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By B. C. Burgess

AFTER many years of close and friendly association with talc and soap-stone, this orthographically distinguished mineral steps forth in this edition, for the first time in a chapter of its own. Pyr, the Greek for fire, and phyllite, a rock or stone, form its name and at the same time refer to the first recorded use of pyrophyllite as firestones or hearthstones. Another derivation of "phyllite" is from the Greek phyllites, "of leaves," alluding to the beautiful white radial crystal aggregates that form when pyrophyllite is heated. Pyrophyllite used by the Chinese for carving is called agalmatolite, from the Greek agolma, meaning an image. COMPOSITION AND PROPERTIES Pyrophyllite has previously been grouped with talc because of the close similarity of the minerals in physical and optical properties. They have the same space group; and chemically they are closely related, pyrophyllite being the aluminum silicate A12Si4010(OH)2 and talc the magnesium silicate Mg3Si4010 (OH) 2. Another arrangement of the pyrophyllite formula is generally given as A12034Si02H20 because it expresses the chemical composition as usually determined (alumina 28.3 pct, silica 66.7 pct, water 5.0 pct). Vanderbilt gives pH values of pyrophyllite 5.6 to 8.4.29 Pyrophyllite usually is white, pale green, cream or pale yellow, buff or light gray. It is found in darker shades and other colors principally due to oxidation of contained iron minerals. It is translucent in thin sections. In hardness it is 1 to 2 in the Mohs scale. Its specific gravity is 2.8 to 2.9. In bulk specific gravity, the powdered mineral ranges from 0.4 to 0.7. Its luster is pearly to dull; it is infusible in the Bunsen burner flame, slightly affected by aqueous solutions of sodium carbonate and hydrochloric acid. It is decomposed by sulphuric acid, with separation of gelatinous silica. It is characterized chiefly by its micaceous structure and cleavage, its softness and greasy feel. Two other varieties occur

Jan 1, 1949

By Henry B. Estabrooks

As was true with many mining companies, the management of Tennessee Copper Co. followed with interest the successful application of AN-FO as an explosive in coal stripping, construction, open-pit mining, and finally in underground salt mines. Since Tennessee Copper's operations required about 1,250,000 lb of dynamite annually, the potential savings in explosives costs that could be realized by switching to AN-FO could not be ignored. From a cautious start, AN-FO is now being used for stoping, development work and secondary blasting in all mines of Tennessee Copper Co. AN-FO accounts for 80% of the explosives used in such work. Fragmentation, fumes, crew acceptance, and cost savings have been quite attractive without any decrease in safety.

Jan 11, 1962

By Harold V. Pearce

The plant of the Boston and Colorado Smelting Company, at Argo, Colo., has not received special notice in technical or scientific publications for some time past. Dr. Peters1 described the development of the reverberatory furnace used at Argo, but he dealt almost exclusively with the increase in size and the corresponding gain in capacity. Since the time of his description the changed conditions hare led to a modification of the

Jan 1, 1906

By George M. Schwartz, Ian L. Reid

The Soudan mine in the Vermilion district of northeastern Minnesota is the oldest iron mine in the state. It has shipped ore every year since 1884 and still contributes a yearly quota of high grade lump ore. No comprehensive report on the Vermilion iron-bearing district has appeared since Clements' monograph,' but Gruner' discussed the possible origin of the ores in 1926, 1930, and 1932, and recently Reid and Hustad have added data on mining and geology." For many years geologists of the Oliver Iron Mining Div., U. S. Steel Corp., have kept up to date a series of plans and vertical sections of the Soudan mine. In connection with mine operation considerable diamond drilling has been done, and this, together with the mine openings, has permitted a reasonably accurate picture of the structure of the orebodies and wall rocks.

