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By M. Tanaka, S. Kita, Y. Jinnouchi, Y. Sawada

This paper generalizes the results of the recent theoretical and experimental investigations on the air-pulsated jigs in Japan. The pulsating mechanism is analyzed as a special vibratory system, and the jigging mechanism as a mass system subjected to the law of hindered settling. The results of investigations on the following items are reviewed: dynamics of the pulsating mechanism; pulsation in a practical TACUB jig development of a new type of air valve; uniform pulsation in a large Baum jig; motion and mobility of bed particles; separating speed in hindered conditions; and standard deviation in practical jigs.

Jan 1, 1985

By Ralph L. Erickson

The discovery of a Carlin-type gold deposit at Cortez, Nevada, in 1966 can be attributed directly to the use of geochemical exploration techniques. Most mineral deposits owe their discovery to geologic concepts, geologic analysis, and luck, but at Cortez, geochemistry as an exploration tool played the clearly dominant role in discovery. Of course, the economic significance of the discovery had to be determined by exploration and development drilling. The story of the discovery began in 1959 when field work was initiated on a new project, "Geochemical Halos Utah and Nevada," by R.L. Erickson and A. P. Marranzino for the US Geological Survey. The Cortez district was selected for geochemical work because it was an area with good geologic control where we could address the problem of how to prospect in barren outcrops for concealed ore deposits in potentially favorable structures (buried thrust zones) or favorable host rocks in the subsurface. Geologic mapping of the Cortez 15-min quadrangle, just being completed by Gilluly and Masursky (1965), showed that the quadrangle contained excellent exposures of both the upper and lower plates of the Roberts Mountains thrust fault, a major structural feature of north-central Nevada. Roberts (1960) had noted that a number of mining districts were associated with windows in the thrust. In 1959, Erickson and Marranzino did some reconnaissance rock sampling and spring-water sampling in the siliceous clastic rocks of the upper plate of the thrust. Results of this reconnaissance prompted a full-scale sampling program in 1960 in the upper plate rocks on the west flank of the Cortez window. Results of the investigation showed that anomalously high concentrations of metals occur in the upper plate rocks, and further, that the distribution of metals is fault controlled and shows a pronounced zoning pattern (central copper zone; intermediate zinc, copper, and lead zone; and outer arsenic zone). The anomalies were interpreted as primary leakage halos that originated from metal occurrences in the thrust zone or in carbonate rocks below the thrust and moved upward along normal faults that cut both upper and lower plate rocks. Erickson gave a talk about these anomalies in the summer of 1961 to the local AIME Section in Reno, Nevada; two short reports were published that year-" Geochemical Anomalies in the Upper Plate of the Roberts Thrust Near Cortez, Nevada" (Erickson et al., 1961) and "Hydrogeochemical Anomalies in Four Mile Canyon Near Cortez, Nevada" (Erickson and Marranzino, 1961). These releases prompted blanket staking in the area by several small companies. In 1963, geologic and geochemical mapping were started by the USGS in the lower plate carbonate rocks of the Cortez window west of the quartz monzonite stock at Mount Tenabo and north of the old townsite of Cortez. The results of the work showed anomalously high concentrations of arsenic, antimony, and tungsten in jasperoid, fracture filling, and shear zones in Silurian and Devonian carbonate rocks. The anomalous area was about 1.6 km (I mile) long and 300 m (1000 ft) wide. A brief report, "Geochemical Anomalies in the Lower Plate of the Roberts Thrust Near Cortez, Nevada" (Erickson et al., 1964a), was published in 1964. During this same time period, 1959-1964, several exploration or mining companies were active in the general area (chiefly mapping geology and acquiring property). In 1964, American Exploration and Mining Company (Amex) concluded that the entire Cortez district was worthy of an extensive exploration effort involving drilling as well as geologic, geophysical, and geochemical studies. To carry out the program, Amex formed a joint venture group with the Bunker Hill Company, Vernon Taylor, Jr., and Webb Resources. Their early efforts were directed to the upper plate rocks and to the lower levels of the old Cortez silver mine. The group also drilled some shallow rotary assessment holes adjacent to the area of the arsenic, antimony, tungsten anomaly in lower plate carbonate rocks described in Erickson et al. (1964a). Assay results from these holes offered little or no encouragement to the joint venture group. Splits of these drill samples were made available to the USGS. In order to enhance any metal content present in these rocks and to determine the mineral residence of any metals detected, heavy-mineral concentrates of each 3-m (10-ft) sam-

