium mill to be constructed and licensed in North America within the last 15 years. The mill uses conventional uranium unit process but employs innovative techniques unique to the JEB mill.This paper presents brief descriptions of the various unit processes, the innovations and the commissioning strategies developed to achieve the designed production capacity in the shortest possible time.INTRODUCTIONThe McClean Lake ore body was discovered in 1979, followed by the discovery of the JEB ore body in 1982. From 1985 to 1990, a cluster of deposits named Sue A, Sue B and Sue C were discovered. Environmental Impact Assessment (EIS) of the McClean Lake project began in 1990 under a joint federal-provincial process. Following the public hearings in 1993, the governments gave approval to proceed with the construction of the project, subject to fulfilling licensing requirements.The McClean Lake ores are located in the uranium-rich geological region of Saskatchewan known as the Athabasca Basin, 700 air kilometers north of Saskatoon. The JEB mill is located near the mined out JEB open pit that is now used as the tailing depository.The approved mill has a production capacity of 6,000,000 pounds of U3O8 annually and is capable and licensed to process JEB, Sue A, Sue B, Sue C, McClean Lake, and Midwest Lake deposits. Although the EIS has been approved, Mining of the Midwest Lake deposit has not been approved at this time."

Jan 1, 2001

By I. Campbell, P. C. Jones, E. G. Potter, R. P. Taylor

"The Cobalt embayment is a large domain of Paleoproterozoic clastic sedimentary rocks that unconformably overlies the Archean Abitibi greenstone belt. Regionally extensive sills and dikes of Nipissing diabase, emplaced circa 2219 Ma, occur throughout the embayment and are the preferential host to gold-bearing polymetallic vein systems on the Merico-Ethel property, near the northeastern margin of the Cobalt embayment. These gold-bearing, polymetallic veins are predominantly east-west-trending, steeply dipping, discordant calcite- quartz vein systems that formed close to the time of crystallization (within ~15 m.y., based on Pb-Pb ages) of the Nipissing diabase. The ore mineralogy is complex in character, typically comprising sulfides, arsenides, native metals (gold and silver), and specular hematite, preferentially concentrated along the interface between silicate and calcite gangue. A simplified sequence of mineral deposition in the veins is: (1) "Early-stage" pyrite ± chalcopyrite hosted in quartz ± chlorite gangue; (2) "Main-stage" polymetallic (Cu + Co + As + Ag + Au + Bi ± Pb ± Ni ± U) sulfides, arsenides, and native metals hosted in calcite gangue; and (3) "Late-stage" calcite flooding ± galena. Wall-rock alteration in Nipissing diabase is restricted to narrow (<5 cm) haloes of calcite-chloriteepidote- bearing assemblages, whereas a weak alteration halo of specular hematite, calcite, and allanite-epidote has been observed in the surrounding sedimentary rocks. In terms of their age, geology, mineralogy, paragenesis, and morphology, the gold-bearing vein systems at Merico-Ethel closely resemble the silver-sulfarsenide vein deposits of the historic Cobalt and Gowganda mining camps. These observations indicate that the Au-bearing veins are variants of the Ag-vein systems and as such, have a common genesis belt. L’Échancrure de Cobalt est un large domaine de roches sédimentaires clastiques d’âge Paléoprotérozoïque qui reposent en discordance sur la ceinture de roches vertes d’Abitibi d’âge Archéen. La Diabase de Nipissing, mise en place vers 2219 Ma et qui constitue un réseau de sills et de dykes d’importance régionale, est présente dans l’ensemble de l’échancrure et constitue la roche-hôte principale des systèmes de veines aurifères-polymétalliques de la propriété Merico-Ethel, près de la bordure nord-est de l’Échancrure de Cobalt. Ces veines à minéralisation aurifère et polymétallique constituent un système de veines de calcite-quartz sécantes d’orientation principalement est-ouest et à pendage fort qui se sont formées peu de temps après la cristallisation de la Diabase de Nipissing (à ~15 Ma près, d’après les âges Pb-Pb). La minéralogie de la minéralisation est complexe; elle consiste typiquement en sulfures, en arséniures, en métaux natifs (or et argent) et en hématite spéculaire, préférentiellement concentrés à l’interface entre les silicates et la gangue de calcite. La séquence de déposition simplifiée des minéraux dans les veines est : (1) «Stade précoce» pyrite ± chalcopyrite encaissés dans une gangue de quartz ± chlorite; (2) "Stade principal" sulfures polymétalliques (Cu + Co + As + Ag + Au + Bi ± Pb ± Ni ± U), arséniures, et métaux natifs dans une gangue de calcite; et (3) "Stade tardif" calcite massive ± galène. L’altération pénétrative de la Diabase de Nipissing est confinée à des halos étroits (<5 cm) présentant des assemblages marquées par la présence de calcite-chlorite-épidote, tandis qu’un faible halo d’altération en hématite spéculaire, calcite et en allanite-épidote est noté dans les roches sédimentaires environnantes. De par leur âge, leur géologie, leur minéralogie leur paragenèse et leur morphologie, les systèmes de veines aurifères de Merico-Ethel ressemblent beaucoup aux gîtes filoniens d’argent-sulfoarséniures des camps miniers historiques de Cobalt et de Gowganda. Ces observations indiquent que ces veines aurifères constituent une variante des systèmes des veines argentifères et qu’elles partagent"

