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By Hans Lundberg

FOR the last 20 years, geophysical methods have been in practical use. The results accumulated during this time have been broad enough to enable us to formulate some general rules for conducting geophysical surveys to the best advantage. It is a well established fact that electrical and magnetic methods have aided the geologist to outline bodies of ore, to differentiate between various types of rocks hidden from view and also to determine the thick-ness of the layer of drift that covers the bedrock. Fundamental require-ments for a successful solution of a geophysical problem is the existence of physical differences between the various formations under investiga-tion. If such conditions exist, our problem becomes a physical, mathe-matical and geological analysis of the effects of these differences upon the structure of an arbitrarily produced, or already existing, field of force. Experience has shown that reliable and consistent results in analyzing such fields of force are obtained only if: (1) the methods and apparatus used are scientifically sound and designed to provide information with a maximum amount of accuracy, reliability, sensitivity, simplicity and speed of operation, and (2) the interpretation of the results of such an investigation is guided not only by rigid mathematical rules but also by common sense, based upon sound geological knowledge and imagination. Today, a number of methods are based upon sound principles, are highly sensitive and are well suited for field work. The instrumental developments have resulted in self-contained instruments, which permit the determination of field ratios and intensities with great accuracy. Magnetic surveys have almost become standardized. The electrical methods, mostly based on the determination of potential-drop ratios, or electromagnetic field ratios, are built as bridge circuits and it is easy to determine amplitude, as well as phase relationship of the various electrical and electromagnetic fields.

Jan 1, 1938

By H. R. Hanley

ONE of the most important contributions to the art of electrolytic zinc production-has been the aluminum cathode. This has been used in all major production: since its commercial development in 1916. The literature is replete with important contributions, some of which may have been replaced by better ones, but thus far there appears no other metal to take the place of aluminum as cathode material. Credit for this innovation goes to Sherard Cowper Coles, of England. When experi-menting on the extraction of-zinc from Broken Hill ore at Hayle, Cornwall, in 1893, he introduced the aluminum cathode, and in 1895 obtained British Patent-No. 20073. The reason for this dominant position of aluminum as cathode mate-rial in zinc sulphate electrolytes is its unique surface, to which electro-deposited metals usually do not tightly adhere. The metal must be of high purity for best results. It is possible to develop a starting-sheet method by which thin electro-deposited sheets of cathode zinc are made and stripped from a smooth aluminum plate. Such thin sheets of cathode zinc may be used as arc tine copper sheets in standard electrolytic copper-refinery practice. However, complications arise because of extreme warping of the zinc starting sheet after a .few hours of deposition, and thus special arrangements must be made to compensate for this abnormality.

Jan 1, 1938

By Howard Eavenson

EARLY in 1917, the United States Coal & Coke Co. secured options on several tracts in Harlan County, Ky., aggregating about 1.9,000 acres in area, and after careful prospecting by outcrop openings and diamond drilling, completed the purchase late in July of that year. This property is situated in the eastern end of Harlan County, south of the Poor Fork f Cumberland River, and extending across Big Black Mountain to the Clover Fork of Cumberland River, a distance of about 7 mi. (11.3 kg.). It extends from the Kentucky-Virginia line westward for about 6 mi. Looney Creek, which empties into Poor Fork, crosses the property for about 4 mi. (6.4 kg.), and as several of the seams within the property outcrop along this stream, it afforded an easy, and the logical, place for development. The property is on the northern side of the geological trough formed by the uplifting of Stone Mountain, on the southern, and Pine Mountain, on the northern side; the northern boundary along Poor Fork is practically at the base of Pine Mountain. This, area has been described in various geological reports.1 The main seam on this property is the one known variously as the "C," Benham, Keokee, Taggart, and Roda; it is, also called, by the Kentucky Geological Survey, the Kellioka seam of the western portion of Harlan County. This seam averages, in this property, about 5 ft. (1.5 m.) in thickness, although local rolls reduce this thickness considerably over small areas; and at the extreme western end of the property the seam splits. It is usually clean, although occasionally a small parting occurs within a few inches f the bottom f the seam; it is one f the best

