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By L. Newman, R. Wyrick, R. Berezowsky

The Stillwater Mining Company operates an integrated mines, mill, smelter and base metals refinery complex in Montana, USA for the production of a high-grade platinum group metals (PGM) bearing concentrate, nickel sulphate crystal and cathode copper from the PGM-containing nickel-copper converter matte. The complex was constructed in stages over several years, starting with the mine and the mill, followed by the smelter and finally, a base metals refinery, which was commissioned in 1996. Due to the relatively small quantity of matte production, a straightforward refinery process was initially selected to extract the base metals, which reported to a mixed nickel-copper solution for further treatment off-site, and yielded a high-grade PGM concentrate suitable for treatment in a PGM refinery elsewhere. Subsequently, as a result of increased matte production, the process was modified to separate the nickel and copper, and to produce a nickel sulphate salt and cathode copper. This paper describes the design and operation of the original and the modified processes utilized in the base metals refinery (BMR).

Jan 1, 2004

By L. M. Lowe, D. B. Chambers, D. G. Feasby

"The presence of the naturally occurring radioactive elements uranium and thorium in rare earth (RE) resources can present challenges in achieving regulatory and social acceptance. The discovery and awareness of radioactivity in mineral resources radioactivity typically generates strong public intuitive responses that may be project prohibitive; a significant proportion of such resources contain radioactivity.The objectives of this paper are to demystify the presence of uranium and thorium in RE resources and to demonstrate how a RE project can be safely developed, operated and closed from a radiological perspective. Radioactivity in RE resources is principally thorium-based. Thorium is interesting and challenging from a metallurgical perspective – one of those stubborn metals commonly assessed as refractory. Thorium is difficult to mobilise into solution and easily precipitates out. Thorium is a common element in the earth’s crust – about 10 ppm on average, and natural geophysical systems conclusively demonstrate its immobility. Specific mine tailings contain elevated levels of thorium, but the contained thorium is neither a significant ecological nor a personal hazard.Waste management for a hard rock rare earth project includes the management of mineral processtailings, waste rock, and metallurgical residue. Proven strategies are available for tailings and waste rockfor all climate conditions. The management of the metallurgical residues is potentially more challenging.Example robust strategies for addressing these challenges are presented.A potential way to reduce the radioactivity of rare earth metallurgical wastes is to selectively remove uranium and thorium. Uranium oxide is readily marketable, but its concentration as a byproduct typically triggers extensive regulatory processes. Thorium is presently not marketable, but may be so in the not-too-distant future with the development of thorium-based nuclear energy. The pro’s and con’s of uranium and thorium byproduct recovery are summarized."

Jan 1, 2016

By Jim Excell, Jim Rothwell, Mike Rylati

"LocationThe Ekati Diamond mine is located at Lac de Gras, Northwest Territories.Brief Description of OperationBHP Diamonds Inc. has developed Canada's first diamond mine in the Northwest Territories (NWT), Canada. BHP Diamonds Inc. is part of the BHP World Minerals Division ofBHP Minerals. The project is a joint venture between manager and operator BHP (51%) and the Blackwater Group (49%). The Blackwater Group comprises Dia Met Minerals Limited, Charles Fipke and Stewart Blusson.Production at the NWT diamonds project began in October with the mine officially opened October 14, 1998. The project is situated on an 853 000 acre claim block located in the Lac de Gras region of the NWT. It is about 300 km northeast of Yellowknife and 100 km south of the Arctic Circle. The seasonal winter ice road to the Echo Bay Lupin mine passes along the eastern margin of the project area. This allows road access each year from mid-January to mid-April. For the remainder of the year, the project is accessible only by air.HistoryIn 1980, Charles Fipke traced indicator minerals east from the Mackenzie River area. He discovered indicator minerals in the Lac de Gras area and staked mineral claims in 1989. A joint venture was formed between BHP and Dia Met in 1990, and in 1991, the first diamonds in the NWT were discovered at Point Lake by BHP and Dia Met. This initiated the largest staking rush in Canadian history. The joint venture launched an aggressive exploration program.Koala, Fox, and Leslie were identified in 1992 as potentially economic pipes.As soon as the project's potential was established, it was recognized that an enormous amount of work had to be completed in several areas before a mine could be developed, namely: technical evaluation of the resources; environmental and socio-economic evaluation to procure the necessary permits for the development; and engineering design to optimize mining and processing of the resource and to comply with specific environmental requirements."