Jan 3, 1955

By James Terry Duce

In order to facilitate interpretation of the data in this chapter, we print the following excerpts from circulars to authors, compiled by Mr. Frank A. Herald when he was Vice Chairman for Production of the Petroleurn Division: Generally in Table 1 the unit for presentation of data is a field. For our purposes a field is defined as the whole of a surface area wherein productive, locations are continuous. Such unit commonly includes and surrounds nonproductive areas. Such unit commonly includes a great variety of geologic conditions-—several units of continuous productive reservoirs of distinctly different structure and of distinctly different stratigraphy. Therefore it is hoped that our authors will subdivide "field" so as to enable students to make analyses that may have scientific and/or commercial value. As to each space in the tabulation, it is either (1) not applicable, (2) the proper entry is not determinable, (3) the proper entry is determinable, but not determinable from data available to the author, (4) the proper entry is determinable by the author. In spaces not applicable, the author will please draw horizontal lines; in spaces where the proper entries are not determinable, the author will please insert 2; in spaces where the proper entries are determinable but not determinable from data available to the author, the author will please insert y; in spaces where the proper entries are deter-minable by the author he will, of course, make such entries. Generally, y implies a hope that in some future year a definite figure will be available. Inability to determine precisely the correct entry for a particular space should not lead the author to insert merely y. Contributions of great value may be made by the author in many cases where entries are not subject to precise determination. In such cases the author should use his good judgment and make the best entry possible under the circumstances. For many spaces, the correct entries represent the opinion of the author (for example, "Area Proved") and in such cases the entries need not be hedged to such extent as in cases where the quantities are definite yet can be ascertained only approximately by the author. In cases under definite headings but where figures are only approximate, the author may use 2. For example, if the total production of a field is known to be between 1,800,000 and 1,850,000, the author may report 1,8xx,xxx; or if the production is between 1,850,000 and 1,900,000, the author may report 1,9xx,xxx. Where a numeral is immediately to the left of x or y, such numeral represents the nearest known number in that position. As to quantity of gas produced from many fields the question will arise as to whether the figures should include merely the gas marketed or should include also estimates of gas used in operations and gas wasted. Although rough approximations may be involved, our figures should represent as nearly as possible the total quantity of gas removed from the reservoir.

Jan 1, 1936

By George A. Desborough, Forrest G. Poole

Marine black-shale samples of Paleozoic age in the western United States that exceed 10 wt % organic carbon contain as much as 5000 ppm vanadium, 5000 ppm molybdenum, 1300 ppm nickel, 600 pprn cobalt, 16 ppm silver, 11,700 ppm chromium, 18,800 pprn zinc, 280 pprn cadmium, and 350 ppm selenium. Depositional set- tings include: (I) continental-rise and marginal- ocean basins, (2) continental-shelf and foreland basins, and (3) cratonic-platform embayments. Most of these metalliferous organic-rich shales have not been examined for resources because rapid weathering and poor exposures preclude easy sampling of unoxidized rock necessary to determine actual concentration and residence of indigenous metals. Generally, when interval thickness is considered, the marine black shales of Paleozoic age in the western United States are richer in metals than marine upper Paleozoic black shales in the eastern United States.

Jan 1, 1983

By Ralph Hultgren, Bernard York, David W. Mitchell

It is a well-known fact that magnesium-alloy castings are apt to be coarse grained if the melt is not superheated several hundred degrees above the melting point before casting. (The casting temperature varies according to the shape of the mold. A typical casting temperature is perhaps 1400°F.) British practice is to heat to 900°C. (1650°°F.) for 15 min., cool rapidly to casting temperature, and cast.1 In Germany superheating is carried out at 850° to 900°C. (1560° to 1650°F.) depending on the amount of scrap used. It is stated that further refinement will be obtained by prolonging the period of superheating or by increasing the superheat temperature to 950°C. (1740°F.).2 In the United States superheating is carried out at i600° to 1700°F. (871° to 927°C.), perhaps even higher in some places. It is stated that superheating effects are found as low as 1500°F. (816°C.), but several hours are required.3 These commercial treatments lead to grain sizes in sand castings that may vary from 4 to 8 grains per sq. mm.§ in heavy sections and from 60 to l00 in 3-in sections to perhaps 380 in thin sections. It is also generally known that the refining effect of superheating is lost if the melt is held for some time at lower temperatures before casting. Aside from these very qualitative statements, there is little to be found in the literature as to the effect of temperature and time of superheat on the final grain size. Because of the uncertainty of these factors, the Office of Production Research and Development of the War Production Board placed a research contract with the University of California, supervised by the War Metallurgy Committee. This research, which was done under the "Restricted" Project NRC-550, is the basis of this paper, which has been released for publication by the O.P.R.D. The material studied was an alloy prepared from carbothermic magnesium. The temperatures required for grain refinement proved to be widely different from those used in practice, as described in the statements in the first paragraph. This difference is attributed to the fact that the magnesium in the specimens was of carbothermic origin instead of the electrolytic magnesium in common use. MATERIALS AND METHODS The magnesium alloy studied was one of the most popular sand-casting alloys, with a nominal composition of 9 per cent aluminum, 2 per cent zinc, and 0.r per cent (minimum) manganese and the balance magnesium. This is designated

