Search Documents

By Brad C. Lewis

The coal mining industry has experienced a general trend toward longwall operations. An increasing percentage of underground coal is being mined by longwalls. And productivity in longwalls is likewise increasing. Operators of longwalls, however, have not yet reached a state of mining euphoria. Competitiveness within the industry and from alternate fuel sources is forcing continued pursuit of higher productivities and lower costs. [Figures 1, 2 and 3] present trends in the industry. Longwall mines, as defined here, are those reportedly having longwall installations in each of the respective years. Production from both the continuous miner and longwall units is included in the longwall mines. Nonlongwall mines are all other underground mines. Productivity calculations are based on total employee-hours associated with the operation. Annual percent increases in productivity appear to have peaked in the 1985-1987 time frame. This was due, in part, to implementation of technological advancements and improvements in management-labor relations. The results shown in [Fig. 3] aroused the author's curiosity. The first question was "Have technological advancements to increase productivity peaked?" It does not appear so.

Jan 1, 1990

By M. M. Fine

Development of a process for winning copper from pelletized chalcocite concentrate without matte smelting and converting is underway at the Twin Cities Metallurgy Research Center, Bureau of Mines. The new route from concentrate to metal includes 2-stage fluid-bed treatment; pelletized concentrate (33 percent Cu, 7 percent S) is first desulfurized (to about 0.5 percent S) in an oxidizing atmosphere, and in the second stage the calcine is metallized by reduction with hydrogen. Thereafter, the reduced product plus 10 percent CaO is routed to a smelting furnace to separate metallic copper from the gangue. Recovery and the Cu content of the product at this point are in the 97-98 percent range. The metal must be refined to remove sulfur and iron to make wirebar copper. An important feature of the process is the pelletizing of the fine concentrate into mini-pellets prior to fluid-bed treatment, which has permitted shorter reaction time, decreased dusting, and facilitated subsequent processing.

Jan 1, 1970

By S. B. Patton

A comprehensive approach to the development and organization of an expert system that is designed to assist electricians in diagnosing electrical faults m mining machinery is discussed. The system includes diagnostic, reference, and tutorial programs. The diagnostic portion of the system is based on a causal-reasoning approach which is used to establish a hierarchy of symptoms and the subsequent production rules for identifying component-level failures m the motor-control circuit of a shuttle car. With this approach, conclusions are developed directly from knowledge of the circuit and its behavior (in both working and failure modes) based on first principles, rather than the heuristics of a domain expert. The symptoms and their hierarchical structure an: formulated by creating "what-if" scenarios and performing a qualitative circuit analysis for each fault Techniques for incorporating interactive graphical displays of the circuit schematic into the diagnostic portion of the system are also presented. Supportive computer programs that provide' reference material and tutorials on the circuit are also described.

Jan 1, 1989

By Z. C. Liu, F. F. Roxborough, Lin. B. B.

The size distribution of coal cut by a mining machine is an important performance factor. It is well established that the main machine system variable that affects product size is the depth of cut. In essence, the greater the amount of coal won by a machine cutting at shallow depths, the greater the proportion of dust and fines produced. Conversely, deep cuts produce less dust and a generally larger product size. When cutting with a rotating drum, as well as with a longwall shearer, the depth of cut always varies from zero in the vicinity of the roof and floor, where most of the dust and fines are produced, to a maximum at mid-drum level. In this paper, minimizing the amount of shallow cutting with a cutting drum is discussed, and the effects of the drum cutting and design parameters on cross-sectional cutting area per revolution are analyzed. This study shows the following: •more shallow cutting occurs during the entry quadrant of a cutting cycle than during pick exit; •the ratio of the projected area of shallow cutting to the total projected area of cutting by a single pick per drum revolution is virtually the same for drums of different radii (however, it decreases as the maximum depth of cut increases); and •for double drums, the use of unequal drum diameters can reduce the production of dust and fines, compared to using drums of the same diameter.

