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By T. W. Beck

Roof bolter occupations in underground coal mines continue to experience overexposure to respirable dust. One potential source of dust in roof bolting operations is the exhaust from the roof bolter dust collection system. A wet exhaust conditioner (water box) has been developed to reduce dust emissions from the exhaust of the vacuum dust collection system on roof bolting machines. The exhaust conditioner consists of a muffler chamber and a water chamber with four internal partitions to direct airflow over the surface of the water. The National Institute for Occupational Safety and Health conducted a series of laboratory tests to assess the respirable dust capture ability of this device as compared to the standard exhaust muffler. To determine the dust collection efficiency, both devices were placed in the exhaust stream of a simulated roof bolter dust collection system. Gravimetric samplers were operated upstream and downstream of the exhaust conditioner and muffler to evaluate the ability to capture both respirable coal and limestone dust. Researchers observed a 41 % reduction in dust concentrations for the water exhaust conditioner in the laboratory configuration. Significant levels of dust deposition in the sampling chambers may have contributed to this effective capture rate.

Jan 1, 2012

By Ian MacGregor

INTRODUCTION I retired in 1977 and have been enjoying myself ever since doing odd jobs for various people - on occasions, politicians. I commend it to you as post retirement - get involved in situations that nobody else will take on. It produces all sorts of excitement, it is a lot of fun and, courtesy of the media, you provide great raw material for their current Punch and Judy shows. The example of the adventures in the Escondida financing made me think about the history of the minerals industry in the United States. In order to see more clearly what is going to happen in the future, we have to look at the past and what we have learned, and try to extrapolate from that a scenario for the future. This paper is about global material cycles and the financial needs of the extractive industries. Since about 2,000 years B.C. we have been living in the Iron Age. Since about 4,000 B.C. we have been living in the Copper Age. These have been the two foundations of modern industrial society. Understanding the use of metals and materials helps us understand the civilization in which we live today. Let me focus more closely on the United States, particularly in this century. In the first two-thirds of this century the United States was growing and expanding and developing. It was providing for its inhabitants a society which was enjoying the benefits of a rising standard of living, improved opportunities and the ability to support a population growing at quite a dramatic rate. It is still growing. In the Department of Commerce, there is a clock that shows how many people there are in the United States. It turns all the time; the numbers are going up. On January 21,1980, when Ronald Reagan was sworn in as President, the number on that clock was a little over 220 million, and in the last week before he left, it was travelling towards 245 million. During his period in Washington, we have added , the equivalent of one total state such as California. That gives the dimensions of the U.S. appetite for raw material inputs. The inputs are of critical importance. COMPARATIVE ADVANTAGE During the first two-thirds of this century, the minerals sector enjoyed comparative advantages. There was a clear understanding of the importance of minerals enshrined in the tax legislation of the country from the early decades of this century - the depletion allowance. No other country identified as clearly that the supplies of minerals were finite. As they are used up, just as with a wearing-out machine, one must get capital back to replace the resource when the time comes. Within the last decade, that idea has been questioned and criticised. It is now seen as giving money away to a preferred part of the economy, instead of recognizing what depletion is all about. In previous times it insured that the U.S. always was able to regenerate the capital in its minerals industry, so that it could remain competitive. The U.S. had plenty of everything, including energy. We had a growing population. Equally important, we had an agriculture that led the world in productivity, even as far back as the turn of the century. It continues to do so. We still retain that comparative advantage, an ability to produce our foodstuffs in quantity and quality at excellent cost. Look at another ingredient of our comparative advantage, the energy position. We ran through the first two-thirds of the century with ever- decreasing energy costs. In the 1940s and 1950s the coal industry went into a decline. Why? Because the $3.00 - $5.00 a ton cost of mining coal in the U.S. represented relatively expensive energy. A ton of good grade bituminous coal contains 25 million BTU's. $0.20 a million BTU's represents $5.00 a ton at the pithead. That price was undermined by the increasing ability to find petroleum at even lower costs. At the apex of the growth of development of the American dominated

