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By W J Fisher

Northern Australia leads in world-class mineral deposits' is a bold statement. First there must be a starting point. Land north of the Tropic of Capricorn (23¦ 26' 5") will be regarded as Northern Australia covering nearly 40 per cent of the land surface of Australia. As opposed to land south of the Tropic of Capricorn, it should be regarded as Tropical Northern Australia and for the sake of brevity, (TNA) Refer Figure 1. Apart from the tyranny of distance from centres of power and population in the temperate zone, it suffered in the past from the belief that the tropics are unsuited for European workers and from the lack of infrastructure. Outstanding mineral deposits of iron, base metals, gold and diamonds, discovered and developed in the past three decades, provided the substance for the title. There are many world-class mines producing and there are mineral deposits neutralised through Government policy. TNA can maintain its lead in world-class mineral deposits provided Government policy will stop partitioning the land and decreasing that available for exploration. Let's look at what we have that is world-class. In Western TNA iron ore deposits at Paraburdoo, Mt Tom Price, Marandoo, gold at Telfer, diamonds at Argyle. In central TNA uranium at Ranger and Jabiluka, lead-zinc-silver at McArthur River, gold at the Tanami, manganese at Groote Eylandt and bauxite at Gove. In eastern TNA Mt Isa, Hilton, Century zinc-lead, bauxite at Weipa, gold at Kidston, Mt Leyshon, magnesite at Yamba and coal mines in the Bowen Basin. Those mines or deposits stand out yet are only an indication of the numerous lesser mines and of mineral deposits depending for development on market demand and/or changes in Government policy, eg 'The Three Mines' policy. Very large areas of mineral rich structures in the western, central and eastern parts of TNA are concealed below flat lying comparatively young unmineralised sediments. The Great Artisan basin sediments in eastern TNA can and do host oil shale and non metallic minerals. Nearly 40 per cent of western TNA is covered by the Great Sandy Desert. The Canning Track, with a series of 54 wells, was constructed by surveyor Alfred Canning in 1908 - 1910 with great difficulty. It extends 1700 kilometres from Halls Creek in the north to the gold town of Wiluna in the south, through the Great and Little Sandy Deserts. Gold explorers are following favourable structures extending to the north east below the sediments and sand hills covering the track. Half of central TNA's mineral structures are concealed by the Tanami desert and the Cretaceous sediments covering the pastoral regions of the Barkly Tableland and the Daly Waters to Top Springs pastoral areas. The Georgina Basin in the south eastern section is part of the concealment.

Jan 1, 1994

By White A. H, Gillies A. D S

In recent years the Australian gold industry has gone through a major expansion phase. The need for finance has led to adoption of different approaches such as the well known gold loan, forward selling, equity participation by suppliers and equipment leasing. During early periods of the expansion, significant new equity was raised chiefly for high risk exploration ventures. The major form of new equity finance was ordinary shares, often in 'No Liability' companies. The increasing capital requirement of the huge new development projects of the 1980s also spurred the use of debt finance. This trend was accelerated as high inflation and the taxation advantages of debt finance made borrowing attractive. This paper reviews major financing techniques used by the Australian gold industry with particular emphasis on the innovative financing techniques initiated recently. An analysis has been undertaken of the effects on the industry of issues such gold loans, forward selling, equity participation by suppliers, fly-in fly-out operations, contractor mining and equipment leasing. In order to achieve a better understanding of the innovative financing techniques, a survey of already published financial data from well known Australian gold mines was carried out. Data was collected from various published financial reports of gold mining companies. In addition, a questionnaire survey was sent to gold mining companies to assist the collection of further information. The results of this study show that there are a significant number of gold mines variously using gold loans, forward sales, contractor mining and fly-in and fly-out arrangements to finance their projects. Only four operations have vendor suppliers investing capital funds in their projects. Based on the findings of this study, conclusions and recommendations are drawn that these approaches are likely to be with Australian gold industry for some time in the future and will continue to be intensively applied to finance gold projects.

Jan 1, 1994

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 Harper F

This paper outlines the authors' views of the methodologies which can be employed to value mineral properties at different stages of development for the purposes of project financing, mergers and public floats. This paper discusses the key issues in Discounted Cash Flow (DCF) analysis including the importance of data verification and the shortcomings in DCF analysis. Stockmarket valuation measures and valuation methodology for exploration and pre development projects are examined through examples and pitfalls are identified. The use of valuations in corporate transactions and their strategic value is also discussed.