Jan 1, 1998

By David Martin Menne, Chris Campbell-Hicks

Optimisation of many oxide gold processing facilities, in most cases, either does not really take place or if it does take place it happens too late or takes too long. This is unf01tunate as extra profits and early cash flows are lost, in new projects, and/or may not be realised at all in others. The situation is easily avoid­ed by ensuring that the plant optimisation happens immediately following commissioning or for an established operation simply 'biting the bullet' and making it happen immediately as a 'better late than never' decision. This type of optimisation requires intense undiluted focus on each and every problem or restriction that contributes to reduced plant performance or bottlenecks, without letting go, until the predetermined outcome is produced. Thus a dedicated person with specific quantative goals is required for these tasks. Methodology and strategies for optimi­sation are discussed and numerous examples presented. The secret of successful heap leaching is discussed.

Jan 1, 1998

By Peter J. Szabo

Many mining engineers tend to think of the economic analysis of mining ventures and projects on an f.o.b. mine basis. This is especially true of mines that are operated in an established domestic mining district. Here, transportation costs are many times smaller in comparison to overall delivered prices. One has only to consider the development economics of taconite mines in Minnesota with production destined for lower lake ports to see the truism of this statement. In the international arena, however, with consumers such as Japan and Europe located thousands of miles from source countries such as Brazil and Australia, the situation is different because mineral transportation is often a critical factor in determining project viability. This article is being presented to provide a basic understanding of the factors that govern ocean transportation of the three largest bulk mineral commodities shipped around the world: iron ore, coal, and phosphate. The major dry bulk commodity trades as a percentage of volume shipped are iron ore, 45%; grain, 25%; coal, 20%; phosphate rock, 5%; and bauxite and aluminum, 5%. Most of these commodities are carried by bulk carriers rather than tankers. These are vessels that have cargo, usually in solid form, loaded directly into the hold of a vessel by shore-side materials handling facilities or, in the case of a geared bulk carrier by the vessel's cranes and derricks. Gearless bulk carriers are used in most cases for iron ore and coal. Geared bulk vessels are mainly used for minor dry bulk trades such as ore concentrates (copper, lead, zinc, etc.), fertilizers (phosphate, potash, etc.), cement, petroleum, and coke. There has been, however, a trend toward using more self-unloading ships in both iron ore and coal ocean transport. And large vessels, such as the Universe Kure of Japan, have been designed with a cargo capability of 157 kt (155,000 dwt (deadweight tons)). Trade patterns of major bulk commodities are influenced by the Panama and Suez canals. Both of these canals have draft limitations that prohibit large, deep-draft, ocean-going vessels from using them for shorter trade routes used by Panamax and Suex vessels. The shipping industry has developed two widely used vessel classes; the Panamax and Suex vessels. The former is the maximum size vessel that can pass through the Panama Canal, usually 51-61 kt (50,000 - 60,000 dwt), depending on the season and draft of the vessel. The Panama Canal is usually 0.6-0.9 m (2-3 ft) deeper in the winter than in the summer. Thus, less cargo can be carried by the same size ship in the summer through the canal than in the winter. The Suex vessel is in the 71-81 kt (70,000-80,000 dwt) class. This larger vessel is able to transit the Suez since Egypt deepened the canal following the Seven Days War. Recently, the Suez Canal has been deepened to accommodate vessels with drafts as deep as 152 kt (150,000 dwt).

