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By Dean S. Rogers

The conventional role of exploration, development and grade control is examined in this paper within the context of the many and varied types of gold occurrences which are found at the Dome Mine. The account endeavours to trace the development of the total ore evaluation process, from diamond drilling through the exploration and drifting stage, to the stope development and planning phase of the operation, with an emphasis on sampling techniques and assaying procedure. The concept of ore reserve calculations is developed and the practice of grade control is described. In summary, the role of the geological, the engineering and the mining department is presented in relation to the contribution each has to make in the evaluation and exploitation of ore from one of the world's classic Archean gold deposits.

Jan 1, 1985

By Neil H. Cole

Cost and price inflation and financial gearing through loans are characteristic of modern resources projects. Conventional discounted cash flow and 1P.R analyses, in real terms, and without financing, have inadequacies which can yield misleading results. The degree of improvement in value for project equity owners is limited to the value of the additional tax benefit accorded through the financing instrument used. Debt financing may be low in price and value, but its priority means that the equity owners assume a higher risk, thereby increasing the cost, or price, of their capital. The cost of equity capital, or investment hurdle rate, is related to the Capital Asset Pricing Model. Distortions do occur, with inflation, due to depreciation effects, which can cause the adoption of misleading project rate of return or hurdle rate criteria. For investment decisions, the greatest accuracy possible in forecasting is essential, especially for inflation rates,

Jan 1, 1985

By L. P. (Les) Haldane

Building a small underground coal mine is a risky endeavor, especially in the recent economic environment. ARCO's Mt. Gunnison No. 1 Mine, located in western Colorado, was designed and built as a small expandable speculation mine with initial production to be sold on the spot market, so it was very important to minimize capital exposure. This mine, operated by West Elk Coal Company, a subsidiary of Anaconda Minerals, was successfully built under budget at $35 million, and has been operating successfully since completion of construction in late 1982. The initial planning phase of a project is extremely important for testing the economic and technical feasibility of a proposal. The construction phase, by contrast, carries with it significant cost and quality risks which can relate to long-term economic and operating problems and therefore directly affect the viability of the project. This paper discusses several different aspects of the cost overrun risk involved in building an underground coal mine, and how attempts were made to minimize these risks during construction of the Mt. Gunnison Mine. Good people, construction planning, and execution are essential factors in assuring a quality, cost-effective project, with corresponding risk minimization during the construction phase and long term favorable implications for the operating phase.

Jan 1, 1985

By M. J. Humenick, K. Garwacka

A laboratory experimental research project was conducted to evaluate the use of chlorine for the oxidative destruction of residual ammonia that may remain in ground water after in-situ uranium solution mining operations. The work tested the idea of injecting high strength calcium hypochlorite solution into the mining zone to convert ammonia to nitrogen gas as a final cleanup process for ammonia removal from the ground water system. This paper details ammonia removal efficiency as a function of chlorine dose, reactant, and product material balances, and how the concept may be used as a final ground water restoration process.

Jan 1, 1985

By W. B. Frank

Events of the mid-1970s have materially affected US coal production and transportation by railroad. Coal, as a replacement or substitute for petroleum fuels, has been hauled in significantly increased tonnages. Concurrent with the new demand, the railroad regulatory environment has undergone major changes, especially in deregulation activity. Those two events have produced considerable litigation regarding coal rates. This paper discusses the factors involved with railroad rates and topics such as revenue adequacy, Ramsey Pricing, stand-alone cost, and differential pricing. In addition, an update on the western railroad merger situation and the implications for coal transportation are presented. The paper concludes with an evaluation of the current regulatory climate and future prospects.

Jan 1, 1985

By P. K. Currie, J. V. Walters

Solution mining of magnesium salts (Carnallite and Bischofite) is taking place near Veendam, in the northeast Netherlands. The magnesium salts are used for the production of magnesia sinter, used as a base material for the manufacture of refractory bricks for furnaces. This paper gives, first, an introduction to the operational procedure followed in Veendam, with the emphasis on some of the unique aspects, and then discusses rock-mechanical aspects of the cavity behaviour. The creep behaviour of magnesium salts is described, and Finite Element calculations on cavity stability and potential surface subsidence are discussed.

