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By E. H. BURROUCHS

This bulletin is the third of the series of yearly petroleum bibliographies being published by the Bureau of Mines. The two preceding, Bulletin 149 and Bulletin 165, were for the years 1915 and 1916, respectively. In arranging the references the same general scheme has been followed, but as in those bulletins, several changes and additions have been made in the classifica.tion, the more important being in the classes " Development and production " and "Refining and refineries." German periodicals for 1917 were not procurable and references to articles in those and in other foreign journals that were not available have been credited to the sources from which they were procured.

Jan 1, 1920

By E. H. Burroughs

This bulletin is the fourth in the series of petroleum bibliographies being published by the Bureau of Mines, the three preceding, Bulletins 149, 165, and 180, being compilations for the years 1915, 1916, and 1917, respectively. In this bulletin the same general plan has been followed in arranging the references, but a few changes and additions have been made in the classification, the more important changes being in the classes "Geology and Origin" and "Refining and Refineries." Dl1'ring the year German periodicals were not available, and, as in the bibliography for 1917, references to articles in foreign journals that were not available have been taken' from other sources and credit given to those sources.

Jan 1, 1921

By G. Roy, D. R. Lentz, A. O. Wills

"Abstract - Diamond-drill hole DDH-B357, located 1.5 km north of the Brunswick No. 6 Zn-Pb- Cu-Ag volcanic-sediment-hosted massive sulfide (VSHMS) deposit, intersects three exhalative horizons within variably altered felsic volcanic rocks of the Nepisiguit Falls and Flat Landing Brook formations. These three petrographically indistinguishable iron formation intervals (Fe2O3T = 21.4 wt.%) likely represent cogenetic hydrothermal sedimentary units because they display a common geochemical signature: Fe2O3T = 42.9 ± 10.5 wt.%, MnO = 5.4 ± 3.1 wt.%, elevated base metal values (Zn+Pb = 1999 ± 1091 ppm), strong enrichment in additional exhalative components (CaO = 5.3 ± 3.9 wt.%; P2O5 = 1.43 ± 1.00 wt.%), oxidized signature (Fe/Mn = 10 ± 6), as well as a common immobile element signature (Zr/TiO2 = 0.025 ± 0.007) representative of a pelagic source. The calc-alkaline to transitional host volcanic rocks can be discriminated by Zr/TiO2, and to a lesser extent by Th/Nb: Nepisiguit Falls Formation: Zr/TiO2 = 0.053 ± 0.004, Th/Nb = 1.08 ± 0.37; Flat Landing Brook Formation: Zr/TiO2 = 0.107 ± 0.043, Th/Nb = 0.86 ± 0.17. A symmetrical repetition of the footwall-iron formation-hanging wall stratigraphic sequence is observed in DDH-B357, with distinct felsic volcanic rock domains separated by the three iron formations. This is best explained by parasitic F2 folds on the west flank of the south-plunging Brunswick antiform, similar to the fold closures known to host massive sulfide accumulations in the Brunswick No. 6 and No. 12 mines. Iron formation geochemistry and felsic volcanic rock chemostratigraphy from drill core sampling can provide an effective mineral exploration tool for the structurally complex rocks of the Bathurst Mining Camp. Sommaire - Le forage au diamant DDH-B357, situé à 1.5 km au nord du gisement de Sulfures Massifs à Encaissant Volcanique et Sédimentaire (SMEVS) de Zn-Pb-Cu-Ag Brunswick No. 6 recoupe trois horizons exhalatifs au sein des roches volcaniques felsiques diversement altérées des formations de Nepisiguit Falls et de Flat Landing Brook. Ces trois intervalles de formation de fer, impossibles à distinguer pétrographiquement les uns des autres, représentent vraisemblablement des unités sédimentaires hydrothermales cogénétiques sur la base de leur signature géochimique commune: Fe2O3T = 42.9 ± 10.5 % poids, MnO = 5.4 ± 3.1 % poids, des teneurs élevées en métaux usuels (Zn+Pb = 1999 ± 1091 ppm), un fort enrichissement en composantes exhalatives additionnelles (CaO = 5.3 ± 3.9 % poids; P2O5 = 1.43 ± 1.00 % poids), une signature oxydée (Fe/ Mn = 10 ± 6), ainsi qu’une signature d’éléments immobiles communs (Zr/TiO2 = 0.025 ± 0.007) indicative d’une source pélagique. Les roches volcaniques encaissantes calco-alcalines à transitionnelles peuvent êtres reconnues par leur rapport Zr/TiO2, et à un moindre degré par leur rapport Th/Nb: Formation de Nepisiguit Falls: Zr/TiO2 = 0.053 ± 0.004, Th/Nb = 1.08 ± 0.37; Formation de Flat Landing Brook: Zr/TiO2 = 0.107 ± 0.043, Th/Nb = 0.86 ± 0.17. Une répétition symétrique de la séquence stratigraphique Mur-Formation de Fer-Toit a été observée dans le forage DDH-B357, avec des domaines distincts constitués de roches volcaniques felsiques séparés par les trois formations de fer. La meilleure explication est que le flanc ouest de l’anticlinal Brunswick à plongée sud est affecté par des plis parasites F2, similaires aux zones de charnière contenant les sulfures massifs des mines Brunswick No. 6 et No. 12. La géochimie des formations de fer et la chimiostratigraphie des roches volcaniques felsiques en forage peuvent fournir un outil d’exploration minérale efficace dans les roches structuralement complexes du Camp Minier de Bathurst."

