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Jan 1, 1908

JAmes E. Howard, Watertown, Mass.:—In connection with this paper, it is the desire of the Watertown laboratory to receive suggestions as to the lines of work and the particular direction along which the examination of the ingot-metal should proceed, and any suggestions so offered will be noted with care, and the tests conducted so as to embrace such features as it is thought desirable to have investigated. To me the question of structural continuity seems of para-

Jan 1, 1909

P. H. Dudley, Yew York, N. Y. (communication to the Secretary*) :—The characteristics of Professor Home's metallurgical papers are, that he is able, from the mass of confusing evidence on the subject, to make an analysis and present hypothetical and essential principles in concrete form for consideration and discussion. I can appreciate, from the practical side of the subject, the labor of collecting and investigating the data which was essential to prepare the paper. Much of it necessarily came from material of preceding years of manufacture in which time was allowed for chemical reactions of the re-carburizer, and for the elimination of the oxidation-products before teeming the ingots. This practice gave a favorable time-element to free the metal from slag and other impurities— a requisite condition for the production of sound steel in the ingots. But, in allowing them to become cold before they were charged into the furnace, a subsequent time-element entered as a detrimental factor in the development of the pipe or shrinkage-cavities, which gave an ingot-structure deficient in soundness, at least in the upper portion. (The term slag is used in a general rather than in a strictly technical sense.) Traces of manganese sulphide are often associated with manganese silicates in the same thread or seam, and at other places they are separate and distinct. Interpretations from material thus manufactured must be made with due allowances for the methods of fabrication and the requirements of service. The only way we now have to estimate what the degree of soundness of the ingot-structure was, in the early foreign and American manufacture of steel rails, is by examination of the worn and failed material after years of service. We must remember also that the poorest material was long since consigned to the scrap-heap without any full record of its history. The rails from a given ingot cannot now be identified ; and in many

Jan 1, 1909

C. D. Demond, Anaconda, Mont. (communication to the Secretary*) :—In order to throw some light on this interesting subject, a series of experiments were made with strips of mild steel, containing about 0.14 per cent. of C and 0.22 per cent. of Ma. These strips were thoroughly cleaned and brightened before use, salts were added to distilled water until it corresponded as nearly as possible to the analysis given by Mr. Lee, and in this water at different temperatures were placed four strips of steel; while four other strips, at corresponding temperatures, were placed in the water used at the Washoe Reduction Works. The latter plant has had no trouble from corrosion of furnace-jackets, pipe-lines or boilers. The analysis of the water used at the Washoe works is: Grains er U. S. Gallon. CaCO3........... 2.92 CaSO3........... 0.76 MgCI3........... 0.64 MgCO3........... 0.58 A1203........... 0.12 Fe2O3........... 0.12 SiO2........... 0.58 NaCl........... 0.35 Organic matter, etc.,........ 1.16 7.23 This water is neutral to litmus; while the artificial Copper Queen water was very slightly alkaline, which Mr. Lee informs us is also true of the water at Douglas. Both waters mere well aerated by pouring from beaker to beaker, and by blowing in air from the experimenter's lungs. The results of these tests, given in Table I., show that there is no significant difference between the effects of the two waters.

Jan 1, 1909

AlFred JamEs," London, Eug.:—I thank you, gentlemen, for Sour kind invitation to address you. It is a very great pleasure for me to be here at your annual meeting, and, although I have been a member since 1894, this is the first opportunity I have

Jan 1, 1909

J. E. Johnson, Jr., Glen Wilton, Va. (communication to the Secretary*):—Mr. Meissner announces early in his paper that one of its purposes is the discussion of my paper entitled, Notes on the Physical Action of the Blast-Furnace,' with which he disagrees in part; and as the second stage of the discussion of this important subject has centered around his paper, some reply by me may not be amiss. Unfortunately, Mr. Meissner has not indicated a single statement or conclusion in my paper that he wishes to controvert; but as there is evidently a difference of opinion between us I will disregard this fact, and will discuss those conclusions of his that seem to me not to be justified by the facts of general practice, or even by the data which he produces to support them. Let me say, however, that I am a believer in the dry-air

Jan 1, 1908

Richard Moldenke, New Pork, N. P. (communication to the Secretary*):—Iu following the discussion of the specifications for cast-iron and finished castings, I mas strongly impressed with two points which might be ventilated to advantage more fully from the view of the practical foundry-man. First, the reasons why only silicon and sulphur were specified and not phosphorus, manganese and carbon; and second, why but little was said concerning the presence of iron oxide in the material.