Jan 9, 1921

By A. L. Holley

It has been customary at our opening sessions, for the presiding officer to address you on the general development of one or another of our several professions, or upon some important feature of Mining or Metallurgical Engineering. It is somewhat embarrassing to his successor that our former President, Dr. Raymond, expert as he is in every one of these professions, has been accustomed to keep them all, in their turn, prominently before yon. In selecting for this occasion a subject necessarily connected with iron and steel, I have thought that a review of these manufactures, with reference to some of their more pressing needs for improvement, will be more timely than a general or statistical paper. I shall endeavor to confine my remarks to a few specific defects of practice and management, and to their equally specific and more or less developed remedies. That serious defects exist; that they must be remedied ; that the manufacture is indeed already on the verge of transition, will be generally admitted. But it cannot be revolutionized all at once, however desirable the technical results might he, for that would bankrupt the business at large. We cannot afford to pull down and rebuild all our blast-furnaces that do not make a ton of pig iron with 25 cwt. of fuel; nor to replace all our hand-puddling furnaces with revolving ones, even if we could select the best revolver. Although the soft steels promise to supplant iron for most structural purposes, there are neither money nor present market to warrant all at once replacing our iron works, or half of them, with steel works. Since, then, these manufactures can neither stand still nor be suddenly metamorphosed, their managers are saying to one another: " We must feel our way into larger development; we must work gradually into better practice; we must improve a little at a time."

By A. W. Ambrose

The underground losses of oil exceed by hundreds of thousands of barrels all the oil that has been lost in storage, transportation, or refining. The quantity lost is, of course, indeterminate; but when it is considered that the contents of an entire oil field have been excluded from recovery by invading waters, some idea of the amount wasted may be gained. Similarly, enormous quantities of gas have been lost underground. Conservation of the oil, therefore, should start before it is brought to the surface rather than after it is placed in storage tanks. Water is one of the most important causes for underground losses and the operator should give as serious consideration to an underground flood of water as he would to a destructive surface flood. The best insurance, of course, is to have the wells drilled in such a manner that water has no access to the productive oil and gas horizons, and on abandonment the wells should be properly plugged. The encroachment of edge water and the occurrence of waterin;the base of an oil sand present a very serious problem to an oil company sooner or later these waters are bound to cause considerable damage, if they do not entirely destroy the possibilities of further production. Too often, however, a field has been considered to be in a hopeless condition, whereas wells in as bad a condition in other areas have been repaired and the life of the field appreciably lengthened. The corrections are very often suggested by technical study. Very successful results have been accomplished by detailed underground work in the California oil fields, in Cushing, Oklahoma, and in other areas. The purpose of this paper is to outline briefly1 general methods of analyzing oil-field water problems in a producing or in a producing and developing oil field, with a view to suggesting repair work on offending wells. Reference is continually made to producing oil wells; the same general method of procedure, however, should be adopted in a gas field.

Jan 1, 1921

By K. R. Van Horn, L. W. Kempf

Plastic deformation of most commercia1 metals within a sufficiently low temperature range results in profound changes in structure and properties, of which the causes and effects are not completely understood. One of these effects is the presence of internal residual stresses and strains, which ordinarily do not appear to require specific consideration in most structural applications but which may be quite undesirable in particular instances. For example, in heavy sections that require considerable machining before assembly, residual stresses may be undesirable because of the distortion they cause when their balance is disturbed by machining or otherwise. In addition, the distribution of stresses may be such that it acts in the same direction as the applied load, thus bringing about premature failure or reducing the load-carrying capacity of the member. One source of residual stress in metal structures is the plastic deformation that may occur during rapid cooling from relatively elevated temperatures, as in the cooling of a casting in the mold or the quenching of a heavy section from elevated temperatures during heat-treatment. These residual stresses are usually undesirable because their direction of operation and magnitude cannot be controlled well enough to permit utilization of the changes in properties of the metal that they may bring about. The most convenient manner of controlling such residual stress is by proper selection of the cooling rate or by reheating to a temperature at which plastic flow can take place, resulting in relief of the residual stresses and strains. Both of these methods of control, however, may cause a reduction in the optimum properties obtainable from the previous operation. A compromise must be struck, and if it is to result in the best possible combinations of properties, specific information must be available regarding the magnitude of the stresses and the rate at which they are affected by variations in cooling rate or in reheating temperature. The complete quantitative estimation of residual stress in complicated metal shapes is exceedingly difficult, if not impossible. In simple sections, however, relatively quantitative analysis may be applied and useful cstimations of stress distribution may be made. This paper is concerned largely with the rate of relief, upon reheating, of internal residual stress in simple aluminum-alloy structures. Since even with simple structures quantitative estimation of residual stresses is laborious and costly, an attempt was made to find other means of collecting data upon which commercial heat-treatments might be based. Incidentally, a few data were collected bearing on the problem of relaxation of aluminum alloys. Determination of Residual Stresses The magnitude and distribution of residual stresses in simple aluminum-alloy shapes rapidly cooled from elevated temperatures has been discussed in a previous paper.' Fig. I reproduces some of the data

