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By John B. Myers

VERMICULITE is a name used to describe micaceous material that exfoliates when heated. It is hydrated magnesium-aluminum-iron silicate. The chemical composition, color, physical appearance, and degree of exfoliation vary. COMPOSITION, PROPERTIES, AND ORIGIN Vermiculite has the characteristic micaceous structure of basal cleavage and readily splits into thin laminae, which are soft, pliable, and inelastic. The monoclinic crystal faces are often marked by triangular lines at 60° and 120°. Hardness is 1.5; specific gravity, 2.2-2.7; luster pearly to greasy; colors, amber, bronze, reddish brown, dark green, and black. Feel is soapy, particularly when wet. When heated it exfoliates by expanding at right angles to the cleavage into long wormlike pieces (the name vermiculite is from the Latin veamiculari, to breed worms). This important characteristic of expansion is believed to be a mechanical separation of the layers when the contained water is converted into steam. Warping of the unit layers may also contribute to the expansion. The increase in bulk volume of commercially prepared material is 8 to 12 times but individual flakes may increase in size more than this. Pure vermiculite is a distinct mineral and has the structural formula (OH), (Mg,Fe)3 (Si,Al,Fe)4 010.4H20. It rarely occurs in this pure form, but generally as a mixed mineral of varying structure. One explanation is that the mixed material is composed of unit layers of inter-stratified pure vermiculite and biotite. The essential difference between the two is that unit cell structure of vermiculite contains a layer of water molecules whereas the biotite cell contains potassium instead of the water. The water content of the mixed vermiculite is less than that of pure vermiculite but more than that of biotite. Pure biotite does not expand when heated. If the proportion of biotite layers in a vermiculite is too high it will adversely affect the degree of exfoliation. Within a given deposit, the great mass of material may approach a definite com-position with local areas of greater biotite content. It is not uncommon to find also small pockets of pure biotite but these are generally segre-

Jan 1, 1949

By W. S. Ayres

A BRIEF history of the growth of the anthracite-coal preparation will give a better view-point from which to judge the present problem of separating slate from coal. At the beginning of the commercial value of anthracite, 70 years ago, only the pure portions, or " splits," of the veins were mined and shipped to market, and without any preparation or screening other than the selection, while loading, of the glassy lumps, and the rejection of the fine material and the slate that had strayed accidentally into the coal. The next step was the crushing or breaking of the coal (hence the name Lt breaker" as applied to the preparation-building), and the sizing of it by means of bars or revolving screens. This stage of its development marked the advent of the "breaker-boy " as a slate-¬picker, with his ever-increasing capriciousness. As the richer veins or ? splits " became exhausted and the market demanded a still greater output, the less-pure " splits " and the thinner veins were utilized to produce the coal. Carrying as they do a far greater percentage of impurities; particularly when removing the pillars, it became necessary to build new and better equipped preparation-plants. Finally, we are now at the highest stage of complication yet known to the art of coal-preparation. We are dealing with varying specific gravities, frictional difference, hardness, structure, and form in the pieces of coal and slate coming from many different veins, and

Dec 1, 1909

By H. Cecil Spicer

THE results described in this article are based on field work conducted during the periods April-May, 1939, and May-July, 1940. The United States Potash Co. is mining potash on Government land under a permit from the Department of the Interior and the geophysical investigation was completed under a cooperative arrangement made between that company and the Conservation Branch of the Geological Survey. The writer, a member of the Section of Chemistry and Physics of the Geologic Branch, was assigned to this investigation. Four definite objectives were in mind for the geophysical work in the studies over the salt deposits. The first was to determine the measure of success that could be attained in this type of work with the resistivity methods that were to be employed. These methods had been introduced into the work of the Conservation Branch by Benjamin E. Jones for the investigation of dam sites, and have been used under his direction by the author for such work. If the method proved to be applicable, an effort was to be made to contour the top of the salt beds and also the other formation boundaries known to be present in this area. Salt-water aquifers were to be studied in an effort to determine their boundaries, and an attempt was to be made to delineate the potash-bearing beds. EARLIER STUDIES Others have made, and reported, resistivity studies over saliferous deposits in different areas. Friede1 and Messrs. Schlumberger2 reported geophysical work performed in the discovery of the salt domes of Alsace; Carrette and Kelly3 described the geology of the same area. Leonardon and Kelly4 published a resistivity curve obtained over the Hettenschlag dome, and a further discussion of this same area was given by the Messrs. Schlumberger5 in a communication. Messrs. Alty6 described studies on salt deposits in which the single-probe method was used. Sinerez7 mentions that electrical methods were tried over salt deposits in Spain. Geoffrey and Charrin8 show a resistivity curve obtained over marl, gypsiferous marl and salt which is similar to that obtained over the New Mexico salt deposits. Kelly9 reported resistivity work performed with the ground comparator of Zuschlag over the salt deposits near Syracuse, N. Y., where the Salina formation is at a depth of 700 to B00 ft. Some structural studies on the potash basin of Alsace are described by Poldini.10 Another single-probe resistivity study, made over salt deposits in New Mexico, is briefly described by Heiland,11 through the courtesy of Harry Aurand, of the Midwest Refining Co.