Jan 1, 1985

By Grover R. Castle

INTRODUCTION "Project Financing" or "Project Loans" have become increasingly popular in recent years, and commercial banks are being asked to consider more and more of such financing. However, the analysis of this type of loan is quite different from the analysis of a loan to a financially sound corporation based on the company's balance sheet. For this reason Chemical Bank did a study of project loans in an attempt to be more sophisticated in our approach to them. As part of this study, we examined 29 project financings for which information was available. In this article I shall describe project loans and set forth the guidelines we developed, as an aid to credit officers who might have occasion to analyse this type of financing. DEFINITION OF "PROJECT FINANCING" OR "PROJECT LOAN" The terms "project financing" and "project loan" commonly describe the various methods that banks and institutional lenders use to finance the construction of new projects on a basis whereby payout is anticipated from the revenue stream generated by the project. A project financing often involves a loan to a new entity formed specifically to own the project. The analysis of a project loan proposal is quite different from the analysis of other term-loan proposals since it involves a credit decision based on the review of a projection or forecast rather than of historical earnings and/or it involves the reliance on contractual obligations of third parties. Lenders are asked to assume the added risks associated with project loans because: 1. Project financing may permit a company to obtain additional leverage. It is possible for companies to arrange financing on a project basis that could not be arranged as a direct borrowing. For example, a company may not be permitted to borrow more money directly, due to a limitation in a bond indenture. However, a project financing can sometimes be negotiated on a basis not prohibited by the indenture. 2. Often the sponsors of, or the stockholders in, the project are seeking an off-balance-sheet financing. For example, 11 of the 29 projects in our study were arranged on an off-balance-sheet basis and one showed on the balance sheet as a deferred income item. An off-balance-sheet financing, for the purpose of this article, is a financing which does not show as a direct liability on the balance sheet of the sponsors of or stockholders in a project. 3. Projects are often located in a foreign country. The financing is arranged so that the lenders assume the political risk on the loan because many companies rightly believe that this arrangement affords a degree of insulation from political risk not otherwise obtainable. 4. Many projects are jointly owned by several sponsors. This form of financing lends itself well to a situation where a new entity is formed to own a project and do the borrowing. Project loans can be used to finance a variety of activities including development of iron-ore deposits and associated pelletizing plants; development of coal reserves; construction of pipelines, alumina plants, fertilizer plants and refineries; etc. The specific areas of analysis can be quite different, depending upon the type of project being financed. It is important, therefore, to classify the proposal according to the type of project, and also by the nature of the financing - nonrecourse financing, financing covered by a guarantee of completion and financing supported by an undertaking lasting for the life of the financing. I will discuss each of these types in more detail later, but first, I should like to make some

Jan 1, 1985

By Thomas R. Couzens

Jan 1, 1985

By K. Adam

Grinding in steel mills adversely affects the flotation of pyrrhotite. The electrochemical nature of inter action between pyrrhotite and active metals was investigated by contacting pyrrhotite with platinum at different applied potentials. Flotation tests, scanning electron microscopy, Auger electron spectroscopy, and X-ray photoelectron spectroscopy were wed to examine the surface properties of pyrrhotite. The formation of hydroxide or oxide and sulfate species of iron through the oxygen reduction reaction at the cathodically polarized surface of pyrrhotite was shown to be the mechanism responsible for the reduced floatability of pyrrhotite.