Jan 1, 1942

By L. W. Kempf, K. R. Van Horn

Plastic deformation of most commercia1 metals within a sufficiently low temperature range results in profound changes in structure and properties, of which the causes and effects are not completely understood. One of these effects is the presence of internal residual stresses and strains, which ordinarily do not appear to require specific consideration in most structural applications but which may be quite undesirable in particular instances. For example, in heavy sections that require considerable machining before assembly, residual stresses may be undesirable because of the distortion they cause when their balance is disturbed by machining or otherwise. In addition, the distribution of stresses may be such that it acts in the same direction as the applied load, thus bringing about premature failure or reducing the load-carrying capacity of the member. One source of residual stress in metal structures is the plastic deformation that may occur during rapid cooling from relatively elevated temperatures, as in the cooling of a casting in the mold or the quenching of a heavy section from elevated temperatures during heat-treatment. These residual stresses are usually undesirable because their direction of operation and magnitude cannot be controlled well enough to permit utilization of the changes in properties of the metal that they may bring about. The most convenient manner of controlling such residual stress is by proper selection of the cooling rate or by reheating to a temperature at which plastic flow can take place, resulting in relief of the residual stresses and strains. Both of these methods of control, however, may cause a reduction in the optimum properties obtainable from the previous operation. A compromise must be struck, and if it is to result in the best possible combinations of properties, specific information must be available regarding the magnitude of the stresses and the rate at which they are affected by variations in cooling rate or in reheating temperature. The complete quantitative estimation of residual stress in complicated metal shapes is exceedingly difficult, if not impossible. In simple sections, however, relatively quantitative analysis may be applied and useful cstimations of stress distribution may be made. This paper is concerned largely with the rate of relief, upon reheating, of internal residual stress in simple aluminum-alloy structures. Since even with simple structures quantitative estimation of residual stresses is laborious and costly, an attempt was made to find other means of collecting data upon which commercial heat-treatments might be based. Incidentally, a few data were collected bearing on the problem of relaxation of aluminum alloys. Determination of Residual Stresses The magnitude and distribution of residual stresses in simple aluminum-alloy shapes rapidly cooled from elevated temperatures has been discussed in a previous paper.' Fig. I reproduces some of the data