Jan 1, 2009

By Peter Barker, Terry Jones

"The Kelsey Centrifugal Jig (KCJ) utilizes the application of centrifugal force (and the resultant enhanced gravitational field) to conventional jigging technology principles to successfully and efficiently process materials where the valuable constituent particulates are very fine and/or where there is a small specific gravity differential between these and the gangue minerals.The KCJ is applicable to a broad range of fine mineral recovery duties, with current installations in the mineral sands, tin, tantalum, gold and nickel industries. Other areas of application are being developed with mineral commodities including tungsten, base metals, iron ore, chromite and apatite/feldspar.Information on the principles of operation of the KCJ, typical performance figures in a number of application areas, comparison to centrifugal concentrators, key elements for a successful KCJ operation and recent developments with the KCJ are presented in this paper to demonstrate the capabilities of the KCJ.INTRODUCTIONAfter a number of years of development by inventor Chris Kelsey, the first commercial KCJ unit was installed at the Renison Bell tin mine in Tasmania, Australia, in 1992. The subsequent decade saw the installation of further KCJ units in applications including tin, tantalum and mineral sands.Development and improvement in KCJ hardware continued and culminated in the introduction of the high-capacity Model J1800 KCJ and standard features such as an automatic screen cleaning system. This opened up further markets and resulted in Model J1800 KCJ installations in the gold and nickel industries, as well as further KCJ installations in the mineral sands and tin industries. In recent years, work has continued on application of the KCJ to many other duties in industries including tungsten, base metals, iron ore, chromite, apatite/feldspar, etc."

Jan 1, 2007

By C. Pelley, A. Piche

"The Canadian mining industry faces the prospects of a severe shortage of graduate mining engineers over the next decade. This arises from three factors: first, a growth in industrial activity; second, the average age of company engineering and management staff; and third, the reduced number of students in engineering faculties around the world. This paper aims to identify the critical factors underlying the trend of inadequate recruitment into higher education for mining and to examine means of alleviating the problem.This paper is based upon surveys of potential and current students and graduate mining engineers from four mining schools. An attempt is made to understand institutional and industrial images, career prospects and what is required to attract enough high-calibre young people into mining education over the next decade.IntroductionThe mining industry has started to experience a severe shortage of graduate mining engineers which is likely to persist and even worsen in the short- to medium-term.This arise s from three principal factors:1. a recent and strong growth in mining activity, which surpasses that experienced through the 70s, before the recent international industrial recession; .2. an increasingly older average age of mine engineering employees, at least in the industry&apos;s larger companies; and3. problems associated with maintaining adequate mining undergraduate recruitment levels ."

Jan 1, 1989

By S. H. Ward

An account of a new method of investigating the electrical .properties J the earth&apos;s crust is presented. The method, called AFMAG, employs, as a source, natural alternating magnetic fields of audio and sub-audio frequencies. Measurements of the distortion of these fields caused by geological features are made with the aid of search coil detectors at several discrete frequencies. Many results of field surveys made with the method are presented and they illustrate its advantages and limitations when applied to the search for massive sulphide mineralization. The advantages far outweigh the limitations and in fact indicate that a major breakthrough in geophysical exploration technique and instrumentation has been made.

Jan 1, 1958

"The Key Lake mill was commissioned in 1983 to process the two Key Lake ore deposits. With the depletion of these ore bodies in 1999, the plant was converted to mill the exceptionally rich McArthur River deposit located seventy eight kilometers northeast of the Key Lake mine site. This paper describes in detail the Key Lake milling process. The mill consists of a grinding circuit, a leachkounter current decantation circuit, a solvent extraction circuit, a yellowcake precipitatiodcalciner circuit, an ammonium sulphate crystallization circuit, and a waste treatment circuit. The paper also describes process changes to handle McArthur River ore, including the ore receiving stationLOCATIONThe Key Lake mill is located 78 kilometres south of the McArthur River mine. It is located at latitude 57' N in northern Saskatchewan, within the southern boundary of the Athabasca formation. The nearest town is Pine House, located 240 kilometres to the south. Access to the mine is by an all weather road and by a private airstrip.HISTORYAND DESCRIPTION OF OPERATIONThe Key Lake mill was commissioned in October 1983 to process ore from the Gaertner and Deilmann ore bodies. The mill was designed to produce twelve million pounds of uranium oxide (U308) a year from a feed grade of 2.4% U3O8.Following grinding, the uranium is leached in a two stage leach circuit using oxygen and sulphuric acid. An eight-thickener counter current decantation (CCD) circuit is used to separate the uranium bearing solution from the solid waste residue. The uranium is further purified in a solvent extraction circuit and then precipitated using ammonia. It is then calcined at 840' Celsius, and packaged into drums for shipping to refineries. There is a crystallization circuit to recover ammonium sulphate produced in the process and a waste treatment circuit."