Jan 10, 1982

By P. G. Corser

A gold and silver open-pit mine located in northwestern Chile contracted ACZ in 1991-92 to assess the stability of their spent ore pile and to determine the cause and magnitude of cyanide contamination associated with leaching operations. The mine is a conventional open-pit located at an elevation of approximately 4,800 meters (m.) (15,744 feet). A spent ore pile is located approximately 2,000 m. southwest of the mine and approximately 1,000 m. northeast of the active pad and plant facilities. The pile was constructed on a gentle northwest slope dipping 12 to 13 degrees. The pile is bordered by a small river to the northwest and by a larger river to the northeast. Both rivers eventually flow into Bolivia. Heap leaching and processing commenced at the mine in 1988. Since 1988, nearly 6.0 million tons of ore at an average grade of 1.96 grams/ton (0.07 ounces/ton) of gold and 52 grams/ton (1.83 ounces/ton) of silver have been treated by cyanide heap leach methods with zinc (Merrill Crowe) precipitation. In approximately three years of operation, the mine has yielded more than 225,000 ounces of gold and over 1.5 million ounces of silver. Currently ore is agglomerated and hauled to the leach pad by truck and is top loaded to produce a 5-meter lift height. Four contiguous reusable (on/off) leaching pads were constructed with an asphalt layer above a carefully compacted sub-base of High Density Polyethylene (HDPE) liner and screened fines. Leach solution of pH 10-11 containing 1.2 to 1.5 gram/liter of cyanide is applied to the heap at a rate of 10 liter/hour/square meter for a total active application period of 30 days. Leached (spent) ore is transferred to the spent ore pile located approximately 1,000 meters to the northeast. The pile currently contains approximately 6 million tons of spent ore. The pile liner, which has been constructed over a prepared sub-grade consists of three geosynthetic layers (geotextile/flexible membrane liner/geotextile). Long term objectives include washing the pile to recover an additional 3 to 4 percent gold and silver.

Jan 1, 1993

By Scott G. Britton

Traditionally, water removal has taken a backseat to many other coal mining functions. However, it is a vital part of the total mine support system. In many US coal mines, more tons of water are removed each year than tons of coal. An excellent discussion of general drainage characteristics can be found in Chapter 8 of Elements of Practical Coal Mining, published by SME-AIME. This chapter is organized into three major sections. These are: designing effective drainage systems; constructing the main mine pumping station (static system); and constructing a portable pumping station (dynamic system). Each topic presents a separate discussion of the elements a construction foreman or engineer should consider for effective installation and operation of the mine drainage system. In addition, a list of pumping equipment manufacturers is available to interested persons and follows these sections.

Jan 1, 1983

By Erik Westman, Brandon Stables, Benjamin Mirabile

"Standing support is often used in conjunction with underground retreat mining. Knowledge of the load-displacement behavior of standing support and loading induced by the mine opening is critical to proper support selection. The NIOSH STOP database contains load-displacement laboratory test data for most commonly used standing supports. Hydraulic load cells currently used to measure in-situ loading of standing supports have exhibited leakage under load, producing irregularities within the dataset. An improved hydraulic load cell eliminates leakage and produces more consistent data.INTRODUCTIONA hydraulic load cell, more commonly known as a flat jack or JackPack, is a device installed to determine the loading characteristics of the roof-to-floor supports. These standing or roof-to-floor supports include, but are not limited to pumpable cribs, cans, wooden cribs (4-point, 9-point, etc.), metal props, wood timbers, concrete donut cribs, and other variations of these standing supports.Flat jack devices have been used previously to determine the loading of such roof to floor supports. The most commonly used load cell for standing supports is based on a design intended for pre-stressing standing supports, not load measurement. Preloading helps to keep the supports, such as timbers props and cribs, in place during the dynamic loading associated with blasting (Barczak and Tadolini, 2004).Flat Jacks are manufactured in various shapes and sizes depending on the application; common shapes are square and round that are 25.4 mm (1.0 inch) thick when collapsed, as shown in Figure 1. These load cells are produced in South Africa and can be formed into several different shapes depending on the application (Barczak, 2003). The sheet metal that makes up the bladder is comprised of 19-gauge or 1.11 mm (0.04 inch) thickness; the top and bottom pieces of sheet metal are resistance-seam welded around the perimeter. There are two different ports installed on one of the bladder skin corners of the flat jacks; these ports allow fluid to fill the unit, and the other port has a relief valve. The fill port is comprised of a check valve. The pressure relief valve is located in the second port; preset to 1,724 kPa (250 psi), the pressure relief valve keeps the load cell from bursting. Bursting of these load cells typically causes a small tear in the metal skin allowing the fluid to leak out without a large catastrophic failure.The effective inflation range of these load cells is between 25.4 mm (1.0 inch) to 254.0 mm (10.0 inches) thick. Different types of fluids can inflate these load cells but the most common and easily accessible fluid for testing applications is water. Water pressure from the mine supply line can inflate these load cells to the desired load. Depending on the pre-stressing requirements, a pneumatic powered pump, hydraulic pump, or hand pump may be required to inflate the load cells."

