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By AIME AIME

IN a recent technical paper of the Central Committee of the French Coal Mines (Note technique No. 198, by L. Lahoussay) the author points out that continuous in¬crease in depth of mine shafts makes it more and more necessary to look for appropriate means to reduce the weights and dimensions of the hoisting ropes. Increasing depth demands a larger section and weight for the cable if the useful load is not to be cut down at the same time. This naturally leads to increased cost per ton, and at the same time creates serious mechanical difficulties. The dimensions of the hoisting engine must be increased, acceleration at the start must be decreased so as to avoid periods of excessive peak power loads, and a longer time be allowed to slow down the speed of the hoist when applying brakes. The hoisting rope, upon which depend the dimensions and hence the mass of the hoisting engine, presents the greatest obstacle to the development of hoisting from greater depths. Evidently, for a given depth, the total weight of the rope can be notably reduced by utilizing a wire rope of decreasing section, approaching the theoretical logarithmic form. This is a solution frequently adopted for great depths. Of course, the weight of the rope could be easily' diminished by reducing the useful load, but it is certain that with increasing depth of mining, more effort must be made to confine the hoisting to a small number of shafts, and increase the load hoisted per trip.

Jan 1, 1933

By AIME

AS with Phil Kraft, referred to on this page last month, travel has always held a great fascination for Raymond Frank Baker and for that reason he determined to become a geologist. He had heard that geologists travel and that was what he wanted to do. Now as chief geologist for The Texas Co. his early wish has been fulfilled-he spends almost one third of his time journeying' from one oil field to another. Mr. Baker was born in New Haven, Conn., on Jan. 11, 1892, and went through the public schools in New Britain. A stalwart New Englander, he attended Yale and in 1912 received a degree in civil engineering. For a year following this he worked as a civil engineer for the New York Central Railroad, but his early urge to travel widely could not be satisfied here. So in 1913 he re-entered Yale and until 1916 studied mining and economic geology. He had a little taste of field work, which later became so enjoyable to him, in the summer of 1915 when he worked with the U. S. Geological Survey as a geologic aid. In 1916 he made his first contact with The Texas Co. when he entered their Tulsa office as a geologist. This early career was interrupted by service in the

Jan 1, 1947

By W. H., Bassett

IN January, 1926, the writer began a study of the commercial value of beryllium in its relation to copper. The purpose of the investigation was not to make a mere laboratory study of the characteristics of beryllium-copper alloys, but to determine under mill conditions the behavior of copper when alloyed with beryllium and when other metals were added to such alloys; in other words, it was considered important to know whether the alloy bars could be hot-rolled or cold-worked, and what limits in composition would have to be established for these two methods of working. Consequently, more stress has been placed on the practical application of the alloys in engineering and commercial use than on a discussion of the metallography of the specimens examined, although this part of the matter has not been entirely neglected. Credit should be first given to G. Oesterheld,1 who, in 1916, published the copper-beryllium equilibrium diagram. Fig. 1 has been copied from the original article with the simple substitution of English words. It will be noted from Fig. 1 that alpha solid solutions are formed, up to about 1.5 per cent. Be (10.5 atom.). The freezing-point curve, after falling from 4.2 per cent. Be (23.5 atom.), enters into a very complicated form over the entire beta region. There is a possible compound, Cu2Be, at about 6.5 per cent. Be (32.3 atom.). The pure gamma range extends from 11.2 to 12.2 per cent. Be. (46.5 to 49 atom.), after which the liquidus rises rapidly to 30 per cent. Be. (75 atom.). The delta solution extends from 25 per cent. to an unknown percentage of beryllium. There is a eutectoid point at 575" C., extending from 1.5 to 11.2 per cent. Be., the maximum time interval of which occurs at 6 per cent. Be. Below this line the beta solution is described as breaking up into alpha and gamma. Microscopically, the eutectiferous alloy thus formed closely resembles pearlite, and requires a high magnification for its resolution.