Jan 1, 1945

By Ralph Hultgren, Bernard York, David W. Mitchell

It is a well-known fact that magnesium-alloy castings are apt to be coarse grained if the melt is not superheated several hundred degrees above the melting point before casting. (The casting temperature varies according to the shape of the mold. A typical casting temperature is perhaps 1400°F.) British practice is to heat to 900°C. (1650°F.) for 15 min., cool rapidly to casting temperature, and cast.' In Germany superheating is carried out at 850' to 900°C. (1560° to I650°F.) depending on the amount of scrap used. It is stated that further refinement will be obtained by prolonging the period of superheating or by increasing the superheat temperature to 950°C. (I740°F.).2 In the United States superheating is carried out at 1600' to 1700°F. (871' to 927°C.), perhaps even higher in some places. It is stated that superheating effects are found as low as 1500°F. (816°C.), but several hours are required.3 These commercial treatments lead to grain sizes in sand castings that may vary from 4 to 8 grains per sq. mm.! in heavy sections and from 60 to IOO in 1/2-in. sections to perhaps 380 in thin sections. It is also generally known that the refining effect of superheating is lost if the melt is held for some time at lower temperatures before casting. Aside from these very qualitative statements, there is little to be found in the literature as to the effect of temperature and time of superheat on the final grain size. Because of the uncertainty of these factors, the Office of Production Research and Development of the War Production Board placed a research contract with the University of California, supervised by the War Metallurgy Committee. This research, which was done under the "Restricted" Project NRC-550, is the basis of this paper, which has been released for publication by the O.P.R.D. The material studied was an alloy prepared from carbothermic magnesium. The temperatures required for grain refinement proved to be widely different from those used in practice, as described in the statements in the first paragraph. This difference is attributed to the fact that the magnesium in the specimens was of carbothermic origin instead of the electrolytic magnesium in common use. Materials and Methods The magnesium alloy studied was one of the most popular sand-casting alloys, with a nominal composition of 9 Per cent aluminum, 2 per cent zinc, and 0.1 per cent (minimum) manganese and the balance magnesium. This is designated

Jan 1, 1945

By James Terry Duce

In order to facilitate interpretation of the data in this chapter, we print the following excerpts from circulars to authors, compiled by Mr. Frank A. Herald when he was Vice Chairman for Production of the Petroleurn Division: Generally in Table 1 the unit for presentation of data is a field. For our purposes a field is defined as the whole of a surface area wherein productive, locations are continuous. Such unit commonly includes and surrounds nonproductive areas. Such unit commonly includes a great variety of geologic conditions-—several units of continuous productive reservoirs of distinctly different structure and of distinctly different stratigraphy. Therefore it is hoped that our authors will subdivide "field" so as to enable students to make analyses that may have scientific and/or commercial value. As to each space in the tabulation, it is either (1) not applicable, (2) the proper entry is not determinable, (3) the proper entry is determinable, but not determinable from data available to the author, (4) the proper entry is determinable by the author. In spaces not applicable, the author will please draw horizontal lines; in spaces where the proper entries are not determinable, the author will please insert 2; in spaces where the proper entries are determinable but not determinable from data available to the author, the author will please insert y; in spaces where the proper entries are deter-minable by the author he will, of course, make such entries. Generally, y implies a hope that in some future year a definite figure will be available. Inability to determine precisely the correct entry for a particular space should not lead the author to insert merely y. Contributions of great value may be made by the author in many cases where entries are not subject to precise determination. In such cases the author should use his good judgment and make the best entry possible under the circumstances. For many spaces, the correct entries represent the opinion of the author (for example, "Area Proved") and in such cases the entries need not be hedged to such extent as in cases where the quantities are definite yet can be ascertained only approximately by the author. In cases under definite headings but where figures are only approximate, the author may use 2. For example, if the total production of a field is known to be between 1,800,000 and 1,850,000, the author may report 1,8xx,xxx; or if the production is between 1,850,000 and 1,900,000, the author may report 1,9xx,xxx. Where a numeral is immediately to the left of x or y, such numeral represents the nearest known number in that position. As to quantity of gas produced from many fields the question will arise as to whether the figures should include merely the gas marketed or should include also estimates of gas used in operations and gas wasted. Although rough approximations may be involved, our figures should represent as nearly as possible the total quantity of gas removed from the reservoir.