Jan 1, 1941

By John A. Dunn

Continued increase in electric power requirements for mining, brought on by higher capacity mining machines and total mechanization, emphasizes the importance of proper power system design and planning. How effective a mine operates to produce quality coal at low cost depends to a great extent on how well its power system is planned and how well it is maintained. To be planned well it must be adequate to serve all the needs of the mine, it should be safe, there should be a margin for expansion, and it should be easily maintained. In planning a power system for mining coal it is helpful to establish a reliable base for estimating loads. Since most mines are served electric power by utility, power bills for similar mine loads are useful in setting up a base for estimates.

Jan 12, 1964

By James K. Richardson

FIRST indications that mineral industries expansion is beginning to show results are contained in the report by Defense Mobilizer Charles E. Wilson, The Battle for Production. The report, submitted to the President early this year, says that the United States has reached a $2 billion-per-month rate in military deliveries-three times that of 1950. Plant expansion in 1951 totalled $11.1 billion, the report states. Certificates of accelerated amortization have been approved to cover $11.4 billion in proposed plant construction. In reference to plant expansion significant to the mineral industry, the report states: •Steel industry goal is 120 million ingot tons by 1954, compared with present 108 -million ingot ton capacity. •Taconite beneficiation should result in 15 million tons by 1955. •An existing annual aluminum output rate of 860,000 tons. •An estimated 500,000 tons of sulphur by late 1953 •Manganese production up 50,000 tons as- the result of new projects in 1952. •Montana tungsten project coming into production in 1952. •Present zinc production expansion projects to add an estimated 150,000 tons to the 1951 production figure in 1953. Information gathered from official sources, other than Mr. Wilson's report, indicates an increase in the annual capacity of other segments of the industry by 1955, as shown in Table I. [ ]

Jan 1, 1952

By H. Cecil Spicer

THE results described in this article are based on field work conducted during the periods April-May, 1939, and May-July, 1940. The United States Potash Co. is mining potash on Government land under a permit from the Department of the Interior and the geophysical investigation was completed under a cooperative arrangement made between that company and the Conservation Branch of the Geological Survey. The writer, a member of the Section of Chemistry and Physics of the Geologic Branch, was assigned to this investigation. Four definite objectives were in mind for the geophysical work in the studies over the salt deposits. The first was to determine the measure of success that could be attained in this type of work with the resistivity methods that were to be employed. These methods had been introduced into the work of the Conservation Branch by Benjamin E. Jones for the investigation of dam sites, and have been used under his direction by the author for such work. If the method proved to be applicable, an effort was to be made to contour the top of the salt beds and also the other formation boundaries known to be present in this area. Salt-water aquifers were to be studied in an effort to determine their boundaries, and an attempt was to be made to delineate the potash-bearing beds. EARLIER STUDIES Others have made, and reported, resistivity studies over saliferous deposits in different areas. Friedel1 and Messrs. Schlumberger2 reported geophysical work performed in the discovery of the salt domes of Alsace; Carrette and Kelly3described the geology of the same area. Leonardon and Kelly4 published a resistivity curve obtained over the Hettenschlag dome, and a further discussion of this same area was given by the Messrs. Schlumberger5 in a communication. Messrs. Alty6 described studies on salt deposits in which the single-probe method was used. Sinerez7 mentions that electrical methods were tried over salt deposits in Spain. Geoffrey and Charrin8 show a resistivity curve obtained over marl, gypsiferous marl and salt which is similar to that obtained over the New Mexico salt deposits. Kelly9 reported resistivity work performed with the ground comparator of Zuschlag over the salt deposits near Syracuse, N. Y., where the Salina formation is at a depth of 700 to 8oo ft. Some structural studies on the potash basin of Alsace are described by Poldini.10 Another single-probe resistivity study, made over salt deposits in New Mexico, is briefly described by Heiland,11 through the courtesy of Harry Aurand, of the Midwest Refining Co.

