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By William P. Lohden

INTRODUCTION It is recognized that, for a variety of reasons, some companies in the mineral industry today are by no means cash-rich and, in fact, are reporting a growing proportion of long-term debt in their capital structures. A review of recent balance sheets of small, medium-size, and some larger companies, indicates that a fair number still have substantial positions in cash equivalents such as U.S. government issues and other short-term money market instruments. In part, this paper concerns itself with companies which have sufficient cash and equivalents and/or cash generation to internally finance mining projects or expansions but which, for some reason, choose to borrow funds. Misconceptions which appear to frequently underlie so-called "leveraging" decisions are explored in this paper. Also considered arc' those circumstances under which any company, including one that is cash rich, should consider borrowing for a project in an amount beyond what would otherwise be necessary based upon its internal financing ability. I do not attempt to cover the raising of equity capital in public markets in this paper. OVERALL RETURN ON INVESTABLE CASH If you approach an individual with an investment which can be financed from savings, or by borrowing at a rate higher than one is earning on savings, that individual will quickly tell you that to pay interest at a rate higher than is being earned on savings would reduce overall income. Assuming that additional investment opportunities are not currently being considered, the individual concludes that a draw-down on savings, leaving a cushion for contingencies suited to individual circumstances, is the correct financial decision. For reasons discussed later, the simple mathematical logic leading to this conclusion tends to become obscured at the corporate level. When Leveraged Studies Are Inappropriate or Premature Surprisingly, I have heard of a number of companies that could afford to finance an investment solely with internal funds, which have made DCFROR (i.e. discounted-cash-flow rate-of-return) studies not only on a 100% equity basis but also on a leveraged basis. Certainly, a leveraged study would be appropriate if additional projects were competing for more capital than was available internally. Often, however, other projects are not far enough along to warrant a leveraged study and there is some danger that a project may be undertaken because it has an estimated acceptable rate of return, on a leveraged basis, that is not ultimately earned because some of the other projects are postponed or abandoned and borrowing is less than expected. For the above reasons, until it has been determined that (1) borrowing is a reasonable certainty for a particular project and (2) the timing and amount to be borrowed has been determined within a reasonable range of accuracy, I believe it is inappropriate and misleading to calculate DCFROR for a project other than on a 100% equity basis. Even when there are several projects currently competing for funds and borrowing will be required to finance one or more of them, using the common yardstick of calculating DCFROR on a 100% equity basis is a safer method to initially evaluate and compare the attractiveness of the projects. Many companies, whether they would have to borrow or not, will reject projects that on a 100% equity basis do not meet their minimum rate of return standards. Some companies which have to borrow will undertake a project provided the project's DCFROR on a leveraged basis meets its minimum return standards. The danger of this approach is that even moderate shrinkages of estimated cash flows could plunge return below

Jan 1, 1985

By Donald E. Zipperian

It has been recognized that froth flotation of mineral particles utilizing rising flow of micro size air bubbles, counter-current to quiescent falling flow of particles in a column type cell, provides a unique mechanical atmosphere conducive to extension of froth flotation process to much coarser and finer particles sizes than possible with mechanically agitated and aerated cells. 1,2,3,4. This paper describes metallurgical results obtained at several plant installations of large capacity commercial size Deister FLOTAIRE® Column Flotation Cells. These cells utilize air aspiration into surface tension lowered water to generate micro size bubbles. Operating costs, power, wear, and scaling characteristics of rougher, cleaner, and scavenger units are compared with mechanical units. Problems encountered and scale up criteria developed when increasing from 0.20m(8inch) diameter pilot cells to 2.42m(96inch) commercial cells are discussed.

Jan 1, 1985

By James J. Brady, Joginder S. Bhore, Robert B. Gordon, Jimmy W. Honeycutt

The authors of this paper have a combined construction experience of 70 years. They have served as engineers and managers on projects throughout the United States and Canada. Approximately 50 shafts have been sunk under their direct and daily participation. Several shafts have been selected from each of their experiences and have been briefly summarized here. SHALLOW SHAFT SINKING Sinking shallow shafts in highly urbanized areas adds an additional set of problems to those encountered in normal sinking operations. During the time between July, 1975 and early 1981, a series of shafts were sunk for The Washington Metropolitan Transit Authority. All of these were located along the "A" line, starting soon after the route departed from its path along Connecticut Avenue, proceeding to Wisconsin Avenue and then along Wisconsin Avenue to the city line at Western Avenue. (See WMATA System Map, Figure 1) The first three shafts were subcontracted from Morrison-Knudsen & Associates, Contract A9a, in July, 1975. They were: Albemarle Street - 27'6" diameter, 78'O" deep Brandywine Street - 30'6" diameter, 88.6' deep Ellicott Street - 33'0" diameter, 110'0" deep