Jan 1, 1942

By Clarence Merritt

STAINLESS iron, as mild stainless steel is usually called, an alloy ranging from 11.50 to 15.00 per cent chromium with carbon under 0.12 per cent, has been considered to be not appreciably affected in respect to corrosion resistance by heat treatment. This metal, while one of the most widely used of the "straight" chromium stainless alloys, has failed in many applications because of insufficient information regarding heat treatment. These failures have been attributed to many possible causes from an inherent lack of resistance to corrosion and misapplication to mysterious electrolytic effects or comparatively minute non-metallic inclusions. Many uses for a steel with such excellent physical properties is are latent in this alloy have been lost on account of corrosion failures which could have been avoided by applying proper heat treatment. The alloy has not received the recognition or attention it should because of the fact that' the details of its metallurgical behavior were not thoroughly understood. Response to heat treatment of the steel is well known as regards tensile properties, 1,2 but its application has been for improvement in tensile characteristics or on account of machining considerations rather than for corrosion prevention. The potential user of this steel has not been clearly advised in papers, either technical or commercial, that have been written about it in the last 10 years or more, of particular features that are of prime importance in developing the excellent properties of this metal. The data to be presented in this paper are concerned mainly with the effect of heat treatment on the corrosion resistance, but a study has also been made of the concurrent microstructural changes and an explanation developed for the phenomena revealed, as well as a correlation to the other physical properties-hardness, tensile characteristics and impact strength. Stainless steel, largely used for cutlery purposes, an alloy of approximately 13.00 per cent Cr with 0.30 per cent C, must be hardened and the surface prepared by polishing or pickling for best resistance to staining and corrosion.3 Monypenny reports that a loss of hardness is

Jan 1, 1932

By Harry V. Welch

This paper presents a brief discussion of numerous devices and processes which have been utilized for the recovery of values from gases in copper reduction works and describes in greater detail the development and application in recent years of electrical precipitation, more familiarly known as the Cottrell process, to the problems of dust losses with furnace gases in copper-smelting and refining plants. The field for collection of suspended particles in gases is widely extended in our modern complex, congested .and industrialized mode of living, and its satisfactory solution is required by our increasing appreciation of the extravagant waste, unhealthful effects and nuisance which such uncontrolled emission of solid suspensions represents. Much of the special dust-recovery equipment in use today has been developed in one industry and carried over to many others. The early work of Cottrell was with sulfuric acid mists, aimed at the purification problem in contact acid manufacture, but the present uses of Cottrell equipment cover a diversified field—carbon black, combustible gas, oil mists, iron blastfurnace fumes and dusts, cement-kiln gases, as well as the purification of gases in contact and chamber acid plants and its wide and extended use in the nonferrous metallurgical field of copper, zinc and lead, and their associated metals. Dust and fume collection from furnace gases became a problem only with the modern development of large and amply powered auxiliary furnace equipment, which in turn permitted large furnace units, fast driving and large outputs of finished product per unit of furnace capacity. The ancient metallurgist with his small clay pot and hand-operated bellows had too little gas velocity to cause a real dust loss. As furnaces grew in size, flues and stacks were added, and undoubtedly the first observable dust losses were indicated by the deposits in the flue and stack base. Large flues, it was noted, collected more than smaller ones, and the expansion of a portion of the flue into a chamber represented the first serious attempt at recovery of furnace dust losses. For a century or more the settling chamber represented the best of skilled metallurgical practice in recovery of furnace dust, and it may be said to have reached

Jan 1, 1934

By V. F. Hollister

Although it is apparent that porphyry copper deposits may have formed in the Andean orogen from Permian time onward, commercial deposits thus far developed appear to have Cenozoic ages only. Following Chilean usage, the porphyry deposits are divided into either (1) a stockwork or (2) a tourmaline breccia model. As indicated by evidence cited in the paper, stockwork-type deposits tend to be related to major strike-slip structures which may be either transcurrent or transverse faults related to plate movements, while the tourmaline breccia type may more frequently form independently of regional faults. Stockwork types may be conjugate fractures that intersect and ramify as a network of veins and veinlets, cutting altered rock, and genetically related to a major regional fault, or in other cases they may reflect the intersection of two large fault structures. Circular fracture patterns may more rarely occur in stockwork deposits in response to a specific intrusion. Tourmaline breccia types are characterized by circular and radial fractures genetically connected in some way with touramline breccia pipe development or an intrusive piercement that preceded it. Each structural model contains mineralized intrusions which have a close time-space relationship to ore, and in each model mineral paragenesis is similar, regardless of age or location in the plate. Also, each model contains the same type of alteration halos (phyllic, argillic, propylitic) as are developed in intrusive centers in porphyry copper deposits found in North America. The potassic zone is exposed best in the older deposits. Examples of each type of deposit are illustrated, demonstrating the feature evolved.