Jan 1, 1990

By Klaus M. Zeitler

INTRODUCTION One cannot discuss the subject of "Raising Capital in the 1990s" without having a crystal ball and a reliable fortune teller. This discusses "Raising Capital for the 1990sW, which is what Metal1 Mining Corporation did in 1987. We raised (3166 million in an IPO (initial public offering) that was originally planned for only some (375 million. Why did we raise this money? How did we do it, and why was this IPO so successful? The answer to the first question requires a description of the promoter and principal shareholder of Metal1 Mining Corporation, Metallgesellschaft AG. This West Germany company was founded over 100 years ago in Frankfurt as a trading house for non-ferrous metals. It has developed into one of the world's leading firms in the non-ferrous metals industry. The company's worldwide activities in all areas of that business include mining, smelting and refining, the trading of ore, base and precious metals, the production of semi-fabricated and finished metal products, and the provision of engineering, construction and transportation services. Metallgesellschaft AG has also diversified into many other areas, the most significant of which are manufacturing, the production of chemicals, the development and application of technical and chemical processes, the planning and construction of industrial plants, and activities associated with finance, insurance, shipping and freight forwarding, and the provision of barter and countertrade services. The company maintains a network of more than 100 offices around the world; it employs some 25,000 people in its worldwide activities. [Selected financial data, as of September 30, 1987: (MetaUgesellschafl AG) Working Capital DM 8%.6 million CDNS 672.8 million Long Term Debt DM 568.0 million CDNS 426.2 million Sales DM 14.9 billion CDNS 11.2 billion Net Income DM 87.7 million CDN$ 65.8 million Market Capitalization at April 27, 1987: (Metallgesellschafi AG) Outstanding Shares ~,6oo,o0o DM 1,875 million CDNS 1,407 million] For the fiscal year ended September 30, 1987, Metallgesellschaft AG had, on a consolidated basis, net sales of DM13.3 billion, net income of DM100 million and total assets of about DM7.0 billion. Metallgesellschaft AG established the American Metal Company, a predecessor of AMAX Inc. one of the largest ventures undertaken by Metallgesellschaft AG then was the acquisition, through the American Metal Company, of a majority share in the Mexican Penoles mine, a large lead and silver deposit. METALLGESELLSCHAFT AG Figure 1 depicts an overview of Metallgesellschaft AG before and at the time the initial public offering of Metall Mining Corporation's shares took place. It shows that mining was far from the centre of Metallgesellschaft's activities. Therefore, it could not expect to receive an extraordinary amount of board attention. Thus, mining investments not only had to compare well with other mining opportunities, but were in fierce competition with projects from other divisions. In addition, mining was sub-divided into two separate departments -- domestic and international. These two departments had different management styles and diverging interests which resulted in a minimum co-operation between them. The domestic mining department was primarily interested in the survival of the local mines. These mines were characterized by rising operating costs and declining ore grades. It took a special commitment and continued ingenuity to develop and adjust to local conditions, and modern mining and processing technology, in order to remain competitive, or at least survive within the international mining industry. Local management

Jan 1, 1990

By J. A. Herbst, K. Rajamani, Y. C. Lo

In spite of potential theoretical and economic advantages of large-diameter ball mills, many manufacturers elect not to build them owing to what is perceived as an excessively large design risk. This is because traditional predictions for mill scaleup to large diameters are not always accurate. Alternative methods of analysis and scale-up are required. Recent studies have shown that detailed population balance models which account for important grinding subprocesses (grinding kinetics, material transport, and classification) are capable of predicting the performance of small- and intermediate-diameter mills (up to 4.3 m, or 14 ft) from small-scale batch tests. These same models are used in the current study to predict the performance of a "borderline "large ball mill (4.7 x 5.5 m, or 15 x 18 ft) at Asarco's Sacaton operation, a ball mill (5 x 5.8 m, or 16.4 x 19 ft) at Kennecott's Chino operation, and one of the world's largest ball mills (5.5 x 6.4 m, or 18 x 21 ft) at Cities Service Pinto Valley operation. Model parameters required for scale-up have been estimated in a 380-mm-diam (15-in.-diam) batch mill. Predictions are compared with the results of detailed plant sampling in the three plants. For the Sacaton and Chino operations, the error of the predictions was found to be less than 2.5%, while the corresponding error for the Pinto Valley operation was less than 2.7%. It is concluded that proper representation of the major subprocesses of grinding in the model equations is the key to achieving accurate scale-up. Of special importance is the need to account for the size distribution of the grinding media and the influence of the size distribution environment in the mill on grinding kinetics.

Jan 1, 1986

A. Cook K.A. Grace's article advocates usage of the terms describing resources as defined by the US Bureau of Mines (USBM) and the US Geological Survey (USGS). Originally recommended in 1943, the terms were revised in 1976 and again in 1980. Mr. Grace further recommends that the term reserves should be severely restricted and that it should encompass mining and processing factors. The list of references quoted in the article does not, however, mention the study concerning reserves that was made over a period of almost four years by a joint Committee on Definitions. This committee was sponsored by three societies - the American Institute of Mining, Metallurgical, and Petroleum Engineers (AIME), the Society of Economic Geologists (SEG), and the American Institute of Professional Geologists (AIPG). Most of the detailed work was done by a working party appointed by the Society of Mining Engineers (SME) of AIME. After studying previous definitions in the US as well as in the United Kingdom, Canada, Australia, France, and other European countries, the following definitions were proposed and accepted in 1974 by the SME board of directors. (Ore reserve definitions in Rhodesia, South Africa, or New Zealand were not mentioned as having been reviewed. Table 1 lists definitions from MINING ENGINEERING, July 1975. Notice in Table 1 it was mentioned, under Resources, that the definitions of reserves were recommended for the purposes of commercial evaluation. It was further stated that the terminology adopted by the USBM and the USGS, as released to the public, covering resources, was recognized as such. Mr. Grace also recommends that reserve calculations should allow for future losses in ore tonnage, ore grade, milling, and smelting. Unfortunately, it might take years to develop a prospect after it has been discovered. Mining methods have to be tested before being finalized in order to know what tonnage of ore is going to be lost, or how much dilution is likely to occur. The same problems are present in concentrating or in smelting. Operating mines usually know how mined grade compares with ore reserve grade. They can usually predict fairly closely what their final metal recoveries are probably going to be. It is, however, expecting too much to have to delay quoting reserves from say a recently drilled prospect. Any responsible mining geologist or mining engineer (or company for that matter) should state several things about an ore reserve calculation: that it is or is not a preliminary estimate only; that estimated grades have not been diluted to allow for a future, as yet unknown, mining method; that metal recoveries are or are not only tentative, based perhaps on drill hole samples only or on no metallurgical testing at all. [ ] Reserves of a partially explored prospect are always quoted when it becomes necessary to raise capital. If they are described as preliminary only (really just tonnage and grade estimates and not true "reserves") in addition to being accompanied by some of the items just mentioned, nobody is going to be misled. If, on the other hand, a report by a member of the SME or SEG is intentionally misleading, the individual must be reported and eventually disbarred from his or her society. To summarize, let us stay with the definitions of ore, ore reserves, and related terms as recommended and accepted by SME. I might add that on occasion I have used a fourth category in my ore reserve calculations, namely Geologically Possible Ore. This category is more or less the same as Inferred ore defined by the USBM and USGS. I have never given a grade to this category, which may be based only on geological mapping, geochemical sampling, or geophysical traversing. ?