Jan 1, 1927

By W. Geo. Waring

Introduction THE winning of zinc and lead ores from the comparatively shallow deposits of the Joplin district, presents, few such problems for the mining engineer as are encountered in deep ore mining and in the handling of complex ores. However, for those who are interested in the origin and nature of ore deposits in general, there is much here to investigate, and upon studies in this direction will depend in no small measure the future of an industry that has produced during the year 1916, in southwest Missouri, lead and zinc ores to the value of $26,319,383; adding $46,022,164 to the metallic wealth of the nation. Including the adjacent mines in Ottawa County, Oklahoma, and Cherokee County, Kansas, which are, really continuations of the Joplin district, the total value of ores produced reached the sums of $34,089,503, and that of the metals, $58,927,941.1 The ores produced in the Joplin district are remarkable on account of their almost uniformly high" metal content in both lead and zinc. Their superiority in this regard is unparalleled, and is doubtless clue to certain geological conditions that are now possibly explicable, provided that the artesian circulation = ascension hypothesis of the origin of the ore deposits is proven beyond question to be the only tenable explanation of the facts. These, as well as other valuable zinc-ore deposits, are bound to he exhausted in time, for ordinary mining purposes, acid it concerns the mining engineer that the conditions under which ores of this character were actually deposited in the form in which they occur, may, if possible, be ascertained, in order that he may learn where to look for similar deposits in other regions, or even how to reproduce artificially such condi-

Jan 9, 1917

By W. Geo. Waring

The winning of zinc and lead ores from the comparatively shallow deposits of the Joplin district presents few such problems for the mining engineer as are encountered in deep ore mining and in the handling of complex ores. However, for those who are interested in the origin and nature of ore deposits in general, there is much here to investigate, and upon studies in this direction will depend, in no small measure, the future of an industry that has produced during the year 1916, in southwest Missouri, lead and zinc ores to the value of $26,319,383; adding $46,022,164 to the metallic wealth of the nation. Including the adjacent mines in Ottawa County, Oklahoma, and Cherokee County, Kansas, which are really continuations of the Joplin district, the total value of ores produced reached the sum of $34,089,503, and that of the metals, $58,927,941.l The ores produced in the Joplin district are remarkable on account of their almost uniformly high metal content in both lead and zinc. Their superiority in this regard is unparalleled, and is doubtless due to certain geological conditions that are now possibly explicable, provided that the artesian circulation = ascension hypothesis of the origin of the ore deposits is proved beyond question to be the only tenable explanation of the facts. These, as well as other valuable zinc-ore deposits, are bound to be exhausted in time, for ordinary mining purposes, and it concerns the mining engineer that the conditions under which ores of this character were actually deposited in the form in which they occur, may, if possible, be ascertained, in order that he may learn where to look for similar deposits in other regions, or even how to reproduce artificially such condi-

Jan 1, 1918

By Zay Jeffries

Rearmament superimposed on buying sprees by the public, caused a general shortage of metals in 1911. and the rare metals were no exception; they also shared with the more common metals the uncertainty of future demand. In general, the apparent undersupply of metals is a favorable condition for the realization of sleeping possibilities of the rare metals, especially if the supply can he made sufficient to take care of the possible new demand. Many changes in metal usage in 1941 were forced because of shortages. When such changes are in the direction of the economic trend there is a speeding up in the tempo of the inevitable change, but when the forced changes are against the economic trend they are likely to be shortlived. In any event, the latter is not a solid foundation on which to build a future business.