Jan 1, 2000

By Jon A. Carlson, W. Scott Williams

The EKATI"" Diamond Mine commenced operation in October 1998. It is operated by BHP Diamonds Inc., which is a part of the Non-Ferrous and Industrial Materials Division of BHP Minerals, a business unit of BHP Company Ltd. of Melbourne, Australia. The EKATI"" Diamond Mine is a joint venture of BHP Diamonds Inc. (51%), Dia Met Minerals Ltd. (29%), Charles E. Fipke (10%) and Dr. Stewart L. Blusson (10%). In December 1993, an office was opened in Yellowknife, Northwest Territories specifically for the then Northwest Territories Diamonds Project (EKATI"" Diamond Mine) development. EKATI"" Diamond Mine is located 300 kilometres northeast of Yellowknife and 200 kilometres south of the Arctic Circle in the Northwest Territories of Canada (Figure 1 ). The site is located in a remote tundra area of continuous permafrost, north of the tree line, which is part of the Canadian Shield. Wekweti (Snare Lake), a Dogrib community approximately 180 kilometres southwest of the project, is the closest neighbour. The mining area and facilities lie within the 10 960 hectares land leases held by the joint venture. The total claim block (core zone and buffer zone joint ventures) covers 344 000 hectares. To date, more than one hundred kimberlite pipes have been identified within the claims. Five of these provide the basis for the present mine plan. Total capital investment in the project is over C$700 million. At full production employment will be about 600, including employees and long-term contractors, with over 33% being Aboriginal from the Northwest Territories.

Jan 1, 2001

By M. W. Bartley

DURING the field season of 1938, the Ontario Department of Mines assigned a combined geological and geophysical survey patty to the investigation of the location, genesis, structural relationships, and economic possibilities of the hematite deposits at Steeprock lake. The investigation was carried out by detailed mapping of the rock exposures and a magneto-metric survey of the drift-covered portions of the area. This was supplemented during the winter of 1938-39 by further geophysical work conducted on the ice. Dr. A. A. Brant, of the Department of Physics, University of Toronto, was in charge of the geophysical work for the Department of Mines in the summer and for the Sterola Exploration Company in the winter. The writer supervised the geological examination. Scope of the Paper The present paper is an attempt to acquaint the members of the Institute with the structure and mode of occurrence of the deposits, since many people are of the erroneous opinion that they are analogous to the Mesaba and Michigan deposits. It is hoped that, from this discussion, they may be able to draw some conclusions of their own regarding the nature of the deposits, and the importance and future possibilities of the region.

Jan 1, 1939

By D. Duff, R. A. Cameron, R. E. S. Whitehead

"Although CO2 content indicates the quantity of carbonate in altered basaltic rocks, it does not measure the intensity of carbonate alteration. CO/CaO molar ratios, which correlate with the relative proportions of individual carbonate species, measure the intensity of carbonatization. The Timmins gold area is characterized by pervasive carbonatization, with large parts of the area having CO2/Ca0 ratios greater than 1, representing C02 supersaturation relative to CaO. The mean CO/CaO in the Timmins area is0.67, compared to 0.13 in two unmineralized control areas. Regional arsenic abundance in the gold-bearing area averages 4 ppm, compared to about 0.35 ppm for the non-mineralized areas. The average K20 and Rb abundances are similar in both mineralized and non-mineralized areas (about 0.30% K20 and 7 ppm Rb). Although there appears to have been no wholesale addition of K20 or Rb to the mineralized area from external sources, these alkalies have been redistributed internally, resulting in patterns of local enrichments and depletions which are characteristic of the mineralized region.Local target anomalies associated with known mineralization consist of CO2/Ca0 > 1.5, As > 10 ppm and K2O > 0. 75%. Not all three values are required to be above these thresholds in order to identify local targets. Combinations such as C02/ Ca0 > 1.5 and As < 10 ppm, CO/CaO 1-1.5 and K20 > 0. 75 or K20 > 0. 75 and As > 10 ppm are equally indicative of proximity to gold occurrences. Gold-bearing veins and associated anomalies occur throughout the entire volcanic succession and are not restricted to any particular stratigraphic horizons. The levels and patterns of alteration and occurrences of gold appear to be structurally controlled."

