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By Ogden Tweto

The classes of ore deposits in the mountain province of Colorado that have been the most productive in the past and that offer the greatest promise for the future are: (1) disseminated or stockwork molybdenum deposits associated with Tertiary stocks; (2) combination precious- and base-metal veins in Tertiary volcanic rocks; and (3) base-metal replacement deposits and veins in Paleozoic sedimentary rocks. Veins in Precambrian rocks, including precious metal-bearing sulfide veins, gold-silver telluride veins, and tungsten veins, have been mined extensively in the past, but their aggregate output has been far subordinate to that of the groups named above, and the outlook for major output from them in the future is poor. Principal ore deposits of south-central Wyoming are sedimentary iron ores of Precambrian age and uranium deposits in Tertiary sedimentary rocks. Precambrian deposits of several kinds are scattered through the mountains of both states. The most promising of these, based on present indications, are vanadiferous titaniferous magnetite in southern Wyoming and southwestern Colorado and thorium-niobium rare-earth deposits associated with alkalic intrusive complexes in Colorado. Most of the mining districts of Colorado are in the Colorado mineral belt, a generally narrow but somewhat irregular belt that extends northeastward across the north-trending mountain ranges and the north-northwest trending geologic grain of the state. The belt is characterized by intrusive rocks of Laramide and younger age and by ore deposits, and it occupies environments ranging from Precambrian crystalline rocks through Paleozoic and Mesozoic sedimentary rocks to Tertiary volcanic rocks. Two ages of intrusion and ore deposition recently have been recognized in the mineral belt. One is Laramide (late Cretaceous and early Tertiary), and the other is Oligocene. As interpreted herein, the major replacement deposits and most of the sulfide vein deposits in Precambrian and sedimentary rocks are Laramide in age, and the molybdenum deposits, the tungsten and the gold telluride veins in Precambrian rocks, and the precious- and base-metal veins in volcanic rocks are Oligocene in age. In general, the Laramide deposits are mesothermal in aspect, and the Oligocene deposits are principally epithermal. The existence of two mineralization stages, in considerable part characterized by different suites of metals, has many applications in exploration.

Jan 1, 1968

The Golden Grove Project area is located 220 km (137 miles) east of Geraldton in Western Australia (Fig. 1). The project is a joint venture involving Amax Exploration (Australia) Inc. (Amax), Electrolytic Zinc Co. of Australasia Ltd. (EZ), and Esso Exploration & Production Australia Inc. (Esso), each with 31 116% interest, and Aztec Exploration Pty., Ltd. (Aztec), with a 3 1/2% carried and a 3% contributing interest. The venture covers two significant volcanogenic massive sulfide deposits and some 40 km (25 miles) of highly prospective Archean volcanics. During the course of the past 12 years (to 1983), all four companies were responsible for operating the project at one time or another and all influenced the discoveries. The Gossan Hill and Scuddles deposits are typical examples of volcanogenic massive sulfide deposits associated with Archean explosive submarine acid to intermediate volcanic complexes. They are located in the northwesterly trending Yalgoo greenstone belt of the West Australian Archean Shield. Gossan Hill, located in 1972, is essentially a copper deposit with minor zinc lenses; to date, 97 diamond holes have delineated a geological resource* estimated to contain 13 Mt (14.3 million st) of of 3.4% Cu and 13 g/t (0.38 oz per ton) Ag in the main lenses with minor lenses totaling 2 Mt (2.2 million st) of 3.7% Cu and 17 g/t (0.49 oz per ton) Ag and 1.7 Mt (1.9 million st) grading 1.5% Pb, 14% Zn, and 87 g/t (2.8 oz per ton) Ag. Scuddles is a zinc-copper deposit with gold and silver credits. It *Resource estimate provided by Esso for inclusion in Aztec Exploration Pty. Ltd. 1982 Annual Report was discovered in 1979 and, to the end of 198 1, had been delineated with 42 diamond holes. On the basis of this drilling, a geological resource* of 26 Mt (28.7 million st) has been estimated in three coalescing lenses. The lenses comprise 7.5 Mt (8.3 million st) of 2.1 % Cu, 12 g/t (0.35 oz per ton) Ag, and 0.3 g/t (0.009 oz per ton) Au; 7.6 Mt (8.4 million st) of 0.4% Cu, 9.9% Zn, 73 g/t (2.3 oz per ton) Ag, and 0.7 g/t (0.02 oz per ton) Au; and 1 1.0 Mt (1 2.1 mil lion st) of 1.1 % Cu, 9.3% Zn, 8 1 g/t (2.6 oz per ton) Ag, and 1.5 g/t (0.044 oz per ton) Au. Readers are referred to Frater (1978) and Harris et a). (1982) for a more detailed geological account of these deposits.