Jan 1, 2001

By Brad Hewitt, Jeff Belke

"Murrin Murrin Operations has not had a successful beginning. Numerous reliability and operability issues many of which are the result of design decisions have been addressed through mechanical and operational changes and the CCD circuit is no exception. Four design aspects of the CCD circuit that have caused and continue to cause operational problems are:1. the inclusion of solution neutralisation gypsum in the CCD circuit feed which was designed solely for HPAL residue without proper investigation of its impact on the achievable underflow density and resulting wash efficiency;2. the decision to construct the thickener base from thickened solids;3. the lack of redundancy in the overflow, underflow and tailings pipe work; and4. the lack of thickener operational flexibility in the central rake-lift and feedwell dilution system.In November 2002, the lack of operational flexibility in the rake-lift and the feedwell dilution system through mechanical modification as follows:•, CCD1 has a modified rake mechanism that now allows central vertical lift of 600 mm;•, CCD1 has forced dilution using the Outokumpu Turbodil® technology and replacing the E-Duc® technology of Eimco;The decision to install, the installation and the results of the CCD1 rake-lift mechanism and feedwell dilution system are discussed in this paper. The installation was justified on improved operational robustness and an increase in the in the underflow density of 1 per cent (per cent w/w). At approximately the same time process modifications in the solution neutralisation circuit were implemented and these changes altered the rheology of the slurry reporting to CCD1. Since the modifications to CCD1 and the solution neutralisation circuit, the CCD circuit has averaged a 2 per cent improvement in the circuit underflow density.The CCD1 modification was completed on time and mechanically has performed well. From a risk point of view, the central rake-lift and Turbodil®dilution system add a degree of freedom and robustness to CCD1 operation that has extended the range of operational confidence. In this respect, the modification has been a success and is complementary solution neutralisation improvements."

Jan 1, 2005

By Zuhair A. Nawab, Muhammad A. Al-Marhqun, Mehmet Guney

"The Atlantis-Il-Deep is a stratified metalliferous deposit located along the median valley of the Red Sea at a water depth of about 2200 m. The metal-bearing mud contains sulphides of zinc, copper and iron with significant amounts of silver, gold and cobalt. A variety of oxide, siliceous and carbonaceous gangue material is also present. Long sediment cores indicate that the thickness of the deposit may reach 25 m, but the average kriged thickness of metal-rich sediments is about 11 m.Mining geostatistics was applied to estimate the Red Sea offshore mineral resources. Experimental semi-variograms were computed along 0 ± 180 degrees and then models were fitted to analyze the mineralization phenomenon. Kriging estimates indicate that 696.330 million t of bulk sediments contain 1.891 million t of zinc, 0.425 million t of copper and 3. 75 thousand t of silver. Gold and cobalt contents were calculated from the analysis of solids in flotation concentrates as 47 t and 5368 t respectively. The significant outcome of implementing geostatistics to the Red Sea brine precipitates is not only for the evaluation of metal resources, but it also provides a useful tool in the optimization of selective dredging of appropriate areas to be mined. IntroductionThe discovery and extensive exploration of hot brines and hydrothermal sediments in the Red Sea median valley revealed the fact that the Atlantis-II-Deep is a potentially exploitable metalliferous mud in the economic sense. Sediments in the mineralized deep are composed mainly of oxides, various types of silicates and sulphides with considerable concentrations of zinc, copper, cadmium, silver and gold. The mineral-rich deposit, located at a mean water depth of about 2000 m, has an average thickness of 11 m, and is covered by a brine layer having a temperature of 60°C."