Jan 1, 2006

By L. J. E. Hofer

THIS BULLETIN analyzes and summarizes research at the Bureau of Mines dealing with the preparation, properties, and reactions of iron carbides in the period 1948-60, part of which was sponsored by Wright Air Development Laboratories. The objective was to develop better catalysts for the synthesis of methane and higher hydrocarbons from hydrogen and carbon monoxide. The investigations resulted in the first adequate characterization of epsilon iron carbide, which later proved to be an important intermediate in the tempering of martensite in steel. At temperatures near 170° C, the carbon in carbon monoxide reacts nearly quantitatively with finely divided alpha iron to form an iron carbide in which the metal atoms occupy the positions of the close packed hexagonal arrangement with lattice parameters of ao=2.754 A and co=4.349 A. The carbide has a composition within 2 atomic percent of that required for the formula Fe2C, a Curie point of about 370° C, a specific magnetization of 160.4 ergs per gauss-gram Fe at 50° C, and a ferromagnetic moment of 1.70 Bohr magnetons. Epsilon iron carbide can be converted to chi iron carbide by thermal treatment at 343° C for about 70 hours. The chi iron carbide so formed has a Curie point of 247° C, a specific magnetization of 142.5 ergs per gauss-gram Fe at 50° C, a ferromagnetic moment of 1.72 Bohr magnetons per iron atom, and a paramagnetic moment of 5.5 Bohr rnagnetons per iron atom. Direct synthesis of this carbide from carbon monoxide at 240° C indicates a composition within 7 atomic percent of that required for Fe2C. Chi iron carbide can be converted to cementite at 550° C in about 315 minutes. The theta iron carbide so prepared has a Curie point of 210° C, a specific magnetization of 147.3 ergs per gauss gram Fe at 50° C, a ferromagnetic moment of 1.72 Bohr magnetons per iron atom, and a paramagnetic moment of 3.9 Bohr magnetons per iron atom. Pure chi iron carbide reacts to form theta iron carbide by the elimination of free carbon. In the presence of an excess of free iron in intimate contact with the carbide, chi iron carbide reacts with the free iron to form theta iron carbide. The second reaction proceeds at an appreciable rate at 320° C and can be used to snythesize finely divided theta iron carbide with no free-carbon impurity at low temperatures. The ease of the reaction in the presence of free iron suggests that chi iron carbide is an intermediate in the tempering of epsilon iron carbide to theta iron carbide as it proceeds in steels. Experiments on carbon steel show that the magnetic moment of the iron atoms in martensite is about 2.2 Bohr magnetons per atom, a value approximately the same as that of the iron atoms in alpha iron. The Curie points of epsilon iron carbide, chi iron carbide, and theta iron carbide were found -in various specimens of tempered steel to be 10° to 20° C lower than normal values. This shift is probably the result of manganese in solid solution. Preparations of various compositions of epsilon iron carbonitrides show many effects of extensive isomorphism between epsilon iron carbide and epsilon iron nitride. The action of carbon monoxide on finely divided alpha iron at 400° C results in free carbon deposits containing filaments about 0.1 micron in diameter and several times as long. The filaments are characterized by nuclei of dense material located midway from each end of the filament. Although carbiding to near completion at 240° C over periods of about 300 hours produces a preparation containing no appreciable percentage of epsilon iron carbide, very brief periods of carbiding of the order of a minute result in the formation of detectable epsilon iron carbide even at temperatures as high as 325° C. The data indicate that epsilon iron carbide is an intermediate in the formation of chi iron carbide during its formation from carbon monoxide in the gas phase. Attempts to convert cementite to chi iron carbide by cold work increased the Curie point but did not change the X-ray powder diffraction pattern.