Jan 1, 1936

By C. R. Forbes, J. C. Barton

Many different shapes of drill bits are in use with hammer drills, but little definite information is available whereby to judge which one of these shapes is the best. The following investigation was undertaken in order to determine what effect, if any, the shape of the cutting edge has on the cutting speed and wearing qualities of drill bits. The bits tested were those in common use, namely, the 4-point or cross bit, the 6-point bit, the Z bit and the "Carr" bit. The rock in which the tests were made was the red granite from southeast Missouri. It is a coarse crystalline granite containing an unusually large amount of quartz and is extremely hard, and on account of its uniform texture is admirably adapted to this work. While tests in other rocks might show somewhat different results, nevertheless it is the opinion of the authors that the relative cutting quality inherent in the shape of the bits would be the same in all rocks. Other qualities, such as mudding freely, freedom from fitchering, etc., might make one bit more desirable than another in softer rocks. Description" of Bits Tested 'I'he 4-point bits were the usual shaped bits commonly made on the Leyner sharpener, with 14' taper on the wings and a 90" angle between cutting edges. Some tests were run at 85 Ib. pressure with a 4-point bit made with a 50 taper on the wings; this bit was formed with the Carr bit dies. The 6-point bits were the usual shaped bits made on the Leyner sharpener. The Carr bits were made with a 5º taper and an angle of 100" between cutting edges.

Jan 1, 1918

By Henry N. Doyle

Basic procedures in the mining industry have changed only slightly over the centuries since metals and fossil fuels became an essential part of man's economic and cultural life. Mining techniques of the 20th century bear a close resemblance to those of the ancients: exploration, ore breakage and removal, hoisting, and processing. The great advances, however, have been in equipment and machinery of greater size and speed which allow greater efficiency in each of these operations, with a corresponding reduction in manpower requirements. Yesteryear production was measured in pounds per man-day; today a giant and complex, but highly efficient, continuous mining machine can remove as much as eight tons of material a minute from the coal face. If our energy and metal demands of the future are to be met, and at this time it can be assumed that coal will continue to supply a significant part of the energy demand, other dramatic and spectacular technologic advances must be accomplished. Along with mechanization, however, public policy will require the industry to place greater emphasis on health and safety protection, as has been well demonstrated by recent actions of Congress. Together, fossil fuels and metals formed the basis for the industrial revolution-coal to develop power and metals to transform power into useful energy. Strangely enough, however, the mining industry the world over has lagged behind the continuous social changes brought on by the industrial revolution, such as preventive health and industrial hygiene services, and other programs directed to the well-being of the worker. In some countries this resistance, to change may have led in part to the nationalization of the coal industry. Whether this disinclination to social change in the industry of the United States reflects managerial attitudes, inept labor leadership, government neglect, or economic relationship would be the subject of an interesting study. Doubtless the mores of miners and their resistance to change, as well as their geographic isolation from other industrial groups, may have had a strong influence on these factors. In every major coal mining country the accident rate in the coal industry is substantially higher than other industrial groups, and the cost of pneumoconiosis compensation in some countries is greater than the combined costs for all other occupational diseases from all other industries. The high social cost of occupational accidents and diseases may have been a factor in the closing of the industry in at least two countries. Despite diminishing manpower needs, the industry is faced with critical manpower shortages. Miners once reared their sons to be miners; now it appears that the opposite is true. This factor alone, however, does not explain an acute labor shortage in the industry. Traditionally, the industry drew much of