Jan 1, 1986

By G. T. Lineberry, L. Adler

Due to safety-imposed constraints on clearances for mobile bulk handling equipment, it is necessary to optimally select a unit based on speed and size. The unit cannot be both large and fast. Since output is proportional to both size (or capacity) and speed, the combination must be carefully examined to maximize output. A simple graphical procedure and a calculus-based solution are presented to accomplish this. While the procedure applies to all mobile bulk handlers, as an example of the solution technique, attention is focused on shuttle cars. Background Major variables To fully define a bulk handling problem, the conditions, equipment, and activities must be characterized. The conditions and activities, when lumped together, are termed "encumbered space," since they "act to impede motion, as with a burden" (Lineberry, 1979). The insertion of mobile bulk handling equipment into what is already a difficult set of conditions and activities compounds the state of encumbrance, as limited space is competed for by many normal and life support systems. Long (1972) recognized the effects of design criteria, including road width, on haulage vehicle speed and, therefore, on production. Velocity-clearance curves Velocity-clearance curves are either available or can be constructed in the field. A preliminary set of curves for average conditions and activities is shown in Fig. 1, where clearances are only for the side of the vehicle (Lineberry and Adler, 1984). These curves set the safe speed limits for a vehicle operating at given clearances, under given conditions and activities. When feasible, velocity-clearance curves should be constructed through field measurement and observation. Curve construction should also consider haulway roughness, distances, and operator skill, as well as loading and dumping characteristics. It should be noted that haulage capacity determination is a total systems problem, not one just dependent on velocity and clearances. Production requirements and company capabilities also influence capacity determination.

Jan 1, 1986

By G. F. Leaming

The paper by R.V. Ramani and R.J. Sweigard is a wonderful description of the labyrinthine web that has been spun about the mining industry by energetic bureaucrats and politicians over the past 50 years. The remedy for the problem, however, is not more of the same, but less. That may be difficult for the industry to achieve, for it is not a technical solution but a political one. And the current fervor for more detailed planning at all levels of government and private enterprise has become deeply ingrained. The authors recommend the provision of more information about mining and mineral resources to "macro" (i.e., government) land use planners. They apparently overlook, however, the already strong tendency on the part of most government land use planners to consider themselves omniscient. Thus, giving them more information about the technical problems of mining will only make them want to get more and more involved in the "micro" (private, site specific) mine development and production plans of the individual mining firm. In fact, this has already happened at all levels of jurisdiction from municipal to federal government. Examples are legion. The most effective way to ameliorate the adverse impacts of government land use planning on existing and potential mining operations is to: (1) introduce greater flexibility in the definition of land use zones by local and state governments; (2) adopt realistic and relevant ambient environmental performance standards in governing relationships between mineral land uses and concurrent or subsequent nonmining land uses; (3) allow greater leeway for economic considerations in land use decisions in contrast to the explicit legalistic approach now in vogue; (4) recognize that all minerals are not the same and that sand and gravel mining should not be treated the same as underground metal mining, coal stripping, oil field production, or in situ leaching; and (5) eliminate the notion that mining operators should be responsible for determining in detail the use of land by subsequent owners of mined land. This last bit of conventional ethic really makes no more sense than requiring the builders of every shopping center or government office complex to provide detailed plans for the use of that land when its use for shopping or government is ended. Did the builder of Ebbetts Field plan for Brooklyn after the Dodgers went to Los Angeles? Should the developer of the Bingham Pit plan for suburban Salt Lake City after the copper mining goes to Chile? The nation's mining industry must address these questions before further bankrupting itself to provide more data to planners and spending thousands of dollars per acre to create land that when reclaimed is worth only a few hundred dollars per acre. ? Reply by R.V. Ramani and R.J. Sweigard We thank Mr. Learning for his valuable contribution. His views on the problems of land use planning and mineral resources are most welcome additions to our paper. As the title indicates, our paper was more concerned with the impacts of land use planning on mineral resource conservation than with the details of the planning process. On the whole, his five recommendations would be helpful for mineral resource conservation. However, we would suggest that the argument he presents for his final recommendation does not address the differences between mining as a land use and commercial or institutional uses. We believe that this difference is the crux of the issue. We share Mr. Learning's desire to ameliorate the adverse impacts of land use planning. Possibly the most detrimental impact is the loss of mineral resources. Any development, whether mineral or community, that does not give proper consideration to other resources can result in permanent loss or sterilization of resources. With proper planning, some of these losses can be avoided. As our paper indicated, one factor that limits the consideration of mineral resources, and ultimately leads to their sterilization, is the generally inadequate levels of resource characterization and understanding of the unique nature of mineral resources and mining operations. The last point raised by Mr. Learning is also important. In terms of reclamation and land use planning in mining districts, we certainly do not advocate spending more than what the results are worth. The main thrust of the paper was to explore the avenues for conserving the mineral resources so that, at some appropriate time, the issue of mining and reclamation can still be addressed. ?

