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The seminar had its origins in an Inquiry into the Box Flat Disaster and one of the conclusions from this Inquiry was that there should be a better dissemination of technical knowledge and the results of research work. As a result of this Mr. W. Roach, Chief Inspector of Coal Mines in Queensland and Mr. R. Menzies, Chief Inspector of Coal Mines in N.S.W. had a meeting to see how this could be done. They concluded that it would be difficult to have the sort of regular meetings that would be possible where distance was not significant, but a seminar would be a major step toward satisfying this particular conclusion of this Inquiry. As a consequence, Mr. Roach, who is on the Committee of the Southern Queensland Branch of the Institute, suggested when the Branch programme was being planned this year that a meeting of this type should be held, and the Mine Fires Seminar which was held today is the result. We have received a great deal of support in arranging the Seminar. First and foremost I wish to acknowledge support from the National Coal Board in United Kingdom. Not only have they released Dr. Willett for a period of six to seven weeks to visit Australia, conduct the Seminar and give a series of lectures in various areas through the country, they have also borne the brunt of the financial support that has been necessary to make this possible. In addition we have received considerable support from many organisations in Australia. I 'mentioned this

Jan 1, 1973

By W. M. Ma, Daniel W. H. Su, K. Centofanti, Yi Luo, W. L. Zhong, Syd S. Peng

2.1 INTRODUCTION When total extraction of an opening of sufficient size is reached in a horizontal coal seam, the roof strata in the overburden deform continuously to reach a new equilibrium condition. The severity of deformation decreases upward toward the surface. As the downward saggings of the strata propagate and reach the surface, there will be a depression zone on the surface directly above, but extending beyond the edges of the underground opening. This is the surface subsidence basin or surface subsidence trough. The surface subsidence basin is circular in plan view, if the coal seam is horizontal and the mined-out opening is square in shape. But it is rectangular with rounded corners or elliptical if the coal seam is horizontal and the mined-out opening is a long- and thin rectangle or a short-rectangular, respectively (Fig. 2.1). Most underground openings (e.g., longwall panel) assume rectangular shape when total extraction has been completed. Theoretically the edges of the subsidence basin are the points of zero subsidence. But it is difficult to exactly locate the points of zero subsidence. Therefore in practice the points with vertical subsidence of 0.4 in. (10 mm) are used. The final subsidence basin is that which exists long after the mining has been completed, because its magnitude and shape are quite different from the dynamic subsidence basin formed while the face is moving. 2.2 CHARACTERISTICS AND TYPES OF DEFORMATION IN THE FINAL SUBSIDENCE BASIN For a horizontal coal seam, every point in the subsidence basin moves toward the center of the basin. Subsidence is maximum at the center of the basin. Any cross-section that passes through the point of maximum subsidence and either parallel to AB or CD line (Fig. 2.1) is a major cross-section along which principal directions of surface movements occur. However among those infinite numbers of major cross-sections, two specific ones are of special significance, not only because the magnitudes of surface movements are the largest, but also because they are the most easily identifiable directions, i.e., one that is parallel to the faceline at the center of the basin (CD in Fig. 2.1) and' the other is that perpendicular to the faceline but parallel to the diction of face advance (AB in Fig. 2.1). Nearly all the subsidence data obtained in the US have been derived from these two cross-sections, although some cross- sections parallel to CD but near the edges of the panel have also been included. In addition to moving horizontally toward the center of the basin, every point in the basin also subsides vertically. The magnitude of subsidence increases toward the center of the basin. Therefore surface subsidence is a three-dimensional problem and should be treated so in all cases. On all the major cross-sections, only principal subsidence and principal displacement occur. Since subsidence and displacement vary continuously in every major cross-section, three additional deformation components are de- rived, i.e., slope, curvature, and strain. On all other non-major cross-sections on the other hand the five components are accompanied by two additional components, i.e., twisting and shear strain. The seven components of the surface movement are defined as follows (Fig. 2.2): 1. Subsidence, S. On any cross-section, the vertical component of the surface movement vector is called surface subsidence. It generally points downward. But sometimes it points upward in areas ahead of the faceline or beyond the edges of the opening. In such cases it is a surface heave which is usually less than 6 in. 2. Displacement, U. On any cross-section, the horizontal component of the surface movement vector is called surface horizontal displacement. It generally points toward the center of the subsidence basin. But in steep terrain, it moves along the downdip direction 3. Slope, i. On any cross-section, the difference in surface subsidence between the two end points of a line section divided by the horizontal distance between the two points is called the surface slope of the section. 4. Curvature, K. On any cross-section, the difference in surface slope between two adjacent line sections divided by the average length of the two line sections is called the surface curvature of those two line sections. There are two types of curvature: con- vex or positive curvature and concave or negative curvature. 5. Horizontal strain, e. On any cross-section, the difference in horizontal displacement between any two points divided by the distance between the two points is called horizontal strain. If the distance between the two points is lengthening, it is tensile strain with positive sign. Conversely, if it is shortening, it is compressive strain with negative sign 6. Twisting, T. On the surface of the subsidence basin, the difference in slope between two parallel line sections divided by the distance between the two line sections is called twisting. 7. Shear strain, y. Shear strain is the changes in internal angles of a square on the surface of the subsidence basin or on any major cross-section. It is the summation of the differences in incremental (or decremental) lengths between the two opposite sides divided by the original distance between the two opposite sides. More precisely, the surface deformation indices (i.e., slope, strain, curvature, twisting and shear) are defined by derivatives of surface movement components. For simplicity, the x- and y-axes of the cartesian coordinate system are set to be parallel and perpendicular to the cross-section of interest, respectively. In such a coordinate system, slope and curvature along x direction are the first and the second derivatives of the vertical components (S) of surface movement with respect to x, respectively, or i, = ds/dx and kx = d2s/dx2. Horizontal strain along x direction is the first derivative of the component along x direction of the horizontal displacement,