Jan 1, 1975

By H. M. Chance

The present value of most coal properties resides largely in the cod remaining to be mined, which thus constitutes the most important asset. The object of this paper is to discuss methods commonly used in computing the value of minable coal. To distinguish clearly between such coal values and the values of other property, the several kinds of property values should be divided into classes; so as to avoid the unintentional omission of items of importance. Value op Coal Reserves Judicial decisions prescribe, and appraisers commonly accept, current sales value as the preferred means for determining the value of transferable property. With few exceptions a property is worth the sum that can be realized from its sale by a willing seller to a willing buyer, a sale in which compulsion urges neither party, and between whom there is no community of interest to fix a value; or it is worth at least as much as a responsible buyer will offer for it. Actual sales of like property or bids from responsible buyers for the property, or for substantially like property, are the best established methods for determining values. Only in the absence of such sales or bids can valuations by other methods be entertained, and only for reasons of weight can sales values be set aside. Valuation Based on Royalties Sales of coal in the ground, as customarily carried out through lease under royalty agreements, are therefore the most trustworthy means available for determining the value of coal reserves. The constantly rising value of high-grade coal in the United States can most readily be shown by the increasing royalties per ton that can be obtained for such coals under leasehold. The rising value of land containing such coal can also, of course, be proven by the price at which such properties are actually sold as compared with prices obtainable for lands containing coal of the same grade in the past. It is exceedingly difficult, however, to establish values by the prices paid for coal

Jan 1, 1927

By Warnie Flint

PERSONAL INJURY ACCIDENTS According to statistics compiled by the National Safety Council, US Bureau of Mines, American Medical Association, and other agencies, accidental injuries cause more deaths than all the leading diseases. NO one is immune to an accident. Probably the best way to describe an accident is to say that it is an unexpected happening. The automobile driver is not expecting a terrifying crash, the electrician does not expect to be electrocuted, nor is the coal miner expecting the roof to fall on him. All personal injuries will not result in death. There is a multitude of victims who are living proof of what accidents can mean to an individual-victims who are blind, paralytic, missing arms, legs, etc. In most instances the earning power of these individuals is gone, and they are utterly dependent upon family or welfare. For many years there seemed to be an attitude that prevailed in industrial America that accidents were inevitable, and that so many fatalities and injuries should be expected. This, of course, was utter nonsense. Since the birth of such organizations as The National Safety Council, American Society of Safety Engineers, and the US Bureau of Mines, much progress has been made in reducing accidents. The enactment of compensation laws greatly contributed to the progress that has been made. Does this mean that all accidents can be prevented? Unfortunately, it does not. Human psychology indicates that men will work unsafely or perform unsafe acts for the following reasons : 1) Lack of knowledge or skill. 2) Conflicting motivations, such as: (a) to be more comfortable, (b) to save time or effort, (c) to be accepted by a group. 3) Physical or mental condition. Nearly everyone desires his own safety, but not all individuals are willing to do what they know to do to insure their own safety.

Jan 1, 1981

By C. A. Heiland

I. Description of reflection equipments.................. 412 A. Design features of present types.................. 412 B. Reflection equipment designed by writer.............. 418 11. Characteristics of reflection seismographs............... 421 A. Types of coupling in electromagnetic seismographs.......... 421 B. Action of pickup, amplifier and galvanometer............. 424 C. Combined action of pickups, amplifiers and oscillographs....... 433 D. Static and dynamic constants................... 434 E. Desirable values for static and dynamic constants.......... 435 111. Calibration of reflection apparatus.................. 442 A. Dynamic tests without shaking table................ 442 B. Calibration methods....................... 445 C. Various other tests........................ 451 INTRODUCTION In the past five years, the reflection method of seismic prospecting has been developed to a high degree of perfection. Its success in mapping oil structure is due to the unique and definite nature of the depth data obtained. While articles on the principle and results of this method continue to appear in increasing number, there is virtually nothing published about the instruments used in this work. Several years ago, the writer started an experimental and theoretical investigation with the object of determining which characteristics would be best adapted to the problem at hand. As a result, an equipment was developed which has proved its usefulness in a great number of field tests. W. E. Pugh, now with the Empire Oil and Refining Co., joined the writer, in 1931 and 1932, in the laboratory experiments and field tests. In 1933, a paper was written on Certain Instrument and Field Problems in Reflection Seismology, and submitted to the Institute. The part of that paper dealing with field tests was published as Contribution 34 (reprinted in this volume, p. 455). Since then, considerably more labora-