Jan 1, 2019

By K. C. Li

The scope of this subject is a broad one. The demand for a metal with high refractory properties, great strength at elevated temperatures and high nuclear cross section, has put tungsten in the foreground as: the most promising metal to fill some of these requirements. Recently developed techniques have made it possible to roll large tungsten sheet and-the availability of fabricated tungsten is already upon us. More and more, the demand is for purer and still purer metals. Tungsten is no exception. As technology improves, we are learning more about the effect of foreign elements in minor amounts upon the chemical and physical properties of metals. As equipment and technology improve, specifications become more rigid, and reasonably so. Pure metals have revealed properties hitherto unknown in metals produced by former technology.

Jan 1, 1961

By I. Pordea

The materials used for the construction of buildings contain natural radionuclides of the U238 and Th232 series and are ? 50% due to land radioactivity. Another component of natural radioactivity is K40, with ? 40%. The presence of these radiopollutants in the final products (i.e. bricks, concrete) due to body irradiation is by two pathways: external irradiation and internal irradiation. External irradiation is due to gamma radiations emitted by Pb214 (RaB) + Bi214 (RaC) from the U238 series, by Ra228 (Mezothoriu I) + Ac228 (Mezothoriu II) + Tl208 (ThC??) from the Th232 series and by the K40 radionuclide. Internal irradiation is due to inhalation of radon (Rn222) and Rn220 (Tn) plus short life descendents (Po, Pb, Bi), radionuclides which are present in concrete. A fraction from radon present in concrete enters into a house leading to internal irradiation by inhalation. In Romania, the maximum concentration of radon allowed for new buildings is 200 Bq/m3.

Jan 1, 2008

By J. Herbst, I. Heber-Panu, Dan G. Cojocariu, E. Ene-Danalache, G. Poling

A general model which represents not only batch but also continuous flotation in multi-cell machines is presented. This model considers both the size distribution and the distribution of flotabilities in a size class for valuable mineral particles in the pulp. The general expression is shown to reduce to several previously reported models. In addition, a number of new models are found to arise for different specific assumptions concerning the flotability distribution and/or the size distribution of the particles undergoing flotation. Several of these new models are tested experimentally using laboratory-scale batch and pilot-scale continuous data. Model parameters are estimated from this data and a comparison of calculated recoveries and those experimentally determined are presented. Finally, the influence of the feed rate, aeration rate and valuable mineral content of the feed on the recovery is examined.

Jan 1, 1976

By J. F. T. Agapito, R. R. Goodrich

Yield pillars have been used for many years to help reduce stresses near mine openings and improve roof and floor stability. A yield pillar is often defined as a pillar that fails but retains residual strength. Stress transfer occurs through the roof and floor after the peak strength of the pillar is reached. High stresses are transferred from around the openings onto abutments that can be barrier pillars or unmined ground. This mechanism, often referred to as pressure arching, is possible as long as the width of yield pillar mining (panel width) is less than the critical width above which stresses cannot be carried by the overburden. Significant stress transfer also can occur due to small amounts of pillar and/or floor yielding before the peak strength is reached. This is accomplished in a quasi-elastic manner with little or no visible roof and pillar fracturing or floor heave. Long-term stability may be achieved when stresses and mechanical properties are favorable to prefailure yielding. This paper gives practical examples where improvements in stability and resource recovery were achieved with this mechanism. Yielding was assessed by comparing measured and calculated vertical pillar stresses. Results indicated that calculated stresses in the pillars were 25% to 40% higher than the measured stresses, demonstrating significant arching load transfer to the abutments. Prefailure yielding is probably often present but unintentional in both development and production areas. Better recognition and use of this mechanism should lead to design improvements, as mines become deeper.