Jan 1, 1985

By McCall. F. E., J. Cervik, A. A. Campoli, P. Thakur

The cross-measure borehole system is a common method of controlling gob gas throughout Europe. Drainage holes are drilled into the strata adjacent to the coalbed being mined. Removal of the coal on a longwall panel relaxes and fractures the adjacent strata, enabling these holes to draw out the methane. A test in the Upper Kittanning Coalbed demonstrated the capture of 50% of the total methane generated by the mining operation. A test in the Pittsburgh Coal bed was not as effective.

Jan 1, 1985

By Tomek Ulatowski

INTRODUCTION In 1974, Industrial Miners Mexico, S.A. (IMMSA), agent for the borrowers, was the largest privately-held mining, smelting, and refining company in Mexico (accounting for 32% of Mexico's nonferrous metal and coal production in 1974), the fourth largest company in terms of sales, and the second most profitable company in Mexico, excluding government wholly-owned and operated industries. The company was engaged in the mining, smelting and refining of coal, copper, fluorite, gold, lead, silver, zinc and related by-products for domestic consumption and export. A combination of favorable factors led IMMSA to propose an investment plan amounting to US$286 million for 1974 through 1978, of which US$150 million was to be financed. These factors included: Substantial profits in 1973 and 1974 Positive near-term outlook for metal prices Success of the reinvestment program in increasing productivity Substantial additions to proved reserves during 1973-1974 and Fiscal incentives provided by the Mexican government to stimulate investment in the mining industry. The primary purpose of the investment program was to construct a new electrolytic zinc refinery and to expand and modernize many of the company's existing mining and refining facilities. THE BORROWER Company History Compania Miners Mexico, S.A. was incorporated in the city of Monterrey in 1918 as a wholly-owned subsidery of ASARCO Inc. (formerly American Smelting and Refining Company, New York) for the purpose of mining and processing non-ferrous metals and related products. In compliance with the Government's Mexicanization program, ASARCO Inc. divested itself of 51% of its equity in Compania Miners Asarco, S.A. on June 30, 1965. Subsequently, ownership in the divested share was apportioned as follows: 15% ownership in Compania Miners Asarco, S.A. to a group of private investors, and 36% in trust for subsequent public sale. The company's name was changed to Asarco Mexicana, S.A. in 1965. Mexican ownership in Asarco Mexicans, S.A. was increased to 51% in 1967, following the purchase of the 36% share ownership held in trust, and then to 66% in 1974 when ASARCO Inc. divested itself of an additional 15% of its holdings in Asarco Mexicans, S.A. Following its 1974 divestiture of 15% of Asarco Mexicans, S.A., ASARCO Inc's ownership in Asarco Mexicana, S.A. was reduced to 34%. In 1974, the company changed its name for the second time to Industrial Miners Mexico, S.A. (IMMSA). Fiscal Agreement IMMSA entered into a fiscal agreement with the Mexican government in 1969. The agreement, which was renewed in 1974, provided for 100% of the production and export tax corresponding to the federal government with a minimum of 50% of the amount refunded to be reinvested in fixed assets. Further, the agreement permitted the company to

Jan 1, 1985

By J. B. Hiskey

The hydrometallurgical application of thiourea in processing precious metal ores and concentrates has reached the development stage. This paper reviews recent technical literature covering the process development of thiourea leaching. In addition, recent fundamental contributions are discussed. Most of the interest in thiourea leaching has involved treating high grade concentrates that have sufficient value to just the use of thiourea as a reagent. An important development in thiourea technology is the addition of SO2 to the leaching solution. This procedure effectively reduces the decomposition of thiourea and eliminates the problems of passive surface layers that limit the leaching efficiency. Results for the thiourea leaching of a bulk sulfide concentrate and a residue from the autoclave leaching of a smelter flue dust are also reported. As determined by a standard bottle roll cyanidation test, the bulk concentrate was extremely resistive to cyanide leaching yielding only 16% gold and 2% silver extraction in 24 hours. Leaching with a relatively concentrated thiourea solution (1MCS (NH2)2) resulted in 83% gold and 75% silver extraction in four hours. With the treated flue dust residue, gold extraction was about 60%. Gold and silver extraction with cyanide was sensitive to both cyanide concentration and oxidizing conditions. Cyanidation resulted in 59% gold extraction and 77% silver extraction in 24 hours.