Jan 1, 1994

By Dodd SF

Valuation of mining companies and their underlying assets prepared by brokers' analysts are, by necessity, approximations. The reliability of the valuations is entirely proportional to the quality of available data, the reliability of forecasts and the nature of underlying commodity price assumptions. The latter is perhaps the greatest single cause of gross variations in company and asset earnings estimates and- valuations. Assumptions are often necessary regarding commodity price achievement based on commodity hedge positions. Public disclosure from listed companies provides a sound base from which to project earnings, cashflows and balance sheets. The uncommon disclosure of projected production and cost schedules often reduces the reliability of future estimates. The application of reserve and resource estimates is contentious with practitioners applying differing weightings to importance of resources in estimating mine lives (and therefore cashflow streams). Valuation methods applied in equity markets usually focus on relative value and the identification of pricing anomalies. The commonest ""rules of thumb"" applied in the valuation of mining companies (and therefore their underlying assets) is with the use of year specific price/earnings (P/E) and price/cashflow (P/CF) ratios, with low multiples suggesting undervalued assets, high multiples overvalued situations (but these rules can often be clouded by market expectations of underlying commodity price movements). Another simply applied valuation tool is to examine the examine the value placed on reserves and resources by the market. Inexpensive gold in the ground (expressed as $ of market capitalisation per ounce of reserves or resources) might indicate a buying opportunity, but the market does discount the value of gold in the ground prior to mine development and where development risk is perceived.

Jan 1, 1994

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 Douglas R. Simms

O & G Industries, Inc. owns and operates a number of rock quarries within the State of Connecticut. These rock quarries are surrounded by residences and commercial neighbors who have concerns related to blasting. In addition, local commissions which issue the mining permits to O & G are required to hold public hearings, prior to issuing the annual permits each year.

Jan 1, 1994

By L. J. Altenburg

There are a lot of key factors involved in achieving a successful Safety Program. I would like to discuss some of these factors and how they have played a major part in our success at Jacobs Ranch Mine. The areas I will cover concern: 1) Facility Standards (Corporate/Minesite), 2) Communication (Employee/Management -"Teamwork"). 3) Proper Training (Employee/Management). 4) Employee Attitude. 5) Incentive Programs. 6) Health Programs. 7) Results/Benefits.

Jan 1, 1994

The words ""Uncertainty"" and ""Risk"" pervade every discussion about mining exploration and investment. Perhaps these terms are subjectively understood by industry professionals, but objective portrayal of these concepts outside the industry is a woefully undeveloped science. This paper addresses current industry understanding and practice regarding quantitative risk assessment techniques, and provides examples of the application of three of these techniques. Probabilistic techniques for financial risk assessment are valuable adjuncts to conventional financial analysis, and address a range of issues not assessable by any other means. The value of whole-of-project probabilistic risk assessment is currently debatable for decision-making purposes, but is seen as important as a mechanism to focus attention to the critical issues that ultimately impact on project success. The dissection of project capital into risk and non-risk components provides valuable insights into risk characteristics not readily quantifiable in any other way. This technique also provides a framework for more objective ""what if?"" scenario evaluation and for the capital structure of resource projects. Finally, mechanisms for the valuation of undeveloped reserves are examined, and guidelines suggested. The importance of reliability in production cost estimates is highlighted and the impact of early development on reserve valuations is discussed. The importance of economics throughout all stages of the evaluation process is fundamental.

Jan 1, 1994

By Robert B. Parsons

"Ontario and Quebec taxpayers will have to dig deeper into their pockets to pay more tax, according to budget papers tabled in these provinces in May 1993. Individuals will be hardest hit, but corporations will also have to ante up in the face of higher rates, reduced deductions, and new taxes.Up, up, and away...Somewhere in the bleak picture of the 1993 Quebec and Ontario budgets, there is a bit of good news for the mining industry.Careful scrutiny reveals:• Ontario will correct a capital tax provision which inadvertently penalizes flow through share issuers;• Quebec's flow-through incentives will be extended to December 31, 1995; and • both Quebec and Ontario will allow deductions for mine site reclamation payments.The industry may also find some comfort in the fact that Ontario's new corporate minimum tax will be profit-based (unlike the federal minimum tax), so that non-producers should not face a liability for this tax. There is some concern though, about Quebec's announcement that the refundable credit mechanism in the Mining Duties Act will be reviewed."