Jan 1, 1982

By S. L. Zekovic

This paper analysis the medium and long-term perspectives, framework and considered possibilities of sustainable development of RTB "Bor" (Copper mines in East Serbia) after consolidation in the period of transition. The copper mine was opened in 1903. and today is the best quality copper producer on Balcan. This paper are elaborates the problems of privatization, debt, investment, growth of copper production from own mines (and imported raw), opening of new mines, economical efficiency of production, markets, environmental problems and impacts of the recent industry consolidation. The RTB "Bor" is a serious hot spot in Serbia. Unsustainable trends and processes are identified, as follows: open-pit waste dumps, flotation tailings, mining and processing waste waters, air pollution; no efficiency (excessive) using nonrenewal resource in the copper production; inefficiency in the use of energy, water and other inputs in copper complex; transboundary character of emissions of dust; environmental degradation and quality of wide area and ecologically highly risk, etc. Analysing some trends and planning-developmental perspectives and development strategies of company, it might be assumed that in the forth coming period, in parts of the Serbia, the borders areas of Bulgaria and Romania, there is an anticipated increase of ecological risk.

Jan 1, 2007

By C. S. Gibson

"MOST of the mines in the Province of Ontario in Canada are multi-level operations in steeply dipping veins; yet there is an appreciable number whose de-posits are relatively flat-lying, ranging up to 45° inclination.The veins vary in width up to several hundred feet and may or may not be branching systems. The depths of mines range from a few hundred to 8,000 feet, approximately. The primary products of the underground group are asbestos, gold, silver, cobalt, copper, nickel, iron, uranium, talc, fluorspar, gyp-sum and salt.There are a few open-pit mines. The majority are temporary in type because, as the outcrops are removed, mining is continued be-low surface. Primary products of the open pits are copper, nickel, iron, magnesium and nepheline syenite.The industry as a whole employs about 50,000 persons, approximately 60 per •cent of whom have dust-exposure occupations. The definition of a dust-exposure occupation and the requirements for •dealing with same are set forth in The Mining Act of Ontario.Results of extensive and continuing studies on the incidence and progression of silicosis have been reported periodically for years past, in annual reports of the Mines Accident Prevention Association of Ontario and in papers presented at Conferences sponsored by Mcintyre Research Foundation of Toronto, all of which have been published. The information provided therein proves the effectiveness of the means being used to prevent silicosis and allied disorders."

Jan 1, 1960

By F. Grant

"General *The mining experiences of the coal mining industry in Western Canada have been extremely varied, with the mining companies having to adjust their operations or fail due to the harsh economy of the country in the first part of the century. The bituminous or mountain mines had the railways as main consumers with, at times, optimism that potential steel producers would require metallurgical coal. The prairie and foothills mines mainly provided household fuels, with the fine coal sold to local thermal power plants at discounted prices. In practically all cases fuel competition was very keen, and the less successful mines ceased operations in short-time spans. Knowledge of the parameters that governed the success or failures of the past coal operations should be of value to the present and future mining companies. The initial coal mines were small and were started to supply local demand. These mines had little in the way of capital machinery, engineering, or transportation equipment; therefore the mining methods and mine plans were very simple. The first industrial-sized mines imported most of their management and mining methods from other mining areas, mainly Great Britain. It took time to change the bias of management and mining methods to the requirements of strata characteristics, with rapid closure to those mines that were slow to adapt working methods. The main markets for coal were for household fuel, thermal power plants and railways, with very few other industrial markets developed. The economy of the period was harsh and cyclic and the coal mines were affected more than most industries by these boom and bust periods. It led to the survival of the fittest or the most efficient. Due to the economy, mechanization was introduced to the mines very slowly, with the inability to sell coal fines at a profit being another reason for the delay. Manual labour with hand tools was the main means of production. The work was heavy and arduous, and the pay was based on contract coal tonnage; therefore both men and management paid close attention to details so that nonessential work could be eliminated. Mine openings were dimensioned so that coal could be loaded easily by hand and support requirements were kept to the minimum. Transporting and handling the timber supports required heavy labour; thus the most efficient dimensions were chosen to suit the strata. On the other hand, during the main production seasons the mines tried to make the strata stress work for them so that the pressure was kept on the coal face to keep the coal loose while the strata, a short distance back, was induced to cave to minimize the abutment stresses. This caused mining to be an art, using skills developed by experience with the strata. This led to the development of efficient mine layouts with the openings dimensioned to the strength of the strata and the type of support available. The lack of capital and mechanization, and the manual labour, induced the mines to correlate their service and haulage systems with their mining methods. This caused many innovations that proved very practical."