Jan 1, 1985

By S. M. Bishoff

The disturbance of surface land to support the underground mining of coal requires several hundred acres to produce easily in excess of $1 billion in sales at a moderately sized mine over 20-30 years. Due to the recent influx of environmental legislation, these surface operations must now undergo complete reclamation upon permanent cessation of production. This reclamation procedure has become so complex that the cost of reclamation must be a major consideration in the design of a new mine. This presentation will discuss these costs as they may be methodically evaluated and surcharged as a percentage of the product price. When placed in the proper, logical perspective, it is anticipated that the obstacles involved in this process may be minimized.

Jan 1, 1985

By P. G. Dunn

Geologic studies during development at Copper Flat were directed at acquiring the necessary information in evaluating a low-grade porphyry copper deposit. In addition to the geologic mapping and core-logging of a typical exploration project, these studies included: - careful checks on the sampling and assaying, - selection of representative samples used to establish the recoverable amounts of precious metals in the ore, - examination of underground workings driven to provide samples both for metallurgical testing and for assay comparison, - evaluation of plant site and waste dump areas as non-material, including a placer examination of the tailings disposal area, and location of an adequate water supply. All these investigation were carefully documented to provide the necessary data both for the engineering design and, more importantly, for the feasibility studies required for successfully financing the project.

Jan 1, 1985

By K. Kobayashi, K. Ueda, K. Yamaguchi

Lead concentrates from Kuroko (black ore) mines, which contain 4-7% Cu, 55% Pb, 3-777, Zn, and 0.5-0.9% As, are pretreated by a hydrometallurgical process before electric furnace smelting with other lead resources from Kuroko. The hydrometallurgical pretreatment involves sulfuric acid leaching in the first stage and ferric leaching in the second stage. This paper describes the short history of lead recovery from Kuroko and the performance of laboratory tests and pilot plant and commercial operations.

Jan 1, 1985

By N. N. Clark

Pachuca tanks are used widely as reactors for treating gold slimes, and for alumina digestion and uranium leaching. In some designs, slurry mixing in the tank is achieved by introducing air at the base of a draft tube, which is the full height of the tank. A buoyant air-slurry mixture rises in the draft tube and is discharged at the top. The slurry flows back through the bulk of the tank volume. Little information is available to predict the relationship between slurry flow rate in the draft tube, and the volume of air added at the base of the tube. Most current designs are based on the energy balance proposed by Lamont 25 years ago. Recent two-phase flow theory is used to develop a momentum balance for the flow in the draft tube, and a new, accurate design equation is derived. Bubble slip, frictional (wall) losses, entrance losses, and acceleration effects all contribute to the pressure gradient in the draft tube. None of these factors may be neglected under typical operating conditions. The new design equation accounts for all of these factors, and finds good agreement with Lamont's experimental example. Also, the new equation demonstrates that it is uneconomical to operate the draft tube with high airflow rates.

Jan 1, 1985

By S. Tandanand, Powell. L. R.

The US Bureau of Mines assessed the geological effects on the ratio of maximum subsidence and extraction thickness, known as the subsidence factor, to develop a simple method for predicting the maximum subsidence. The study is restricted to the Northern Appalachian Coal Basin where data were collected from 13 coal mines. A model previously developed to relate the subsidence factor with the lithology and with the width and depth of working panels was used in the assessment. The result shows the possibility of determining maximum subsidence without resorting to a rigorous method.