Jan 1, 1985

By Raymond E. Funderburk

Today, there are four alternatives available for disposal of highly toxic, non-radioactive hazardous waste: deep well injection, chemical processing, landfill and incineration. However, based upon research conducted by the author, a fifth alternative now exists. Disposal in salt. Salt, because of its chemical characteristics, is an ideal medium for retention of inorganic hazardous waste. Except for a few elemental compounds such as lithium and potassium, there is no reaction with sodium chloride. In the family of inorganic wastes, there are basically seven suites of waste that may be mixed together without any chemical reaction. The process developed by the author would be to take a suite of waste, either dewater or add moisture, add a solidification agent to the mix and slurry pipeline the mass into a cavern. Residence time before hardening can be adjusted, but the nominal time until full solidification is 48 hours. Once solidified, the mass will reach compressive strengths exceeding 3000 psi. The slurry can be introduced into an evacuated cavern pumped free of brine, or it can be placed beneath the brine and the waste will force the brine to the surface. The latter technique requires a high degree of engineering control to prevent contamination of the brine leaving the cavern-thus creating more hazardous waste and additional problems. The Environmental Protection Agency endorses the concept both at the research level and within EPA Headquarters. The technology will soon be utilized in a salt formation in Texas.

Jan 1, 1985

By C. Richard Tinsley

INTRODUCTION Documentary complications arise from the risk apportionment in project financing which generally means that once the project is up and running and has satisfied the lender's completion test, the loan agreement specifically limits the lender's recourse to the project and its assets. It is the purpose of this paper to describe the special considerations which apply to industrial minerals projects and explore the reasons why so few project financings are negotiated in this industry. SIZE Small projects do not warrant the relatively high costs of negotiating and documenting project financing. The extent of the documentation is directly proportionate to either (a) the degree of risk apportionment, or (b) the amount of control given to lawyers to negotiate the documents. Although one would like to believe that project-finance documentation could be off-the-shelf, it is almost always necessary to tailor the documents to the mine development itself and the individual desires of the borrower. Accordingly, the documentation costs and initial expenses are seldom less than $40,000, and for complex projects can reach $400,000. In addition, banks often charge an up-front fee to partly compensate them for their staff time and partly to increase their yield on what is deemed to be a "riskier" loan asset. Another factor is the generally lower debt:equity ratio when bankers are uncertain of the accuracy of the cash flow projections. The ratio of the amount of cash flow left over after debt service to debt service itself is a key tool for project finance (debt service coverage). Bankers will require a higher coverage ratio for industrial minerals projects because of the relatively higher uncertainties in the following categories: Prices Markets Geology/Quality Transportation Environmental This, in turn, means that lower debt:equity ratios are the norm for new industrial minerals projects. INDUSTRY STRUCTURE It is hardly worthwhile to generalise about a field as diverse as industrial minerals, but there are four other structural reasons why project financing has not been widely applied. 1. The most obvious example is the predominance of small-sized operations, largely a function of transportation economics. Geological conditions also contribute to their dispersion. 2. Often, the product is only a small part of a company's business in contrast to many petroleum, metals, or coal companies whose sole business is the production of the raw material. The construction industry is a good example here for cement, gypsum, crushed stone, sand and gravel, and the drilling-mud services business for barite and bentonite. A company is unlikely to jeopardise its main business through the failure of a project financing on one of its key inputs. The corrollary is that the mined input is often regarded as a cost centre and not run on the sort of economic basis suitable for project financing. 3. There may be a reluctance to reveal key aspects of an industrial minerals venture to an outsider for purely competitive reasons. Unlike the other minerals industries which readily share technical information at plant visits and

Jan 1, 1985

By S. T. Sorrell

To obtain a negative determination for prime farmlands in its approved lignite surface mine permit application, Phillips Coal Co. conducted a soils mapping effort and a historic land use survey. In addressing the justification for topsoil substitute materials, the company relied on results of a geochemical evaluation to demonstrate improved drainage, trafficability, and fertility. It also relied on results of field test plots. Post-mining land use was determined through the use of overlay maps considering existing land use, vegetation, and historic prime farmland. The reclamation plan incorporated these elements plus indicator species, existing vegetation, and wildlife needs.