Jan 1, 1993

Pictured on these pages are the seven RMCMI Scholarship Award Winners for the 1992-93 year followed by a brief profile. All winners were present as guests of the Institute at the June convention in Beaver Creek, Colorado to receive recognition at the Institute Awards Luncheon Monday, June 28. 1993. Each state vice president served as the host for the collegiate winner. In addition to receiving a plaque from the Scholarship Chairman, Alan Czarnowsky, each winner receives $750 tuition credit for the coming academic year. As this is a continuing award, the winners from the previous year will receive another $750 for tuition credit in their senior year if they have maintained good academic standing and are recommended by their university. A resident from each of the eight RMCMI member states is selected from among Board approved institutions. Criteria for these awards to be made in the spring annually is (1) That the award be made to a sophomore student and used as tuition during the junior year. (2) That the recipient be both a U.S. citizen and a resident of the member state. (3) That the recipient have good academic standing, be pursing a degree in a mining related field and have an expressed interest in Western coal as a possible career path. The scholarship program includes curricula other than those in the mining departments, but in engineering disciplines, such as geology, mineral processing and metallurgy. Contributions to this worthy project are tax deductible to each individual RMCMI member or his firm. Through annual donations of $100 or more, the Patrons of the Institute fund the scholarship pro- gram and the various vice presidents contribute the travel expenses to convention for these outstanding young collegiates. Donations to this worthwhile program may be made payable to RMCMI Scholarship and mailed to the RMCMI Office, 3000 Youngfield Street, Suite 324, Lakewood, CO 80215. Profiles of the 1993 Scholarship Winners follow. [ ] ARIZONA WINNER Kevin Shirley University of Arizona Tucson, Arizona A member of the Student Chapter - Society of Mining Engineers, Mr. Shirley also belongs to the Campus Crusade for Christ organization. He enjoys baseball, basketball and football. He states, "Miners are meeting the demand of the public by providing energy fuels and minerals to support the standard of living we enjoy. It is sad to see people out of work in this country, but the third world is largely undeveloped, and many jobs are moving abroad." 'I consider winning the RMCMI scholar- ship a great motivator; your belief in me will help me become my best." [ ] COLORADO WINNER Derek Rawson Colorado School of Mines Golden, Colorado "1 have been enthusiastic about the mining industry since I lived in Divide, Colorado and spent time exploring the old mine sites." Derek says. "President Clinton may hit the mineral industry with many reforms, but I believe self sufficiency is important ... we need to produce here in the U.S. what we consume." Mr. Rawson is involved with intramural sports and varsity track. He is a member of the Society for Mining, and Exploration, Inc.; Colorado School of Mines Caving Club; Colorado School of Mines Shooting Club; and Alpha Tau Omega Leadership Fraternity.

Jan 1, 1993

By Andres Vikdahl

The Rönnsktär smelter has recently undergone a series of technical and operational changes. This changes are caused by our own will to remain and gain in competivety and to adapt to the ever changing surroundings. To be able to remain competitive in surrounding with high wage costs, high inflation and high environmental standards thorough cost management is needed. The Swedish economic policy in the beginning of the 80'ies consisted amongst other things of two devaluations. The exchange rate of the Swedish Krona was reduced with approximatively 25 %. This boosted the profits of our export industry, some even believed we entered the land of milk and honey ... And working in this promised land where everything turns into profit it is very difficult to be careful and restrictive with your spendings. Apart from some healthy and fruitful investments we allowed ourselves yearly steady increases in salary for ever reduced number of worked hours and we of course employed more people. Inflation rates went up and so did property prices. In 1986 finally reality catched up on us. Reality in the form of too high costs started to hit Swedish export industry 5-6 years after the big devaluations. Furthermore the high inflation rate also hit the domestic industry a couple of years later. Together with other important factors Sweden faced a severe home-made recession in the beginning of the 90'ies. With this background we now report and analyse our smelter's performance and operating results, shown in fig 1 The main constrictions on smelting and refining at Rönnsktär are today: * Income restrictions by governmental production level Limit * Throughput resmctions by governmental emission limit * High capital costs in the aftermath of Swedish high inflation in the recent decade * Low work force turnover Below we will illustrate how we tackled with these issues along the following lines: * People * Quality * Technology