Jan 1, 1991

By Ogden Tweto

The Leadville district, on the west flank of the Mosquito Range in central Colorado, has produced silver, zinc, lead, gold, and minor metals valued at $512,000,000. The ore deposits are in a sequence of dolomites and quartzites, Cambrian through Mississippian in age and about 500 feet thick, which is extensively intruded by porphyry sills, dikes, and plugs of Tertiary age. The sedimentary rocks and sills dip about 15°E and are broken by many faults, which are predominantly of nearnorth trend and downthrown to the west. The ore deposits are principally blanket or manto replacement deposits, but in the eastern part of the district many veins occur also. The replacement deposits are largely confined to three dolomite units in the stratigraphic sequence. Of these, the uppermost or Leadville Dolomite is the most productive. Most ore bodies are on the underside of porphyry sills and, particularly, beneath sills that occupy unconformities. Many replacement bodies have vein roots or branch from veins. The veins occupy faults and are productive mainly in the section of quartzites and dolomites and included sills. The primary ores consist principally of pyrite, marmatitic sphalerite, and galena but locally contain chalcopyrite, silver minerals, bismuth minerals, and gold. Principal gangue minerals are manganosiderite and jasperoid. The ore deposits have a crude zonal pattern centered around an intrusive center at Breece Hill, which evidently influenced ore deposition thermally. The ore deposits were oxidized to depths of several hundred feet in Miocene time. Bonanza ores mined in the early days were characterized by cerussite, cerargyrite, and embolite. Later, zinc carbonate ores were identified and mined on a large scale. The Leadville district is a complexly faulted and intruded area at the intersection of major fault systems trending N20°W and N15°E in the Mosquito Range. The intensely fractured area evidently localized igneous intrusion and subsequent mineralization. Ore solutions rose on many of the faults in the area, presumably from the same source as the porphyry magmas. Movement on these faults continued into the Pleistocene, displacing ore bodies, oxidation zones, Pliocene sediments, and glacial deposits.

Jan 1, 1968

By Roger C. Malan

The Monument Valley and White Canyon districts are in northeastern Arizona and southeastern Utah. Exploration and mining for uranium has been conducted in these districts since the late 1940's. In July 1965, ore reserves plus ore production at 174 properties were approximately 3.3 million tons of ore containing about 19 million pounds U3O8, of which about 10 per cent remained in reserves. The two largest mines, Monument No. 2 and Happy Jack, together account for about 45 per cent of the sum of production and reserves. Approximately half the deposits in these districts contain less than 1000 tons of ore. Nearly 5000 feet of Permian, Triassic, and Jurassic sedimentary rocks, mainly continental in origin, are exposed in these districts. All the important uranium deposits are in the Shinarump, the basal member of the Chinle Formation of Triassic age. The Shinarump lies on a widespread unconformity. It is composed of fluvial sediments, generally less than 100 feet thick, that were deposited by streams flowing from a source to the south. Most of the deposits are in an arcuate belt, convex to the west. This belt, 3 to 12 miles wide, extends from Monument Valley northward nearly 130 miles. It is along the western flank of the ancient Monument Valley-Monticello upland, an area that was slightly uplifted at the beginning and again at the end of deposition of the Shinarump. Erosion and subsequent reworking of the Shinarump sediments in the vicinity of this upland are postulated to have made possible the transportation, in solution, of the uranium contained in these sediments. The soluble uranium probably was carried by migrating ground water into sites favorable for precipitation in Shinarump beds bordering the upland. Thus, the original very small amounts of dispersed uranium in the early Shinarump sediments were accreted in the favorable belt where the accumulations of carbonaceous plant remains and their decay products provided a persistent reducing environment.