Jan 1, 1992

By Kazem Oraee

Implementing stable final pit walls in open pit mines during the open pit design phase and mine exploitation has become one of the most important concerns of mining engineers in recent years. Failure of mine walls can potentially cause loss of life, roads blocks, and damage to mining machinery, temporarily or permanently halt production at the face and in the worst case scenario, close the mine. Thus, the role of creating stable mine walls is crucial to safety and general operations of mines and any effort to optimize this process has great economic value for mine operators. This paper aims to illustrate the technical aspects of use of the successful presplit blasting method in metal open pit mines. It also shows that using this approach not only increases safety in mines through wall stabilization, but also will boost economic profits by savings in stripping ratio. In this regard, appropriate practical concepts for designing the drilling and blasting patterns and the role of selecting the correct drilling rigs are elaborated in detail through conducting a case study in Chador Malu iron ore mine in Iran.

Aug 1, 2013

By Daniel T. Brian, O&apos

Exploration targets and results in the mining industry are commonly summarized in terms of tonnage and grade. Business appraisals require, as additional information, the expected profit or loss implied by the physical summary. The early incorporation of knowledge gained through financial analysis computations can provide a means for economically resolving many common exploration and development problems. Examples of such applications from the activities of exploration planning, reconnaissance, land acquisition, and development planning are presented in this paper.

Jan 1, 1969

"This paper challenges the traditional notion that mine planners need to plan production so as to incur the lowest mining cost. For a given mine configuration, a mine that increases its mining rate will incur increased mining costs. In an environment in which operations are fixated on cost reduction, a proposal that increases costs will not be readily accepted. Such a proposal requires financial justification—the increase in costs might be recuperated by the additional production. This paper evaluates the net present value (NPV) across a range of copper prices for two underground orebodies located at different depths, using a production rate of 300 kt per quarter and a scenario that introduces additional equipment and costs for 450 kt per quarter. The evaluation was based on the changes of NPV for the orebody located at a shallow depth compared with the orebody at a greater depth. Discrete event simulation combined with mixed integer programming was used for analysis. Unlike traditional sensitivity analysis, this study re-optimizes the mine plan for each commodity price at each production rate. The results show that, for the low mining rate at the final copper price, an NPV of A$1530.64 million is achieved, whereas an NPV of A$1537.59 million is achieved at a higher mining rate. Even though pushing mining rates beyond traditional limits may increase mining costs, this option may be beneficial at certain commodity prices, particularly when prices are elevated. IntroductionA traditional notion among mine planners is that mining rates should be planned in such a way as to reduce production costs. This concept generally relates to the mining rate that results in the highest machine utilization for the selected equipment. Although an existing mine may consider increasing its mining rate by adding equipment to a given mine configuration, this typically increases mining costs. In an environment in which operations are fixated on cost reduction, a proposal to increase costs may be very difficult to argue for. The value of the mine plan is well recognized as varying with the mining rate for a given orebody (Smith, 1997)"