Jan 1, 1986

By William P. Lohden

INTRODUCTION It is recognized that, for a variety of reasons, some companies in the mineral industry today are by no means cash-rich and, in fact, are reporting a growing proportion of long-term debt in their capital structures. A review of recent balance sheets of small, medium-size, and some larger companies, indicates that a fair number still have substantial positions in cash equivalents such as U.S. government issues and other short-term money market instruments. In part, this paper concerns itself with companies which have sufficient cash and equivalents and/or cash generation to internally finance mining projects or expansions but which, for some reason, choose to borrow funds. Misconceptions which appear to frequently underlie so-called "leveraging" decisions are explored in this paper. Also considered arc' those circumstances under which any company, including one that is cash rich, should consider borrowing for a project in an amount beyond what would otherwise be necessary based upon its internal financing ability. I do not attempt to cover the raising of equity capital in public markets in this paper. OVERALL RETURN ON INVESTABLE CASH If you approach an individual with an investment which can be financed from savings, or by borrowing at a rate higher than one is earning on savings, that individual will quickly tell you that to pay interest at a rate higher than is being earned on savings would reduce overall income. Assuming that additional investment opportunities are not currently being considered, the individual concludes that a draw-down on savings, leaving a cushion for contingencies suited to individual circumstances, is the correct financial decision. For reasons discussed later, the simple mathematical logic leading to this conclusion tends to become obscured at the corporate level. When Leveraged Studies Are Inappropriate or Premature Surprisingly, I have heard of a number of companies that could afford to finance an investment solely with internal funds, which have made DCFROR (i.e. discounted-cash-flow rate-of-return) studies not only on a 100% equity basis but also on a leveraged basis. Certainly, a leveraged study would be appropriate if additional projects were competing for more capital than was available internally. Often, however, other projects are not far enough along to warrant a leveraged study and there is some danger that a project may be undertaken because it has an estimated acceptable rate of return, on a leveraged basis, that is not ultimately earned because some of the other projects are postponed or abandoned and borrowing is less than expected. For the above reasons, until it has been determined that (1) borrowing is a reasonable certainty for a particular project and (2) the timing and amount to be borrowed has been determined within a reasonable range of accuracy, I believe it is inappropriate and misleading to calculate DCFROR for a project other than on a 100% equity basis. Even when there are several projects currently competing for funds and borrowing will be required to finance one or more of them, using the common yardstick of calculating DCFROR on a 100% equity basis is a safer method to initially evaluate and compare the attractiveness of the projects. Many companies, whether they would have to borrow or not, will reject projects that on a 100% equity basis do not meet their minimum rate of return standards. Some companies which have to borrow will undertake a project provided the project's DCFROR on a leveraged basis meets its minimum return standards. The danger of this approach is that even moderate shrinkages of estimated cash flows could plunge return below

Jan 1, 1985

By Dean S. Rogers

The conventional role of exploration, development and grade control is examined in this paper within the context of the many and varied types of gold occurrences which are found at the Dome Mine. The account endeavours to trace the development of the total ore evaluation process, from diamond drilling through the exploration and drifting stage, to the stope development and planning phase of the operation, with an emphasis on sampling techniques and assaying procedure. The concept of ore reserve calculations is developed and the practice of grade control is described. In summary, the role of the geological, the engineering and the mining department is presented in relation to the contribution each has to make in the evaluation and exploitation of ore from one of the world's classic Archean gold deposits.

Jan 1, 1985

By C. Richard Tinsley

INTRODUCTION Documentary complications arise from the risk apportionment in project financing which generally means that once the project is up and running and has satisfied the lender's completion test, the loan agreement specifically limits the lender's recourse to the project and its assets. It is the purpose of this paper to describe the special considerations which apply to industrial minerals projects and explore the reasons why so few project financings are negotiated in this industry. SIZE Small projects do not warrant the relatively high costs of negotiating and documenting project financing. The extent of the documentation is directly proportionate to either (a) the degree of risk apportionment, or (b) the amount of control given to lawyers to negotiate the documents. Although one would like to believe that project-finance documentation could be off-the-shelf, it is almost always necessary to tailor the documents to the mine development itself and the individual desires of the borrower. Accordingly, the documentation costs and initial expenses are seldom less than $40,000, and for complex projects can reach $400,000. In addition, banks often charge an up-front fee to partly compensate them for their staff time and partly to increase their yield on what is deemed to be a "riskier" loan asset. Another factor is the generally lower debt:equity ratio when bankers are uncertain of the accuracy of the cash flow projections. The ratio of the amount of cash flow left over after debt service to debt service itself is a key tool for project finance (debt service coverage). Bankers will require a higher coverage ratio for industrial minerals projects because of the relatively higher uncertainties in the following categories: Prices Markets Geology/Quality Transportation Environmental This, in turn, means that lower debt:equity ratios are the norm for new industrial minerals projects. INDUSTRY STRUCTURE It is hardly worthwhile to generalise about a field as diverse as industrial minerals, but there are four other structural reasons why project financing has not been widely applied. 1. The most obvious example is the predominance of small-sized operations, largely a function of transportation economics. Geological conditions also contribute to their dispersion. 2. Often, the product is only a small part of a company's business in contrast to many petroleum, metals, or coal companies whose sole business is the production of the raw material. The construction industry is a good example here for cement, gypsum, crushed stone, sand and gravel, and the drilling-mud services business for barite and bentonite. A company is unlikely to jeopardise its main business through the failure of a project financing on one of its key inputs. The corrollary is that the mined input is often regarded as a cost centre and not run on the sort of economic basis suitable for project financing. 3. There may be a reluctance to reveal key aspects of an industrial minerals venture to an outsider for purely competitive reasons. Unlike the other minerals industries which readily share technical information at plant visits and