Jan 1, 1942

By AIME AIME

CONVENTION plans for the A.I.M.E. Regional Meeting to be held on the Minnesota Iron Range Aug. 12 to 1.5 are being completed to give the visiting member?s from all parts of the country a wide variety of technical and recreational features. High spots of the social events are the official dinner, dance, luncheon and golf: and of course, special provision is being, made for the entertainment of visiting ladies. The technical sessions will fit in with scheduled trips to view all phases of mining, beneficiation and transportation of iron ore. Men from the West and Southwest will find much of interest in the detail of the mining operations. A trip to the steel plant of the

Jan 1, 1941

EUROPE continued to be unsettled, financially, commercially and socially. October opened with Germany in a state of turmoil following the Government's cessation of passive resistance to the French and Belgians. In many places there were riots with much bloodshed. In Bavaria a military dictator-ship was set up in order to keep peace. In the meanwhile France continued in an uncom-promising position.. Great Britain, having been diplo-matically discredited, disappeared from any prominence in the international picture. Under the constraint of circumstances the policy of deflation in Great. Britain was temporarily abandoned. Perhaps no other course was open, for with declining trade and heavily reduced revenue, and no chance for cutting expenses propor-tionately, a check to deflation comes of its own accord. The effects of this should become manifest in the course of a few months and should appear in the form of an improved margin between the prices for commodities and the wage costs in producing them. About Oct. 20 an effort was made to set up the Rheinland as a separate republic. On Oct. 26 were published communications from Lord Curzon to Secre-tary Hughes and the latter's reply. In these Lord Curzon drew attention to the gravity of the situation in Europe and expressed the hope that France might listen to renewed suggestions for a general inquiry. Secretary Hughes promised American cooperation, in this, with the reservation that the question of inter-national debts should not enter into the situation. In the latter part of October there were military mutinies and disorders in Greece, which resulted in the reestablishment of martial law by order of Col. Plas-tiras, who is virtually the dictator of Greece. The incipient revolt was promptly crushed.

Jan 10, 1923

By Wheeler North

THE United Eastern Mining Co.'s property is located in the Oatman, Gold Roads mining district of Mohave County, Ariz. The mine and mill are some 26 mi. (41.8 km.) southwest of Kingman, the nearest railway connection. The ore consists of a mixture of calcite and quartz with some andesite. The values, which are mainly gold, alloyed with approximately 34 per cent., by weight, of silver, are extremely fine so that fine grinding is a most important factor in extraction. The milling process, briefly, consists of single-stage, coarse-crushing, two-stage ball milling in cyanide solution, followed by combined mechanical and air agitation, and by straight counter-current decantation. The Merrill zinc-dust precipitation method is used to recover the values, and is preceded by the Crowe vacuum treatment of the solution. The most notable features of the plant are the absence of filters, and the use of short peb mills loaded with steel balls, for fine grinding. As originally designed, the capacity of the mill was to be 200 tons per day, although the grinding end was to be capable of handling double that amount. By adding extra agitators and thickeners and by some alterations to the grinding end, the daily capacity has been raised to 285 tons. This, it is hoped, may be increased to 300 tons during the warm months of the present year. TONNAGE MILLED PER DAY 1917 average 234 Maximum month 272 Minimum month 146 1918 average 253 Maximum month 276 Minimum month 217 As this article primarily deals with plant operations, those interested in the mechanical description are referred to the article by Mr. Otto Wartenweiler,1 the designing engineer, which gives the details and costs of design and construction. The following changes have been made since that article was published:

Jan 8, 1919

By A. L. Blomfield, M. J. Trott

ThE Golden Cycle Mining and Reduction Co. operates its custom mill at Colorado Springs on Cripple Creek ores exclusively. These ores are straight sulfo-tellurides, with practically no base metals such as Pb, CU, Zn, As, or Sb. Upon entering the mill, the ore all passes through the sampler to storage bins, where beds of 5000 tons each are made to insure uniformity in roasting. Classification of ORes For efficiency, it has been found advisable to separate the ores into two classes according to their lime content. Other constituents have their effect, such as alumina and magnesia, but, speaking generally, these are roughly proportional to the lime, which, as CaO, is used as the indicator. Class A contains not more than 2 per cent. CaO and comprises about 66 per cent. of the ore treated. Class B contains over 2 per cent. CaO, and comprises 34 per cent. of the ore treated. Typical analyses of both classes are as follows: Class A a B Insol.......................... 86.70 75.90 Al2O3........................:.. 2.30 3.40 Fe.............................. 3.26 3.48 CaO............................. 1.57 5.12 S............................... 1.79 1.80 MgO........................... 0.21 1.08 Ignition loss..................... 3.20 6.50 99.03 97.28 The beds of each class of ore are made as large as possible with the available ore as it comes in, to avoid changing from one bed to the other any oftener than necessary. Each roaster will handle 50 per cent. more of class A ore than of class B, with practically the same results. This necessitates changing the rate of feed for each new bed and tends toward a poor roast and loss of tonnage at each change.