Jan 1, 1905

William H. Blauvelt, Syracuse, N. Y.:—Is the coal itself from which the briquettes are made of good quality for steam-ing-purposes? Mr. Parker :—It is an anthracite coal mined near Bank-head arid used on the Canadian Pacific railroad. It contains about 83 of carbon, 8 of ash, and 8 per cent. of volatile material. With regard to briquetting of a mixture of fine coal and coke-dust, I understand that a plant has been installed near Detroit in which coke is mixed with anthracite; also the plant of the United Gas Improvement Co. near Philadelphia is briquetting a mixture of anthracite coal, the resultant briquettes being used in the gas-retorts. Mr. Blauvelt:—The purpose of the Detroit briquette-plant of the Solvay Process Co. has been partly to use up the coke-breeze from the by-product ovens and partly to utilize the pitch. There is no necessity for mixing anthracite with the coke-breeze, but the supply of breeze is limited, and anthracite

Jan 1, 1909

R. W. Raymond, New York, N. Y,:—Since the presentation of my note on this subject at the New York Meeting, Professor Louis has pointed out an error in my statement of his conception of " pitch "—namely, he understands the pitch, in the restricted sense which he proposes, to be the angle of inclination of the axis of an ore-body, measured on the vertical plane drawn through the body; whereas, I represented him as proposing to define " pitch " as the angle of inclination of an oblique body, measured on the plane of the dip, in the direction of the strike. The difference will appear upon consideration of the accompanying isometric projection, Fig. 1, in which ABCD represents the plane of the inclosing ore-deposit (vein or bed), and AC the axis of the oblique ore-shoot. ABE is the angle of the dip, as universally understood; and ACE

Jan 1, 1909

E. T. Dumble, Houston, Texas (communication to the Sec-retary?):—In addition to the list of publications mentioned by Mr. Schorr and those by Prof. Hofman, I call attention to the following references:— Sludi sulle Lignite, by Capacci. Turin (1890). (An excellent work.) Report of Brown Coal Industry in Germany. J. Cosmo New-berry. Department of Mines, Victoria (1892).

Jan 1, 1905

R. Culver, Colorado School of Mines I appreciated Professor Starfield's presentation, because his approach to blasting research reflects my feelings that a lot of practical work can be done toward making short-term advances that can be used by the blasting industry. We should not forget this in our attempt to obtain solutions to such idealized problems as a mathematical theory of cratering. The blasting industry would like very much to have the efficiency of the basic blasting processes improved from the range of 20 percent up into the range of 50 percent. And many of these problems should be approached and attacked in the laboratories. Blasting research at the Colorado School of Mines for the past two or three years has been aimed at improving the pre-splitting process, because we feel it will become increasingly important to the construction industry. We have attempted to develop a unified theory of how pre-splitting works; and the more we investigate, the more variables we find. We may never obtain an entirely satisfactory theory of pre-splitting, but we have developed a tentative explanation. One of our first conclusions was that we are making very poor use of the explosive in current pre-splitting practice. But to appreciate this we must first consider how pre-splitting works. A series of parallel boreholes are loaded with low density charges which are detonated simultaneously. (Delayed detonation has been tried, but most people agree that simultaneous detonation is best, and this is what we found.) Stress waves traveling out from each borehole interact with the stress waves from the two adjacent boreholes influencing the direction of the fractures that occur and propagate from each borehole. It has been suggested in private communication with Mr. Wilbur Duvall of the U. S. Bureau of Mines, that the fracture between the adjacent boreholes is a result of the net particle velocities above and below the pre-split plane which tend to set up a net tension along the pre-split plane. Regardless of what the exact mechanism is that causes the fracture to propagate from one borehole to the next, we know that it, in general, relies upon an interaction of the stress waves. However, if there is a large compressive stress normal to the pre-split place, it can practically eliminate any possibility of obtaining the desired pre-split by preventing the desired fractures from getting started. Aside from obtaining a fracture along the pre-split plane, the other major aim of pre-splitting is to minimize the fracturing that occurs around the borehole. We do this by drilling a large hole and putting a small charge in the middle of it. This results in a badly decoupled charge which is very inefficient; most of the energy is used in compressing the air in the borehole. Out of discussions about how pre-splitting works, we decided that perhaps there was some other explosive geometry which would make more efficient use of the explosive, and result in optimizing the pre-splitting process. Starting in the laboratory with small plexiglas blocks, we found that a fully-coupled explosive charge of 5 grains/in. of PETN gave random fractures extending about I in. from the borehole. A 1/4 in. plexiglas plug fit into a 1/4 in. hole in a similar block with the same fully coupled charge gave random fractures extending out only about 1/2 in. due to the energy absorbed in fracturing the plug. If the plug was split longitudinally but otherwise using the same geometry, it was possible to drive a fracture about 2 in. in either direction from the borehole, with an even smaller amount of fracturing around the borehole.