Jan 1, 1985

By Peter H. Fletcher

THE ECONOMIC THEORY It will assist in the understanding of the Resource Rent Tax ("RRT") proposals in Australia if the economic theory behind the tax is briefly explained. The idea goes back to the concept of rent put forward by the nineteenth century economist David Ricardo. His analysis was broadly as follows: A tenant who farms land which is just on the margin of economic viability cannot afford to pay his landlord any rent, because the value of the crop produced by such marginal land is equal to the cost of producing the crop, plus the cost of keeping the tenant alive. There is nothing left out of which to pay rent to landlord. A tenant who farms good land can afford to pay his landlord rent -- but the maximum amount of rent that he can be asked to pay is the excess of the value of the crop produced by the good land over the cost of producing the crop and of keeping the tenant alive. Adapting this theory to the taxation of mining projects, modern economists who favour this system of taxation say that a profitable mining (or resource) project produces rent in the Ricardian sense. The amount of the rent is the excess of the profits by the project over the amount of profit which is required to attract the taxpayer to invest in the project in the first place. This explains why the tax is called "Resource Rent Tax". PAPUA NEW GUINEA PRECEDENT Although Papua New Guinea ("PNG") is now independent of Australia, there are still close links between the two countries, and strong similarities between their respective tax regimes. PNG introduced an Additional Profits Tax ("APT") in 1978. In many respects, Australia's RRT proposals follow the precedent set by PNG1s APT. However, in practical terms, not a great deal can be learned at this stage from PNG's experiences since, according to the writer's understanding, no PNG mining project has yet paid any APT. The Bougainville mine is not liable to APT, being subject to tax under its own separate Act, which contains a different formula. Outline of PNG Additional Profits Tax. PNG has two versions of Additional Profits Tax ("APT) - one applying to general mining, the other to petroleum mining. The two versions are very similar. The general mining version is described below. The tax applies on a licence by licence basis. This means that losses on Licence A cannot be offset against profits on Licence B. Expenditure relating to two or more licences, is apportioned "in such manner as the Chief Controller thinks reasonable". Tax is levied on the "accumulated value of net cash receipts" at the rate of (70 - n)% where n=the rate of income tax. The accumulated value of net cash receipts ("av") is calculated as follows: Calculations commence from the first year in which substantial expenditure was incurred on the construction of facilities for the carrying out of mining operations on the licence. For that year the av consists of the total allowable expenditure to date on that lease. For the second year, the av is the av at the end of year one indexed in accordance with the statutory formula set out below, plus the total allowable expenditure in year 2. For year 3, the av is the av at the end of year 2 adjusted by the index factors, plus the total allowable expenditure in year 3. This process is repeated year after year. When the licence starts to earn revenue, the revenue is deducted from total allowable expenditure for that year. If revenue exceeds total allowable

Jan 1, 1985

By Michael R. Cartwright

The Gold Acres outcrop was located by Lee Lakin in 1922, according to Mr. H. W. Treweek. There was no activity, however, until 1935, when prospect drifts and pits penetrated the deposit. It was then drilled by the Willow Creek Mining Company. Beginning in the late 1930s and continuing to the late 1940s more than 150 churn drill holes were drilled in the Gold Acres area. From this drilling came what is now known as the London Extension pit. Only oxidized ore amenable to cyanide vat leaching was mined during this time. Our records indicated that this period of mining removed some 1.4 Mt (1.5 million st) of ore at an average grade of 0.006 kg/ t (0.2 oz per st). Union Pacific and Newmont Mining Company worked in the area prior to acquisition by the Cortez Joint Venture. Union Pacific drilled a number of core holes in the area. The unoxidized nature of the ore, small tonnage, and low grade undoubtedly prevented mining at this time. From these indications of mineralization shown by previous companies, the Cortez Joint Venture developed and mined 2 Mt (2.4 million st) at 0.005 kg/t (0.15 oz per st) in the Gold Acres pit. This pit is located immediately southwest of the older London Extension pit. Cortez Gold Mines has continued to drill to the west and south of these pits along the downdip continuation of the former ore bodies. The downdip extension is unoxidized and more metallurgically difficult than the normal Carlin type ores, but, more than 2.4 Mt (2.7 million st) have been outlined. It depends now upon the gold price and milling costs to turn this mineralized area into an ore body. A possible lesson to be learned from this deposit is that continued mining success depends upon an ongoing adequately funded exploration-development-metallurgical research program. These three disciplines must always be present to locate the mineralization and to turn this mineralization into ore. [ ]