Jan 1, 1968

By H. I. Meyer

The mine is a large open-pit copper mine located near Tucson, AZ. Mining operations involve shovels digging at relatively fixed locations and haul trucks moving the muck to a primary ore crusher, a primary waste crusher, and directly to waste dumps. The total investment in shovels and trucks is some $100 million. Fig. l is a schematic drawing of the operation. A static method of truck assignment is used; i.e., each driver is given one particular shovel to serve until reassigned by the dispatcher. A dynamic system is one where trucks are reassigned after each trip. The problem is to compute a near optimum assignment of trucks for efficient operation.

Jan 1, 1979

By William Paxton Hewitt

Mineral deposits of western Utah and eastern and central Nevada have produced in excess of $8,500,000,000 since 1871. Through 1965, Bingham Canyon had produced over $4,600,000,000 and seven other camps over $100,000,000 each, principally from base metals. In addition, they yield iron and uranium ores; contain the world's largest beryllium reserves; and have produced the United States' most important gold discovery in 25 years. The area is famous for its silver production and its bonanza-type precious metal deposits, but such production has become unimportant. The area's greatest producers of metallic wealth are base-metal deposits in limestones and porphyry-type copper ores. In contrast to silver's decline, gold production has been rising-the result of by-product operations at Bingham Canyon. The area also contains gold deposits in which the gold is so finely disseminated it is not recoverable by panning. The area's gold ores frequently are associated with realgar, cinnabar, and carbon. The ore deposits generally are attributed to Tertiary intrusives,* but, at Mountain City, they may be related to Paleozoic volcanism. Mountain City has yielded rich chalcocite from quartz-pyrite-chalcopyrite bodies in siliceous sediments. Regional stratigraphy and structure are difficult to interpret, 69 per cent of the area being obscured by alluvium or volcanics. In general, central Nevada consists of chert, shale, silty sandstones, lavas, and pyroclastics; eastern Nevada and western Utah of many alternations of limestone, shale, and sandstone. Central Nevada has been structurally active since late Devonian. Although granitic stocks may have intruded eastern Nevada and western Utah prior to the Cretaceous, these areas remained quite stable until affected by the Laramide Revolution. Precambrian exposures, occupying 3 per cent of the area, have not been important hosts. However, the question is raised as to whether Precambrian carbonates, properly situated with respect to invading mineralizers, might yet prove to be important. This paper describes 16 precious metal camps, 6 limestone replacement districts, 2 silver-base metal vein deposits, and 9 miscellaneous types and discusses briefly the 11 * Some ores, as at Ely, are associated with intrusives of. Cretaceous age. major camps that are described in detail in this Volume.