Jan 1, 2017

By A. H. C. A. Zimmerman

WE have just heard what must be regarded as a thoughtful, constructive and somewhat painful analysis of the financial function of our industry. While thinking about this, it is interesting to reflect on the conditions which have stunted the growth of the financial side of our affairs. Mining must be regarded as a wealthy business. •while immeasurable grub takes and development budgets have been lost, there can be little argument that a productive ore-body nearly always produces the type of wealth that breeds some extravagance. I recognize that this statement can be attacked from many sides, but an historical comparison with a commercial enterprise involving similar investment will demonstrate what I mean. However, these old times are be-ginning to disappear for a variety of reasons. High amongst these are: ( l) Increased costs of exploration. (2) Remoteness of many new finds. (3) Fixed or declining metal prices (particularly when expressed in constant dollars). ( 4) Constant demands for higher wages.

Jan 1, 1962

By C. M. Jones

The training program developed at Sierrita over the last twelve months has led to several significant improvements in both safety performance and productivity. Our most easily quantified results have been in truck productivity, where we have also experienced a 6% decrease in truck cycle times. We feel this is due to increased skill levels and awareness on the part of our operators due to our new training effort. The cycle time improvement has resulted in an increase in Truck productivity of 6%. Costs associated with productivity training have been $160,300. This includes program development and execution costs, as well as lost productivity during the training itself. These costs are offset by $1,400,000 in savings directly attributable to the increased skill levels of our technicians due to our training effort. As such, this represents a solid, high return investment at Sierrita.

Jan 1, 1998

By James H. Boettcher, W. Durand Eppler

INTRODUCTION In the second quarter of 1979, Rapid Mining Co., Inc. ("Rapid") inquired whether Crocker National Bank ("CNB") would provide $4 million in term loan financing to help ("Dry Creek") acquire the outstanding shares of the Dry Creek Coal Company ("Dry Creek") in West Virginia. Prior to approaching CNB, Rapid had sought financing with the assistance of a financial advisor from a number of commercial banks without success. A summary of the initial terms requested by Rapid is shown in Table 1 compared with the actual terms on which the transaction closed. It is not difficult to note that the two sets of terms differ significantly. This is often the case when financing requests based on the expectations and vision of a mine developer are juxtaposed with more pragmatic requirements of a commercial bank. The "art" and fund of structuring financing plans for mining ventures (highly leveraged acquisitions or grass roots) comes in working with mine developers to arrive at a final financial structure that meets their objectives and constraints as well as those of the bank or other financial institutions providing much of the financing. Beginning with the terms requested by Rapid and ending with the terms that closed the transaction, this article briefly describes the process we went through with Rapid Mining. The Seller and Buyer The Dry Creek Coal Company was established in 1961, after its owner acquired the coal leases from Republic Steel. Republic has mined the primary coal seam from 1948-1961. Dry Creek was owned as a subchapter S corporation (i.e., for federal income tax purposes, income is taxed at the shareholder level) and had been run on a low key basis. Since the company had virtually no debt and limited cash needs, the owner produced primarily when rail cars were available and income was required. Output was therefore erratic as is shown in the top of Table II, but the result was a profitable little company with an attractive free cash position. Because the owner wished to retire and enjoy his wealth in a more readily spendable form, he had put the mine, with stated recoverable reserves of approximately 13 million tons, up for sale. In contrast, Rapid Coal's investors consisted of a number of investors of disparate financial situations. They had agreed upon a primary objective of income maximization and planned an annual production rate of 120,000 TPA which they and the current owner believed realizable. The Formulation of a Financing Structure Figure 1 presents a simplified overview of the sequence of steps taken in the financing process which lasted approximately three months from start to finish. Since banks see many requests for funding and considerble time is required to follow up on each, an important step was determining, after a brief review of the materials provided to us, whether the basic "eonomic entity" was viable. In this case, the size and quality of the reserves, the inherent operating cost characteristics, the sales arrangements, the management/labor situation and Rapid's principles all appeared to be sound enough to warrant investing the time necessary to do a thorough analysis of the project. Once this decision was made, the evaluation and analytic process shown in Figure 2 was initiated. The first and most fundamental concern of any banker is whether the loan will be paid back as scheduled from the cash flow generated by the project. The amount of debt relative to the owner's equity is of course crucial in such a determination. Before the debt/equity issue was addressed, however, a number of more qualitative factors had to be studied and if