Jan 1, 1985

By David C. N. Cockburn

INTRODUCTION This paper analyses certain of the financial considerations which will commonly apply in relation to the following questions: - what equity structure or project vehicle should be adopted for the exploration and/or exploitation of a project by more than one unrelated participant? - what vehicle should be adopted by a participant for its participation in a multiparty project? Due to local, politically motivated laws in certain jurisdictions, or due to the overriding requirements of a dominant participant, there may be little choice of the underlying multiparty structure which may be adopted for the exploration, appraisal and/or development phases of a project. Nevertheless, even in such circumstances, attention should be given, at least in the preparation of the related documentation, or in considering methods of participating or funding the project, to certain of the points discussed below. This discussion of financial considerations in the context of the more commonly adopted multiparty structures concentrates primarily on fiscal, financial accounting, financing and funding aspects. TYPES OF PROJECT VEHICLE FOR MULTIPARTY INTERESTS The well known types of vehicle adopted for the participation in a project by more than one participant (assuming that the participants are effectively unrelated) are as follows. Joint Venture (unincorporated joint venture) By far the most commonly adopted structure for mining ventures, a joint venture is usually defined and documented in terms to distinguish it from a partnership for important tax and legal reasons. In essence, this is a contractual association of more than one participant to carry out a specific commercial project or purpose. The relationship between the separate participants and their respective rights, interests, obligations and liabilities are agreed between the participants in one or more contracts (viz Joint Venture Agreements or Joint Operating Agreements together with ancillary documentation). Unlike other project vehicles of participation, in most jurisdictions there is no specific body of law governing joint ventures. The participants thus enjoy contractual freedom to negotiate whatever deal they may wish between themselves. Jointly-Owned Project Company (corporate joint venture) A very familiar vehicle, this is a separate and distinct legal and tax entity incorporated under the company laws of the place of incorporation to undertake specific objects, and granted specific powers, in relation to the Project. Although certain rights, interests and obligations may be circumscribed in the governing corporate instruments by the promoter participants, the corporation laws of the relevant place of incorporation, and the selection of such governing laws (assuming freedom of choice) and future political changes in such corporate laws, should be carefully considered. The use of a company in a multiparty structure may be peripheral to the project itself as a specific purpose vehicle (for example, a joint sales agent or marketing company or a joint borrowing vehicle) or it may form a central function such as in the case of a tolling company which will own the project for legal and taxation purposes and raise financing with the backing of the shareholder participants commonly by the adoption of take-off, throughput and/or user agreements. Partnership This is a legal relationship, subject to the often wide-sweeping restrictions of the relevant local partnership laws, under which the participants have agreed to carry on a business venture together with a view to profit. The effect of the relevant partnership laws, as well as the various types of partnerships and the