Jan 1, 1985

By Breaux B. Castleman

The ultimate test of a business strategy is whether it achieves the owner's objectives. Most shareholders are interested in growth and profits, and share values on stock exchanges are very often closely correlated with profit growth and profitability measured as return on equity (ROE). Strategic management, then, involves managing investments or resource allocations to optimize long-term growth and real return on equity, within reasonable limits of risk. Figure 1 shows a plot of the five year, weighted average ROE of a number of communications companies against their stock market valuations in 1983, measured as a ratio of market value to book value. The principal explanation of the differences in the relative valuations of the individual stocks is historical ROE, weighted toward the most recent years. Further analysis demonstrates the added importance of growth in explaining the differences in stock market to book ratios. [ ] Research conducted by Booz Allen and others in recent years suggests that the relationships between ROE and market to book multiples hold true in industry after industry. Furthermore, we have found that in assessing business strategies for companies in these industries, the analyses should focus on whether proposed strategies are likely to lead to consistent long-term growth in real ROE, without excessive leverage. Our research also reveals, however, that these approaches to strategy assessment are not consistently applicable in the natural resource extractive industries. Figure 2 shows a similar comparison of market to book values against five year average ROE for a group of nine mining companies in 1983. Market value of the shares shows little correlation with ROE. [ ] Analysis of the data for other extractive industries indicates a similar pattern; that is, low correlation between share values and

Jan 1, 1985

By James W. Clark, William C. Dixon, Kevin L. Wiley, Thomas R. Couzens

This paper is a description of certain geologic aspects of the Inspiration mining operation. It is not a geologic description of the Inspiration deposit nor an exposition of all the geologic work. Involved in the development and exploitation of the deposit. A few specific examples of the application of geology and geostatistics to the mining process are given to illustrate the progress that has been made in making the Inspiration Mine more efficient and cost effective, and a statement of the philosophy of geologic applications is offered.

Jan 1, 1985

By B. L. Seegmiller

Horizontally stratified lithologies of certain open pit or strip mines create unique stability problems for mine operations. Such problems may result when specific lithologies, such as sandstone and shale, exist in final or long-term slopes. Slope instabilities may occur when a sandstone unit directly overlies a shale unit and ground water drains into the mine along the lithologic contact. In essence, the ground water erodes the underlying shales and undercuts the sandstone. Large sandstone blocks fail in a toppling mode and cause safety and cleanup problems. Use of rock reinforcement including chain link fencing, roof bolt mats, rock bolts, rock anchors, and shotcrete offers a possible solution to the problem.

Jan 1, 1985

By I. Iwasaki, K. Adam

The oxidation behaviors of simple and complex chloride systems of copper, iron, nickel, cobalt, and manganese in a stream of oxygen were investigated using a thermogravimetric analysis technique. Their reaction mechanisms are discussed from stoichiometry, thermodynamic feasibility, and X-ray diffraction analysis of reaction products. The results are used to determine an optimum operating temperature of the selective oxidation step in a chlorination process for producing nonferrous metal chlorides, elemental sulfur, and ferric oxide from copper-nickel sulfide flotation concentrates.