Jan 1, 1985

By Lynton B. Manssen

Introduction Net Present Value (NPV) techniques are becoming widely used in industry as a standard analytical tool in making capital budgeting decisions. However, NPV techniques are often misused in "common practice." A comparison was made between the use of NPV techniques in common practice and an Adjusted Net Present Value (ANPV) approach to capital budgeting in the financial analysis of a mining project. The comparison was made by applying both methods to a hypothetical copper project. The intent of the analysis is to provide an example for practitioners to follow when financially analyzing mining (or other) projects. To maintain the thrust of the analysis, the project has been evaluated as a stand alone, total project. No consideration has been made of the division of cash flows accruing to various owners over the life of the project. This omission will not affect the comparative nature of the analysis. This discussion assumes that the reader is familiar with present value as a concept and as a tool in capital budgeting. Finance theory has embraced NPV analysis as the correct way to evaluate capital budgeting alternatives. Many articles have been written expounding the virtues of NPV over other capital budgeting methods, such as Internal Rate of Return (IRR), Payback, Accounting Rate of Return, and others. It is not the purpose of this article to review all of the literature in this area; suffice it to say that in academic circles NPV concepts are accepted as the norm. A survey by Schall, Sundem, and Geijsbeck (1978) indicates that major US companies are finally following in academia's footsteps. Fifty-six percent of the companies responding to the survey use NPV techniques in their capital budgeting process. Further, some 86% of the companies surveyed use discounted cash flow methods (NPV or IRR) for capital budgeting decisions. This compares with a survey by Klammer (1972) that showed 57% of companies using both techniques, a considerable increase in seven years. With the increasing use of NPV techniques in industry, there are certain uses in common practice that can give misleading results. Five common errors in NPV analysis of large projects are: • No distinction is made between real and nominal cashflows. • The discount rate(s) used in the NPV analysis is not formally adjusted for risk. • There is no distinction of possible differences in the riskiness of different project cash flows; i.e., revenue vs. depreciation. • There is no recognition of the cash benefits to the project from interest tax shields (interest payments on the project's debt that are tax deductible). • There is no clear recognition of subsidies to the project from concessionary debt financing. No Distinction Between Real and Nominal Cash Flows Often, expected cash flows for a project are stated as a mixture of real (in constant dollars) and nominal (in current dollars) cash flows. For example, expected revenue cash flows may be stated in real terms and depreciation may be stated in nominal terms. If cash flows are added together to give an after tax cash flow, and this single cash stream is discounted, care must be taken to ensure that cash flows are consistently stated. All cash flows should either be stated in nominal terms or in real terms. In addition, the discount rate used must be stated in the same terms as the cash flows being discounted. Real cash flows must be discounted using real discount rates and nominal cash flows using nominal discount rates. Discount Rate Not Adjusted Numerous methods for obtaining discount rates are used in common practice. Schall and others

Jan 6, 1983

By Hugh Douglas

This paper discusses the financial health of the U.S. mining industry and its ability to meet the future raw material requirements of this country in the context of resource independence. The title of this paper begs several questions, and three will be raised here. The answers to them will form the basis for discussion. The three questions are: What does one mean by resource independence. How is the U.S. mining industry defined. How is financial health measured.