Jan 1, 1968

By T. B. Nolan, R. N. Hunt

In terms of present metal prices, analysis of extant records of the Eureka district indicate past production of the magnitude of $200,000,000 in recovered silver, lead, and gold. Production to date has been thoroughly oxidized ore from massive replacements, fissures, manta, and pipe-like bodies-in large part from the massive Eldorado (middle Cambrian) and Hamburg (middle to late Cambrian) dolomite horizons. In the productive area of about 6 square miles carbonate rocks comprise 80 per cent of the section, which includes early Cambrian to late Ordovician horizons. Four-fifths or more of the district's production came from a block of Eldorado dolomite in Ruby Hill that was moved in over younger horizons on strands of a regional thrust fault. The lower 500 to 600 feet of the block was much fractured and brecciated and became host to the ores. The Ruby Hill fault, a late normal fault, limits the Ruby Hill block of dolomite on the north for its entire length of nearly a mile and terminates the downward extent and exploitation of its ores. It introduced an hiatus of some 40 years in the district's development. Drilling of the past 20-odd years, followed by underground work, has now exposed the down-faulted extension of the Ruby Hill block of Eldorado dolomite and its contained ores, dropped 1800 feet in a dip shift to depths beneath the surface of 2000 to 3000 feet. The ores at depth are the sulfide counterpart of those mined in early years on the footwall side of the fault. The ores of the district may be attributed to the same source as the intrusive quartz diorite outcropping in a limited way south of Ruby Hill but found at depth elsewhere in drill holes. The long north-south axis of the district, its anticlinal structure, its major faults, and the distribution of the intrusives and, in their relation to the surface, the ores themselves, all suggest that erosion has not cut deep enough to expose the extent of intrusives and the ores consequent upon them.

Jan 1, 1968

By John T. Eastlick

The Banner mining district is about 70 miles northeast of Tucson in the southern part of Gila County, Arizona. Production from the district, valued at about $26 million, is chiefly from copper-silver-lead zinc ores. The stratigraphic section consists of Precambrian conglomerates, quartzites, dolomites, and limestones, Cambrian quartzites; Devonian limestones; dolomites, and shales; Mississippian limestones; Pennsylvanian limestones and shales; and Cretaceous volcanic and sedimentary rocks. Deformation of these rocks presumably started near the end of the Cretaceous, and extended into the late Tertiary. The sedimentary rocks were folded, faulted, and intruded by fine grained diorite, quartz mica diorite, and dacite porphyry. At least four distinct stages of mineralization are recognized. In the first stage of contact metamorphism and the second stage of hydrothermal alteration, favorable zones were prepared for ore deposition. Metallization occurred in three of the mineralizing stages. Magnetite, pyrite, and hematite were deposited near the end of the second stage of hydrothermal alteration. The third stage included the main deposition of sphalerite, chalcopyrite, bornite, and galena. In the fourth and final stage, minor amounts of sulfide minerals were deposited with a late anhydrite and quartz gangue. The ore deposits in the form of veins and veinlets, pipes, irregular massive replacements, and bedded replacements are localized by the extent and distribution of metamorphic and hydrothermal alteration, by the proximity to the intrusive contacts, and by the effects of structural development. Oxidized ores of copper, lead, and zinc constituted the principal production of the district prior to 1940, but, for the most part, supergene enrichment was of minor economic importance. The ore bodies of the district are in the mesothermal class of deposits, occurring as normal metasomatic replacement and vein types.

Jan 1, 1968

By AIME

IN the parlance of Hollywood, it was a super-colossal meeting. In the more restrained language of engineers, the Institute's 75th Anniversary Celebration attracted the largest crowd ever; was the longest Annual Meeting ever held, occupying a full week; had more important papers, more important people, more of an international flavor, and more glamour than ever before. And in the minds of those who came to the big city from the wide open spaces, one other record should be mentioned: for those not on an expense account, it was the most expensive affair ever staged by the Institute! To state the attendance down to the last digit for a meeting such as this is impossible. The total names registered on cards, plus those who attended the Annual Banquet but were not otherwise registered, came to 3149. But a few were registered twice, and probably a still larger few did not register at all, but just dropped in for a session or two in which they were interested. It would appear that 3200 would be about as close an estimate of attendance as could be made, and that is some 300 more than came to the biggest Annual Meeting of the past-in 1944. A considerable number of members brought their wives, but most were delegates at large.