Jan 1, 1993

By V. R. Degner

Comments Summary It is very interesting to review the technical changes which have occurred in the industrial practice of minerals flotation over the past two decades. In 1972, worldwide industrial flotation was dominated by 'mechanical' flotation machines having an individual cell volume less than 500 cu.ft. Manufactures, such as DENVER Eqpt. Co., OUTOKUMPU, WEMCO, GALIGHER (AGITAIR), AKKER, and later DORR-OLIVER, produced flotation machines featuring a mechanical rotating impeller which served to mix pulp and air, prior to flotation, and to keep the solid ore particles in suspension. While sharing this common mechanical impeller feature, the machine design of the various manufactures differed in detail; particularly in regard to the vertical location of the impeller in the cell and the means by which flotation air was brought into contact with the pulp within the rotor mechanism. A review of the existing technical literature in 1972 would identify academic research studies, particularly at Columbia University (N. Arbiter, C, Harris ...) aimed at comparing flotation cell design concepts, of the various machine manufactures, on a hydrodynamic basis. These research studies were confined to very small, laboratory bench size, flotation machines, and the benefits of incorporating hydrodynamic considerations in the scale-up of the existing 300 cu.ft. mechanical flotation technology to larger cells was not commonly practiced industrially. Technological advances in minerals flotation, over the past two decades, have been influenced by a variety of economic factors including the increasing development of lower grade ore bodies, the attractions of producing a higher grade final concentrate, and the economy of tails retreatment to improve overall plant recovery performance, and flotation system “optimization" became increasingly important through the 1970-80 time period. The trend toward processing lower grade ores led to higher tonnage mill operations, and stimulated the development of the very large capacity mechanical flotation machine for roughing and scavenging duty. In 1972, the 500 cu.ft. size flotation machine was being pilot tested and introduced to the industrial market. Today, 1993, individual cell volumes of 1500-3000 cu.ft. are operating successfully throughout the world, and well planned plant test programs have concluded that the very large flotation machine can achieve the same metallurgical performance level of its smaller predecessor. The large flotation machine development record clearly credits the incorporation of internal cell hydrodynamic considerations in guiding the scale-up of the mechanical flotation machine to large sizes. This guidance eliminated, or reduced significantly, costly in-plant prototype machine changes which increase Dramatically with increasing flotation machine size. Early in the 1980's, at approximately the time that flotation machines in the 1500 cu.ft. class were being introduced into the market, it became evident that the availability of the very large mechanical flotation machine brought with it the need for a systematic means to "optimize" the flotation system by relating flotation cell size, row length (i.e. number of cells per row), and flotation rougher, scavenger, and cleaner system configuration to the economic objectives of the concentrators' operating management. Flotation system optimization consists of quantifying the flotation process performance using a suitable model which relates the kinetic response of the trace specie and the gangue material to the cell overflow, and produces a numerical relationship between product grade and value recovery. The computer analysis technique has proven to be an invaluable tool in determining the kinetic model coefficients which characterize a given application, and is also used to apply the resulting model to a proposed minerals beneficiation situation seeking to "optimize" the flotation system by relating metallurgical grade-recovery performance, flotation cell size, and circuit arrangement, to plant space, installation, and operating costs. It is interesting to note that these same computer based kinetic flotation analysis techniques can be easily applied to quantitatively evaluate the effect of different chemical reagent strategies, and flotation air transfer, on process performance for a variety of candidate feed ore types.

Jan 1, 1993

Seventy-three of the 90 naturally occurring elements that are found in the earth's crust are metals or metalloids. The quantities of metals used annually in the United States range from about 100 million metric tons (steel) to a few kilograms (osmium). The recovery of metals from discarded products or industrial process wastes, especially those metals that are used in large quantity, are very expensive, or are unusually toxic, is important to the national economy and to the natural environment. From its inception in 1910, the U.S. Bureau of Mines (USBM) has been the Government's prime source of information on metals recycling, as well as a major innovator in recycling technology. Statistical data on scrap generation and processing have been summarized annually for many years in the USBM's Minerals Yearbook. Most of the data for individual metals discussed in this report were extracted from that publication.