Jan 1, 1977

In constructing a financial model of a project significant effort is expended on capital and operating cost estimation, commodity price forecasts, and choice of discount rates while uncertainty in the primary input, the reserve, is often completely overlooked. The aim of this paper is to highlight the impact of uncertainty in the resource/reserve estimation process on the assessment of the financial performance of a project. Four qualitative processes have an impact on resource/reserve uncertainty. These stages are: 1.Ore definition 2.Geological interpretation 3.Resource estimation 4.Ore reserve estimation and mine planning. Each stage contains a number of tasks that may be considered as key performance activities (KPAs). Optimizing the manner in which these KPAs are completed can remove a great deal of uncertainty and error from the resource/reserve process. Examination of these KPAs within a company can also provide an insight to the quality of the information underlying the project. This will allow the company to identify any shortcomings in the data and to assess the resulting risks (Gilfillan, 1998). A hypothetical financial model based on a gold operation has been used to estimate the potential effect of resource/reserve uncertainty on revenue. Monte Carlo simulation has been employed to simulate a number of hypothetical scenarios: 1.a base case scenario which assumes no major errors or biases, but contains realistic margins for uncertainty that would exist in any project where work is being completed to the limit of best endeavours 2.a poor sampling scenario which assumes poor sampling practice and lack of understanding of sample preparation 3.a poor resource estimation scenario which assumes poor modelling and inappropriate choice of interpolation technique, and 4. a ?typical? scenario which represents a project where the majority of KPAs are not performed as best as they could be. The results show that realistic uncertainty ranges can generate changes in the estimate of potential revenue of plus or minus 30%.Therefore, it is important to allow for errors in these processes in any financial analysis or feasibility study. It is recommended that, when building a financial model, are view of relevant resource/reserve KPAs be carried out and appropriate ranges for uncertainty be applied to provide a range of potential outcomes. These outcomes can then be factored into the detailed cash flow analysis in order to ensure that technical uncertainty is built into financial decisions.

Jan 1, 1999

By S G. Gemell

"The financial model is an integral component of any project evaluation based on mineral resources, ore reserves and (at least internally) exploration targets. Given the unity of purpose for preparing financial models for project evaluation purposes, the diversity of both format and content of the finalised models is surprising. Many models are prepared by staff or consultants who are comfortable with a particular format that may be used for other purposes, such as budget preparation or financial reporting. It is natural in these situations that the practitioner will take these models and adapt them to the purpose. The end result may or may not succeed in providing a clear, accurate and sufficiently detailed view of the project’s economic viability.When preparing a model, the practitioner should be cognisant of the interpretation and review, or audit, process. The auditor may be a consultant or employee of a bank, potential equity provider or of the project sponsor itself. Depending upon the scale of the project and the level of participation of the entity that the auditor represents, the financial model will be interrogated more or less rigorously. In any event, the end user will require the model to permit easy change of inputs and will wish to confirm that such change is appropriately and thoroughly transmitted throughout.Accordingly, there are some ‘dos and don’ts’ that can be readily applied in the creation of the financial model that will greatly assist the end user, not just in the change of inputs, but also in reviewing the model’s integrity. The less time and effort required by an auditor in this regard is reflected directly in the cost of the review process.CITATION:Gemell, S G, 2016. Financial modelling with the auditor in mind, in Proceedings Project Evaluation 2016, pp 172–180 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Mar 8, 2016