Jan 1, 1985

By S. C. Westerfeld

The original patent for the gyratory crusher was granted to Philetus W. Gates in 1881. This first crusher was used by the Buffalo Cement Co. At the time these early gyratory crushers were developed all mining and quarrying, either underground or open pit, was done by hand; tonnages generally were small and product specifications simple and liberal. Likewise plants were small and demands for small product sizes practically nonexistent. In addition to substantial amounts of hand labor, the available material handling equipment was small, simple, and not suited to handling large run of mine ore. Mine can, cable ways, or belt conveyon transporting crushed material to the mill had limited capacity per hour. At the turn of the century the largest Gates crusher, the No. 9, had a receiving opening of 21 x 48 in. with a three-arm spider and a 21 x 80-in. opening with a two-arm spider. The steam shovel began to change the entire picture of open pit quarrying. As a result of the use of steam shovels around 1910 crushers with 48-in. receiving openings were built; thus it can be seen that the basic gyratory crusher was developed prior to World War I. The improvement of the internal combustion engine and the use of pneumatic tires created a new set of operating conditions. Early mines were small, using shrinkage stoping and small mine can. The capacity of material handling was small, limiting the size of the largest piece and the feed rate. Improved material handling resulted in more and more large open pit mines with large shovels and a tremendous increase in the size of off road or mine haul trucks or rail can. Primary gyratory crushers also increased with receiving openings as large as 60 in. and connected hp of 1,000.

Jan 1, 1985

By M. T. Erickson, C. A. Rowland

Ball mills 5.5 m (18 ft) in diameter and larger tend to use energy delivered to the mill less efficiently than smaller diameter mills, particularly when the large mills carry 40% by volume ball charges. This paper will explore factors used in scaling up ball mills, showing where the advantages of one factor can possibly be negated by another factor. The paper will propose possible operating limits and areas for further study to establish selection and design limits.

Jan 1, 1985

By Otto C. Kopp, Thomas B. Crattie, Dennis R. Owen

Whole-rock analyses of limestones, fine-gralned dolostones and coarser-grained dolostones adjacent to mineralized breccias (Coy mine, Mascot-Jefferson City district) were compared with similar lithologies adjacent to apparently non-mineralized breccias at the new Thorn Hill section located approximately 39 km north of the Coy mine. Specimens were analyzed for Ca, Mg, Si, Al, K, Fe, Mn, Sr, Br, C1, S, Ti and P using X-ray fluorescence analysis. The concentrations of the major and most minor elements for Thorn Hill specimens fall within the range of concentrations for Coy mine specimens; however, significant differences (probability < 0.05) were noted for Fe, C1 and Br for fine-grained dolostones and for MgO, Fe and Mn for the coarser-grained dolostones. No significant differences were detected for the limestones.

Jan 1, 1985

By J. Murphy

The economics of microbial coal desulfurization are affected significantly by the proper selection of the plant site and by maintenance of variables at suitable levels. High sulfur coal particles below 200 mesh show sulfate production rates triple those with 150 mesh coal but grinding costs are greater. Slurry solids density increases from 5% to 20% reduced the rate constant by a factor of 10. Coal added to a batch reactor in the stationary phase resulted in a sudden second exponential sulfate production phase indicating feasibility of lower cost continuous operation. Successful operation in the absence of beef broth, yeast or added nutrients at non-sterile conditions enhanced projected economics. Finally, the need for adequate agitation and aeration was well established.