Jan 1, 1919

By Joseph Bernhardt

THE Cornwall Ore Mines, Division of the Bethlehem Steel Co., at Cornwall, Lebanon County, consists of two separate magnetite ore bodies, approximately one mile apart. The one ore body was an outcrop in which open-pit mining operations were begun in 1742 and continued without interruption. This mine is also served by a shaft for mining that portion of the ore body not recoverable by open-pit methods. The other property had no outcropping and is entirely an underground operation. This mine, cap-tioned No. 4 mine, is serviced by two shafts 220 ft apart. The No. 4 shaft is for hoisting rock and ore, and the No. 5 shaft is for handling men and ma- terials. The shafts are on a catenary curve, closely following the dip of the ore body. Slope of the shafts at the collar is 36", flattening to 26" at the bottom. The footwall at Cornwall is a traprock which varies structurally from solid to highly fractured. Grizzly stations at the top of each chute raise were reinforced by setting timber sills on concrete. Occasionally it was necessary to concrete the entire chute raise. Concreting was done by using 35-yd electric mixers set up in the breaking subs. Sand, stone, and cement were hoisted up through the chute raises to the breaking subs. Late in 1937 it was decided to eliminate chute raises and breaking subs in future development. Haulage levels are 50 ft apart vertically. When ore is below a 40 " dip, slushing drifts are driven normal to the haulages and on 40-ft centers. In a few areas, ore dips greater than 40" and slushing drifts are then placed parallel to the haulage drifts. Finger raises are opposite each other and on 20-ft centers making 20x20-ft draw areas (fig. 1). For loading

Jan 1, 1951

By Joseph Bernhardt

THE Cornwall Ore Mines, Division of the Bethlehem Steel Co., at Cornwall, Lebanon County, consists of two separate magnetite ore bodies, approximately one mile apart. The one ore body was an outcrop in which open-pit mining operations were begun in 1742 and continued without interruption. This mine is also served by a shaft for mining that portion of the ore body not recoverable by open-pit methods. The other property had no outcropping and is entirely an underground operation. This mine, cap-tioned No. 4 mine, is serviced by two shafts 220 ft apart. The No. 4 shaft is for hoisting rock and ore, and the No. 5 shaft is for handling men and ma- terials. The shafts are on a catenary curve, closely following the dip of the ore body. Slope of the shafts at the collar is 36", flattening to 26" at the bottom. The footwall at Cornwall is a traprock which varies structurally from solid to highly fractured. Grizzly stations at the top of each chute raise were reinforced by setting timber sills on concrete. Occasionally it was necessary to concrete the entire chute raise. Concreting was done by using 35-yd electric mixers set up in the breaking subs. Sand, stone, and cement were hoisted up through the chute raises to the breaking subs. Late in 1937 it was decided to eliminate chute raises and breaking subs in future development. Haulage levels are 50 ft apart vertically. When ore is below a 40 " dip, slushing drifts are driven normal to the haulages and on 40-ft centers. In a few areas, ore dips greater than 40" and slushing drifts are then placed parallel to the haulage drifts. Finger raises are opposite each other and on 20-ft centers making 20x20-ft draw areas (fig. 1). For loading