Jan 1, 1976

By K. C. Ko, D. A. Pifer

The theory of probability with respect to the failure of structures is discussed. It is shown that the probability of safety, probability of failure, and factor of safety are directly related to each other and that as standard deviation approaches zero, the probability curves approach a unit step function which can be interpreted as the conventional factor of safety. The factor of safety is numerically the ratio of the load to the strength of the material at a particular point or plane in an engineering structure. Mathematically, it can be illustrated as a unit step function undefined at the point where the factor of safety is one (Fig. 1). The uncertainty of variation of soil and rock strengths require factors of safety much higher than those used in other engineering structures. The factors of safety used are generally determined from past experiences with similar structures. However, the factors thus determined do not have any theoretical meaning or do not indicate any relationship to actual safety.' It seems, therefore, logical to develop a system with a sound theoretical basis to obtain a more suitable factor of safety for structures. An application of elementary theory of probability indicates that it is possible to relate this number to theoretical and practical engineering facts.

Jan 1, 1971

Discussion of the paper of J. IV. GWINN, presented at the New York meeting, February, 1915, and printed in Bulletin No. 98, February, 1915, pp. 239 to 247. GIRARD B. ROSENBLATT, Salt Lake City, Utah (communication to the Secretary*).-The storage-battery locomotive certainly has its place in metal mining and I an) glad to note that it is now receiving the recognition that is its clue. It is, however, not a panacea for all conditions of mine haulage. There are places where it will not work to advantage and cannot compare with` the trolley-type locomotive in cost of operation or in cost of maintenance. On the one hand, there are places where it clearly outshines the trolley-type locomotive. Much depends on the headroom available in the drifts and on the condition of the roof. For short hauls with moderate-

Jan 5, 1915

I. N. KNAPP, Ardmore, Pa. (written discussion *).-The writer would first call attention to the fact that the mid-Continent field was credited from 1900 to 1915 with a production of about 641,000,000 bbl. of oil with-out any burdensome water troubles being reported. In fact, the authors say the conditions were not acute until about two years ago when the unusual conditions in the deeper oil fields were first encountered. The writer disclaims any personal knowledge of the district mentioned but, from the experience he has gained in directing drilling in various fields by both the cable-tool and the rotary methods and also in plugging and cementing wells, he fails to see how the analysis of water trouble given in the paper under discussion could be of any practical assistance in solving the problems so vaguely outlined. Possibly it might induce academic discussion, if not limited to practical operating conditions. A recent bulletin of the Bureau of Mines gives definite and practical statements that can be easily understood by one skilled in the art of drilling wells and heading off water troubles. From an operating standpoint subsurface knowledge must be based on logs of completed wells. Absolutely no one can have such knowledge as that indicated in Fig. 1 of the paper in question without drilling wells, and no one can question such facts when disclosed by the drill. Under classification of water the paper states "This water (primary) cannot be exhausted from the sands, but its encroachment can often be checked and so directed that wells need not be abandoned, until most of the available oil is secured." This is a live question to the writer. A couple of years ago he had some wells drilled and found the conditions comparable with sands A and D of Fig. 1 with B and C left out; but nothing in the paper, so far as can be found, indicates how this water encroachment is or can be checked or directed particularly under the High heads named.

Jan 5, 1919

By M. C. Leverett

The behavior of mixtures of immiscible liquids in porous solids is of rapidly increasing interest to those engaged in the production of petroleum. The operation of artificial water-floods and the control of natural ones immediately raise questions concerning the fundamental nature of such processes. Moreover, it is now recognized that often water occurs dispersed throughout the rock from which the oil issues into the well,' and thus tends to move toward the well simultaneously with the oil. The work reported here is a laboratory investigation of the simultaneous, steady-state flow of oil and water through the same column of uncon-solidated sand. It is thus directly related to the situation in which water occurs in oil-producing sands; it may have less direct implications for the displacement of oil from sands by water. However, it is to be clearly understood that the experiments to be described were performed primarily to obtain information of a more or less fundamental nature, and are not an attempt to reproduce, on laboratory scale, any part of an oil field. The dynamic behavior of a system in which oil and water are flowing simultaneously through sand is best described in terms of its "effective permeability" to either phase. For incompressible fluids flowing through a system of uniform cross section, the effective permeabilities to the two phases, in darcys, may be defined by the equations: Ko = PA6A [la] and Ku = Q [lb] In order to put the results obtained on a comparable basis for different sands, the effective permeabilities will be stated as fractions of the normal permeability of the sand; i.e., fractions of its permeability to a homogeneous fluid. Algebraically, these fractions are: KO' = Ko/K, and KWr = K,/X [2a] and [Zb]