Jan 1, 1966

By H. B. Hill

The Salt Flat field, formerly called the Joe Bruner field, is located northeast of the town of Luling in Caldwell County, Tex. This field, which is a fault structure, approximately parallels and is about 5 miles east of the Old Luling field. The proved area is approximately 1,280 acres, on which 332 producing wells (September, 1930) have been drilled. The majority of the wells are producing from the Edwards limestone at an average total depth of 2,700 feet. A few wells are producing from the Austin chalk or from other formations above the Edwards limestone. The Wilcox formation is exposed, and the fault trace in places is scarcely evident. The strike of the structure is approximately N. 20 to 45° The displacement of the fault is probably 200 to 500 feet. The discovery well was completed in the Austin chalk by the Lutex Oil Co. during April, 1928. In October, 1926, the Sun Oil Co. completed the discovery well in the Edwards pay. This well was an important discovery, as it indicated the potential oil possibilities of the Edwards limestone in echelon fault structures. The discovery led to the development of the third fault field in the Edwards limestone and opened up a large area for future prospecting.

Jan 1, 1931

By By Staff

"Acid mine drainage can be controlled by water treatment, retardation of the pyrite oxidation reaction system, or enhanced prediction that allows preventive action to be taken. The Bureau of Mines is conducting research in each of these areas; the results of this research are summarized in the eight papers that comprise this volume. Field work to evaluate overburden analysis, alkaline injection, and bactericidal control of acid formation is described, along with two new inexpensive methods to treat acid mine water. These papers were prepared for an acid mine drainage technology transfer meeting held in Pittsburgh, PA, on April 3 and 4, 1985. INTRODUCTIONAcid drainage from coal mines is one of the most persistent industrial pollution problems in the United States. Over 5,000 miles of streams and rivers are adversely affected, primarily by underground mines that have been abandoned for decades. Meanwhile, at active mining operations and at sites where mining occurred after 1977, discharge water must be treated to meet fairly stringent regulatory limits--at a cost to the industry of over $1 million per day.The Bureau of Mines has a special responsibility to facilitate integration of mining and mineral processing with environmental safeguards. This responsibility is twofold: the development of techniques to reduce or eliminate environmental degradation, and the improvement of existing pollution control processes to make them more efficient and more cost effective. Research in acid mine drainage exemplifies the Bureau's concern for these environmental aspects of mining.This collection of papers summarizes much of the Bureau's recent research on acid mine drainage and will give the reader a sense of where the research is headed, in addition to providing details regarding new technology and recently acquired knowledge. The research papers address four basic objectives:"

Jan 1, 1985

By Don Deardorff, Ke Yang, Yingcai Han, Ken Sorensen, Robert Kruger, Mark Petersen, Diane Fiorelli, Larry Goldfarb, Kathryn Petek, Kwabena Ofori-Awuah