Jan 1, 1934

By C. W. Stratford

[During the last few years, the necessity for development work has been generally recognized by executives throughout the oil industry, resulting in greatly accelerated progress and the adoption of many noteworthy improvements in refining methods and equipment. Several years ago, the Associated Oil Co. decided to improve distillation methods with the object of reducing refining costs. This extremely interesting work was entrusted to the writer, and W. S. James, now Chief of Research for Studebaker Corpn. of America, was selected as the principal collaborator. The latter contributed much during his two years with the Associated Oil Co., to the development work that has followed. The writer extends to the Associated Oil Co. his appreciation for permission to disclose the details of distilling equipment. In petroleum refining the principal requisites of good economics are the separation of high-priced distillates from those of lower price; maxi-mum yield of any desired distillate; lowest capital investment in refining equipment; lowest cost of operation and maintenance, and the best adaptability and flexibility of the same refinery equipment for handling crudes of widely varying characteristics. The first two items mentioned, separation and yields of distillates are determined by efficiency of fractionating equipment,. Discussion in this paper is chiefly concerned with oil-heating equipment, combustion and furl economy. It has long been well known that velocity plays a very important part in all heat transfer systems. Any betterment in specific transfer. rates in such systems must. always involve velocity. Realizing this fact, IV decided to adopt as a basic principle, the employment of energy to impart velocity required for high transfer rates through a heating diaphragm, and our method of modernizing obsolete shell stills is founded on this principle. Mechanical energy is usually cheap and its rational rspcntliture is returned in the form of greatly increased heat transfer rates, on both oil and gas sides of the sheet. Certainly there is nothing new in this principle, the only novelty being that of our peculiar method of application On the oil side (Fig. I) use is made of a centrifugal pump to jet the oil against the heated sheet thereby creating a high velocity sheet flow over the entire fired area. Such a pump is one of the most efficient machines, so far developed, for moving fluids. 'I'he oil, under pressure impinging

Jan 1, 1928

By A. J. R. Curtis

THE Portland Cement Association was organized more than a third of a century ago by a group of cement manufacturers, to do cooperatively the educational and research work needed to ensure proper use of their product. Specifically, the Association has a threefold purpose: (1) to search out facts to ensure the best possible service from concrete; (2) to give the widest possible circulation to facts affecting the use of concrete; (3) to urge practical application of those facts on actual building projects. An organization of technically trained men conducts many research projects in the Association laboratories, interprets their findings and applies them practically in the field. The net effect of this work has been to improve the design and prolong the life of roads, bridges, industrial, commercial and public buildings, homes, farm structures and concrete products. The results of this technical research and experimentation are made available to the entire construction industry through bulletins and reports. Information is also released to the general public through newspapers, magazines and Association publications. In addition to a1 technical staff in the general office in Chicago, the Association has district offices in 22 cities. Field engineers cover 37 states, the District of Colum-bia and British Columbia, to give service to users of Portland cement.

Jan 1, 1937

By John Chipman

RECENT developments in iron alloys containing nitrogen have indi-cated that this element may exert a considerable influence on the proper-ties of the metal. This influence is not always in an undesirable direction and the indications are that nitrogen should be regarded as an alloying element, the amount of which should be subject to control, rather than as an inherently deleterious impurity. In controlling this element in liquid iron to the best advantage, it is necessary to have a reliable background of fundamental data pertaining to solubilities, rates of solution and chemical reactions of nitrogen in liquid iron. Obviously, the first step in such an investigation is the determination of the solubility of nitrogen in pure iron, and this has been the object of the experiments described in this paper. The solubility of nitrogen in solid iron has been measured by Jurich,1 Sieverts,2 Martin,3 and Iwasé4 and the agreement among the first three inspires confidence in their results. No accurate determinations of its solubility in liquid iron have been recorded though several investigators have obtained approximate results. Strauss5 was able to introduce 0.03 to 0.04 per cent nitrogen into steel by the action of either ammonia or nitrogen on the liquid metal. This was accomplished by Eilender and