Jan 1, 1985

By C. Hertzler

The difference of means of milling characteristics by rock and ore type is tested in a statistical manner in the paper. The null hypothesis being tested is that the sample means of two different populations are equal. It is assumed that the null hypothesis is true when performing the test. Because of this, acceptance of this hypothesis leads to the conclusion that the sample means of the two different populations are equal (or there is no significant difference between the sample means), not that the samples come from the same population, as the author asserts. Rejection of the null hypothesis leads to the conclusion that the sample means of the two different populations are not equal. A P value for this test is reported in Table 2 and is incorrectly identified as the probability that the two samples came from different populations. Actually, what was recorded was 100(1 - p) where p is the usual p-value. The usual p-value measures, on a scale of zero to one, the extent to which the data agree with the null hypothesis. It is the probability of observi" a value of the test statistic (Z score) that is at least as contradictory to the null hypothesis as the one computed from the sample data (McClave and Dietrich 11, 1982). The author makes no mention of the fact that were these tests to be conducted together, the chances of determining that the null hypothesis is not true when it is really true are increased considerably (Snedecor and Cochran, 1980). This is a multiple comparisons problem and should be dealt with accordingly. The usual methods involve adjusting the level of the individual tests. Table 2 reports an incorrect 100(1 - p) value in the comparison of concentrate grades for other rock types with .30 to .69% Cu vs other rock types with .70 + % Cu; 86% should be 98.6%. Although the article can be criticized for poor data presentation and discussion of that data, the point the author makes regarding the use of these statistics in the ore reserve estimation process is well taken. It does not appear that inaccuracies in the statistical interpretations have hindered that usefulness.

Jan 1, 1985

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 P. Somasundaran

Almost a decade has elapsed since the problem of fine particles processing was first discussed at the National Science Foundation workshop in Arden House (Somasundaran and Fuerstenau, 1976). Problems involved in processing fines are as enormous now as they were then. We still lose 20 to 50% of mineral values during the processing of many ores. While the problem's magnitude has remained at as high a level as ever, our perspective on the causes for the difficulties, I believe, has changed. While we do not yet see any grand unified solution to all the problems in this area, I do feel that we are beginning to get an understanding of the basic reasons for the behavior of fines. I would like to share my views on the fundamental reasons for the problems we face. They are based essentially on results obtained during the last few years. A decade ago, I presented the reasons shown in the [Fig. 1] as the causes for the difficulties in separating fines. We have seen the same type of information discussed by others during the years since then. I now believe that these are not the only primary causes. Indeed, they do contribute, but there are other major reasons we ought to recognize. Mass certainly would have its effect, but since microorganisms and even ions can be separated from each other using flotation, provided correct conditions are used. I do not believe that fines 10,000 times bigger suffer fundamentally from their smallness or lightness. Similarly, the surface energy increase cannot be as important a fundamental factor since, theoretically, we should not see significant changes in surface energy until we get down to particles a hundred times finer than we are concerned with. Increase in surface areas, again, cannot be a primary problem except for an increase in reagent consumption. What possibly could be the reasons? I have added these three items to the list in [Fig. 1]: morphology, mineralogy, and surface chemical composition. Differences that I believe are partly responsible for the behavior of mineral fines are those due to alterations in morphology or mineralogy and surface chemical composition with decrease in size.

Jan 1, 1985

By Michael Bradbury

INTRODUCTION A major change in financing exports in recent years has been the decreased importance of subsidized export credits, following the commitment of the OECD countries to eliminate the subsidy element. Subsidized export credit rates are now often more expensive than market rates as the financing for exporters has decreased in volume and importance. The forfait market, in recognition of this decreasing importance, provides a rapidly expanding source of nonrecource finance for exporters. The following is a step by step guide to what it is, how it works, its benefits and problems. WHAT IS FORFAITING? Forfaiting is not new. It has been used in Europe for about 25 years to provide export finance for both capital goods and commodities without recourse to the exporter. Although long the preserve of exporters in Germany, and more lately Italy, forfaiting is now used increasingly by exporters in Great Britain, the United States, Canada and Scandinavia. It is a fairly simple operation with easy straight-forward documentation. The transaction involves the purchase by the forfaiting bank of a bill of exchange or a series of bills without recourse to the exporter. These bills will have been drawn by the exporter, accepted by the importer, and will usually bear the unconditional guarantee of the importer's bank. They are normally drawn payable at intervals during the credit period agreed between importer and exporter and are purchased at a discount by the forfaiter. The exporter thus obtains his cash payment and the importer receives his credit period. The forfaiter collects the amount of the bills as they mature directly from the importer. Credit periods vary, depending upon the type of goods and the country and commercial risk of the importer. The period is generally between one and five years with six monthly maturities. The usual forfait currencies are US dollars. Deutschmarks and Swiss francs and others, such as sterling, French francs, and the Scandinavian currencies are being used more frequently. CHOOSING FORFAITING Most types of financing require the continued involvement of the exporter in the financial side of the transaction during the credit period. Forfaiting has certain comparative advantages. In particular, it is possible to forfait 100 percent of the risk without recourse to the exporter, unlike government sponsored export finance schemes, where some retention of the risk by the exporter is required. In addition, exports from country sources do not present problems and forfaiting can also cover trade within the EEC. Other benefits for the exporter are: (a) The exporter's balance sheet is improved; debts are turned into cash thus improving the liquidity of the company and enhancing its cash flow. And there are no contingent liabilities for bills of exchange. (b) If the sales contract is in a foreign currency forfaiting removes the risk to the exporter of adverse movements in foreign exchange during the credit period. (c) Fluctuations in interest rates during the credit period can be ignored since in forfaiting the transaction is usually done on fixed interest rate terms on a discount basis. (d) The political and transfer risks are taken by the forfaiter. (e) The commercial risk is taken by the forfaiter. (f) The costs of administration and collection etc. during the credit period are removed.