Jan 1, 1947

Banks' focus in using cash flow methods can differ markedly from that of equity investors. This paper attempts to explain and describe bankers' approach by: ò outlining the fundamental difference between banks' and investors' risk / return profiles. ò describing lenders' consequent use of cash flow methods in mineral valuation. areas. explaining lenders' specific treatment of key risk Fundamental to understanding banks' appraisal of mineral projects is the appreciation that lenders have a basically different risk profile and outlook from those familiar to equity investors. Lenders do not normally participate in any project upside. The economics of lending dictate that banks can only accommodate a low probability of loan default and consequently banks' principal focus in mineral ""valuation"" is ensuring an acceptably comfortable probability of debt repayment. A simple conceptual explanation of lenders' risk / return position is outlined.

Jan 1, 1994

By John S. Carman

Our industry is in trouble. Real trouble. It has never been an easy, secure business. But to-day it is engulfed in revolutionary currents. No longer can there be reliance upon the checks and balances of market forces. Supply and demand largely dictated the economics of business enterprise in simpler days. To-day politics, in particular nationalism become increasingly dominant. And as governments expand and put out tentacles of interference in the direction of the mining industry, far too little understanding is evidenced as to how that industry works. Then there is something which is relatively new -stagflation. As the prices of minerals falls, the capital investment required for new extractive facilities soars at rates which far outdistance those which are cited by governments to indicate the magnitude of inflation. To illustrate; 1) In 1971 it was calculated that $355 million would be required to bring the Cuajone property in Peru into production. Five years later that stage was reached at a cost of $680 million. 2) With the Caridad mine in Mexico, estimated capital investment doubled between 1971 and 1976. 3) The requirements calculated for Cerro Colorado in Panama have risen in two years from $560 to $800. 4) The budget of $240 million for Sar Chesmeh in Iran in 1971 had become $500 million by 1976.

Jan 1, 1977

By A. F. Stewart

Slope design in an open pit mine includes the determination of a number of parameters, including bench height, bench face angle and berm width. By way of a case history of two highwall slopes (160m and 220m high) excavated in dipping strata in an operating coal mine, this paper illustrates the influence that bench face angle can have on the stability of an entire slope. The two highwall slopes, the lower of which experienced significant instability, were excavated in essentially the same lithologic and structural environment, with the main differences between the slopes being the angle at which the bench faces were excavated and the excavating methods that were employed. In addition to describing the instability that occurred on one of the pit walls, relevant aspects of the engineering geology, slope design and excavation procedures are described.

Jan 1, 1998

By Richard C. Travis, Edward C. Dowling

A detailed kinetic study of the flotation installation at the Metcalf Concentrator revealed a rougher flotation circuit operating under less than optimal conditions. Based on these results, a project was initiated to approximately double the rougher flotation capacity by increasing the installed volume from 780 cubic meters to 1,560 cubic meters. This project, which was completed in early 1991, replaced the existing cells with larger capacity cells. A comprehensive analysis of results demonstrates significant metallurgical benefits. INTRODUCTION/BACKGROUND The Metcalf Concentrator is located in Morenci, Arizona and is part of Phelps Dodge Morenci, Incorporated. Sumitomo Metal Mining of Arizona is a minority partner in the operation with 15% interest. The Metcalf Concentrator is the newer and smaller concentrator and operates in conjunction with the Morenci Concentrator. Operating capacity at Metcalf is currently 48,000 TPD of ore on a 365 days per year basis. The Metcalf Concentrator was commissioned in 1974 at a 30,000 TPD operating rate for the purpose of treating ores originating in the Metcalf Mine. The mine takes its name from the former town of Metcalf which was named for Robert Metcalf who was credited with discovery of the mineral district. The predominant ore mineral is chalcocite which occurs as a secondary enrichment closely associated with iron pyrite. The host rock is largely granodiorite and quartz monzonite. The original rougher flotation circuit consisted of a total of six rows of Wemco 8.5 cu. meter (300 cu.ft.) flotation machines treating pulp from the two grinding sections (Sections A and B). Each row was configured in a 4-4-4 arrangement. Shortly after startup the throughput rate was increased significantly without sustaining a recovery loss. This increase was achieved by raising the target value for the particle size of the cyclone overflow which is the rougher flotation feed. Shortly thereafter, the capacity of the pump and cyclone began to restrict further increases in throughput. After testing, two 66 cm. (26-in.) cyclones and a 12-in. X 12-in. centrifugal pump replaced the original classification equipment. As a result of these modifications, the grinding section could routinely process in excess of 42,000 TPD. Due to the increased tonnage rates, limitations in the rougher flotation circuit performance were observed. In an effort to improve the performance of rougher flotation with this higher throughput, the speed of the flotation mechanisms was increased from 230 RPM to 250 RPM. This change improved the suspension of the coarser feed and induced additional air into the pulp. It did, however, apply additional strain to the motors, shortening their life. At these elevated processing rates, it was found that the dart valves operated almost entirely at the top end of the control range and could not efficiently handle upsets from the grinding section. This was remedied by lowering the end overflow weir and allowing some of the tailings to overflow the end weir. However, in order to obtain acceptable recovery levels, the flotation pulp was maintained at a high level, adversely influencing the rougher concentrate grade.