Jan 1, 1941

By Marvin P. Barnes

Definition The term mineral inventory is a relatively new designation, born of the computer age and grown to common usage with the development of computer techniques for extending drill-hole sample values to regularly gridded data blocks representing in situ mineral values. The term has been generally accepted by geologists and engineers because it has a precise meaning which avoids many of the ambiguities of ore reserve. A mineral inventory is an estimated inventory of mineral in place and is usually achieved by dividing the deposit into regularly spaced gridded blocks to which are assigned estimated values using various extension techniques. A mineral Inventory makes no presumptions about the minability of the blocks or their cutoff grade. A mineral inventory estimate may be good or poor according to how much is known about the deposit, how extensively it has been sampled, and what techniques have been employed to assign estimated grade to the blocks Such an inventory, however, does not change with time, economic conditions, or mining technology, but only with new and better data and methods. Thus, the mineral Inventory is an excellent designation for describing mineral value distributron within a deposit's geological setting

Jan 1, 1979

By M. F. Goudge, R. V. Tomkins

Sodium sulfate is an important chemical raw material that is being used in ever increasing quantities in modem industry. It comes on the market mainly in three forms: (1) Salt cake (Na2SO4), a relatively crude form of the anhydrous salt containing up to 3 pct impurities, and comprising about three-quarters of the North American production; (2) anhydrous sodium sulfate (Na2SO4), a refined form containing less than 0.3 pct impurities; (3) Glauber's salt, the decahydrate (Na2SO4.10H2O) containing 55.9 pct water of crystallization. Competing with salt cake from natural sources is byproduct salt cake from a number of industrial operations. For instance there is Mannheim cake resulting from the manufacture of hydrochloric acid by the reaction of salt (NaCl) and sulfuric acid in Mannheim furnaces; rayon cake, a high-quality product, resulting from the process of making rayon by the viscose process; chrome cake from the processing of sodium chromate to dichromate; phenol cake from the manufacture of phenol; also byproduct sodium sulfate resulting from the conversion of lithium sulfate to lithium carbonate; from the processing of sodium tetraborate to boric acid; from converting sodium formate to formic acid; and in the manufacture of cellophane. Sodium sulfate is also obtained as a byproduct in the manufacture of isosebasic acid. In addition strong competition has resulted from imports of byproduct salt cake from the chemical industries of a number of highly industrialized European countries. However in recent years due to technological changes the output of byproduct salt cake is rapidly diminishing and the natural deposits are becoming the most important source of sodium sulfate used in North America. For instance, the production of hydrochloric acid in Mannheim plants has become obsolete and thus the greatest single source of byproduct salt cake will disappear. Also viscose rayon is meeting strong competition from nylon and other synthetic fibers and production of byproduct salt cake from this source may do little more than remain at the present level. These factors together with increasing demand for sodium sulfate point to increased production from natural sources. In 1958, 36 pct of the total United States production was derived from natural sources and in addition 97,000 short tons was imported so that over 40 pct of the total consumption was supplied by natural sources whereas in 1953 the proportion was only 24 pct. The rapid growth in production is shown in Table 1. Principal Sodium Sulfate Minerals There are many minerals in which sodium sulfate is a constituent but those of commercial importance at the present time, and consisting wholly of sodium sulfate in either the hydrous or anhydrous states, are mirabilite and thenardite. Minerals of potential importance but consisting in part of compounds other than sodium sulfate are glauberite in which sodium sulfate is combined with calcium sulfate, and blödite in which sodium sulfate is combined with magnesium sulfate. Mirabilite (Na2SO4.10H2O) the decahydrate, consists of 24.8 pct SO3, 19.3 pct Na2O, and 55.9 pct H20. It is a colorless to opaque, soft, water-soluble mineral with a slightly bitter taste. It has a hardness of less than 2 and a specific gravity of 1.48. It forms long needle-