Jan 1, 1985

By Paul M. Jr. Musgrove, Thomas D. Henderson, Mark B. Nesbitt

Introduction History. Vat leaching operations began in October 1953. Since that time, about 4.2 million tpy of oxide ore averaging 0.72% copper have been treated. Economic conditions, improved operating methods, and increased production facilities have allowed the ore grade to be reduced over the years. The average ore grade was 0.84% Cu during the 1950s, 0.68% in the 1960s, and was 0.50%, or below, during the 1970s. By 1961 some 35 million tons of oxide ore had been removed from the mine, exposing the underlying sulfide ore body. A 5,000¬ tpd concentrator was constructed and put into operation to treat the sulfide ore in November 1961.1 The original crushing plants were used for both oxide and sulfide ores, but by adding a third crushing shift, six days per week, the total ore treated was raised from 12,000¬17,000 tpd. Dwindling oxide ore reserves prompted expansion of the concen¬trator to 13,500 tpd in 19672 so that exhaustion of known reserves of both ores would occur at nearly the same time. Again, no additional crushing facilities were added during the expansion. It was anticipated that the treatment rate of oxide ore would be reduced from 12,000 to about 9,000 tpd. Instead, the addition of two crushing shifts per week and improved operating procedures have increased the treatment rate to 26,500 tpd-13,000 tpd to the leaching plant and 13,500 tpd of sulfide ore treated in the concentrator. Geology. The Yerington ore body is a disseminated porphyry copper deposit where a quartz monzonite porphyry intrusive contains the major part of the ore values, with some copper mineralization found in the adjacent granodiorite and other rocks. The geology of the Yerington Mine was aptly described by J. R. Wilson (Mining Congress Journal, June 1963). The ore body is one of few porphyries where geologic conditions were optimum for the formation of an important concentration of oxidized ore with minimum economic effect of secondary enrichment. The principal mineral in the oxidized zone is chrysocolla, which irreg¬ularly occurs dispersed throughout the rock and as narrow seams along fissures. The grade of the ore in the oxidized zone is generally the same as in the primary sulfide below, although some massive concentrations do occur as vein-like fissures and as filling of breccia zones. Cuprite, tenorite, melaconite, malachite, and azurite occur but are not abundant. Lying between the chrysocolla horizon and the primary sulfide is a transition zone whose limits are irregular but seldom with vertical range exceeding 50 ft. Chalcocite, cuprite, melaconite, native copper, and chrysocolla occur superimposed on the primary sulfides. Chalcocite replacement of chalcopyrite, as well as secondary chalcocite, do occur. The primary sulfide minerals are chalcopyrite and pyrite, with minor amounts of bornite and covellite. There are no appreciable gold or silver values, and molybdenite has rarely been noted.

Jan 1, 1985

By Douglas A. Karvonen

"Competition in the world potash market has increased significantly since the late 1970s. The failure of consumption to grow at expected levels has led to industry over-capacity, a situation which is likely to persist at least until 1990. Individual Saskatchewan producers and their offshore marketing company, Canpotex, have responded to this challenge by increasing mining efficiency, developing more cost-effective and reliable transportation systems and establishing innovative financing and market development programs tailored to customers&apos; special needs. Investment in warehouse facilities to serve U.S. customers and exploration of opportunities for intermodal distribution through the Great Lakes and the Mississippi River system have maintained individual producers&apos; position in the highly competitive domestic market.Export sales through Canpotex have been bolstered by utilization of CIDA funds, Exp ort Development Corporation financing guarantees and other innovative payment plans which enable heavily indebted developing countries to maintain the import levels which are necessary for their agricultural development.IntroductionPotash is the general term applied to various potassium salts both natural occurring and commercially derived. The most common of the commercial product s are potassium chloride, potassium sulphate and potassium magnesium sulphate. The potassium content of potash is measured in units of K20 equivalent. The common grades of potassium chloride produced for agriculture average at least 60 0/0 K20 compared with approximately 50% Kp for potassium sulphate and 22% for potassium magnesium sulphate."

Jan 1, 1985

By Jack M. Jodrey, Neil D. Donnell, O&apos

Bituminous sands of the Lower Cretaceous McMurray Formation in northern Alberta constitute the ore for the surface mining operation at Syncrude Canada Ltd. These sediments represent a complex succession of fluvial, estuarine and marine depositional environments. Grade prediction is realized through a combination of geological interpretation, computer modeling, and reference to past mining experience. Accurate forecasts of feed grade permit reliable predictions of volumes for removal to meet budgeted synthetic crude oil production. This planning facilitates efficient allocation of mining equipment and resources. The feed grade to the Extraction Plant is monitored at various points along the delivery system.