Jan 1, 1985

By W. R. A. Graeser

"The Nordenham finishing mill is situated in the town of Nordenham, Fede1•al Republic of Germany, on the banks of the Weser River opposite the town of Bremerhaven, with access by water to the North Sea.The unfinished fibre, shipped j?•om Deception Bay during the sub-Arctic summer shipping season, is unloaded from bulk ocean carriers, stored and then processed throughout the year until the following shipping season. This paper describes the unloading and storage facilities,the finishing mill and the finished-fibre storage arrangement. Details of environmental and dust control practices and West German environmental standards are discussed. A resumé of fibre markets is included."

Jan 1, 1976

By Hidenori Hatta, Takero Watanabe, Hideo Yoshida

"The effect of the quenching rate on age hardening in an Al-6.0mass%Zn-0.75mass%Mg alloy sheet was investigated. The quenching rates and aging conditions were as follows: water quenching (WQ) or furnace cooling (FC) followed by pre-aging at 20°C,then artificial aging at 120, 160 or 200°Cwere performed. The peak strength of the FC and the WQ are very similarat120°C aging. It is important high strength was obtained even at the extremely slow quenching rate. On the other hand, the strength of the WQ significantly decreased compared to the FCat200°C aging. GP(I) zones were formed during the pre-aging at 20°C even if the cooling rate was very slow like the FC, and were transformed into the GP(II) ones at 70°C or higher and then into the ?’ phase. However, these zones were dissolved by reversion during heating to 200°C. Thus the strength of the WQ decreased. On the other hand, it is considered that an unknown cluster or GP zone with a thermal stability formed during the FC was not dissolved up to 200°C and was transformed into the ?’ phase. Therefore, a higher strength was obtained in the FC for the200°Caging.INTRODUCTIONAl-Zn-Mg alloys are widely available in commercial production because these alloy have lower quench sensitivity and can be produced by air cooling (AC). Heat treatable aluminum alloys are usually produced by water quenching (WQ) to increase their strength because a high cooling rate inhibits the precipitation of the stable phase during cooling and increases supersaturated solute atoms. However, Baba(1967)reported the strength of an Al-6%Zn-1.8%Mg(mass%) alloy without additional elements quenched by very slow cooling (15°C/min) was 96% of that quenched by WQ. Furthermore,the age hardening at room temperature (RT) occurs after annealing at 410°C followed by furnace cooling (FC, 0.5ºC/min or less)in these alloys. Therefore, the process of annealing at 410 to 430°C for 120 min followed by AC, and reheating at 230°C for 240 min, then cooling is recommended in the specifications (Japan Aluminum Association, 2011). Matsuda and Yoshida(1996)also recommended annealing at 300°C for Al-Zn-Mg alloy extruded products to inhibit age hardening at RT by precipitating the solute atoms and decreasing them in the matrix. It has been considered that the higher the content of excess quenched-in vacancy becomes by WQ, the higher aging rate at RT is obtained. Therefore,it is theoretically and commercially important to clarify the reason why the age hardening occurs relatively quickly in almost no excess quenched-in vacancies such as the FC, and why the same strength as the WQ can be obtained in the FC"

Jan 1, 2018

By E P. Graham

Orebodies occur in an infinite variety of grades, shapes and sizes, and take many millions of years to grow. When extraction starts there is only one possible end -the mine sooner or later will run out of ore and shut down. If the mineral industry is to supply the ever increasing demands of modern civilizations, more and more metals must be found and mined. This will require a never-ending search for ore, and the development of every economic body, large or small. To justify the mining of a small orebody, it first of all must pay its way. If the size of the burden imposed by the capital cost estimates is not carefully worked out, an otherwise promising situation could be killed. The very nature of mining, as a transient industry, re-leases a steady stream of good used equipment, and the trained personnel to install and operate it. All manner of plans and layouts, which can be utilized at a new property, are available. Working these and other economies into the estimates will sometimes make enough difference to give a prospect the green light.