Jan 1, 1993

By H. W. Schreiber, G. R. Castle

INTRODUCTION The small mining company faces the dilemma of how to finance the development of its properties. Many of these small companies don't have the financial resources to pay for development costs from their own funds and frequently they do not even have the financial strength to permit them to borrow the money needed for development. A project financing can sometimes be arranged in such a way as to solve this dilemma. A typical project financing will not provide the answer to the "little guy's" problem because most project financings require that the sponsors of the project provide completion undertakings and sometimes other undertakings. These undertakings are often a prerequisite to obtaining financing, and if the sponsor is not financially strong enough to provide the comfort that the lenders require, then the sponsor will have difficulty obtaining financing no matter what undertakings are offered. However, with a little imagination and the right set of circumstances, a project financing can sometimes provide the solution to the small mining company's problem. The Strathcona Sound Project is unusually suited as a case study because the sponsor, Mineral Resources International Limited,(MRI) was able to arrange a project financing for the development of the project even though the lenders probably would not have been willing to loan a similar amount of money direct to MRI based on the full faith and credit of MRI's balance sheet. The way that MRI was able to arrange this financing makes for an interesting story. THE CASE In early 1974, MRI owned 100% of a small to medium sized zinc - lead - silver massive sulfide deposit (Property) located 475 miles north of the Arctic Circle less than two miles from deep water on Strathcona Sound which is a shipping zone in the Canadian Arctic. The Property was situated at a desolate location except for an Eskimo settlement (Arctic Bay) which was about 20 miles west of the Property. In other words, the project required that complete infrastructure would need to be installed in this far northern location. Independent reserve and feasibility studies (Study) had been completed on the Property which confirmed a total of 6,825,000 tons of reserves classified and summarized as shown below on Table I: [ ] These reserves were based on 229 diamond drill holes totalling 58,909 feet and were established on a cut-off grade of 7% zinc and a minimum mining height of seven feet. The overall mining recovery rate was estimated at not less than 85% and not more than 90%. The feasibility study indicated that it would cost an estimated $45,044,000 to develop an underground mine, a concentrator, a town-site, a power plant, storage facility, loading dock, a tailings disposal area and an airstrip on the Property with an annual capacity of 525,000 tons of ore per year. The construction period was expected to take two years and projected capital costs were broken down as set forth below on Table II:

Jan 1, 1985

By J. R. Linney

A HISTORY of the ore-mining and iron-smelting industry of the Adirondacks comprises a century and a half of pioneering by rugged individualists, both men and women. By geographical location, the climate is most severe-long, cold winters with heavy snowfall, and short seasons of vegetation growth; this, together with its remote location from large centers of population, adds considerably to the difficulties of conducting mining operations in this area.