Jan 1, 2003

By R. Q. Honaker, D. Tao, D. Taulbee, B. K. Parekh

A significant amount of energy exists in the waste generated by the coal and timber industries. In the coal industry, the energy loss is mainly due to the discharge of fine coal to the waste impoundment. Despite the fact that the fine coal has the greatest cleaning potential, dewatering, handling and transportation concerns prevent its use as product in many cases. Likewise, the sawdust generated from wood production has energy value and is used as industrial boiler fuel when the transportation distance is relative short. However, wood waste is often discarded into cumbersome landfills due to uneconomical transportation alternatives. Recent research found that these two waste materials can be combined to provide a high energy fuel of around 13000 btu/lb that can be easily handled and transported to end users.

Jan 1, 2004

By M. J. Hrebar

This paper reviews large dozer stripping techniques and presents results of two field studies. The first is a seven-shift study of a contour block stripping operation where a Caterpillar DII is used as the primary stripping equipment. The second is a two-shift study of two Cat DIIs dozing blast cast material ahead of a dragline operation. Surveys and continuous time studies were used to determine production rates and as a basis for forecasting unit stripping costs in both cases.

Jan 1, 1994

By S. Mathur

Oxide particles are commonly used as fillers in plastics, paper, rubber, etc. (particulate composites). The successful fabrication of such composites is dependent upon the adhesive strength of the filler particles to the matrix. The compatibility of the matrix and the filler particles is generally enhanced by the adsorption of surface modifiers such as surfactants and polymers at the particle-matrix interface. To develop a scientific basis for the selection of the appropriate modifiers it is necessary to understand their adsorption mechanisms. specifically, the adsorption of polymeric additives is attributed to a combination of chemical and electrostatic interactions, hydrogen bonding and van der Waals forces. Hydrogen bonding has been suggested to be the primary adsorption mechanism for nonionic polymers. However, a literature survey of the Poly(ethylene oxide) (PEO)-oxide system suggested that PEO, a nonionic polymer, was substrate specific. A systematic study was undertaken to investigate the adsorption mechanisms of PEO on oxide particles. It was determined that strong Bronsted acid sites on the surface interact with the ether oxygen, a Lewis base, of PEO to induce adsorption. In this work, characterization of PEO binding sites on oxides is reported and the mechanisms of PEO adsorption are discussed.

Jan 1, 1999

The processing capability of a semi-autogenous (SAG) mill is greatly affected by ore geology and operating variables within the mill. The SAG mill is problematic because it cannot be conveniently studied on a smaller, laboratory-scale mill. The interior of the mill, where grinding takes place, cannot be observed using instrumentation available today. Yet the motion of the rock and ball charge determines the power draft and hence capacity of the mill. Therefore, mill optimization is pursued with a charge motion simulation software. This software uses the discrete element method to describe the individual motion of numerous ball and rock particles in the mill. It is shown that by simply increasing the chord length between the lifters and increasing the face angle of the lifters the capacity of the mill can be increased. Such a configuration of lifters allows the operator to increase mill speed, hence drawing higher power while considerably minimizing direct ball strikes against shell plates and lifters. A case study of a 36 ft. diameter x 15 ft. long mill is presented. Reducing the direct ball strikes leads to lesser steel consumption both in terms of balls and lifters.