Jan 1, 1964

By J. C. Thornley

Service failures of seemingly conventional galvanized bolts, in normal operation, on transmission towers in New Brunswick have been found to be the result of hydrogen cracking. In both these cases, similar failures elsewhere can be avoided by suitable clauses in the purchase specifications. In the first case described, the manufacturing procedure was responsible for strengthening and embrittling a standard, soft, constructional steel. In this case, a fracture mechanics analysis predicted critical crack depths for final fracture very similar to those found in practice. This case reveals an apparent cooperative connection between hydrogen embrittlement and strain ageing in plain carbon steels. In the second case described, the steel was simply a high strength steel which should not have been made into galvanized bolts.

Jan 1, 1979

By Michael J. Lord, Richard H. O. Wagner

"The technologies used in the mineral processing of ores are being increasingly applied to the identification and remediation of metal contaminated industrial, military and landfill sites. The objective of mineral processing treatment of contaminated site material is to restore the value of the land and to concentrate the contaminants into a very small volume of separated material which, depending upon its nature, can be further processed, marketed, or sent to a landfill. A systematic characterisation of the site material is first undertaken. Bench and pilot testing follows to evaluate criteria for metal separation. The testing may examine one or more physical or physico-chemical reprocessing methods, singly or in combination, for the remediation of the test samples. These mineral processing tests determine the % metal removal fiom the soil and the contaminants concentrated from the medium. The usefulness of mineral processing testing for site remediation flowsheet design and execution is illustrated by the case studies presented. This paper will present the test results of three case studies: an industrial site decontamination, the cleanup of a small arms firing range, and the reclamation of property within a landfill.INTRODUCTIONEnvironmental legislation and our society’s quest for a cleaner environment has led to the application of mineral processing expertise and technology for industrial site decontamination, military site cleanup and landfill reclamation. Although the required level of decontamination varies between jurisdictions, a site becomes a candidate for decontamination once the contaminant concentrations are found to exceed the Canadian Council of Ministers of the Environment (CCME) Interim Remediation Criteria for soil (decommissioning guidelines) or applicable provincial guidelines. The objective of mineral processing treatment of contaminated site material is to restore the value of the land and to concentrate the contaminants into a very small volume of separated material which, depending upon its nature, can be further processed, marketed or disposed of in a landfill"

Jan 1, 1999

By R. P. D. Graham

It is almost exactly two hundred years since the foundations of the mining and metallurgical industries in Canada were laid. There &apos;."&apos;as nothing spectacular about this early start. It had to do with the most basic phases of these industries-the mining of coal and iron ore, and the manufacture of cast and wrought iron. At several points along the coast of Cape Breton island, coal seams may be seen outcropping quite conspicuously, and it is probable that they had been observed, and possibly worked in a small way, in very early times. However that may be, these coal seams have the distinction of being the first in North America of which there is any printed record, reference to them appearing in a volume by Nicolas Denys which was published in Paris in 1672. Regular coal mining in the district did not commence until about fifty years later, however. The metallurgists started their operations along the north shore of the St. Lawrence river. Here, at many points between Montreal and Quebec, are to be found deposits of bog iron ore, and in 1 730 a furnace for smelting such ore was established on the St. Maurice river. The St. Maurice forges continued in operation until 1880, and throughout that long period they were famed for the fine quality of castings produced, and also for a-superior wrought iron.

Jan 1, 1924

By D. C. Peck, H. D. M. Cameron, N. M. Halden, L. S. Jobin-Bevans

Abstract-The late Archean Pipestone Lake anorthosite complex (PLAC) is a 0.9 x 17 km sill-like layered intrusion that is part of a suite of coeval megacrystic anorthosite bodies in the Cross Lake region, northwestern Superior Province. Exploration for Ti-V-Fe oxide mineralization and concurrent geological investigations have contributed to a greater understanding of the lithostratigraphy of the PLAC and its oxide mineralization. Mapping and drill core studies have established a laterally continuous igneous stratigraphy comprising six leucogabbro/anorthosite zones and three melagabbro/gabbro zones. Field evidence, including disrupted blocks of layered units, scour contacts, and size-graded and modally-graded layering, suggests younging towards both the northern and the central parts of the complex. A decrease in the anorthite content of the feldspars from An75 in the south to An30 in the north suggests that the magmas become more evolved to the north. Macrorhythmic layering and gross morphological features suggest that the PLAC crystallized from four major influxes of geochemically similar basaltic magmas. The paucity of magmatic erosional features in the PLAC indicates that layering developed in a relatively static magma chamber, so that in-situ crystallization processes are required to account for the observed petrologic diversity. Drilling has confirmed that a significant Ti- V-Fe resource is contained in two of the four discrete mineralized subzones in the PLAC. Textural evidence and the stratiform nature of the oxide-enriched subzones are consistent with a magmatic origin for the oxide mineralization.