Jan 1, 1985

By L. O. Storey

The McDermitt mine was found as a separate mercury ore-bearing occurrence approximately 305 m (1000 ft) northeasterly and in a different geologic setting from the old Cordero mine, which had been the district's major producer. The following briefly describes the discovery of the new deposit and the Placer Amex lnc. involvement. The Cordero mining property was under lease by Sierra Mineral Management from the owner Fred H. Lenway in February 1971, when the property was brought to the attention of Placer Amex Inc. (known at that time as American Exploration and Mining Co.) by Richard F. Hewlett of Sierra Mineral Management. The property was first examined by Amex geologists in the spring of 1971, who reported favorably on the project. During that year, Sierra Minerals Management had retained Dr. Larry Walters as a consultant. He proceeded to drill test mercury soils anomalies which he had found northeast of the old Cordero mine in an area overlain by recent alluvium and gravel. An area known as the D area was subsequently blocked out and ascribed a tonnage of about 18 1 kt (200,000 st) which occurs in the vicinity of the eastern edge of the currently defined McDermitt ore body. This mineralization was found in flat lying mercury-bearing lakebeds, unlike the steep structurally controlled ore which was mined in the old Cordero mine. It became apparent to Placer Amex that since the chances of much more extensive ore were good in such a geologic environment, additional exploration was warranted. A joint venture was formed in October 1972 by American Exploration and Mining Co. and Sierra Mineral Management to further explore the Cordero property. The project exploration was fully funded and managed by Amex. Sampling began by Placer Amex in the D area where an open trench had exposed the lakebed ore. Visible cinnabar could not account for the high-grade mercury assays taken from the trench, and an unknown mercury mineral was suspected. Subsequent work established the presence of a chlorine-bearing mercury sulfide which may have enriched the lakebeds as a secondary supergene mineral. Early identification of the mercury-bearing mineral corderoite (Hg3Cl2S,) aided in the geologic concepts for the ore occurrence and was helpful in exploring for the expansion of the D area. Corderoite was found occurring with cinnabar in the lakebeds, and in places it is a major contributor. Specimens of the unique ore were given to Dr. Eugene E. Foord and Dr. Pieter Berendsen at Stanford University, who subsequently identified the chemical and crystallographic makeup of the new mineral and described it for the first time as a naturally occurring substance. Metallurgical work on mercury recovery from the newly described mineral was carried out by the Placer Development Ltd. laboratories in Vancouver, and an acceptable recovery system was worked out together with a planned mill design. Step out drilling from the D area by Placer Amex Inc. encountered extensive flat lying lakebed ore. The McDermitt ore body, as subsequently defined by drilling, was found to contain 2.7 Mt (3 million st) of open pittable ore, containing approximately 5 kg/t (10 lb per st) Hg. The ore body gently dips to the north and is found lying mainly in claybeds just above an opalite breccia blanket which overlies the earlier volcanics. Some ore is also found in the opalite breccia. The mine and mill were constructed under an operating joint venture with Placer Amex Inc. and Sterling Mineral Ventures, and production began in June 1975 at the rate of 20,000 flasks per year. The mine is currently in progress.

Jan 1, 1985

By Stephen Zorn

INTRODUCTION The process of financing mining projects in developing countries has changed greatly in the past 15 years. New methods of financing, notably the use of syndicated Eurocurrency project loans, have appeared, and direct equity financing by transnational mining corporations has become less significant. These changes are of particular importance to developing countries which have many mineral deposits still awaiting development, or even discovery. If major new mines are to be financed, host governments will need to obtain more sophisticated information than has hitherto been widely available as to the various sources of finance currently available and as to possibilities for innovative approaches to financing, such as the combination of several different kinds of financing in a single package. This paper reviews the major sources of mining finance potentially available to developing countries and highlights those problems in obtaining adequate financing that developing country producers have begun to experience in the last few years and that are likely to persist through the 1980s. Section I surveys the major types of mining finance; section II reviews specific financing problems, including (a) the withdrawal of the transnational corporations from developing countries, (b) inflation and the size of new projects; (c) developing country indebtedness, and (d) competition among projects in different countries. SOURCES OF DEVELOPING COUNTRY MINING CAPITAL1/ There is a wide range of financing mechanisms which are potentially available to developing countries with economically viable mining projects., Moreover, these financing mechanisms have not been fully exploited by developing countries, and more aggressive pursuit of financing by the governments of these countries may well reveal greater possibilities in respect of any particular project than may initially have appeared. However, virtually all the funds available from these sources are available only to projects which meet the standards of viability acceptable to lenders and others in the business community. If a project does not, for example, promise to generate a discounted cash flow rate of return of at least 15 per cent on total funds employed, or if it does not appear likely to generate sufficient cash flow in the early years of production to cover debt service requirements with a comfortable margin in reserve, most of the sources of financing will not be available. Only where a government has its own financial surplus (as in the case, for example, of the industrialization program of the Saudi Arabian government) can it effectively undertake projects which do not satisfy the definition of economic viability that is accepted at any given time by the worldwide financial community. Internal Sources In Developing Countries Internal financing capacity in developing countries is restricted to a relatively small number of countries - typically those large enough to support a well-rounded industrial sector, in which mining is only one of a number of dynamic industries. While there are large mining companies in certain other countries, the ability of such companies to finance new projects (or even, in some cases, to generate the cash necessary to maintain existing levels of production) is highly problematical. Within developing countries, the possible sources of internally-generated mining finance are the following: (1) state-owned enterprises; (2) private capital; (3) the banking system, and in particular those financing agencies that have a special involvement with the mining sector; and (4) direct budgetary appropriations.