Jan 1, 1985

By Fernando A. Buttazzoni, Jorge C. Munita

INTRODUCTION To provide a background for discussing long-range financial and operational planning in the mining industry, we would like to begin by describing the role of planning in Codelco. Having taken part in Codelco's planning process since its inception in 1976, we believe that useful conclusions may be drawn for the experience we shall relate. Although Codelco is a state-owned copper producer with an important role in the Chilean economy, and is consequently very much at the core of national economic planning, the following discussion is not related to government planning but to planning in an operationally and commercially autonomous business concern with all the characteristics of a private enterprise. The only way in which Codelco differs from private business is that its financial successes or failures have a more direct impact on the countryls ability to participate in international trade, to meet its international financial commitments and to achieve economic and social growth. Thus, what follows is a presentation of the conceptual features of the planning process at Codelco and a description of the current state of planning in the company. It is understood that certain conceptual components are basic to any formal strategic planning process, and that the components of Codelco's planning process are therefore generally applicable in similar companies. First, the mission and scope of operation of the company must be defined, and goals must be set to achieve leadership in the business activities in which it engages. Having set this framework, the company must constantly scrutinize those internal elements and conditions that are essential to fulfill its mission and achieve leadership. In Codelco this means considering the actions which can best serve to define future capacities, taking into account declining ore grades and determining optimal production levels; watching over the productivity and skills of its labor force, and; keeping abreast of technological developments in non-ferrous mining and processing. If the company is proficient in these three areas, it will be cost efficient and there- fore competitive. Codelco must also watch over the business environment in which it operates. The company sells concentrate, blister and fire-refined copper, wirebar, cathodes and wire rod and must study the behavior of the market to attune its product mix to the demand existing for these various commodities in the international market and the copper consuming industries in general. By examining the internal and external environment in which the company conducts its production and commercial operations, it is able to diagnose its strengths and weaknesses, to identify the hazards it must overcome to stay ahead in the copper trade, and to take full advantage of business opportunities as they arise. CHARACTERISTICS OF CODELCO-CHILE Although our subject is Codelco, readers should keep in mind that there are many other copper producing operations in Chile, all in the private sector, and many valuable deposits that may be exploited in the future. Codelco is the only public sector copper producer, although there is one other state enterprise that operates smelting and refining facilities principally to serve a large number of very small producers of copper concentrate. In the mid-19801s, Codelco is the largest copper mining company of the world and the largest producer and exporter of copper with yearly sales totalling close to US$ 1.8 billion in 1983. Moreover, it is a highly profitable copper company at a time when the world copper industry as a whole has reported losses for several years. Codelco-Chile is a fairly new organization. The history of the four mining operations it manages is much longer: El Teniente was opened in 1912, Chuquicamata in 1915, Salavador in 1959 -- with installations of the old Potrerillos mine dating from 1927 -- and Andina in 1970. Having had separate owners, the management systems of the