Jan 1, 1997

By P. J. Noakes

Remote and isolated, located in a frigid, hostile environment, the Black Angel mine in Greenland had to create a warm social environment which would help attract and retain a stable work force of miners and support staff. The high cost of personnel turnover plagues many mines and, when the mine is inside the Arctic Circle, accessible by helicopters which are highly vulnerable to unpredictable weather conditions during the long, dark winters, the potential costs of personnel turnover become critical factors in the success or failure of the mining venture. Manpower planning should start from the date the engineers begin the technical design of the new mine. The plan should include provisions not only to ensure an adequate, skilled work force, but also to ensure a stable work force of people who are happy enough in the mining environment to want to remain, take their vacation and return to work at the mine. The skilled work force was assured with training courses of four months, designed to produce highly specialized underground workers from unskilled Danes and Greenlanders supported by trained Swedish and other Scandinavian miners. The stable social unit was assured by plans the primary attribute of which had to be flexibility. The accommodation changed from shared accommodation with communal washroom facilities to single accommodation with private washroom facilities. A recreational director was hired to help the workers make use of elaborate recreational facilities. A closed-circuit TV and radio system was installed to operate as a private broadcasting system using taped programs originally broadcast on European TV networks or developed by the mine personnel themselves. The liquor rules were changed and the mine manager became a licensed innkeeper responsible for the orderly operation of the Black Angel Bar in accordance with the Danish laws governing the services of a public bar. The result is a relatively stable work force. Some 35% of the people have more than two years&apos; service with the company, Greenex A/S, and some 62% complete 10 months of service.

Jan 1, 1978

By K. Webb, M. Hohn

"This paper reviews the evolving Ontario mining regime for mining industry-Aboriginal engagement and its apparent alignment with court decisions, domestic law, emerging international norms, mining industry rules, and mining firm-Aboriginal agreements, drawing on publicly available commentary from government officials, the private sector, and Indigenous communities. This paper provides a preliminary analysis of the potential implications of the new regime, especially for the mining industry and Aboriginal communities and, on that basis, discusses possible future developments.RÉSUMÉ Le présent article analyse le régime minier de l’Ontario pour l’engagement entre l’industrie minière et les Autochtones et son harmonisation avec les décisions des tribunaux, le droit interne, les nouvelles normes internationales, les règles de l’industrie minière et les ententes compagnies minières- Autochtones en se basant sur des commentaires, disponibles publiquement, d’officiels gouvernementaux, du secteur privé et des communautés autochtones. Cet article fournit une analyse préliminaire des implications potentielles du nouveau régime, surtout pour l’industrie minière et les communautés autochtones et, en s’appuyant sur ces données, il traite des futurs développements possibles."

Jan 1, 2016

The negative effects of pyrite and pyrrhotite on thiosulfate gold leaching have been investigated. Possible remedies to reduce some problems are discussed. In a gold bearing pure silicate ore, 92% of gold could be extracted within 3 hours using a solution containing 0.2 mol/L ammonium thiosulfate, 0.9 mol/L ammonia, 30 - 300 ppm copper sulfate and 8.6 ppm dissolved oxygen at pH 10.26. The thiosulfate consumption was 7.1 kg/t under these conditions and could be further reduced to 3.5 kg/t by decreasing the dissolved oxygen to 0.3 ppm. Addition of 16% pyrrhotite or pyrite into the silicate slurry led to a decrease in gold extraction by 2% or 9% respectively and an increase of thiosulfate consumption by 11 kg/t or12.8 kg/t respectively in three hours. Several adjustments, such as increasing copper ion and ammonia concentration and reducing the dissolved oxygen level to 0.3 ppm resulted in increased gold extraction and lower thiosulfate consumption despite the presence of these sulfides.

Jan 1, 2005

By Karl J. C. Harries

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

Jan 1, 2003