By E. Kendall Cork

The traditional financial objective for a single mine company has been to operate as frugally as possible and to pay out most of the earnings as dividends. If the business is cyclical (as it is for most metals) the dividends might fluctuate quite widely. When the mine is exhausted the company disappears. This is still quite a viable strategy for a single mine company. It is not however a viable strategy for the world as a whole. The mining industry is built by mine development companies who can mobilize the people and capital to bring new mines into production. Their skills must include marketing, engineering, finance and other politics. It is very rare for a property to be brought in without the support of a major company that can provide all these services. The exceptions will usually have some other form of big brother support, for example the U.S. government uranium contracts at guaranteed generous prices. The mine development company will seek as a minimum to perpetuate itself by developing new mines in order to replace those which are running out. The more common and more ambitious objective is to grow -- that is to add to its ore reserves and current production by developing more new mines. The financial objectives for that company are very different. Obviously if all the earnings were paid out in dividends there would be nothing left to work with. The first financial policy then is to spend an appropriate amount on exploration for new properties. The next is to retain enough of the earnings to provide the capital for new projects at least sufficient for the equity. There is no magic formula as to what proportion of earnings should properly be distributed as dividends by a growth-oriented mine development company. As a rough rule of thumb distributing half or more will probably leave too little to work on and 30% or so is probably a good balance. However the circumstances differ widely from company to company. It may be useful to set an objective for the rate of growth of a company's earnings. Some have picked rates such as 15% per annum compounded. Others have set a target in real terms which might appear as 10 or 11% plus inflation. Obviously the arithmetic of compound interest is very attractive; however in practice there is much variation. Indeed current returns from existing operations swing widely with the business cycle and there is no assurance that economic new properties will be found according to someone's arbitrary time schedule. For example, Western Mining Corporation Limited in Australia explored for 30 years with little to show for it, but then found the great Australian nickel deposits and more recently the huge Roxby Downs copper. That long dry spell could not have fitted anyone's arbitrary calendar of growth and yet they would not have found such orebodies without that long period of effort. Should they have abandoned the search? Once a new property has been found or acquired there has to be a threshold rate of return on the new capital to be invested against which to evaluate the property's economics. Conventionally this seems to be 15% after tax, a number common in other heavy industries as well. In some cases it is expressed as a lower number plus allowance for inflation. Discounted cash flow analysis is a very useful tool but it does not make the decision. In the end a "go" decision depends on judgment of many factors some of which are numbers used in the DCF calculation whose credibility must be examined. It is curious how frequently investment proposals come in with the rates of return very close to 15%. The project advocates know that a number much less than 15% will not fly and that a number much more is not necessary. With much higher nominal and real interest rates of recent years, even though before tax, logic suggests that the hurdle rate should also rise. The power of compound interest is so great that 20% is very hard to achieve in any cash flow projection but 18% may be a sensible yard - stick. Once again it is remarkable how many project proposals come in with an 18% return. On the record the mining industry as a whole has not been overly restrictive in choosing its hurdle rates of return. This is shown by the abundance of metals in recent years and the failure of metal prices to keep up with inflation. All of the foregoing is standard text book stuff.

Jan 1, 1985

By Jr. Winters

The United States continues to be the largest producer and consumer of copper in the world. Table 1 on the following page shows several production statistics for 1974, the most recent year which the non-communist world copper industry might consider a good year, and for 1976 and 1977. In 1974 an estimated 24 percent of the non-communist world's newly mined copper was mined in the United States, and. 87 to 89 percent of that was from the western porphyry coppers. In 1976 U. S. new mine production was down to 22 percent of the non-communist world's newly mined copper, and the percentage of U. S. new mine production supplied by the porphyry coppers had risen to 89 to 91 percent. In 1977 the statistics remained the same as in 1976. U. S. porphyry copper production represented about 65 percent of U. S. refined copper consumption in 1974, rose to 75 percent in 1976, and dropped back to 61 percent in 1977 as imports of foreign copper into the United States began to swell.

Jan 1, 1978

By David M. Koogler

If you are contemplating starting a small coal mining operation there is a good possi¬bility that you can not afford it. If you, have already started, you may be on the road to bankruptcy. If you are a small but well established operator you may be trading dollars, or even dissipating your capital, equipment and other assets. A bleak outlook? Yes! Meant to be discouraging? No! Just a reminder that, with todays costs of doing business, high interest rates, rapidly increasing costs and decreasing sales prices, a small businessman/miner had best watch closely or he will be mired in something worse than a soft bottom - namely a cash and credit shortage, and in too many instances In recent times, bankruptcy. We will not dwell on what happens once you are that far gone, though I could cite a good example. But, let us look at what should be done to avoid such a catastrophe.