Jan 1, 1985

By Murray Pezim

In the good old days of the folklore of the mining industry, grizzled prospectors obtained a few loose dollars from friends and neighbours then wandered off to eventually return with the great discovery which became the core of the new corporate empires. Alternatively, merchant banking barons obtained exclusive rights to just about anything of future value over hugh nation-size territories. Some of this probably still goes on, likely with about the same ineffectiveness and waste of effort and money as in the past. CURRENT CONCERNS IN MINING In today's difficult climate in the mining industry, for that matter in all industry, effectiveness is the vital consideration. Cost effectiveness -- more bang for the buck -- is especially important in such an area of high risk as mineral exploration. And there are other factors to consider. Since minerals are depleting resources, the mining inddustry is constantly confronted with the reality that those resources extracted today must be immediately replaced if a resource enterprise is to continue. And if growth is to be achieved, even more resources must be found to support future expansion. The current and immediately foreseeable climate internationally for the mining industry creates a special need and urgency for aggressive and successful exploration, certainly in Canada, if not also in the United States. Depressed world markets and prices have turned yesterday's economic reserves into today's waste, hopefully to be converted into economic ore again in some distant time. One way of replenishing reserves and maintaining a viable mining industry is to find and develop mines which are economic under short-term depressed price and market conditions. This probably means higher grades. A new copper discovery with the right combination of characteristics to be an attractive investment even at today's pices for copper would still merit development into production. Exploration is the only way to find such mines for the difficult short-term conditions. Another important consideration is that normally many years stretch from the first thought of conducting exploration to production -- in those rare instances where an economic discovery is made. If discoveries are not made today, then there will not be any projects to develop when business conditions are more attrative. This industry and the vast number of skilled professionals who are part of mining, are faced with two key problems that underlie the need for a junior exploration segment. One consideration is how to maintain exploration during those years, indeed eras, of recession and depression. We are in such a time now. Throughout the world, major companies have sharply cut back, if not eliminated completely, exploration expenditures other than what is vitally necessary and easily and inexpensively done at the known and producing deposits. And related to that consideration, even more important today than during happier times, is how to finance such necessary ongoing exploration if major companies and governments back away because of financial stringency. CANADIAN SUCCESS In Canada, such problems are being tackled with a success which is capturing worldwide attention. The ability of mineral explorers to obtain willing, eager, high-risk capital is achieving even more outstanding results than in the past. These results are reflected in the widespread continuing exploration ativity in Canada which even spreads into the United States, with some outstanding discovery successes. The most notable exploration success from junior mining activity is the discovery of the Hemlo gold camp in northwestern Ontario, a source of gold which promises to rank with the South

Jan 1, 1985

By Robert L. Voss, Richard D. Hagni

Sparry dolomite from all of the operating mines in the Viburnum Trend of Southeast Missouri have been found by cathodoluminescence microscopy to reveal a systematic pattern of banding resulting from a growth zoning within individual dolomite rhombs. Four principal bands have been recognized throughout the entire Trend and each of the major bands contain even finer internal banding. Minor bands a few microns in width can be correlated in specimens collected ten's of kilometers apart along the trend. The first three principal dolomite bands decrease from south to north. This feature, together with the fact that the white sparry dolomite crystals decrease in abundance from south to north in the Trend, suggests that a major source for the fluids was from the south. The application of cathodoluminescence microscopy to crystalline dolomite demonstrates a strong correlation between ore grade and the intensity of internal banding and dissolution textures.

Jan 1, 1985