Jan 1, 1960

By R. W. Raymond

This paper is simply a summary, prepared at the request of the Council of the Institute, of the report of Mr. Albert Ladd Colby, of South Bethlehem, Pa., presented at the New York meeting (October, 1896) of the Association of American SteelManufacturers, on " The Advisability of the Endorsement by the Association of the United States Standard Gauge, approved by Act of Congress, March 3, 1893, to the Exclusion of the Birmingham Gauge, the .Brown and Sharpe, and all Others:" a subject on which, at the Pittsburgh meeting (April, 1896) of the said Association, Mr. Colby had been appointed as a committee. The report favors the adoption, not of the United States standard gauge to the exclusion of others, but of a decimal system of gauging all materials in thousandths of an inch, thus doing away entirely with arbitrary gauge-numbers running in inverse order to the actual thickness. The American Institute of Mining Engineers originated this movement. The report of its committee on a standard wiregauge, presented in October, 1877,* recommended the abandonment of the system of fixed gauges for commercial use, and of the system of representing the diameters and sizes by numbers, and the adoption, in lieu thereof, of the system of expressing sizes in thousandths of an inch or fractions of a millimeter, and the use of the micrometer-gauge as a means of measuring sizes. In 1892 the American Society of Mechanical Engineers appointed a similar committee, and corresponding action was

Jan 1, 1898

By W. I. Duvall, D. E. Stephenson. Discussion by R. G. K. Morrison

R.G.K. Morrison (Chairman, Dept. of Mining Engineering and Applied Geophysics, McGill University, Montreal, Que. Canada) - The authors have introduced a subject, the intensive study of which has awaited scientific developments. These are now such as to justify a thorough review of our thinking on the causes and control of rockbursts. The formulae developed in the paper, the comparison between rockbursts and earthquakes in figure 1 and the energy data relating to explosives serve as an effective foundation. In the paper this writer is quoted as suggesting that energy of the order of 10 x 10 11 ft. lb. may have been released in some of the heaviest rockbursts in the Kolar Gold Field. He now hastens to add that such an estimate has no scientific validity. It arises only from a casual comparison of surface and underground effects of the medium heavy bursts, referred to in the paper and estimated by Jones at 3.0 x 1010 ft.lbs., with those of obviously greater magnitude. In any case, we have the estimate by Jones above, that by a team of seismologists 1 on the Witwatersrand of 10 x 1010 ft.lbs., that by Coates of 3.8 x 10" ft.lbs., also referred to in the paper, that by Blan-chard2 for the catastrophic rockburst at Springhill, N.S., of only 7.4 X 107 ft. lbs., and finally the range covered by Cook, referred to in the paper. It is probable also that data for the heavy rockburst at Merkers3 in the WERRA potash area of Germany are available as it was recorded on seismographs from Moscow to Spain. It is the writer's impression that some standardization is present in the estimates above for 10 x 10 10, 3.8 x 1010 and 7.4 x 107 ft.lbs., respectively. The latter, for Springhill, represents a relatively low order of magnitude. It is obvious that any energy estimate must be related to the local geometry of openings at the time of the event. It is also obvious that any explanation of the causes of rockburst must be capable of providing a wide range of energy. However, we must remember that the energy release is an effect indicating magnitude. The cause lies with the mechanism initiating the primary failure, generating the seismic activity, to which much of the damage is probably due.

Jan 1, 1967

By John V. Beall

Many Americans will judge the energy crisis by the picture shrink on their TV screen. And they are right to make this assessment considering the large areas of the country with marginal generating capacity, (See Fig, 1). The Federal Power Commission (FPC) recommends 20-25% reserve generating capacity above peak summer loads and 15-20% as minimal. The New York metropolitan area is the most concentrated power service area in the United States, and a spot check with Consolidated Edison, serving this area, revealed that on Friday, August 18, the company was operating at 5% reserve.

Jan 10, 1972

By Donald W. Mitchell

MINE operators have a choice of several classifications of mechanical loaders. Within each classification there are many types and makes available. Table I lists loaders on which manufacturing data as to operating characteristics are available. This paper discusses the conditions met in a mine as they affect these characteristics. It is assumed that management will provide satisfactory engineering, supervision, power, maintenance, loader service within a concentration of workings, and a balanced working cycle served by balanced production equipment. These are factors which affect the optimum operational efficiency of a loader. The conditions which determine loader choice are:

Jan 5, 1951

By Ogden Malin

IN conducting the manufacture of extruded brass rods and brass forgings it has been noticed that there is considerable variation in the physical properties, particularly the machinability of different rods and forgings, even though the composition, working temperatures and method of manufacture remain the same. It is the purpose of this paper to attempt to establish the cause and extent of this variation, and also to determine whether variations in composition within certain defined limits influence hardness and machinability to any marked degree. The writer believes that this variation probably is due to the variation in grain size of the metal, therefore the microstructure of several compositions under various conditions of working were examined in an effort to establish this as a fact.