Design of deep foundations for lateral loads requires an understanding of soil-foundation-structure response during loading. Lateral loads on a deep foundation (piles) could be due to earthquakes, winds, waves, and/or machine vibrations. Over the years, analysis of response of piles due to lateral loads evolved from closed-form solutions to p-y methods to strain wedge to finite element/finite difference modeling. Although analysis of lateral response of piles and shafts is routinely performed, there is no single guidance document and/or standard for design and testing. Several different analytical methods are available for the analysis, and the resulting design can result in significantly different responses which can create confusion. This is especially true for analyzing and designing piles in potentially liquefiable soils with lateral spread issues under seismic conditions.This guidance document is intended to assist geotechnical engineers, pile designers, and contractors in analysis, design, and testing of piles and drilled shafts for lateral loads. This document discusses the background of different analytical and testing procedures and presents the recommended methods for analysis, design and testing of piles for lateral loads.Chapter 1 defines the different kinds of lateral loads to which a single pile or pile group may be subjected. This first chapter also presents different types of piles used to resist lateral loads.Chapter 2 discusses geotechnical issues related to lateral pile design such as liquefaction and lateral spreading and other non-seismic issues. Also addressed in Chapter 2 is geotechnical site characterization (as related to lateral loads) in terms of site investigation, in-situ testing, geophysical testing, laboratory testing, and estimation of soil/rock properties.Chapter 3 discusses the background and available analytical methods and tools for the analysis and design of single piles and drilled shafts. Several methods of analyses from closed-form elastic solutions to the finite element/finite difference solutions and their applicability are discussed. Available commercial computer software packages for analyzing single piles and drilled shafts are also presented.Chapter 4 expands the discussion of single piles and drilled shafts into the analysis and design of pile groups. In addition, group effects, resistance of pile caps, results of previous experimental and analytical studies, and available analysis tools and software for pile groups are discussed.Chapter 5 presents the issue of lateral resistance of piles and drilled shafts as discussed in different national and international building and non-building codes. A summary of extensive research on several codes are presented to facilitate the compliance with different codes.Chapter 6 discusses structural design issues of individual piles and drilled shafts such as depth of fixity.Chapter 7 discusses soil structure interaction issues related to kinematic and inertial effects due to seismic loading and available methods of analyses.Chapter 8 discusses and presents the typical procedures for the lateral load testing of piles. This guideline was developed as an aid to the practicing engineer in providing information, direction and commentary on the lateral design of deep foundations. Although all reasonable effort has been made to accurately compile the material and information contained herein, no warranty is made with regard to any such material or information and the Deep Foundation Institute assumes no responsibility for any possible errors or any direct or indirect result of the use of any such material or information. It is not intended that this document address every factor affecting lateral design for every situation. Therefore it is the responsibility of the person utilizing information from this document to confirm that it is appropriate and correct for their situation as well as to understand and properly apply

Jan 1, 2012

By H. W. Kilau

The U.S. Bureau of Mines is evaluating water spray additives for the purpose of improving respirable dust control during coal mining operations, with particular emphasis on the longwall shearer. Recent field tests of surfactant-polymer reagents at two production longwall operations have shown favorable respirable dust reductions compared with water sprays containing no additive. Gravimetric dust samples obtained by a technician downwind of the shearer while following or preceding the machine showed dust reductions in the range of about 40% to 60% for some of the reagent formulations compared with using water alone. Three polymers were tested: two polyethylene oxide compounds of different molecular weight and hydroxypropyl methylcellulose (HPMC). All were effective for dust reduction, and two were cost effective when used in combination with sodium di(2-ethylhexyl) sulfosuccinate surfactant. How-ever, the use of these reagents requires the longwall operator to be more aware of headgate dust control. Experimental evidence indicates that dust captured by reagent-treated sprays at the shearer can be reemitted in the headgate area if stagcloader-crusher sprays and other dust controls are inadequate.