Jan 1, 1951

By A. L. Blomfield

THE Golden Cycle Mining and Reduction Co. operates its custom mill at Colorado Springs on Cripple Creek ores exclusively. These ores are straight sulpho-tellurides, with practically no base metals such as Pb, Cu, Zn, As, or Sb. Upon entering the mill, the ore all passes through the sampler to storage bins, where beds of 5000 tons each are made to insure uniformity in roasting. CLASSIFICATION OF ORES For efficiency, it has been found advisable to separate the ores into two classes according to their line content. Other constituents have their effect, such as alumina and magnesia, but, speaking generally, these are roughly proportional to the line, which, as CaO, is used as the indicator. Class A contains not more than 2 per cent. CaO and comprises about 66 per cent. of the ore treated. Class B contains over 2 per cent. CaO, and comprises 34 per cent. of the ore treated. Typical analyses of both classes are as follows: Class A Class B Insol 56.70 75.90 Al203 2.30 3.40 Fe 3.26 3.48 CaO 1.57 5.12 S 1.79 1.80 Mg0 0.21 1.08 Ignition loss 3.20 6.50 99.03 97.28 The beds of each class of ore are made as large as possible with the available ore as it comes in, to avoid changing from one bed to the other any oftener than necessary. Each roaster will handle 50 percent. more of class A ore than of class B, with practically the same results. This necessitates changing the rate of feed for each new bed and tends toward a poor roast and loss of tonnage at each change.

Jan 8, 1918

By John C. Branner

Five of the geologic horizons that yield oil in other parts of the world are represented in Brazil; namely, the Devonian, Carboniferous, Permian, Cretaceous, and Tertiary. Thus far, the first two have shown no evidences of being oil bearing within Brazilian territory. Not enough exploring has been done to permit trustworthy comparisons of the relative importance of the Permian, Cretaceous, and Tertiary as oil-bearing horizons in this country. The most important, indeed almost the only, information available relates to the locations of the areas and to the structural features of the several horizons. The theories regarding the physical conditions under which these rocks were laid down, however, I regard of the utmost importance. Permian Rocks of Permian age cover an enormous area in Brazil, extending from Rio Grande do Sul to Maranhao on the north, and to Matto Grosso on the west. These Permian rocks in many places are known to include oil-bearing shales and in some locations contain small veins of gilsonite. The geologic map of Brazil shows that the Permian area is widely distributed, but there is considerable doubt about the origin of some of the rocks. Some of the lower Permian beds in southern Brazil contain marine fossils, but in Minas no fossils have as yet been found in them, and in Bahia, at only one locality have a few Permian plants been found. Indications of oil have been found in the states of Sa0 Paulo, Parana, and elsewhere farther south, but wells drilled in the Permian of SaO Paulo near the Morro do Bofete did not find oil. One well has been started, by the Brazilian Government, in the Permian of Parana near Marechal Mallet, close to latitude 26" south, but thus far oil has not been found.

Jan 1, 1923

By John C. Branner

Five of the geologic horizons that yield oil in other parts of the world are represented in Brazil; namely, the Devonian, Carboniferous, Permian, Cretaceous, and Tertiary. Thus far, the first two have shown no evidences of being oil bearing within Brazilian territory. Not enough exploring has been done to permit trustworthy comparisons of the relative importance of the Permian, Cretaceous, and Tertiary as oil-bearing horizons in this country. The most important, indeed almost the only, information available relates to the locations of the areas and to the structural features of the several horizons. The theories regarding the physical conditions under which these rocks were laid down, however, I regard of the utmost importance. Permian Rocks of Permian age cover an enormous area in Brazil, extending from Rio Grande do Sul to Maranhao on the north, and to Matto Grosso on the west. These Permian rocks in many places are known to include oil-bearing shales and in some locations contain small veins of gilsonite. The geologic map of Brazil shows that the Permian area is widely distributed, but there is considerable doubt about the origin of some of the rocks. Some of the lower Permian beds in southern Brazil contain marine fossils, but in Minas no fossils have as yet been found in them, and in Bahia, at only one locality have a few Permian plants been found. Indications of oil have been found in the states of Sa0 Paulo, Parana, and elsewhere farther south, but wells drilled in the Permian of SaO Paulo near the Morro do Bofete did not find oil. One well has been started, by the Brazilian Government, in the Permian of Parana near Marechal Mallet, close to latitude 26" south, but thus far oil has not been found.