Jan 1, 1981

By Peter J. Szabo

The mining executive works in a cyclical industry. His employment is subject to the vagaries of the marketplace. Boom and bust has always been the industry's story. "Big oil" failed in its mining effort. This left emotional and financial scars on many mining families. One must remember that mining executives always play a high-stakes game. Given the cyclical nature of the mining industry, mining executives need to take care of their own financial security. The mining executive that does not plan for his financial security in this cyclical business is playing Russian Roulette with his future. Take a look at those people who have reached their later years with the mining industry. One usually finds three categories of people. Those few in the first group have been fortunate enough to have worked for one company. They have survived the winnowing process of cyclicality, political problems, and takeovers. They have reached normal retirement age. For them, the retirement years are usually comfortable. People in the second group have worked for those same mining companies. But these people have been forced out by early retirement. Or they have been laid off for cyclical, takeover, or political reasons. The third group includes those who have held many positions in the mining industry. Probably not until their later years are they fully vested, if at all, in a pension program. The first small group, then, is the exception. The others, unless they have taken care of their financial security, are doomed to later years of financial problems, stress, and unhappiness. Too late in life, many realize the harsh realities of failure to plan and implement a personal financial program. Mining executives go to some of the world's leading mining schools, to learn how to make money. The curriculum is technically strong. Most mining graduates are familiar with the intricacies of discounted cash flow, present value, and the Hoskold formula. But few of these same mining schools require courses on personal financial planning. Such courses could give mining students a realistic foundation and the mechanisms with which to cope with their cyclical profession. An executive has only three sources of money. He can make money at work. He can put his money to work. Or he can get money from charities, such as government programs. Of these three sources of money, money at work has the best chance of providing financial security in later years. The mining executive must think of the day when he will be too old to work and contribute to the market place. At this point, the quantity and quality of his investments will determine whether his later years will be secure. Along with the Mining Engineering Handbook, two key books should be included in the mining executive's library. These are Venita Van Caspel's The Power of Money Dynamics and Benjamin J. Stein's Financial Passages. These books contain the basic concepts of personal financial planning so critical to an individual's financial survival. Venita points out the simple formula that is the key to financial independence: Time + Money + American Free Enterprise (Rate of Return) = Opportunity to Become Financially Independent Chart 1 shows that this is not a trite formula. The chart shows the dramatic effects of compounding over time. The chart also shows at various yields what a $2000 a year Individual Retirement Account (IRA) contribution will accumulate. Chart 1 (from Money magazine) is based on the future value of an ordinary annuity. It shows that the key to amassing a small fortune by the time a person reaches his 50s is starting to save methodically in his 20s. This, coupled with the highest yields consistent with safety of principal will ensure financial security. There are significant effects from compounding money over time. Every year the decision is put off to save for later years will cost a person dearly by the time he reaches his 50s. For example, consider the decision to put off for one year a $2000 IRA investment at a 12% return. Starting it at age 31 instead of 30 will cost the executive almost $100,000 by age 65. What if the executive waits until age 35 to get started with his $2000 a year investment? He will then lose nearly $400,000 by age 65. Stated another way, the executive costs himself this $400,000 simply because he did not invest $167 a month for five years. $167 a month - that's less than an inexpensive second car payment. This $400,000 pool of money could provide the executive a $40,000 a year income at age 65, assuming a 10% return on invest-