Jan 1, 2010

By C. F. Jackson

This paper has been prepared as a progress report in connection with the series of articles on mining methods and costs which are being published by the U. S. Bureau of Mines in the form of information circulars. When enough circulars have boon completed it is planned to publish a more complete and comprehensive paper in bulletin form dealing with the subject of underground transportation. Progress reports, followed b., bulletins, will be prepared from time to time dealing with other subjects included in the general study of mining methods at individual nines, such as mine development, drilling, and blasting; stoping methods (each principal stoping method to be summarized in a separate paper); Ventilation; wage, contract and bonus systems, etc.

Jan 1, 1931

Exploration of new resources and development of new equipment and designs are an ever changing facet of mining. New equipment to handle specialized operations is being developed and new techniques for its use explored. One such system is reviewed. Another is a potential system for handling the thinner stray coal seams between the more profitable thick seams. The availability of federal coal leases in the West is reviewed and current planning discussed. Gulf Coast lignites have been of much interest in recent months and are overviewed.

Jan 1, 1979

By Steven K. Ruggieri

This report describes the operation and maintenance of the Mobile Inert Gas Generator for use in the Remote Sealing System for fighting underground coal mine fires. Seals are emplaced in mine passageways between the fire zone and the rest of the mine isolating the fire zone from the mine. The seals consist of fly ash that has been pneumatically conveyed via inert gas through a borehole connecting the surface and the passageway, Inert gas is used as the fly ash seal transport medium (instead of fresh air) since the introduction of large volumes of fresh air in the vicinity of the fire zone would be undesirable. The inert gas generation equipment is mounted on two flatbed trailers, the "hot" trailer and the "cold" trailer. The hot trailer contains the combustion and cooling equipment. The cold trailer contains the moisture removal and compression equipment necessary to convey the fly ash. The system is self-sufficient and requires only fuel and fly ash deliveries. The Inert Gas Generator has been thoroughly performance tested and has been operated in the field for approximately 200 hr. The system was employed in the demonstration of the entire Remote Mine Sealing System at the Jenney Mine in the Fall of 1978. The system is currently available for fighting any future underground coal mine fires.

Jan 1, 1980

By M. M. Fine

A process for simultaneously reducing and indurating iron are pellets was developed by Bureau of Mines laboratory research and confirmed on a continuous pilot plant basis. Moist iron are concentrate was balled, mixed with solid reductant, and heated at about 1,100° to 1,150° C. On a small scale, a variety of concentrates and fuels were utilized successfully. The pilot rotary kiln tests were limited to natural magnetite, synthetic magnetite, lignite, and anthracite. In both cases, partially reduced pellets with excellent physical properties were regularly produced with average analyses of at least 80 percent total iron and 60 percent or more metallic iron. These and other prereduced pellets were smelted in the Bureau's experimental blast furnace facility, Bruceton, Pa. With prereduced spheres comprising 85 percent of the burden, the coke rate was approximately half that with standard oxide pellets and production of hot metal was increased by 75 percent. Economic appraisal of the cost of making hot metal indicates that reduced pellets could be more profitable than any other iron raw material in both investment capital and daily cost of operation.