Jan 1, 1967

By Y. C. Kim, F. Szidarovszky

G.M. Philip and D.F. Watson The article cited above reflects the difficulty that is often encountered in interpreting different aspects of kriging. Baafi et al. write : "Due to negative kriging weights, negative block grades may be obtained in some extreme situations, which makes no practical sense." Their solution to this particular problem is to constrain the kriged estimates to data values that have positive weights, i.e., reduce the subset size contributing to the estimation. As Journel (1986, p. 133) has already observed, "Negative weights are no evil." Indeed, they are an ineluctable result of the Lagrangian multipliers in the system of simultaneous equations. The fact that data distant from the estimation point may be given negative weights simply means that the influence of such distant values must be negated because their influence is contradictory to closer values (as illustrated by Baafi et al. in their Figs. 3 and 4). Of course negative kriging weights applied to distant grade values will not in themselves induce negative grade at some central interpolation point. Negative grade values, rather, seem to be a particular artifact of automatic methods of estimation involving accu¬mulations (Philip and Watson, 1985a, 1985b, 1987b). The elimination of negative weights, suggested by Baafi et al., is likely to exacerbate a quite different problem of kriging and piecewise spline interpolation discussed elsewhere (Philip and Watson, 1987a). In interpolating large data sets of scattered observations, changing local subsets or neighborhoods must be selected automatically. Because of the mathematical formulation of kriging and spline interpolation, discontinuities then occur between closely-spaced estimation points as the subset used in the estimation changes. If this subset is reduced in number and size, the discontinuities will be amplified and more common. ? References Journel, A.G., 1986, "Geostatistics: models and tools for Earth Sciences," Journal of Mathematical Geology, Vol. 18, No. 1, pp. 119-139. Philip, G.M., and Watson, D.F., 1985a, "Theoretical aspects of grade-tonnage calculations," International Journal of Mining and Geological Engineering, Vol. 3, pp. 149-154. Philip, G.M., and Watson, D.F., 1985b, "A deterministic approach to computing ore reserves. I, Grade Estimation," Earth Resources Foundation, Occas. Paper 2, The University of Sydney, 24 pp. Philip, G.M., and Watson, D.F., 1987a, "Neighborhood discontinuities in bivariate interpolation of scattered observations," Mathematical Geology, Vol. 18, No. 1, pp. 69-74. Philip, G.M., and Watson, D.F., 1987b, "Estimating interactions of topological functions," Mathematical Geology, Vol. 18, (at press). Reply by Y. C. Kim Before replying to the comments by Philip and Watson, it is desirable to establish the original perspective of our paper, which was intended primarily for the practitioners of mining who possess a working knowledge of ordinary kriging. The paper tried to convey the following practical points: (1) there are circumstances in which one observes negative weights, (2) illustration of circumstances under which one can expect negative weights, (3) should one obtain a negative estimated grade, one can resort to elimination of negative weights using the technique outlined in the paper, and (4) one could normally select only the first layer of surrounding assays to estimate the block grade. Under such a perspective, most of the comments by Philip and Watson are irrelevant and misdirected. For example, the practitioners do not find it difficult to "interpret" the results of ordinary kriging, as evidenced by the fact that they have been using the results for nearly a decade. Nor are the practitioners concerned with discontinuities in estimated block grades due to changing neighborhood of assays during kriging. What matters to the practitioners is the fact that kriging does provide the best estimate among all the estimation tools available to them as of today. ?