Jan 1, 1988

By D. M. Doyle

A study of the various components contributing to energy costs and their relationships to generally trended operating data, such as tonnage, operating costs, etc., over progressively shorter time periods provides information for an energy audit. A study of annual data gives some insight into the importance of various energy components. As the time frame of the study progresses through monthly, daily and, finally, into quarter hourly data, the variations become more evident and, most important, strategies develop to minimize energy costs. The results of an audit conducted during the summer of 1978 at Wesfrob Mines Limited are reported to illustrate this important phase, prerequisite to a meaningful energy cost avoidance program. The balance of the paper deals with the energy conservation program at Falconbridge Nickel Mines Limited&apos;s Sudbury operations, the metering and control equipment, the commitment, the new energy accounting practices and, lastly, the policies. Examples of successful energy conservation endeavours include automatic peak electrical load control, waste heat recovery from mine air and compressor cooling water, energy reductions resulting from lower building temperatures and curtailment of idling loads. The use of pulse meters to measure the flow of gas, steam, compressed air and electrical energy, with their signals interfaced to process computers, allows monthly, daily and, if necessary, immediate reporting of energy and energy per unit of production information The program so reported at Falconbridge&apos;s Sudbury Operations is credited with an annual cost avoidance of .9 million dollars in a 14.0-million-dollar annual energy account

Jan 1, 1979

By R. Tyreman, G. Ritson

"The Red Lake Mine is situated in Balmer Township, Red Lake area in northwestern Ontario. It is an underground mine that has been in production since 1948. The property was originally known as the Dickensen Mine and was shut down in 1996.A feasibility study was carried out in 1998 and it was determined that a new mill should be constructed with a throughput rate of 600 stpd. The life-of-mine average gold grade was projected to be 1.35 oz/t with gold predominantly associated with arsenopyrite and pyrite. Metallurgical testwork indicated that the optimal flowsheet for gold recovery would include an autoclave for oxidation with a carbon circuit for adsorption. To limit capital cost and establish cashflow, the mill was constructed without an autoclave. The recovery by gravity and cyanidation was projected to be 83%. A flotation plant was constructed at the tail end of the circuit to recover the additional gold associated with sulphides from the leach circuit tailings. This material is being stockpiled onsite for future oxidation treatment.Detailed engineering was started in early 1999 and the first gold was poured in August 2000. One feature of the project was the use of Contact Lake equipment from Cameco’s Contact Lake project. The entire mill was purchased and equipment re-used where possible. The capital cost for the process facilities was C$3 1.5 million."

Jan 1, 2001

By J. Goyman, K. R. Rawling

"1.1 Location and Transportation ServicesNanisivik Mines Ltd. is located at latitude 73°, 3,200 km north of Montreal and 700 km north of the Arctic circle, on the south side of Strathcona Sound, which is an arm of Admiralty Inlet, in Northern Baffin Island. The orebody and mill site are 4 km distant from Strathcona Sound which provides deep water anchorage for ocean transportation of concentrate to Europe during the short northern shipping season from mid-July to mid-October.The operations and the resident community have direct jet aircraft service from Montreal two days per week, and local nights connect with other Arctic communities in the northern Baffin region. Bulk supplies and general cargo are delivered in the summer shipping season.1.2 HistoryThe Texas Gulf Sulphur Company, now Kidd Creek Mines Limited, staked claims in the Nanisivik area in 1957 and carried out exploration through to 1968. After the Kidd Creek orebody was found, Texas Gulf optioned the property in 1972 to Mineral Resources International Inc. (MRI), which undertook further exploration and completed a feasibility study.Nanisivik Mines Ltd. was formed in 1975, with MRI as the majority shareholder and minority shareholdings held by Metallgesellschaft, Billiton and Texas Gulf. Strathcona Mineral Services Limited was retained to manage the project during both the construction and operational phases."

Jan 1, 1984

By Karl J. C. Harries

"12.1. NO DEPRECIATION/GAAPAll calculations and computations relating to the Royalty shall be carried out in accordance with generally accepted accounting principles consistently applied to the extent that such principles are not inconsistent with the provisions of this Schedule and the agreement attached hereto, it being specifically agreed that nothing herein contained shall permit, or be construed to permit, the Operator to deduct any amount for depletion, depreciation, amortization or any deduction that represents a non-cash outlay.Comment: In cases like net profit royalties where recoupment of prior expenditures is permitted, care should be taken to avoid any implication that depreciation may also be taken. It is only logical and equitable that Property Owners should not be permitted an apparent ability to “double dip” with respect to deductions. A provision like this example should accomplish the task. It will be noted that the example specifically contemplates that the negotiated arrangements will prevail over any requirements of GAAP. Accordingly, if the parties agree to an unusual formula for recoupment, it will not be set aside to accommodate GAAP requirements. Under GAAP, revenues and expenditures are accounted for on an accrual basis. In addition, it specifically prohibits the taking of non-cash deductions, which is in keeping with the concept of recoupment.Although in some ways the example states the obvious and could be considered redundant, its presence, especially in provisions contemplating recoupment, makes it clear to the financial people that there may well be some variations from normal practices dictated by GAAP, while at the same time confirming the availability of GAAP to fill any voids.The accounting profession often makes the caveat that application of GAAP is an “art”, not a “science”. GAAP do not provide a cure-all and can create problems that will have to be addressed. For example, GAAP contemplate that asset costs are to be reduced by investment tax credits, which can cause a problem for a payor with more than one mine."

Jan 1, 2003