Jan 1, 1939

By M. C. Leverett

The behavior of mixtures of immiscible liquids in porous solids is of rapidly increasing interest to those engaged in the production of petroleum. The operation of artificial water-floods and the control of natural ones immediately raise questions concerning the fundamental nature of such processes. Moreover, it is now recognized that often water occurs dispersed throughout the rock from which the oil issues into the well,' and thus tends to move toward the well simultaneously with the oil. The work reported here is a laboratory investigation of the simultaneous, steady-state flow of oil and water through the same column of uncon-solidated sand. It is thus directly related to the situation in which water occurs in oil-producing sands; it may have less direct implications for the displacement of oil from sands by water. However, it is to be clearly understood that the experiments to be described were performed primarily to obtain information of a more or less fundamental nature, and are not an attempt to reproduce, on laboratory scale, any part of an oil field. The dynamic behavior of a system in which oil and water are flowing simultaneously through sand is best described in terms of its "effective permeability" to either phase. For incompressible fluids flowing through a system of uniform cross section, the effective permeabilities to the two phases, in darcys, may be defined by the equations: Ko = PA6A [la] and Ku = Q [lb] In order to put the results obtained on a comparable basis for different sands, the effective permeabilities will be stated as fractions of the normal permeability of the sand; i.e., fractions of its permeability to a homogeneous fluid. Algebraically, these fractions are: KO' = Ko/K, and KWr = K,/X [2a] and [Zb]

Jan 1, 1939

By J. S. Bowles

DISCUSSION, M. Cohen presiding J. W. Christian (The Inorganic Chemistry Laboratory, oxford, Englandl)—I was very interested in Dr. Bowles' results on the suppression of the transformation by solid films of alcohol or propane. The transformation in cobalt, which is also martensitic, can be explained by a mechanism involving the reflection of "half dislocations" down a series of atomic planes.* This reflection process is similar to that considered by Frank13 for plastic deformation on a single slip plane and, as he pointed out, reflection would be impossible if the metal were immersed in a liquid of higher density. It seems possible that solid films of alcohol have a similar effect on the lithium transformation. Reflection should also be possible at a grain boundary, though a higher kinetic energy of the dislocation, and hence a lower temperature would be required. As Dr. Bowles used coarse grained polycrystalline speci- mens, transformation on cooling should still have occurred in grains which did not form part of the outside (free surface) of the metal. This may account for the X-ray lines of the low temperature phase which were found. There is thus the interesting possibility that in a polycrystalline specimen a liquid, or in some cases a solid, film of material of or or higher density will lower M,, while in a single crystal it should suppress the transformation completely. In the case of cobalt it is necessary to find a dense liquid which will not react with the metal at the transformation temperature. The most promising liquid appears to be pure lead, but it is very difficult to devise a method of investigating whether or not this does suppress the transformation.