Jan 1, 1923

By John Branner

FIVE of the geologic horizons that yield oil in other parts of the world are represented in Brazil; namely, the Devonian, Carboniferous, Permian, Cretaceous, and Tertiary. Thus far, the first two have shown no, evidences of being oil bearing within Brazilian territory. Not enough exploring has been done to permit trustworthy comparisons of the relative importance of the Permian, Cretaceous, and Tertiary as oil-bearing horizons in this country. The most important, indeed almost the only, information available relates to the locations of the areas and to the structural features of the several horizons. The theories regarding the physical conditions under which these rocks were laid down, however, I regard of the utmost importance. PERMIAN Rocks of Permian age cover an enormous area in Brazil, extending from Rio Grande do Sul to Maranhão on the north, and to Matto Grosso on the west. These Permian rocks in many places are known to include oil-bearing shales and in some locations contain small veins of gilsonite. The geologic map of Brazil shows that the Permian area is widely distributed, but there is considerable doubt about 'the origin of some of the rocks:. Some of the lower Permian beds in southern Brazil contain marine fossils, but in Minas no fossils have as yet been found in them, and in Bahia, at only one locality have a few Permian plants been found. Indications of oil have been found in the states of São-Paulo, Paraná, and elsewhere farther south, but wells drilled in the Permian of São Paulo near the Morro do Bofete did not find oil. One well has been started, by the Brazilian government, in the Permian of Paraná near Marechal Mallet, close to latitude 26° south, but thus far oil has not been found.

Jan 6, 1922

By L. F. Reinartz

FROM the earliest times when our prehistoric ancestors laboriously fashioned crude tools and weapons from meteoric iron until our day when we manufacture steel in 150-ton open-hearth furnaces, the production of iron and steel has played a dramatic and important role in the development of civilization. Progress in the science of refining iron ore into iron and steel was painfully slow for many centuries. The keen scimitars of Damascus, the broadswords of the English knights, the coats of mail of French knights, and the Iron Pillar of Delhi are well¬known examples of medieval metallurgical technique. Expense and the scarcity of raw materials originally limited the distribution of iron and steel products. It was not until the nineteenth century that a determined effort was made to adapt the use of steel to peaceful pursuits. The spectacular and rapid strides made in the manufacture of steel during the last hundred years were hastened by the invention during the decade 1860 to 1870 of two great steelmaking processes-the Bessemer and the open-hearth process.

Jan 1, 1936

By F. E. Lathe, L. Hodnett

This paper summarizes extensive data supplied by 40 copper converter plants in 18 countries, and includes a partial analysis and comments on the effect of converter slag composition and temperature on the fomzation and elimination of magnetite and the life of basic and neutral refractories. APRELIMINARY draft of this paper, including data from 26 companies which had submitted replies to a questionnaire, was presented at the Annual Meeting of the AIME held in New York in February, 1956. Publication was delayed in the expectation that additional replies would be received, and justification for the subsequent delay may be found in the fact that the present revised paper contains data from 40 converter plants situated in 18 different countries. The suggestion that a questionnaire be sent to the major copper and copper-nickel plants outside the U.S.S.R. and associated countries arose at the Los Angeles Annual Meeting in February, 1953, where several papers dealing with converter construction and operation were presented. In private discussions which followed, a group of metallurgists and refractories engineers raised the question why practices varied so much at different plants. Why did magnesite brick give superior service to chrome-magnesite in some plants but chrome-magnesite prove superior in others? Would metallurgical studies point the way to the development of still better refractories? Could magnetite formation be prevented in converter slags and reverber-atory furnace mattes? If this was feasible, why was a heavy circulating load of magnetite tolerated, when, in all probability, it increased copper losses in the reverberatory slags and, in some cases, made it necessary to shut down the furnaces periodically to clean out the accumulated magnetite? Was the sole purpose of coating brick with magnetite that of