Jan 1, 1935

By M. F. Trice

PYROPHYLLITE is a hydrous aluminum silicate (Al2Si4O10(OH)2)1 that occurs in both the foliated and the massive forms. The foliated variety resembles talc in that it has a greasy feel, a pearly luster, perfect basal cleavage, and usually is white, although in some deposits apple green, gray, brown, russet, and nearly black specimens may be found. The massive deposits of pyrophyllite yield pearl gray to light tan aggregates, some of which are so friable that they may be crushed with the hands into a fine gritty powder. Frequently specimens of the massive variety are studded with crystals of radial structure. The mineral has a specific gravity of about 2.7 and a hardness of 1 on Mohs' scale.1 The chemical composition of commercial pyrophyllite reflects the mineralogy of the deposits, which, according to Stuckey,2 contain pyro-phyllite and quartz, together with chloritoid, sericite, and a few other minerals of negligible importance. The latter, he says, "are noticed in but small quantities to the extent they might occur as accessory constitu-ents of an igneous rock or as products of regional metamorphism or weathering. . . . Quartz is abundant everywhere except in the very best grades of pyrophyllite." Analyses of specimens from several deposits are listed in Table 1, showing that the silica content varies from 57 to 73 per cent and the alumina from 22 to 33 per cent. Oxides of iron and the alkaline metals are collectively present, with one exception, to an extent of about 1 to 1.5 per cent.

Jan 1, 1940

By L. D. Clark

Pay-out, the ratio of capital expenditure to annual cash return can be very revealing when employed to gage the merits of a proposed mining venture. It is a quantity, numerically but not physically equal to a factor, by which cash return may be discounted to equal required investment. The fewer the pay-out years, the greater the average annual earning power of the project. Considerable material has been written in the past about the most important and difficult problem mining management faces in evaluation of a property: the optimum production rate for the venture. What daily capacity should be adopted for the proposed operation that it may be the most rewarding to those underwriting it? H.C. Hoover has said, "The most important objective is the least cost per ton mined; and minimum working costs can only be gained by the most intensive production." Theoretically and practically, the quicker the ore is removed, the more profitable should be the venture because of the saving in fixed charges, the consequent lower unit costs and the interest unearned by the profit from the unmined ore. Yet, such performance will be tempered by policy and a restraint imposed by the ratio of capital expenditure to annual cash return. * The 'Annual net profit after taxes but including depreciation and depletion allowances. former will be based upon an analysis of the economic climate anticipated, with its many ramifications including the demand for the product, prices, tax laws, the conduct of labor and related wage scales. The variables and intangibles involved in estimating the optimum production rate for a mine do not readily lend themselves to mathematical relationships or equations and the problem can become complex indeed. The more readily applicable and relatively faster appraisal method will be used which, in addition to being reasonably adequate in most cases, will serve as a guide, should a more expanded and detailed estimate be desired. The first question is what is company policy with respect to the rate of investment return? This will depend on that significant period of time referred to as the pay-out, which can be defined as the estimated interval during which capital investment is returned through application of annual cash return to its recovery. Expressed another way, it is the ratio of capital expenditure to the annual cash return. For example, if the capital investment is $C and the annual cash return is $A (after Federal tax), then $C/$A = the pay-out period in years. That is to say, if $C = $1,500,000 and $A = $214,000, then which is the mathematical expression for the period of time it takes to recover the funds originally invested in a mining enterprise. The relationship yp = $C/$A can be useful — an expression which requires only the significant tern yp to be fixed; in other words, the long range investment policy. For what is the pay-out period but an expression of that policy in terms of the speed, within practical limits, with which an individual or company may want to recover capital expenditure? A policy by which pay-out will be fixed is imperative. This ratio must lie within relatively narrow limits governed by what is economically feasible. It cannot be too low, rendering the ratio impractical or absurd, nor too great, delaying the return of capital for reinvestment beyond a commensurate interval. What pay-out will govern this policy? Federal corporate taxes would seem to present the best measure. Consider mining in Canada where new mines are exempt from Federal income tax for 3½ yr from date of first production. This exemption expressly allows The Act states: "A corporation . . . i s not required to include the profits . . . for the period of 36 months commencing with the day on which the mine came into production in reasonable commercial quantites." a company to recover capital expenditure during the early stages of production. With such an incentive, it is logical to strive for as much capital redemption as possible during this period. Thus, 3½ yr would be a major contribution to the pay-out in Canada. Furthermore, it generally takes from 1½ to 3 yr to develop