Jan 1, 1985

By W. Weissberger, Frankiewicz, L. Pommier

Introduction In the U.S., about one-quarter of the fuel oil and natural gas consumption is associated with power production in utility and industrial boilers and process heat needs in industrial furnaces. Coal has been an attractive candidate for replacing these premium fuels because of its low cost, but there are penalties associated with the solid fuel form. In many cases pulverized coal in unacceptable as a premium fuel replacement because of the extensive cost of retrofitting an existing boiler designed to burn oil or gas. In the cases of synthetic fuels from coal, research and development still have a long way to go and costs are very high. Another option, which appears very attractive, is the use of solid coal in a liquid fuel form - coal slurry fuels. Occidental Research Corp. has been developing coal slurry fuels in conjunction with Island Creek Coal (ICC), a wholly-owned subsidiary. Both coal-oil mixtures and coalwater mixtures are under development. ICC is a large eastern coal producer, engaged in the production and marketing of bituminous coal, both utility steam and high quality metallurgical coals. There are a number of incentives for potential users of coal slurry fuels and in particular for coal-water mixtures (CWMs). First, CWM represents an assured supply of fuel at a price predictable into future years. Second, CWM is available in the near term; there are no substantial advances in technology needed to provide coal slurry fuels commercially. Third, there is minimal new equipment required to accommodate CWM in the end-user's facility. Fourth, CWM is nearly as convenient to handle, store, and combust as is fuel oil. Several variants of CWM technology could be developed for different end-users in the future. One concept is to formulate slurry at the mine mouth in association with an integrated beneficiation process. This slurry fuel may be delivered to the end-user by any number of known conveyances such as barge, tank truck, and rail. Slurry fuel would then be stored on-site and used on demand in utility boilers, industrial boilers, and potentially for process heat needs or residential and commercial heating. An alternative approach is to formulate a low viscosity pre-slurry at the mine mouth and to pipeline it for a considerable distance, finishing up slurry formulation near the end-user's plant. Finally, at the other extreme of manufacturing alternatives, washed coal would be shipped to a CWM manufacturing plant just outside the end-user's gate. Depending on fuel specifications and locations of the mine and end-user facility, any of these alternatives may make economic sense. They are all achievable in the near term using existing technology or variants thereof. The Coal-Water Mixture CWMs contain a nominal 70 wt. % coal ground somewhat finer than the standard pulverized ("utility grind") coal grind suspended in water; a complex chemical additive system gives the desired CWM properties, making the suspension pumpable and preventing sedimentation and hardening over time. Figure 1 shows the difference between a sample of pulverized coal containing 30 wt. % moisture and a CWM of identical coal/water ratio. The coal sample behaves like sticky coal, while the CWM flows readily. The combustion energy of a CWM is 96-97% of that associated with the coal present, due to the penalty for vaporizing water in the CWM. Potentially any coal can be incorporated in the CWM, depending on the combustion performance required and the allowable cost. CWMs are usually formulated using high quality steam coals containing around 6% ash, 34% volatile matter, 0.8% sulfur, 1500°C (2730°F) initial deformation temperatures, and energy content of 25 GJ/t (21.5 million Btu per st). Additional beneficiation to the 3% ash level can be accomplished in an integrated process. There are a number of minimum requirements which a satisfactory CWM must meet: pumpability, stability, combustibility, and affordability. In addition, a CWM should be: resistant to extended shear, generally applicable to a wide variety of coals, forgiving/flexible, and compatible with the least expensive processing. It was found that a complex chemical additive package and control of particle size distribution are necessary to achieve these attributes simultaneously, while maximizing coal content in the slurry fuel. Formulation of Coal-Water Mixtures A major consideration in the manufacture, transportation, and utilization of a slurry fuel is its pumpability, or effective viscosity. Most CWM formulations are nonNewtonian, i.e., viscosity depends on the rate and/or duration of shear applied. Viscosities reported in this paper were obtained using a Brookfield viscometer fitted with a T-spindel and rotated at 30 rev/min, thus they are apparent viscosities measured at a shear rate of approximately 10 sec-1. The instrument does reproducibly generate a shear field if spindle size and rotation rate are held fixed. By observing the apparent viscosities of several slurries at fixed conditions it is possible to obtain a relative measure of their viscosities for comparison purposes. A true shear stress-shear rate relationship at the shear rates at which the CWM will be subjected in industry may be obtained using the Haake type and a capillary viscometer. These viscometers are used for specific applications. However, for comparison purposes, apparent viscosities are reported.