Jan 1, 2000

By B. P. Boisen

INTRODUCTION The rapidity of onset, rate of increase, and magni¬tude of loads in an underground support system can be measured using load cells or pressure cells, whichever is appropriate to the type of support. These instruments should be installed at the various instrumented station locations immediately after excavation. If the loading of a member is of interest, the load should be measured, whereas if the deflection or strain of a member is of interest, the strain should be mea¬sured. It makes as little sense to use a load cell to allow computation of strain as it does to measure the strain and then back calculate the load. Tunnel steel set de¬signers today invariably rely on the early work of Karl Terzaghi, the basis for which is load, so load measure¬ment should be the main concern. The current trend of using strain gages on steel sup¬port systems stems from the inability by some to eval¬uate unusual loading conditions caused by uneven block¬ing. In fact, uneven blocking will obscure almost any attempt (whether with load cells or strain gages) to properly evaluate support performance. The load curve in Fig. I shows the development of a characteristic early peak load sometimes called the "rear abutment load" seen in many underground open¬ings. It is thought that the peak reflects the coupling of the rock and the support system, and that the magnitude will increase until some yielding, or minor failure, of the support system occurs. At that time, the slight deforma¬tion of the support system promotes the formation of minute shears in the opening walls, and these shears tend to distribute stress between the support system and the adjacent rock in proportion to the relative rigidity of the support elements and the rock. In normal rock, as a result of this stress redistribu¬tion, subsequent load magnitudes generally do not reach the magnitude of the early peak load. In physically unstable (squeezing) or chemically un¬stable (swelling) rock, however, the loads experienced after passage of the early peak load may in fact show a slow, continuous increase. One of the very important purposes of load instrumentation is to provide the means for recognizing such long-term adverse trends, thus enabling the proper remedial steps to be taken. Another purpose of load instrumentation is to pro¬vide a comparison between the magnitudes of the early peak load and the subsequent stable load. The ratio of these two loads is analogous to a safety factor, and may be used to evaluate the efficiency and economy of the support system design. Aside from considerations of economy, it may be well to design support systems which do not have excessively high ratios of early peak load to subsequent stable load. Should these ratios be exces¬sively high, the support system may be so rigid that the yield or failure associated with stress redistribution may occur with explosive violence. Load cells for use in mines, tunnels, and on con¬struction projects come in many forms. Almost all, however, employ the same procedures for installation, readout, etc. Therefore the following comments are almost universal in application. LOAD CELL INSTALLATION Load cells should be installed with bases parallel to the surfaces against which they bear. Care must be taken to orient the cells so that their signal cables are protected from accidental damage as a result of con¬struction, maintenance, or cleanup activities. Most electronic load cells are compensated for tem¬perature variations likely to be encountered during nor¬mal operations. However, if a large difference is an¬ticipated between the calibration temperature [21°C (70°F)] and the average operating temperature, the cells should be conditioned to the operating temperature for at least 8 hr prior to installation. This is to insure that the initial reading, made under no-load conditions prior to installation, provides a stable value to which subse¬quent measurements can be referred. Hydraulic load cells tend to be temperature sensitive and should be used with that in mind. Also, hydraulic load cells tend to be soft compared to electronic types and will sometimes allow movement to take place in a system intended to be semirigid. Furthermore, hydrau¬lic load cells tend to be difficult to read remotely. Care must be taken to use bearing plates on both sides of load cells which are sufficiently rigid and of high enough bearing capacity to prevent bending and crush¬ing under load. This is very important with tieback load cells (basically a ring of steel) which can easily dig into bearing plates. MAINTENANCE AND TROUBLESHOOTING Except for a direct hit by a miner's axe or flyrock from a blast, most hydraulic load cells are nearly in¬destructible and require little, if any, maintenance. Hy¬draulic oil on the bearing plates is a good indication of a leak and the need for corrective action. Field maintenance of electronic load cells involves protecting the instrument and signal cable from mechani¬cal damage and from unnecessary exposure to dirt and moisture, and recognizing and correcting damage and the effects of normal wear and tear.