Jan 1, 1932

(Under this heading will be published notes sent to the Secretary of the Institute by members or other persons introduced by members.) Engineer of many years' experience in mining engineering, construction, public works, contracting, water-power development and operation, having heretofore retired on a sufficient competence, wishes to have employment with thoroughly reputable concern where his experience would be of value; the question of remuneration is of secondary importance. A-2591. Engineer, in military service nearly two years, desires, when discharged, to secure permanent position offering future opportunities. Experienced as mechanical and metallurgical engineer, investigator, teacher. Technical graduate and post-graduate from two of best American schools. Ability as executive, organizer and industrial leader. Especially fitted for industrial position of administrative nature or as technical assistant to industrial manager. Salary expected $4500 to $5000. A-2619. Member A. I. M. E., age 36, twelve years' experience in smelting and hydrometallurgy of copper ores, desires research or works position with responsible company. Speaks fair Spanish. Can handle men. Will welcome difficult metallurgical problems. Salary $5000. A-2627. Mining engineer, recently discharged from the Army as Captain, Engineers, age 38, 15 years' experience in the Southwest and in Mexico in gold, silver and copper mining, engineering, surveying, sampling and assaying, with special training in prospect and mine examination and the development of prospects. Speaks Spanish; immediately available; references. A-2136.

Jan 6, 1919

By Nicholas J. Grant, Robert F. Wilde

TAYLOR and Floyd's"" work in establishing phase diagrams based on the elements Ni-Cr-Ti-A1 has led to an understanding of the precipitation hardening mechanism in alloys based on these elements. Nordheim and Grant4 concluded that in simple alloys, and where the aluminum to titanium atomic ratio was such that less than three out of five aluminum atoms were replaced by titanium, the precipitate on aging is the face-centered-cubic Ni 3A 1 phase, called They further found that increasing amounts of hexagonal ? phase, Ni3Ti, precipitated from these alloys when the titanium content exceeded the solid solubility of both matrix and Ni3A1. For alloys of Ni-Cr-Ti-Al, in which the titanium and aluminum contents each ranged from 0 to 4 wt pct, the titanium-rich was superior for strengthening to either pure ?' or 7. It was also noted that the combined titanium plus aluminum content (atomic pct) was a direct measure of the high temperature strength and overaging temperatures for these alloys.4 The present investigation was undertaken to extend existing data on precipitation hardening in the more complex commercial alloys containing higher titanium plus aluminum, and with significant quantities of cobalt, molybdenum, and carbon. Experimental Procedure Reforging of As-Received Bar Stock—The alloys were received as ground, forged bar stock. Chemical analyses and the as-received bar diameters are shown in Table I along with the ASTM grain size after the various treatments. All stock except the Waspaloy was reforged to % in. diam to gain material and to facilitate machining of stress-rupture specimens. Forging was carried out at 2100°F, and discontinued when the bar temperature fell to 1800°F. Heat Treatments—For experixental simplicity it was desirable to heat treat all of the alloys at, the

Jan 1, 1958

Butte Meeting. It is expected that the technical program of the Butte meeting will be a sufficient attraction to draw to that point every member who can possibly get away long enough to attend. Attention is particularly called to the papers already sent in by the Committee on Precious and Base Metals, and the papers which they are undertaking to secure for the meeting, as published on pp. ix and x. In addition to these papers, and in addition to those published in this Bulletin, the office of the Institute already has in hand several papers, which will be published at an early date, and presented in abstract and discussed at the meeting. Of the discussion of these papers a special feature is being made. Therefore, let every member come to Butte who can do so. A meeting of the Board of Directors of the Institute will also be held at Butte. In the May Bulletin, we stated for the information of members the railway excursion rates for two suggested tours in connection with the meeting, which included Glacier Park before the meeting and Yellowstone after it. The itineraries there given and rates quoted were planned and offered by the railway agent bureaus in New York. Circulars have been sent to the members of the Institute by A. E. Vaughan & Co., a tourist trip agency of New York City, containing details of tours nearly identical with those outlined in the Bulletin, and quoting rates covering, the expenses of the whole trip. Members can easily compare these rates with the rates offered by the railroads, and published in the last Bulletin. In order that no misapprehension may exist, the statement is here made that the Institute and its officers have no connection whatever with Vaughan & Co.'s proposals and that any such tours will be strictly personal matters between said company and the members of the Institute who take them. Nevertheless, the Board of Directors calls to the attention of members the circumstance that tours such as these will afford an opportunity for members to travel together to the meeting.