Jan 1, 1970

By Keith L. Harris

Surprisingly, real gross national product (GNP) surged at a seasonally adjusted annual rate of 4.3% for the first quarter of 1987 according to preliminary estimates made by the Department of Commerce, the highest rate in 3 yr and significantly above the revised fourth quarter 1986 rate of 1.1% (table 1). The spurt, however, was caused by an unusual $59.5 billion rise in inventories, mostly cars and trucks, and there was little support from other sectors of the economy. Motor vehicle inventories rose as consumers continued to tighten their purse strings--consumer spending declined 0.4% for the second quarter in a row. Nonresidential and residential fixed investment and government purchases of goods and services were also down from the previous quarter. The increasing cost of energy was the major factor in the jump to 3.696 in the rate of inflation, as measured by the fixed-weighted price index for GNP, and rising inflation also helped put a damper on consumer spending. The underlying good news was that the trade deficit shrank for the second quarter in a row as imports declined at an annual rate of 11.1%. Also, profits in the manufacturing sector rose strongly in the fourth quarter, and for the first time in 9 quarters, the primary metal industries became profitable (table 1). If one discounts the anomalous inventory growth, the bottom line is that the economy continues to grow at close to the expected 2.5% level experienced over the past 2 yr. Of concern over the next several quarters, though, is the impact of the large over- hang of motor vehicles inventories on the economy. EMPLOYMENT The civilian unemployment rate declined to 6.636 in March after remaining at 6.7% for the previous 3 months. Employment continued to expand in February and March, although growth was significantly slower in March than in previous months. The manufacturing sector, however, lost 24,000 jobs in March after gaining 46,000 in February. Three-quarters of that gain came when striking workers at USX Corp. and Deere & CO. returned to their jobs. Employment in the manufacturing sectors of direct interest to the mineral industries has generally been increasing for at least the last quarter, while worker hours for these sectors have been on the upswing since April 1986 (figures 1 and 2).

Jan 1, 1987

By J. R. Thoenen

[Before 1914 Germany held virtual monopoly on the world supply of potash for fertilizer purposes. During the world War, potash shipments to the United States ceased, and recourse was had to domestic supplies. High war-time prices stimulated interest n various sources, and domestic production increased rapidly. At the close of the war, resumption of shipments from Germany and other sources reduced prices to below pre-war levels, and, as a result, most of the domestic producers ceased operational.]

Jan 1, 1941

By J. R. Thoenen

[Before 1914 Germany held a virtual monopoly on the world supply of potash for fertilizer purposes. During the World War, potash shipments to the United States ceased, and recourse was had to domestic supplies. High war-tine prisms stimulated interest in various sources, and domestic production increased rapidly. At the close of the war, resumption of shipments from Germany mad other sources reduced prices to below pre-war levels, and, as a result, most of the domestic procedures ceased operations. This experience demonstrated that a domestic source of potash was necessary but that it must be of such a nature that it could compete in price with foreign sources. As a direct result the potash content of thick]

Jan 1, 1941

By Keith L. Harris

Economic activity in the United States picked up in the third quarter, according to the latest estimate released by the Department of Commerce. Real gross national product (GNP)--the Nation's output of goods and services--grew at a seasonally adjusted annual rate of 4.3%, or $17.6 billion, compared with a rate of 1.9% for the second quarter of 1985 and 1.6% for the third quarter of 1984 (table 1). The 4.3% rate is one percentage point above the preliminary estimate reported in the August/September issue of Minerals and Materials. Most of the upward revision was due to the change in business inventories and Government purchases, while the figure for net exports was revised downward substantially. The 4.3% growth bettered by 1.5% the average rate of growth in GNP from 1974 through 1984 and was 1.1 % above that of the period from 1975 through 1984 and 0.7% above that of 1980 through 1984. Of importance to the minerals industry was the $14.4-billion growth in personal consumption expenditures, $10.2 billion of which was for durable goods (especially domestically produced automobiles) and the growing residential investment. The net export deficit continued to grow, however, and investment in nonresidential structures, producers' durable equipment, and business inventories declined. Prices, as measured by the GNP fixed-weighted price index, increased at an annual rate of 3.1% in the third quarter, compared with 3.9% in the second quarter. The slower rate of inflation resulted mainly from a decline in energy prices, following second-quarter increases. Fourth-Quarter Prognosis Many of the economic data available for October and November indicate that the economy is growing modestly and will continue to grow over the next 3 to 6 months. The composite index of leading indicators, designed to predict economic activity within 3 to 6 months, rose 0.3% in October, the sixth consecutive monthly advance, according to the Department of Commerce. Six of the 11 available leading indicators were positive: Stock market prices rose, as did sensitive material prices, credit outstanding, and manufacturers' new orders for consumer goods and materials; initial claims for unemployment insurance decreased, and firms were getting slower delivery of goods. Four of the indicators were negative: Business formations, homebuilding permits, contracts and orders for plant and equipment, and money supply all declined. The average hours worked per week, already at a high level, remained unchanged.