Jan 2, 1987

By Roy C. Kirkman

Dear Editor: It is with great pleasure that I read Mr. Howard M. Wells article in the December 1978 issue of MINING ENGINEERING entitled: "Optimization of Mining Engineering Design in Mineral Valuation." Mr. Wells very adequately presents the case and point that there are a great number of variables which must be analyzed during an economic evaluation of an FUND RESOURCE, such as copper or uranium. I wish to take this opportunity to suggest that, given today's economic climate, decision making takes place under conditions of uncertainty and that this uncertainty justifies our need to examine each one of the parameters entered into the evaluation model. It is my contention that the influence of the tonnages and grades as well as their distributions, have the most profound effect upon the results of an evaluation. Everyone concerned with the evaluation of FUND RESOURCES realizes that as metal prices decline or stagnate with sharply rising direct operating costs, cutoff grades (Gc) must increase according to the equation below which Mr. Wells uses: Gc = Total Operating Cost/(Market Price X 20 X Recovery) However, historically, we have seen cutoffs move dramatically lower in both the copper and uranium industries for the past decade. Henceforth, this established the metals industry most important argument for processing greater tonnages of lower grade materials from disseminated deposits (refer to paper by Kirkman, Roy C.). These disseminated deposits, created by either concentration processes (uranium) or dispersion processes (copper, gold, molybdenum), have log-normal grade distributions (Fig 1). Gross profits are rising, but unit profits are falling. The industry has created longevity through economy of scale, i.e., mining vast tonnages of low grade. In order to develop the great tonnages necessary to prove economic viability, we must examine alternatives at the low-end of the tonnage grade relationship. Notice from [Fig. 2] that as we move further to the right away from line A-B drawn tangential to the average grade curve at 45°, total profits will increase (given fixed annual production capacity) and unit profits decrease. The theoretical optimum operating point is where: [ ] At this point my observation is that slight shifts in production capacity bring about greater changes in profitability due to greater grade changes. Therefore, the best financial risk evaluation is obtained by totally revising the mining engineers methods and fixing the financial parameters such as discount and interest rates. A 10% shift in either of these two parameters will not cause near the same variance in economic viability as will a change on the GRADE-TONNAGE curve [(Fig. 2)].

Jan 1, 1980

By Donald N. Rosenblatt

I would like to commend the author on his description of Pinto Valley's plant, and its interesting innovations. The author's discussion of 18 ft in diameter by 21 ft long primary ball mills (the largest wet ball mills made to date) is of considerable importance to those who have been engaged in the field of studying ball mill liner wear as it relates to various grinding installations. While it is stated that the mills have operated on a fixed tonnage and therefore it has been difficult to determine the best liner pattern, calculations from the data in the paper indicates that for mills 1, 2, 5, and 6, the tonnage per hour varies from a low of 223 for mill No. 1, up to a high of 314, for mill No. 2, while mills 5 and 6 calculate 285 and 246, respectively. Analysis of the wear patterns for the single wave liners used in mill No. 1 as compared to the double wave liners in mill No. 2, suggests that the author's data may tell more than he suspects about liner wear to be expected and thus what should be a best pattern selection from what may appear to be only limited hours of operation. [Fig. A] is a reproduction of author's [Fig. 10], to which wear forecast patterns [F-1 and F-2] have been added. Forecasts are based on many previous studies of large diameter ball mill operations over many years of field service. Calculations from the first-wear pattern provide an initial wear rate of only 13 lb of liner per 100 sq ft of shell liner surface per day, or 0.031 lb per to: ground. However, the second wear pattern is ac-