Jan 1, 1985

By L. S. Kolbert, C. H. Baab

Introduction In June 1981, the Electric Power Research Institute (EPRI) issued a report titled "Control Systems in Coal Preparation Plants" to determine the status of instrumentation and automation systems in the coal preparation industry. EPRI concluded that the control systems presently being employed in the US coal preparation plants "are relatively primitive compared with those in other mineral processing industries; and analytical instrumentation is virtually non-existent." With tighter specifications on the quality of steam coal, interest is increasing in more sophisticated control systems. One type of device that is currently assisting the preparation plant operator optimize and control the coal cleaning process is nuclear based instrumentation. Nuclear instrumentation includes methods for measuring weight, level, and density as well as for performing elemental analysis on coal. Major Features and Benefits of Nuclear Measurement and Analysis Systems There are many features and benefits of nuclear instrumentation. The major benefit is that nuclear instrumentation is non-contacting. The measuring heads do not contact the process materials. This enables measurements of corrosive, abrasive, or high temperature materials with no loss of performance, reliability, or useful life. Also, there are no moving parts to wear or be fouled by dust or corrosion. Installation is simple and inexpensive. For instance, density gauges are simply clamped onto existing pipe runs. Weigh scales and level switches usually require nothing more than welding brackets to customers' equipment. Once installed, routine maintenance can be performed without interrupting the process. Thus, nuclear instrumentation is highly reliable and easily installed and maintained. The operating life of the instrumentation is virtually unlimited. Principle of Operation Nuclear belt weigh scales, point level switches and density gauges all operate on the gamma-ray transmission principle. A beam of gamma radiation from a radioisotopic source is projected through the process material either on a belt, in a vessel, or in a pipe. Opposite the source is a radiation detector whose electrical output is proportional to the intensity of the radiation it absorbs. Gamma radiation is part of the same electromagnetic spectrum that encompasses light, infrared, and x-rays. In many respects, gamma radiation behaves much like light. However, it is far more penetrating and can be transmitted through considerable thickness of materials that are opaque to visible light, e.g., several inches of steel. Types of Nuclear Instrumentation in Coal Preparation Plants There are four types of nuclear instrumentation presently being employed in coal preparation plants. They are: •Belt Weigh Scales •Point Level Switches •Density Gauges •Coal Analysis Equipment. Each type of instrumentation has a number of potential applications within the plant. What follows is a discussion of three different types of devices and their applications. Weigh Scales In coal preparation plants, weighing instruments are used for measuring material throughput, totalized weight, and batch weight on conveyor belts and other transport equipment. They are also used on drag chain conveyors, vibrating conveyors, and screw conveyors. Weighing is important for receiving the run-of-mine coal, controlling mass flow, scheduling production, and loading and shipping the washed coal to market. There are two basic types of weighing instruments: gravimetric and nongravimetric devices. Gravimetric devices are units which measure the pull of gravity on the material being weighed. Nongravimetric devices are not dependent on the force of gravity on the sample. Nuclear weigh scales are the most prevalent nongravimetric devices used. The nuclear weigh scale works on the same basic principle as other nuclear gauges. The greater the quantity of material placed in the path of a radiation beam, the more radiation will be absorbed by the material. In weigh scales, Cesium 137 source is generally placed above the moving stream of material so that the radiation is directed through the material. An ion chamber radiation detector is on the opposite side of the material. The radiation passing to the detector generates a signal which is inversely proportional to the weight of the material present. This signal is amplified and integrated with the speed of the process flow yielding the weight. The weight is indicated and can be totalized for throughput, batch control, etc. In conclusion, radiation weighing methods have become well established in the coal preparation industry throughout the world. As mentioned before, this device finds its most

Jan 1, 1985

By M. S. Azun

The authors' paper did not explain the facts and reasons why state companies are established and what their role is in international industrial mineral trading. Also. I do not agree with the conclusion implying that the main goal for state companies is to capitalize natural resources. Almost all state companies are founded by certain laws and their activities are arranged by state regulations. Their only aim is to operate mineral deposits for their people and to protect the rights of the people. Although some ore deposits, such as nonstrategic or small, may be exploited by privately owned companies, the state has the right to control the operation and production. Activities of state companies may or may not be widened because of the character of the deposits and the importance of the mineral market involved. For some countries, although governments may occasionally change hands, the policy of the mineral trading system is not affected by this change. There is no doubt that any government desires to make more earnings to increase GNP, when it is involved in operating and trading mines. It wants to produce and sell the finished products, instead of unprocessed ones, if possible. When it is known that some mineral deposits are relatively rare, such as Turkish boron deposits, the government can nationalize the mines to control production and affect the market. If there is an abundance of a certain mineral in the market, the government can cut production and set a floor price, such as Canadian potash. Also, when production of a specific mineral is unique, such as Turkish chromite, the price of such mineral may be set by correspondent government. One may add that if some governments with their state companies produce a certain mineral in a larger amount, they may decide to establish a cartel to protect their production and price. These are the facts followed by government-owned state companies and partially government-owned companies. The reason being charge of many deposits by the state companies is always the same: "protect" the mineral rights of the people.

Jan 1, 1985

By Michael R. Cartwright

The Gold Acres outcrop was located by Lee Lakin in 1922, according to Mr. H. W. Treweek. There was no activity, however, until 1935, when prospect drifts and pits penetrated the deposit. It was then drilled by the Willow Creek Mining Company. Beginning in the late 1930s and continuing to the late 1940s more than 150 churn drill holes were drilled in the Gold Acres area. From this drilling came what is now known as the London Extension pit. Only oxidized ore amenable to cyanide vat leaching was mined during this time. Our records indicated that this period of mining removed some 1.4 Mt (1.5 million st) of ore at an average grade of 0.006 kg/ t (0.2 oz per st). Union Pacific and Newmont Mining Company worked in the area prior to acquisition by the Cortez Joint Venture. Union Pacific drilled a number of core holes in the area. The unoxidized nature of the ore, small tonnage, and low grade undoubtedly prevented mining at this time. From these indications of mineralization shown by previous companies, the Cortez Joint Venture developed and mined 2 Mt (2.4 million st) at 0.005 kg/t (0.15 oz per st) in the Gold Acres pit. This pit is located immediately southwest of the older London Extension pit. Cortez Gold Mines has continued to drill to the west and south of these pits along the downdip continuation of the former ore bodies. The downdip extension is unoxidized and more metallurgically difficult than the normal Carlin type ores, but, more than 2.4 Mt (2.7 million st) have been outlined. It depends now upon the gold price and milling costs to turn this mineralized area into an ore body. A possible lesson to be learned from this deposit is that continued mining success depends upon an ongoing adequately funded exploration-development-metallurgical research program. These three disciplines must always be present to locate the mineralization and to turn this mineralization into ore. [ ]