Jan 1, 1963

By L. C. Raymond

Valuations in the mineral industry differ from those of other enterprises because mines and oil wells have a definitive life so cannot be considered a perpetuity. This requires that in any mineral-property evaluation the recovery of invested capital is necessary during the life of the property. Capital writeoffs for nonextractive industries are assumed to be continuously plowed back to sustain the operation and produce yields on the capital invested. The extractive or mineral industry, however, generally attempts to return to the investor both interest and principal during the life of a property. Normally this is done currently and the dividend includes both items. Where the mineral properly possesses large reserves and the life factor approximates a perpetuity, the return on investment is generally comparable to that of industrial stocks. The valuation of a mineral property, at best, is based on educated estimates and judgment factors. This is particularly true as it relates to estimating selling prices over a long term or assessing the quality of management. Also, it is possible to make various assumptions as to rapidity of working out the deposit, varying time for start-up of operations, varying earning rates, so as to obtain different results with the same basic facts. Thus it is not surprising that two engineers, irrespective of their abilities, may not agree exactly even when given the same facts, but their results should be close enough to be used in establishing a fair value for trading purposes. The valuation is no better than the source of basic data and the soundness of judgment factors. Fundamentally the basic principles of mineral valuation are similar for base metals, sulphur, oil, or any other mineral. Each mineral, however, requires an engineer to have a knowledge of such factors as its occurrence, distribution, mining and processing methods, and marketing problems in order to gather and analyze all the facts and data that have a bearing on the earning potential of the property. PRESENTVALUEOFAMINERALPROPERTY In essence the present value of a mineral property is a sum of money in today's dollars that future earnings from the property are worth. It differs

Jan 1, 1959

By L. C. Raymond

Valuations in the mineral industry differ from those of other enterprises because mines and oil wells have a definite life so cannot be considered a perpetuity. This requires that in any mineral-property evaluation the recovery of invested capital is necessary during the life of the property. Capital writeoffs for nonextractive industries are assumed to be continuously plowed back to sustain the operation and produce yields on the capital invested. The extractive or mineral industry, however, generally attempts to return to the investor both interest and principal during the life of a property. Normally this is done currently and the dividend includes both items. Where the mineral properly possesses large reserves and the life factor approximates a perpetuity, the return on investment is generally comparable to that of industrial stocks. The valuation of a mineral property, at best, is based on educated estimates and judgment factors. This is particularly true as it relates to estimating selling prices over a long term or assessing the quality of management. Also, it is possible to make various assumptions as to rapidity of working out the deposit, varying time for start-up of operations, varying earning rates, so as to obtain different results with the same basic facts. Thus it is not surprising that two engineers, irrespective of their abilities, may not agree exactly even when given the same facts, but their results should be close enough to be used in establishing a fair value for trading purposes. The valuation is no better than the source of basic data and the soundness of judgment factors. Fundamentally the basic principles of mineral valuation are similar for base metals, sulphur, oil, or any other mineral. Each mineral, however, requires an engineer to have a knowledge of such factors as its occurrence, distribution, mining and processing methods, and marketing problems in order to gather and analyze all the facts and data that have a bearing on the earning potential of the property. PRESENT VALUE OF A MINERAL PROPERTY In essence the present value of a mineral property is a sum of money in today's dollars that future earnings from the property are worth. It differs

Jan 1, 1964