Jan 1, 1943

By D. R. Knowlton

IF I were a minister, and this were a sermon, and such a passage appeared in the Bible, I would choose for my text: "From whence cometh the oil for our war?" And no preacher was ever more serious than I am. You petroleum engineers recognize that the producing branch of the industry is passing through an era of plenty and inflated potentials into an era of scarcity and unmet allowables. Not too long ago the oil operators of Kansas, California, and Texas were appearing before operators' meetings and regulatory authorities asserting that these States were capable of producing at rates far in excess of what the demand at that time would absorb. Today every oil-producing area in the United States except the Texas Gulf Coast and West Texas is producing close to or in excess of its maximum efficient rate.

Jan 1, 1943

By Clarence Linville

IN an article published in the Iron. Trade Review 1 I gave a convenient arrangement for the installation of wet and dry bulb thermometers for use in making moisture determinations in the air being blown into a blast furnace, and also gave a chart for use in obtaining moisture values from the thermometer readings. The data from which this chart was prepared were obtained from the tables in use by the U. S. Weather Bureau.2 The work of Carrier 3 has shown that these tables are somewhat in error. He has recalculated the values for moisture as referred to, wet and dry bulb thermometer readings, and he has prepared a psychrometric chart from the values thus obtained. This work has priced the subject of psychrometry upon a correct scientific basis. I think it is proper that we should recognize the importance of his work and give him credit for one of the most interesting and valuable researches that have been published in recent years. Blast-furnace men are not ready to use, as he suggests 4 a value expressed in grains of water accompanying a pound of dry air. However convenient this may be for heating and ventilating work and other engineering problems, there are several reasons for preferring the use of a value expressed in grains of water in a. cubic foot of mixed air and water vapor, in connection with combustion phenomena and the effects of moisture on blast-furnace operation. Previous papers presented to the Institute have used such values and we have

Jan 10, 1913

DCF Valuations are very important to individuals and companies involved in the mining industry. Such valuations are critical to investment decisions in relation to new and existing projects. In particular they provide fundamental information to shareholders in the event of a capital raising or takeover and to financiers supporting mining companies and projects. Also, DCF Valuations are often used to support asset carrying values in the financial statements of mining companies. This paper presents a Chartered Accountant's (CA's) perspective on the main issues to be considered in preparing, analysing and relying upon DCF methods in mineral valuations and provides some practical examples relating to key issues. The paper makes the important point that DCF methods involve making assumptions about future events and circumstances that inherently contain uncertainty which results in a valuation prepared on a DCF basis providing a range of values that are not perfect or accurate. In order that DCF valuations provide meaningful information the underlying methodology used and assumptions made must be consistent, sound and well supported. Credibility of those involved in preparing mineral valuations is vital and this paper supports the adoption of sound practices by all concerned.

Jan 1, 1994

By B. Konda, R. Lauer, D. Camilucci, D. Gladwin

"Income based taxes are significant cost elements to be considered in evaluating investment in new mine development. This paper presents the results of comparative analysis of effective income-based tax rates for mining in the Northwest Territories (NWT), selected Canadian provinces and international jurisdictions. The study was done as background to a review of royalty regulations for the NWT. ObjectiveThis paper presents results of comparative analysis of effective mining royalty1 rates, and combined effective mining royalty and income tax rates on selected mine models for the Northwest Territories (NWT), with those for several other jurisdictions in Canada and abroad which compete with the NWT for mining investment.BackgroundThe February 27, 1995 federal budget directed the Department of Indian Affairs and Northern Development (DIAND) to proceed with a comprehensive review and amendments to northern natural resource management legislation in order “to increase revenues and ensure a fair return to the Crown.” DIAND is responsible for the administration of the Territorial Lands Act, and its regulations.The Territorial Lands Act gives the Governor-in-Council the authority to “… make regulations for the leasing of mining rights in, under or on territorial lands and the payment of royalties therefor,…”. In the NWT, the Canada Mining Regulations (CMR) provide for the disposition of mineral rights for most minerals, other than coal, petroleum and related hydrocarbons, in return for the payment of a royalty to the Crown.As part of this review of the NWT mining royalty regime, several computer mine models were developed and tax regimes in a number of jurisdictions were analyzed. Effective mining royalty rates, and the combined effective mining royalty and income tax rates were compared across the jurisdictions. The results presented in this paper are a part of the background work done in preparing a discussion paper on proposed changes to the NWT mining royalty that is expected to be released for public consultation in the very near future."