Jan 1, 1982

By K. G. Tsakalakis

The Greek Cement Industry is a vital sector of our economy. With an annual production of cement over 15.5 million tonnes, it contributes significantly to the national gross domestic product (G.D.P.). The cement industry, as other mineralogical transformation process industries (lime, glass, ceramics, extractive metallurgy etc.), is high energy intensive. Each tonne of cement produced requires not only large amounts of fuels (coal, fuel oil), but additionally a significant quantity of electrical power as well. All fuels consumed by the Greek Cement Industry are imported and energy accounts for one third of the cement production cost. Therefore, it is of interest of the community and the industry to increase energy efficiency, to reduce the quantities of fuels consumed in the cement manufacturing process. It is also known that like almost all manufacturing processes, the cement industry produces large amounts of CO2 (combustion of fuels, de-carbonization of limestone and use to electricity). The utilization of wastes (principally as alternative fuels, scrap tires, spent solvents etc.) is compatible with the general principles of waste management and it is also a common practice in other European and developed countries. In the present paper the economic, social and environmental benefits provided by the recycle process of the various wastes in the Greek cement plants are extensively analyzed. From the whole work, it was concluded that such a practice: - replaces a significant percentage of imported fossil fuels in the cement manufacturing process, - maximizes the recovery of energy and also ensures their safe disposal, - produces overall environmental benefits by reducing releases to air, water and land, - prevents resource depletion of valuable non-renewable fossil fuels, - overcomes the need for the construction of dedicated incineration facilities, - contributes positively to the principles of the sustainable development.

Jan 1, 2003

By Stephen Semeniuk

Discussion by Stephen Semeniuk Discussion As a valuator and SME member, I view Ross D. Lawrence's position as based on unproven and faulty assumptions made with regard to the pragmatic evidence presented in his paper. Moreover, his call for the inclusion of all mineral resources in discounted cash flow valuations is redundant, if not irrelevant, as there are procedures that already take all classes of mineralization into consideration for valuation purposes. In my experience as a valuator, I find that Canadian securities regulators are more than accommodating in allowing any valuations of mineral properties to be based on cash flow calculations. In other business areas, the same regulators usually reject discounted cash flow valuations of projects or businesses with no operating history. Instead, the regulators prefer valuations to be based on other transactions tested in the marketplace. Valuations based on actual market transactions are less subjective than discounted cash flow calculations and/or the capitalization of arbitrary, untested or undemonstrated earnings projections. In the mining and minerals sector, such projections may be made by persons not qualified to make such projections. In support of this statement, I direct readers to the article "Valuation of mineral properties which do not contain exploitable reserves" by Lionel C. Kilburn, which appeared in the August 1990 issue of the CIM Bulletin. To quote from the article: "Value of a mineral property depends basically upon metal prices, recoverable grades, mining and metallurgical practices, commodity supply and demand, and political-economic conditions, all of which vary with time. Five fields of expertise influence the value of a mineral property: •geological engineering, •commodity markets, •financial markets, •stock markets and •mineral property markets. The skills of geologists and engineers properly apply to the first field of expertise. Knowledge and consideration of the other four fields is important, but such advice is more properly sought from marketing experts, economists and stockbrokers." Securities regulators have created no hardship for valuators by excluding unsubstantiated resources in discounted cash flow valuations. In the field of engineering, best design practices apply. A margin of safety is built into the design criteria for any new equipment or structure that will exceed normally expected load levels and stresses, even though such considerations imply higher front end costs. In accounting, the comparable operating principle is conservatism. It explains why, for balancesheet presentation purposes, inventory is stated at cost or market, whichever is the lowest value. Similarly, when the engineering or geoscience-based valuator plays in the field of finance, the rules of accounting and applied economics apply. Regulators in their skepticism of income-based valuations are in tune with similar views already expressed in mining literature. To quote H. Van Tingley, in Mining Magazine, July 1996: "... the DCF method has inherent dangers when applied to undeveloped resources. Firstly, it presents an often-undeserved aura of accuracy. A DCF value is no more accurate than the least accurate of the assumptions incorporated into the calculation - and assumptions

Jan 1, 2003