Jan 11, 1985

By D. A. Karvonen

Although the economy in the Province of Saskatchewan has historically been agriculturally oriented, a major new source of wealth has been realized through natural resources such as petroleum and natural gas, coal and uranium and since the 1960's - potash. Potash or potassium chloride, in the form in which it is presently produced in Saskatchewan is used primarily as fertilizer, a source of potassium, one of three essential elements required for healthy plant growth with about 5 percent of production sold to the chemical industry for use in such products as soap and liquid detergent, glass and ceramics, textiles and some pharmaceuticals. Saskatchewan is estimated to have approximately 40 percent of known world potash reserves and its ten active mines account for some 25% of annual world production. The development of this resource was recognized to be important to the development of Saskathcewan. In an effort to guarantee a fair and lasting economic benefit to the Province of Saskatchewan the Potash Corporation of Saskatchewan (PCS) was created on February 4, 1975 through an Order-in-Council under the Crown Corporation's Act and later on April 1, 1976, the Potash Corporation Act provided for its continuation. PCS was given the mandate to acquire ownership of a significant portion of the potash mining capacity in Saskatchewan and to establish an organization capable of operating the facilities, marketing the product and conducting all of the other activities necessary for a successful corporation competing in the world potash industry.

Jan 1, 1983

By James H. Boettcher

In the second quarter of 1979, ASL Inc. inquired whether Crocker National Bank ("CNB") would provide $4 million in term loan financing to help ASL acquire the outstanding shares of the S&S Coal Company in West Virginia. ASL had, prior to approaching CNB, sought financing with the assistance of a financial advisor from a number of commercial banks without success. A summary of the initial terms requested by ASL is shown in Table I compared with the actual terms the transaction closed with. It is not difficult to note that the two sets of terms differ significantly. This is often the case when financing requests based on the expectations and vision of a mine developer are juxtaposed with more pragmatic requirements of a commercial bank. The "art" and fun of structuring financing plans for mining ventures (highly leveraged acquisitions or grass roots) comes in working with mine developers to arrive at a final financial structure that meets their objectives and constraints as well as those of the bank or other financial institution providing much of the financing. This article briefly describes the process we went through with ASL beginning with the terms they requested initially and ending with the ones on which the transaction was finally closed.

Jan 1, 1981

By Robert Halupka

The industrial minerals sector represents a broad range of products involving a variety of technologies serving a diversity of markets and end uses. Unit values of products vary widely, reflecting the peculiarities of each product/market sector. Generalizations are therefore understandably difficult to make and borrowers may need to take extra time to "educate" lenders on the key aspects of their business and industry sub-sector. This paper will examine the factors and the thinking that lenders apply when considering financing proposals to companies in the industrial minerals sector. If you understand the lender's perspective and their concerns, then you can make better use of your own time and resources when arranging financing for your company or project.

Jan 1, 2001

"Investment in diamond exploration has been declining over the past decade, in spite of positive long-term industry fundamentals and a growing interest in diamonds as an investment category. The lack of new significant discoveries in recent years has eroded investor confidence, yet no new discoveries are possible without investment in exploration. Junior ‘mine finders’ have been the hardest hit. Their agility, tenacity, and appetite for risk are not sufficient to attract the funding required, even at the greenfield stage. Developing new discoveries into mineral resources can be crippling without solid financial support. Junior incubators could play a crucial role, especially at the project evaluation stage – but where are they? Alternatives to traditional funding mechanisms have become available, many still untested in the junior diamond exploration space. Valuable lessons can be drawn from the past and used to inform emerging new strategies. IntroductionDiamonds are the ultimate expression of love. Their ancient and timeless allure continues to influence consumer emotions and behaviours across continents, cultures and age groups. Analysts are predicting a sustained supplydemand shortfall in the years ahead which will trend diamond prices generally upwards. With positive long-term industry fundamentals, one cannot help but wonder why funding for diamond exploration and development projects is so scarce.Investment in exploration across commodities – including diamonds – has been declining for a number of years, reaching a historic eleven-year low early in 2017. The lack of major diamond discoveries in recent years has done little to strengthen the case for investing in diamond projects, yet no new discoveries can be made without investment in exploration.Global estimates of known carats in the ground stand currently at 2.5 billion carats, which equates to around 18 years of production at current levels of 140 million carats (mct) per annum. Sustainable replenishment of depleting diamond resources is possible only through the development of new discoveries. This is what junior explorers are best at – but they need investors to fund their evaluation activities from early in the project development continuum."

Feb 1, 2019