Jan 1, 1985

By Bruce Vandre

Jan 1, 1985

By G. V. Sullivan, B. E. Davis, T. O. Llewellyn

The Bureau of Mines, US Department of the Interior, conducted studies to recover phosphate from four dolomitic southern Florida deposits not currently mined. The samples contained 5.8-10.2% P205 and 1.7-4.8% MgO. Chemical analyses of sized fractions indicated that no pebble concentrate, +1.2 mm (+14 mesh) could be produced from these samples. A scheme was developed that consisted of desliming, grinding, scrubbing, and redesliming the ore to produce a flotation feed. Conventional one-step fatty acid fuel oil batch flotation tests on the samples resulted in concentrates containing 29.0-31.3% P205 at flotation recoveries ranging from 72.4 to 96.1% of the flotation feed. The MgO content of the concentrates ranged from 0.47 to 1.36%. Continuous flotation of the Manatee No. 2 sample indicated that commercial-grade phosphate concentrates analyzing 31.3% P205 and 0.55% MgO could be produced with a flotation recovery of 89.9%. The MgO content of concentrates obtained from the Manatee No. 1 and Hardee samples was 1.20 -1.36 %, respectively. Leaching with aqueous SO2 reduced the MgO content of these phosphate concentrates to 0.5 and 0.8%, but with a concomitant loss in phosphate recovery of about 10%.

Jan 1, 1985

By M. J. Taylor

A common method of classifying non-water- impounding mine waste structures is necessary to facilitate professional comnunications within the industry and between representatives of industry and government. Camnon classifications can a1 so he1 p quickly create and maintain a mental picture of the structures being discussed. Three categories for classification presented in this paper include: (1) configuration and location with respect to existing topography. (2) material characteristics of waste, and (3) environmental sensitivity or characteristic; of the disposal area. Configuration and location classification involve terminologies typically utilized for waste dumps over the past several years. General classification categories for non-impounding structures include: (a) valley-fill, (b) cross-valley, (c) side-hill, (d) ridge, and (e) heaped. Material characteristics can govern the location, engineering details, and environmental sensitivity of the waste structure. Material classification includes: (a) hazardous, (b) non-hazardous, (c) inert, (d) fugitive dust susceptible and (e) leachate susceptible. A1 though many characteristics are potentially applicable, this paper will focus on the categories mentioned above. Environmental sensitivity of a waste structure encompasses many objective and subjective evaluations plus many multi-disciplinary considerations. Environmental sensitivity incorporates numerous factors in addition to those highlighted in configuration and location, and material characteristic classifications. A few examples of how this categorization can govern the engineering design and location of waste dumps are provided in this paper. In addition to the verbal descriptions of classifications, a simplified version of the combined classifications with an alphanumeric format and its methodology is discussed in this paper. Surface water controls often govern the classification or vice versa. In order to maintain a non- impounding status, water must be prevented from collecting behind the structures. Depending on material characteristics, water inflow to or over the site can cause significant environmental or human consequences. Finally, the access of water to the waste dumps can play a large role in the degree of environmental sensitivity to the site. This paper provides a framework in which to discuss the other aspects of this conference and also provides insights as to how the framework is based on actual practice.

Jan 1, 1985

By George H. K. Schenck

The investment analysis methods that are most generally accepted in the mineral industries in the mid-80's are presented along with their advantages and disadvantages. Also covered are current widely-used practices for introducing the uncertain nature of most of the important variables in an investment analysis, which is contrasted to the former dominance of deterministic analysis. Finally, the discussion turns to current practice for handling the two critical areas: cost of capital and inflation. The advice contained is reinforced with data from a survey of current practices in the petroleum industry.