Jan 1, 1985

By R. W. Courtney

The objective of this study is to make a critical evaluation of the magnitude and extent of electrostatic hazards in typical U.S. mining operations and to assess the adequacy of techniques, materials, and equipment for detecting and minimizing these hazards. This was accomplished with an incident/accident survey, mine visits, literature search, and engineering analysis. It was concluded that it would be desirable to (1) utilize ground fault interrupters to minimize stray current from electrical utilities, (2) decrease the current and electrostatic sensitivity of electric detonators used in areas with a high incidence of lightning strikes or troublesome stray currents, (3) institute quality control and test standards for blasting material and protective devices, (4) establish an electrostatic monitoring program for loading ANFO in plastic lined holes, and (5) establish a risk criteria for operator exposure in mines.

Jan 1, 1982

By Robert L. Lappi

Volume I of this report described the demonstration of cross-ridge mountaintop coal mining. This document, Volume II, is intended for use as a supporting document to Volume I. This report describes the MATHMINE Mine Simulation System, a modularized software system used to support the demonstration of cross-ridge Mountaintop coal mining. The MATHMINE Mine Simulation System was used to generate mine plans for coal extraction at lowest cost. The functional details, data requirements and output of the software system are detailed here. The computer program was written in FORTRAN. One module which generates resource location data required the use of SAS?.

Jan 1, 1984

By Michael Samis

The real option valuation method is often presented as an alternative to the conventional discounted cash flow (DCF) approach because it is able to recognize additional project value due to the presence of management flexibility. However, these two valuation methods can be separated on a more fundamental level by their differences in risk discounting. Real option valuation applies the risk-adjustment to the source of uncertainty in the cash flow while the DCF method adjusts for risk at the aggregate level of net cash flow. This seemingly small difference is the reason why the real option method is able to differentiate between projects according to each project?s unique risk characteristics while the conventional DCF approach cannot. This paper provides an overview of the real options and DCF valuation frameworks and discusses the differences in risk discounting that exist between the two methods. Using grade-school mathematics, this paper clearly demonstrates how, with real options, a unique project risk discount can be calculated which is directly linked to the project?s unique risk profile. It also highlights why the DCF method fails in this regard and shows why a call to ?increase the Risk-Adjusted Discount Rate? is an incomplete solution at best. Finally, a heap-leach project and satellite reserve development project are valued with both techniques and the difference in investment conclusions is explained in terms of the risk-discounting concepts discussed here.

May 1, 2003

By S. M. Shelton, W. A. Calhoun

"INTRODUCTION Discovery and development of a southwestern Arkansas quicksilver district are recent history. In July 1930 4/, a specimen was discovered near the Little Missouri River in sec. 1, T. 7S. R. 26 W., which was identified as cinnabar. In the summer of 1931, Leo Yount began prospecting for cinnabar near the Little Missouri River. In the fall of that year he operated a small three-tube retort near the present Parker Hill mines and produced several flasks of quicksilver. Yount optioned a considerable block of ground containing the best showings in the Little Missouri River area, and on February 19, 1932, he and W. C. McBride, Inc., of St. Louis, Mo., formed the Southwestern Quicksilver Co., which was the largest producer in the district until operations ceased in September 1934.The Southwestern Quicksilver Co. installed a rotary furnace on Parker Hill in April 1932, which treated ore from the three principal mines Gap Ridge, Parker Hill, and Parnell Hill. In 1934 production was entirely from the Gap Ridge and Parker Hill mines. Nothing was done at Parnell Hill except a little small-scale work on a share basis.Mercury Producers, Inc., later took an option on the holdings of the Southwestern Quicksilver Co. and in June 1935 began operations. The company produced considerable quicksilver before the lease and option were surrendered in the summer of 1936. Most of the work of Mercury Producers, Inc., was on Parnell Hill, but some work was done on Parker Hill and at the Bell prospect on ground not controlled by the Southwestern Quicksilver Co."

Mar 1, 1942