Jan 1, 1985

By David C. N. Cockburn

INTRODUCTION This paper analyses certain of the financial considerations which will commonly apply in relation to the following questions: - what equity structure or project vehicle should be adopted for the exploration and/or exploitation of a project by more than one unrelated participant? - what vehicle should be adopted by a participant for its participation in a multiparty project? Due to local, politically motivated laws in certain jurisdictions, or due to the overriding requirements of a dominant participant, there may be little choice of the underlying multiparty structure which may be adopted for the exploration, appraisal and/or development phases of a project. Nevertheless, even in such circumstances, attention should be given, at least in the preparation of the related documentation, or in considering methods of participating or funding the project, to certain of the points discussed below. This discussion of financial considerations in the context of the more commonly adopted multiparty structures concentrates primarily on fiscal, financial accounting, financing and funding aspects. TYPES OF PROJECT VEHICLE FOR MULTIPARTY INTERESTS The well known types of vehicle adopted for the participation in a project by more than one participant (assuming that the participants are effectively unrelated) are as follows. Joint Venture (unincorporated joint venture) By far the most commonly adopted structure for mining ventures, a joint venture is usually defined and documented in terms to distinguish it from a partnership for important tax and legal reasons. In essence, this is a contractual association of more than one participant to carry out a specific commercial project or purpose. The relationship between the separate participants and their respective rights, interests, obligations and liabilities are agreed between the participants in one or more contracts (viz Joint Venture Agreements or Joint Operating Agreements together with ancillary documentation). Unlike other project vehicles of participation, in most jurisdictions there is no specific body of law governing joint ventures. The participants thus enjoy contractual freedom to negotiate whatever deal they may wish between themselves. Jointly-Owned Project Company (corporate joint venture) A very familiar vehicle, this is a separate and distinct legal and tax entity incorporated under the company laws of the place of incorporation to undertake specific objects, and granted specific powers, in relation to the Project. Although certain rights, interests and obligations may be circumscribed in the governing corporate instruments by the promoter participants, the corporation laws of the relevant place of incorporation, and the selection of such governing laws (assuming freedom of choice) and future political changes in such corporate laws, should be carefully considered. The use of a company in a multiparty structure may be peripheral to the project itself as a specific purpose vehicle (for example, a joint sales agent or marketing company or a joint borrowing vehicle) or it may form a central function such as in the case of a tolling company which will own the project for legal and taxation purposes and raise financing with the backing of the shareholder participants commonly by the adoption of take-off, throughput and/or user agreements. Partnership This is a legal relationship, subject to the often wide-sweeping restrictions of the relevant local partnership laws, under which the participants have agreed to carry on a business venture together with a view to profit. The effect of the relevant partnership laws, as well as the various types of partnerships and the

Jan 1, 1985

By Murray Pezim

In the good old days of the folklore of the mining industry, grizzled prospectors obtained a few loose dollars from friends and neighbours then wandered off to eventually return with the great discovery which became the core of the new corporate empires. Alternatively, merchant banking barons obtained exclusive rights to just about anything of future value over hugh nation-size territories. Some of this probably still goes on, likely with about the same ineffectiveness and waste of effort and money as in the past. CURRENT CONCERNS IN MINING In today's difficult climate in the mining industry, for that matter in all industry, effectiveness is the vital consideration. Cost effectiveness -- more bang for the buck -- is especially important in such an area of high risk as mineral exploration. And there are other factors to consider. Since minerals are depleting resources, the mining inddustry is constantly confronted with the reality that those resources extracted today must be immediately replaced if a resource enterprise is to continue. And if growth is to be achieved, even more resources must be found to support future expansion. The current and immediately foreseeable climate internationally for the mining industry creates a special need and urgency for aggressive and successful exploration, certainly in Canada, if not also in the United States. Depressed world markets and prices have turned yesterday's economic reserves into today's waste, hopefully to be converted into economic ore again in some distant time. One way of replenishing reserves and maintaining a viable mining industry is to find and develop mines which are economic under short-term depressed price and market conditions. This probably means higher grades. A new copper discovery with the right combination of characteristics to be an attractive investment even at today's pices for copper would still merit development into production. Exploration is the only way to find such mines for the difficult short-term conditions. Another important consideration is that normally many years stretch from the first thought of conducting exploration to production -- in those rare instances where an economic discovery is made. If discoveries are not made today, then there will not be any projects to develop when business conditions are more attrative. This industry and the vast number of skilled professionals who are part of mining, are faced with two key problems that underlie the need for a junior exploration segment. One consideration is how to maintain exploration during those years, indeed eras, of recession and depression. We are in such a time now. Throughout the world, major companies have sharply cut back, if not eliminated completely, exploration expenditures other than what is vitally necessary and easily and inexpensively done at the known and producing deposits. And related to that consideration, even more important today than during happier times, is how to finance such necessary ongoing exploration if major companies and governments back away because of financial stringency. CANADIAN SUCCESS In Canada, such problems are being tackled with a success which is capturing worldwide attention. The ability of mineral explorers to obtain willing, eager, high-risk capital is achieving even more outstanding results than in the past. These results are reflected in the widespread continuing exploration ativity in Canada which even spreads into the United States, with some outstanding discovery successes. The most notable exploration success from junior mining activity is the discovery of the Hemlo gold camp in northwestern Ontario, a source of gold which promises to rank with the South

Jan 1, 1985