Jan 1, 1952

By J. J. B. Rutherford

IT is now well known that troublesome intercrystalline corrosion may occur in austenitic stainless steels following exposure of the metal to a temperature within the range 1000° to 1500° F. (540° to 815° C.). The present paper describes a satisfactory method of estimating the extent of such corrosion, based on the measurement of the electrical resistance of a specimen before and after attack. This new method enabled us to study quantitatively the effect of several factors upon intergranular corrosion in the 18 Cr, 8 Ni type of alloy. The results show that susceptibility to this attack increases with increasing carbon content and grain size and appears to pass through a maximum for certain combinations of temperature of sensitization and period during which the alloy was maintained at that temperature; and are in complete accord with our interpretation of the mechanism of this phenomenon. The method is probably applicable to other metals or alloys subject to intercrystalline attack, such as the aluminum alloys of the duralumin type. The methods hitherto in use for estimating the degree of intergranular attack fall into three types: (1) microscopic examination,1 (2) macroscopic examination of fractures, and (3) determination of the time required for complete failure or disintegration .2 None of these lends itself very well to a measurement of the extent of corrosion. The first two are qualitative in nature and the third provides an arbitrary value largely dependent on individual judgment, since failure is a progressive phenomenon and not a sudden event. Our experience is that weight-loss determinations, although valuable in some types of corrosion investigations, bear no simple relation to intercrystalline corrosion in this type of alloy, as is to be expected since the phenomenon probably involves only the thinnest films between adjacent metallic grains.

Jan 1, 1932

By L. C. Raymond

Valuations in the mineral industry differ from those of other enterprises because mines and oil wells have a definitive life so cannot be considered a perpetuity. This requires that in any mineral-property evaluation the recovery of invested capital is necessary during the life of the property. Capital writeoffs for nonextractive industries are assumed to be continuously plowed back to sustain the operation and produce yields on the capital invested. The extractive or mineral industry, however, generally attempts to return to the investor both interest and principal during the life of a property. Normally this is done currently and the dividend includes both items. Where the mineral properly possesses large reserves and the life factor approximates a perpetuity, the return on investment is generally comparable to that of industrial stocks. The valuation of a mineral property, at best, is based on educated estimates and judgment factors. This is particularly true as it relates to estimating selling prices over a long term or assessing the quality of management. Also, it is possible to make various assumptions as to rapidity of working out the deposit, varying time for start-up of operations, varying earning rates, so as to obtain different results with the same basic facts. Thus it is not surprising that two engineers, irrespective of their abilities, may not agree exactly even when given the same facts, but their results should be close enough to be used in establishing a fair value for trading purposes. The valuation is no better than the source of basic data and the soundness of judgment factors. Fundamentally the basic principles of mineral valuation are similar for base metals, sulphur, oil, or any other mineral. Each mineral, however, requires an engineer to have a knowledge of such factors as its occurrence, distribution, mining and processing methods, and marketing problems in order to gather and analyze all the facts and data that have a bearing on the earning potential of the property. PRESENTVALUEOFAMINERALPROPERTY In essence the present value of a mineral property is a sum of money in today's dollars that future earnings from the property are worth. It differs

Jan 1, 1959

By L. C. Raymond

Valuations in the mineral industry differ from those of other enterprises because mines and oil wells have a definite life so cannot be considered a perpetuity. This requires that in any mineral-property evaluation the recovery of invested capital is necessary during the life of the property. Capital writeoffs for nonextractive industries are assumed to be continuously plowed back to sustain the operation and produce yields on the capital invested. The extractive or mineral industry, however, generally attempts to return to the investor both interest and principal during the life of a property. Normally this is done currently and the dividend includes both items. Where the mineral properly possesses large reserves and the life factor approximates a perpetuity, the return on investment is generally comparable to that of industrial stocks. The valuation of a mineral property, at best, is based on educated estimates and judgment factors. This is particularly true as it relates to estimating selling prices over a long term or assessing the quality of management. Also, it is possible to make various assumptions as to rapidity of working out the deposit, varying time for start-up of operations, varying earning rates, so as to obtain different results with the same basic facts. Thus it is not surprising that two engineers, irrespective of their abilities, may not agree exactly even when given the same facts, but their results should be close enough to be used in establishing a fair value for trading purposes. The valuation is no better than the source of basic data and the soundness of judgment factors. Fundamentally the basic principles of mineral valuation are similar for base metals, sulphur, oil, or any other mineral. Each mineral, however, requires an engineer to have a knowledge of such factors as its occurrence, distribution, mining and processing methods, and marketing problems in order to gather and analyze all the facts and data that have a bearing on the earning potential of the property. PRESENT VALUE OF A MINERAL PROPERTY In essence the present value of a mineral property is a sum of money in today's dollars that future earnings from the property are worth. It differs

Jan 1, 1964