Jan 1, 1959

By Richard P. Rothwell

In January last I published in the Engineering and Mining Journal a table giving, with a considerable degree of accuracy, the production of anthracite coal for the year 1874. At that time it mas impossible to give any correct estimate of the production of bituminous coal, for the returns I had been able to secure from such distant and scattered districts were not always forwarded punctually, and the work of .obtaining anything like a true estimate of the coal mined in districts from which I was unable to obtain official returns was both laborious and tedious. As will be seen from the detailed reports furnished herewith, I have succeeded in obtaining tolerably accurate returns of 20,093,704 tons; and upon careful revision by numerous well-informed local authorities, my first estimate of the amount of coal not officially returned to me has grown very considerably; indeed, as I get more information on the subject I find that our bituminous coal production greatly exceeds the amount we have been accustomed to hear it placed at, aggregating as it does, 26,465,704 tons. Mr. Andrew Roy, State Inspector of Mines for Ohio, has reported the production of Ohio at 4,168,445 tons, while his first estimates were but 3,820,000 tons; and similarly, in other cases, the more full the returns direct from the mines the more incorrect do I find all previous reports. I am able now to furnish, not an accurate statement, indeed, but by far the most full and reliable one that has yet been published of our coal production. The amount of labor involved in obtaining this admittedly imperfect report has been simply enormous. In the following tabular statement it will be perceived that Pennsylvania produces nearly one-half of all the bituminous coal mined

By Carl L. Renzoni

INTRODUCTION This paper defines equity as the issuance of a permanent interest in the business on a broadly distributed basis. As such, it excludes the issuance of equity to either a merchant bank or to another corporation. Nearly twenty years ago the equity markets were very simple: The instruments used were primarily common shares, convertible debentures or convertible preferred shares. Another equity-type option often used, especially by junior companies, was the sale of joint venture interests. Issue sizes were generally in the order of $25 - $100 million and issues were syndicated primarily in North America and Europe by one or two investment dealers. Mining corporations today benefit from a market with much more depth. Issues are syndicated by dealers on a truly international basis, and issue sizes now often range up to $300 million. Moreover, dealers are now willing to take significant risk in buying the issues for redistribution. This discussion of trends in equity markets will encompass: 1) common shares 2) warrants to buy common shares 3) convertible debentures 4) commodity backed instruments A review follows of events that affect the mining industry and investment dealers as they have a bearing on the equity markets for the metal producers. FACTORS AFFECTING THE MINING INDUSTRY The current business cycle, up to October 1987, had been characterised by a buoyant stock market and depressed base metal prices. Mining companies entered this period with weak balance sheets and little prospect of cash flows meeting capital needs. The issuance of equity and the sale of assets were used extensively to reduce debt to manageable levels. During this period, the relative high price for gold, and more important, the very high earnings and cash flow multiples afforded to gold producers, caused companies to target gold as the only game in town. The need for capital to acquire and develop gold properties prompted an unprecedented volume of equity issues. (Burns Fry led or co-managed over $1 billion of mining equity issues per year during this period). This high demand for equity capital by the industry prompted an increase in the use of equity instruments, such as commodity backed instruments. In addition, government tax incentive programs in Canada, such as flow-through shares, allowed smaller companies to raise significantly more equity than would otherwise have been possible. Over $1 billion in flow-through equity was raised in 1987 alone. The abundance of flow-through capital in Canada made it easy to form a new company. One flow-through share fund developed a system of providing the working capital required for a company to be eligible to receive flow-through share capital so that an entrepreneur required only a mining property to get started. Many new companies were formed and several flourished in a buoyant stock market environment to the point that market capitalizations grew to $100 million or more. The current period is in stark contrast to that before October 1987. The equity markets are generally available to the resource industry only on a window basis and only for senior companies and for special situations. The industry is benefitting from buoyant metal prices, and bankers are anxious to provide debt capital. Investment dealers previously processing several equity issues

Jan 1, 1990