Jan 1, 1978

R. B. BrinSmade, Ixmiquilpan, Hgo., Mexico (written discussion*).—While agreeing with Mr. Gibson that his net-profit tax is the fairest and best for mines, I believe that the tax he describes can be more accurately defined by another name. In accounting, net profits are usually considered to be the residual of the gross income after operating expenses and the annual charge for upkeep of plant have been deducted. Even the necessary interest on bonds or mortgages should not be subtracted in this calculation, for this interest represents merely that fixed portion of the net profits going as a return to that fraction of the total property value owned by the bondholders. Applying this method of calculation to the gross income of a mining property, we should onIy deduct operation expenses and upkeep of plant to get the net profits on its whole property value. So Mr. Gibson in deducting a further sum, to cover the interest and amortization of the capital expended in mine development and equipment, really arrives at something quite differen't from net profits; which can properly only be defined as the annual value of the mineral in the ground, or the royalty value in miners' parlance. From one viewpoint, Mr. Gibson's first principle, which assesses taxes, "proportionate to the benefits received by the person or property taxed," is identical with his third principle wbich assesses "with reference to the extent and value of the natural resources enjoyed." With one exception, everything of use around a mine represents a cash expenditure, or its equivalent in human labor, and state action has not added an iota to its value. The one exception is what makes the enterprise possible and it includes the mineral deposits and their associated surface; water and other landed rights. These natural resources are origin2!1y the gift of tile people acting through their agent, the state, and it is evident that a tax laid on whatever profits may arise from their enjoyment will be exactly "proportionate to the benefits received by the person or property taxed." Mr. Gibson is mistaken in his belief that the general property tax of the United States has the same incidence as his system of taxing profits, because the general property tax falls not only on land1 value—as does

Jan 1, 1920

By R. W. Barbaro, R. V. Ramani, K. V. K. Prasad, P. T. Luckie

Discussion by A. Unal Barbaro et al. (1990) implemented a tedious study aimed at delineating the short-scale spatial variability of sulfur in a coal seam. It is not possible, however, to extend their conclusions to any other coal seam or use their in any other fashion, because the background geology was not presented. Nor were the conclusions accompanied by geological interpretations in the paper. In addition, an unfortunate printing error occurred where the total sulfur (determined by High Temperature Combustion) variogram in Fig.3 was duplicated in Fig. 2 instead of the seam height variogram. A more serious error, however, has been committed in the definition of the variable, seam height. What is defined as seam height by Barbaro et al. (1990) is, in essence, mining height, and is not a regionalized variable that should be studied by geostatistical methods directly. Despite the fact that the variable, seam height, is not defined in the paper explicitly, the following quotation discloses the fallacy: "All roof rock that exceeded 1.8 m (6 ft) from the floor was not taken because the longwall was operated to not mine more than 1.8 in (6 ft) unless the coal seam height exceeded 1.8 m (6 ft)." From this definition, the seam height, and therefore the sampling height, is equal to the actual coal thickness, if the coal thickness is greater than 1.8 m (6 ft). Otherwise, it is equal to the sum of the coal thickness plus the thickness of the roof rock that complements the thickness to 1.8 m (6 ft). In the latter case, the seam height is constant and equal to 1.8 m (6 ft). It is possible to conduct a variogram study on a pool of samples that are realizations of two different variables. But the conclusions derived would not belong to any one of the two variables uniquely and, therefore, do not possess any significance. Geostatistical analysis is irrelevant for the sum of multiple regionalized variables formed by arbitrary selections. In a two-seam setting, for example, the mining height, as defined by the thickness of one seam at one location and the thickness of both seams at another location (due to quality and/or minimum thickness considerations perhaps), should not be used in the calculation of one common variogram. The two seams should be modeled separately. They can then be combined according to the specific purposes of the study. On the other hand, if a constant is added to a regionalized variable (to incorporate dilution perhaps), the variogram of the new variable will not change. Barbaro et al. (1990), surprisingly, does not give any geological interpretation of their results despite the fact that most of them can be explained by the origins of sulfur in a coal seam. The presentation of the results of a geostatistical study with no reference to the geology of the deposit is uninformative. It may also be misleading for the potential users of geostatistics, It is not unusual to find nuggets of pyrite in coal seams. In such cases, pyritic sulfur will probably display a spatial structure for only a very small distance that will appear in the experimental variogram as no spatial correlation. This very well known phenomenon is called the pure nugget effect in geostatistics (Journel and Huijbregts, 1978) and perhaps can explain the lack of correlation found for pyritic sulfur content. The lack of correlation found for the total sulfur content may also be explained in the same way because the total sulfur content is dominated by the pyritic sulfur content in this case study. One should notice, however, that the situation may completely be reversed after cleaning the coal. Not all of the inorganic sulfur should be expected to be in the form of pyrite nuggets in a coal seam. It may also be disseminated in the coal seam and it is expected that it follows a certain spatial structure. However, an existing spatial structure may be masked by including a part of the roof rock, rich in sulfides, into the seam thickness in an arbitrary fashion because areas having a sandstone roof sometimes are known to show a higher sulfur content due to the downward percolation of solutions rich in iron sulfides (Clark, 1979). Plants use sulfur in their growth processes. Much of this sulfur is bound organically during peat accumulation and coal formation (Cecil et al., 1978.) This suggests a spatial structure of some sort for the organic sulfur. However, it is not possible to test this hypothesis because the results obtained by the authors for the organic sulfur content are not given in this paper. For this reason, the conclusion that simple average of the nearby samples would provide the best unbiased estimates is questionable for organic sulfur and is not based on any substantial supporting evidence. It is suspected that no spatial structure was detected and this was due to high sampling and laboratory analysis errors. Before concluding that sulfur variability in the seam at the location of study was random, a more detailed study for the disseminated non-pyritic sulfur should have been conducted, not for the sake of scientific curiosity only, but also due to its utmost importance with regard to coal cleaning and emission control. Pyritic sulfur can be cleaned to a considerable extent, whereas organic sulfur can not, making the emission control strategies highly dependent on the spatial distribution of the organic sulfur (Knudsen, 1981). In the light of these facts, one wonders why Barbaro et al. (1990) did not present the results of their study for the sulfate and organic sulfur content. References Barbaro, R.W.. et al., 1990, "Short-Scale Spatial Variability of Sulfur in a Coal Seam,' Mining Engineering, Vol. 42, No. 11, pp. 1267-1269. Cecil, C.B., et al., 1978, "Geology of Ccontaminants in coal," report prepared for Environmental Protection Agency, North Carolina, 123 pp. Clark, W.J.. 1979, "An interfluve model of the upper Freeport coal Bed in part of western Pennsylvania," unpublished MS thesis, University of South Carolina, 57 pp. Journel, A.G., and [Huijbregls], Ch. J., 1978, Mining Geostatistics, Academic Press, London, 600 pp. Knudsen, H.P., 1981. "Development of a Conditional simulation model of a coal deposit," unpublished PhD dissertation, The University of Arizona, 109 pp.