Jan 1, 1993

By P. C. Dagneau

QUEBEC CARTIER MINING COMPANY was incorporated in 1957 to explore and develop low grade iron are deposits in Northeastern Quebec. Four separate deposits were located and identified as being of ore quality and size to support commercial development. Said deposits were located at Lac Jeannine, Mount-Wright, Fire Lake and Mount-Reed. In 1970, in preparation for the replacement of the depleting Lac Jeannine are reserves, construction of an SS-mile railway extension was initiated, towards the newly selected mine site at Mount-Wright. This orebody was selected because the physical and chemical characteristics of the ore were very much similar to those of Lac Jeannine, as well as its huge reserves, estimated at more than one billion tons. In addition to the railroad extension, a mine, concentrator and related facilities were constructed and the new town of Fermont was created. Total investment for the Mount-Wright project exceeded $700 million and initial production commenced in 1976. Quebec Cartier is presently (1992) the leading producer and seller of iron ore in North America at 15,5 million tons and employs some 2,300 people.

Jan 1, 1993

By Eugene M. Trisko

Presentation Overview State-Of-The-Art Scrub/Switch Analyses > Allegheny Power System > PSI Energy UMWA Phase I Coal Interests > 16 Phase I Scrub Plant Coal Profiles > Coal Price/Emission Allowance Interaction Southern Company Case Study > 2+ Million Ton Phase II Allowance Purchases > 10+ Million Ton Phase I Coal Switch > Georgia PSC Proposed Fuel Price Cap > Shift/Avoid Georgia Scub Costs Through System Allowance Purchases

Jan 1, 1993

By T. P. Meloy

Riffles on a shaking table have a major effect on particle separation. This effect is modeled in a spreadsheet.

Jan 1, 1993

By S. C. Suboleski

Forecasts indicate that the acid rain bill currently before Congress is likely to cause an increase in demand of 30 to 40 million tons per year of compliance quality coal from Central Appalachia. This represents a doubling of this segment of the coal business. This paper will examine how this doubling can be met, what the likely implications for pricing are, the major uncertainties associated with these predictions, and the likely outcomes of the growth in compliance coal. Finally, some implications for fuel planners will be discussed.

Jan 1, 1993

By Don C. White

Santa Rosa is a mid-Tertiary, volcanic-hosted, bulk-mineable, open-pitable, heap-leachable, gold-silver deposit. It is the product of hydrothermal mineralization along an arcuate segment of a caldera collapse ring fault in a probable maar volcanic setting. This segment was later broken by radial faults. Gold occurs principally as electrum finely disseminated through intermediate tuffs, and associated with pyrite, at Santa Rosa. The nearby Alto de la Mina deposit displays stockwork silica-pyrite-gold in a tectonically and hydrothermally shattered andesite flow. Miocene epithermal mineralization was accompanied by central silicification and pyritization and more distal argillization. An andesite flow cap rock at Santa Rosa played a pivotal role as an upward permeability barrier. Highest gold grades and most intense alteration occur closest to the ring faults and immediately beneath the andesite flow. Supergene alteration effects on the gold distribution are minimal.

Jan 1, 1993

By J. H. Desautels

The modern coal mining industry is subject to a vast array of regulations affecting virtually all aspects of its operations. Probably the most significant over-sight role involves the Office of Surface Mining Reclamation and Enforcement (OSH) established by the Surface Mining Control and Reclamation Act, or SHCRA.1 Although complying and coping with SHCRA can be difficult for coal operators, this complex regulatory process has helped insulate the industry from ongoing efforts to extend regulation under the Resource Conservation and Recovery Act, or RCRA, 2 to aspects of the mining industry in general. The Environ-mental Protection Agency (EPA) has struggled with regulation of mining wastes under RCRA since the mid-1970's, but RCRA itself places most coal mining wastes firmly under the control of OSH and SHCRA. Despite the general exemption from RCRA regulation for waste materials that result from extraction and processing of coal itself, there may be circumstances under which coal mining operators could find themselves subject to regulation under RCRA or a number of other statutes administered by EPA. This paper will review briefly the history of mine waste regulation under RCRA, as well as touch on the policy decisions that led to the exemptions from RCRA regulation. The paper will summarize coal waste requirements under SHCRA, and also will review what operations at coal mines need to be controlled, in order to avoid potential liability under RCRA. In addition, it will mention requirements under other federal laws, including CERCLA, or the "Superfund" law,3 and describe how they may impose restrictions or liability on coal operations for waste or other materials commonly found at surface and underground coal mines.

Jan 1, 1993