Jan 1, 1997

By Robert L. Davidoff

INTRODUCTION The impact of taxation differs substantially from state to state in a complex fashion that depends on both the physical characteristics of a mineral deposit and on the price of the mineral commodity relative to its costs of production. A comparative analysis of the tax structures of eight states (Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wisconsin) showed wide variations in rates of return for any given type of mineral property, with no state having either the most burdensome or least burdensome tax structure under all circumstances. Three hypothetical mineral operations were analyzed: a producing open-pit copper property, a non-producing underground platinum operation, and a non-producing underground gold operation. None of them corresponds exactly to an existing property. Each of these property types is further defined to have ore feed grades at three different levels, leading to three potential profitability levels, referred to in this paper as "economic", "marginal" and "subeconomic". Thus the differential impact of state tax structures is measured for mineral properties of different types, as well as for different profitability levels. Montana is used as the base case. This study does not address the topic of corporate structures or tax consolidation. There are no costs assumed external to the operation of the deposit (e.g. exploration to locate additional deposits). Two types of analyses were performed for this study. The first calculates the total cumulative tax payments in each state using all applicable taxes (including U.S. federal income taxes and examines the resultant differences in discounted cash-flows rate of returns DCFROR's amoung the eight states. The second is a sensitivity analysis that examines each type of state tax separately (i.e. state income, property, and severance taxes) in order to isolate and examine the differences in tax payments that are due to the difference in rates and methods of computing specific types of taxes in each state. The results of this study serve to illustrate the complex nature of interactions among various taxes. For example, property tax is a deduction in calculating severance tax in some state. Changes in property-tax and severance-tax payments both enter into the calculation of state and federal income-tax liability. This, in turn, could change the timing and usage of tax-loss carry forward amounts and investment tax credits. Additionally, the physical characteristics of a property, the method and costs at which the mineral will be extracted, and the profitability level at which each property operates will affect tax treatment. Each mineral operation was evaluated at three different predetermined profitability levels, referred to using the terms economic, marginal and sub-economic. These three profitability levels are defined by the ore feed grades of the primary commodity that yield in constant terms, approximately an "economic" 18% DCFROR, "a marginal." 10% DCFROR, and a "sub-economic" 5% DCFROR, respectively, under the Montana tax structure. In the analyses, the mining and processing parameters for each of the three types of properties were assumed to be identical for each of the eight states. It was assumed that each operation produces at full operating capacity throughout its life. This implies the level of mineral commodity demand will support the inferred commodity price, such that each operation will be able to sell all its output. The analyses performed for this study were done using a comprehensive economic evaluation simulator that is used in the Bureau of Mines, Division of Minerals Availability MAS program to perform DCFROR analyses. All economic evaluations performed upon these data (see appendix 2) were in constant January 1981 dollars. By-product prices used for the analyses were: [Gold $425.00/troy ounce Palladium$200.00/troy ounce Silver $ 10.00/troy ounce] Typical cash-flow calculation layout is given in Appendix 3. The initial step for each evaluation is to define an "economic" profitability level scenario. An 18% DCFROR rate in Montana was considered the

Jan 1, 1985