Jan 1, 1992

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

By Stephen Semeniuk

Working with junior mining companies as a valuer, my experience with regulators is that simplicity works and the sales comparison method is the way to go. What I like about Mr. Ellis?s approach (as in his Table 7) is the integration of commodity prices with the timing of acquisitions and the implication of price changes in gold on the adjustment of individual project valuations. However, the sample gold-related appraisals in Ellis?s paper are pre-2008 transactions and readers should be made aware of the current market for such projects. Before moving on, to be noted is that the effective date of the Las Brisas appraisal (Ellis?s sample Appraisal 3) is Feb. 10, 2006; given that the subject value of Transaction 9, Choco 10 in Ellis?s Table 6 was listed as $353 million for a 95% interest in the con-cession, I am uncomfortable accepting that the acquisition was suddenly worth the adjusted value of $1,205 million (as given in Ellis?s Table 7). In some cases, illiquidity discounts can apply, and commodity-wise, in the one-month period between the acquisition in January 2006 and the adjustment to the Las Brisas conditions as of February 10, 2006, the indicated gold price change was only 41 cents/g ($12.60/oz); i.e., from $17.50/g to $17.91/g ($544.40/oz to $557/oz).

Jan 1, 2012

Jan 1, 1985

By A. D. Hughes

C. W. MERRILL*-Mr. Hughes' paper not only is very well presented but is most timely in that it covers a subject of vital interest to the United States. Tin is one of the strategic metals which has not been found here in appreciable quantities. The total United States tin output since the first recorded production over 100 years ago would not supply current consumption for a fortnight. On the consumption side, tin is extremely important in national defense because of its use in tin plate which, in the form of tin cans, makes it possible to feed properly the armies that the United States recruits from its civilian population in emergencies. Moreover, the internal combustion engines so important in powering tanks, planes, and other war machines, require large quantities of tin alloys for bearings and for soldering. These considerations, along with the fact that Malaya, historically, has been the leading source of tin to the United States, make the kind of information that Mr. Hughes has presented so ably, a matter of vital interest.

Jan 1, 1949