Jan 1, 1985

INTRODUCTION The International Finance Corporation (IFC) is affiliated with the International Bank for Reconstruction and Development (World Bank) but operates with a separate staff and funding. It supplements the activities of the Bank by providing, to private business, equity and loans without government guarantees in whatever form and combination most suited to the project. IFC frequently complements the Bank's activities by utilizing, for example, the Bank's public sector infrastructure activities to support IFC's private sector projects. In the case of local financial institutions especially, IFC collaborates with the Bank by providing technical and financial assistance. IFC is the world's largest multilateral organization which finances private sector business in developing countries. IFC's fundamental purpose is to promote the economic development of its developing member countries through the support of the private sector. Of the 124 member countries of IFC, more than 100 are developing countries. Since it began operations in 1956, IFC has been associated with more than 2,000 companies and financial institutions in supporting over 700 business ventures in more than 80 countries. The total capital costs of these projects exceeds $26,000 million. In the 1984 fiscal year, IFC approved 62 projects in 37 countries with a total project cost of $2,473 million. IFC will make investments only if sufficient capital cannot be obtained on reasonable terms from other sources. IFC often serves as the catalyst for a project by encouraging other investors--from inside and outside the host country--to make their own equity investments along with the local sponsor for a particular project. IFC'S SPECIAL ROLE The significance of IFC's role extends beyond just its financing and technical assistance: IFC's capability to raise investor confidence in a project and to help all the participants to arrive at mutually satisfactory investment arrangements is its distinctive character. Direct Investments IFC invests in all types of projects both large and small. Heavy industrial ventures not only supply essential materials and equipment for other domestic enterprises, but also earn foreign exchange through exports. In recent years, increased emphasis has been placed on agriculture and agribusiness products, aquaculture, food and food processing, and other renewable and nonrenewable resources such as metals and energy. [ ] An overall objective of IFC is to assist entrepreneurs and others in the private sector raise the needed capital for business ventures. IFC does not compete with, nor seek to replace private initiative and capital. Rather, IFC helps to raise funds in order to undertake projects that would otherwise be held back by the lack of adequate funding. IFC can do this in several ways: IFC can invest in equity and make loans for its own account. But beyond that, IFC can reach out into the international capital markets in search of additional capital. Because of IFC's 25 years experience and record, outside investors who might otherwise be

Jan 1, 1985

By Y. C. Kim, S. L. Barua

Underground coal mine planning has traditionally focused on the mine design aspects concerning safety and efficiency in the quest to produce low cost coal. Very little attention has been given to coal quality control aspects of mine planning at most US underground coal mines. With the enactment of the Clean Air Act of 1970, the generally high sulfur content of coal has become a major concern for the coal-fired power plants in the east. Similarly, the ash and the Btu content of coal are equally important for boiler efficiency. Coal mine planning must incorporate coal quality control aspects as well as traditional safety and efficiency aspects. According to an article in Coal Age (March, 1982), nearly one-half of the US coal exported to Europe does not meet the contract specifications regarding ash, sulfur and Btu contents. Although one of the reasons cited for this problem was "inadequate sampling at the US ports," the more fundamental cause probably lies in the inadequate quality control of run-of-mine (ROM) coal at the source. To perform adequate quality control of ROM coal, mines need predicted short-term in-situ coal quality information. Such predictions are generally based on whatever available sampling information is around the mine workings. Unfortunately, the closest sampling information, in the form of diamond drill hole assays, is often several thousand feet away in most underground coal mines and is inadequate for short-term coal quality prediction purposes. This is because the diamond drill holes (DDH) were traditionally placed in the coal deposit during the mine development phase to determine coal seam continuity and overlying roof conditions. They were not placed for short- term mine planning. A study was undertaken by the University of Arizona for the Homer City Owners in Pennsylvania to show that there is a need for more closely spaced samples, if the short-term coal qualities are to be predicted with any "reasonable" degree of accuracy. Prior to this study, a short-term quality prediction model, STPM, had to be developed. This model uses not only DDH, but also other sample information obtainable during face development work to predict the qualities of in-situ coal that are available in the immediate future.

Jan 1, 1985