Jan 6, 1913

By T. B. Counselman

"C" VERYONE who has to calculate cyanide circuits, -¦-' using either thickeners, filters or both, realizes the headaches involved in solving a set of simultaneous equations. When you calculate a large number of these, based on experimental data, trying to arrive at the best flowsheet, you can spend days at the task. T. B. COUNSELMAN, Member AIME, is Manager, FluoSolids Division, The Dorr CO., Stamford, Conn. AIME New York Meeting, Feb. 1950. TP 2783 B. Discussion (2 copies) may be sent to Transactions AIME before March 31, 1950. Manuscript received Aug. 23, 1949. Herewith is presented a short method, equally accurate with the standard simultaneous equation method, and much quicker. Here for instance is the standard simultaneous equation method, for 100 tons per day of $10 ore, with the conditions assumed as below (fig. 1). Conditions Assumed a. 100 tons of ore per day crushed in cyanide solution. b. Discharge from all thickeners with 50 pct moisture. c. $10 value dissolved per ton of ore. d. 50 pct in mill and 50 pct in agitators. e. 400 tons of solution from thickener V precipitated to $0.02. f. Agitation with a dilution of 2 of solution to 1 of solids. g. Let V, W, X, Y and Z represent value in dollars per ton of solution discharged from the resvective thickeners. Equating Out of and Into Each Thickener 1. lOOVplus 400V = 500W plus (0.50 X $10 X 100) 2. 1OOWplus 600W= 500X plus lOOW plus (0.50 X $10 X 100) plus lOOV 3. lOOXplus 500X = 1OOWplus 500Y 4. 1OOY plus 500Y = 1002 plus 1OOX plus (400 X 0.02) 5. 100 Zplus l00Z = l00Y plus 100 tons of water (value $0.00) Simplifying: 1. v = W plus 1.00 2. W = X plus 1.20 3. X = Y plus 0.24 4. Y = 0.2Zvlus 0.064 5. 2Z= Y

Jan 1, 1951

By T. B. Counselman

"C" VERYONE who has to calculate cyanide circuits, -¦-' using either thickeners, filters or both, realizes the headaches involved in solving a set of simultaneous equations. When you calculate a large number of these, based on experimental data, trying to arrive at the best flowsheet, you can spend days at the task. T. B. COUNSELMAN, Member AIME, is Manager, FluoSolids Division, The Dorr CO., Stamford, Conn. AIME New York Meeting, Feb. 1950. TP 2783 B. Discussion (2 copies) may be sent to Transactions AIME before March 31, 1950. Manuscript received Aug. 23, 1949. Herewith is presented a short method, equally accurate with the standard simultaneous equation method, and much quicker. Here for instance is the standard simultaneous equation method, for 100 tons per day of $10 ore, with the conditions assumed as below (fig. 1). Conditions Assumed a. 100 tons of ore per day crushed in cyanide solution. b. Discharge from all thickeners with 50 pct moisture. c. $10 value dissolved per ton of ore. d. 50 pct in mill and 50 pct in agitators. e. 400 tons of solution from thickener V precipitated to $0.02. f. Agitation with a dilution of 2 of solution to 1 of solids. g. Let V, W, X, Y and Z represent value in dollars per ton of solution discharged from the resvective thickeners. Equating Out of and Into Each Thickener 1. lOOVplus 400V = 500W plus (0.50 X $10 X 100) 2. 1OOWplus 600W= 500X plus lOOW plus (0.50 X $10 X 100) plus lOOV 3. lOOXplus 500X = 1OOWplus 500Y 4. 1OOY plus 500Y = 1002 plus 1OOX plus (400 X 0.02) 5. 100 Zplus l00Z = l00Y plus 100 tons of water (value $0.00) Simplifying: 1. v = W plus 1.00 2. W = X plus 1.20 3. X = Y plus 0.24 4. Y = 0.2Zvlus 0.064 5. 2Z= Y

Jan 1, 1951

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

EVERY mould, of whatever kind it may be, must have an entrance appropriate to the material if it is wished to fill its inner space with bronze or other metal. It is likewise necessary that it have vents, that is, air holes, for there is nothing that is not full of air even though it be called empty. Now, molten bronze is a material that has an immediate effect because of its heaviness, and because it is as hot as fire or even hotter,

Jan 1, 1942