Jan 1, 1985

By C. W. Matthews

Introduction Screening is an art, one of the oldest in the process field today, and one of the most widely used in our present age. Screening is being applied to an ever-increasing number of assignments, in an ever-expanding circle of industries. Screening is defined precisely as a mechanical process which accomplishes a separation of particles on the basis of size and their acceptance or rejection by a screening surface. Particles are presented to apertures in a screening surface and rejected if larger than the opening, or accepted and passed through if smaller. Screens are machines with screening surfaces used to classify materials by size. The screening surface is the medium containing the apertures for the passage of the undersize material. Screens are put to many uses - size separation, dewatering, desliming, media recovery, scalping, trash removal, washing, dedusting, conveying, concentration, and many combinations of these functions. It is interesting to note that screens are used for handling commodities

Jan 1, 1985

By A. Brown

"The first printed report on Canada's coal resources was published in Paris in 1672(1. Written by Nicholas Denys, then Governor for France of Isle Royale (Cape Breton Island), the report dealt exclusively with the coal of the Atlantic region because little or nothing was known about the interior of North America. Clearly, also, he wrote about a resource of which much was known among the military and early settlers of that day. This early knowledge is not surprising because the presence of coal is clearly displayed in the coastal cliffs of Cape Breton as it was also, at a later date, to the first arrivals on Vancouver Island.An example of early use was that of the French garrison at Fort Louisburg in the first half of the 1700s. Still earlier, in 1643, Governor Winthrop of New England reported the receipt of a small ship load of coal from New Brunswick (2). Despite this early knowledge there was no significant development of coal mines until the 1800s. This had to await the ending of wars between the French and British factions and the growth of population. Basically, also, its development awaited the beginning of the Industrial Age. Organized coal mining began in Canada in 1825 with the formation of the General Mining Association. This British firm was the creation of a group of London jewellers which had been granted royal rights, by the British crown, to all minerals in Acadia (substantially the present Maritime Provinces). The Association took over a number of existing small mines and opened up larger operations in the Sydney coal field. Subsequently, it expanded to the mainland Nova Scotia fields at Stellarton and Springhill. The Association continued in existence as the major coal producer in Canada until 1899 when it sold its properties to the Nova Scotia Steel and Coal Company, Limited (3). This Montreal-based firm managed the coal mines as a major Canadian producer of coal until 1968 when financial problems led to the expropriation of the mines by the Government of Canada. The federal government established the Cape Breton Development Corporation to operate the larger mines on Cape Breton Island. This Crown corporation continues to be a .major producer of coal in Canada."

Jan 1, 1985

By Richard D. Mills

Throughout the mining industry, many companies perform sophisticated business and financial analyses of proposed capital investments. However, once the project is approved, it is never reevaluated. At best, there is an attempt to control capital costs and minimize overruns. The post-installation appraisal, a formalized review of investment performance, may prove helpful. Typical Project Review A typical capital investment is approved after business and financial benefits have been reviewed with management.* The financial data shown to management often include a net income statement, cash flow analysis and summary economic data similar to those shown in Table 1 overleaf. These financials report the expected impact of the project on the corporation financial statements. This project is a rudimentary example of a capital investment decision. An actual project would undergo a more sophisticated analysis incorporating depletion benefits, deferred taxes and a detailed cost breakdown. The example project has several financial benefits that could result in management approval. For example, it provides an immediate net income benefit to the company, generates positive cash flows every year of the project life and has a discounted cash flow rate of return of 25 percent. However, it also has the disadvantage of a long payback period. A sensitivity analysis would show which areas of the analysis have the greatest impacts on profitability. Post-Installation Program Objectives The post-installation appraisal goes beyond the analysis shown in Table 1 by comparing actual results to those projected in the original economic analysis. The post-installation program has three primary objectives: 1. To provide a periodic performance review of major spending programs. 2. To review decision-making and evaluation procedures. 3. To provide a means of controlling individual project investments. The first major function of the post-installation program is the periodic review of actual performance of projects and investment programs, identifying those factors which proved critical to the health of investments. This review will serve to keep management abreast of progress, provide a comparison of actual performance against expectations, and provide valuable information that can be used for improving future economics. The second major function of the program is to perform a continuous review of the decision-making process. This includes testing of evaluation procedures, forecasting techniques, and logic used in making decisions. An information system should be set up whereby original evaluations and historical performance data gathered under the appraisal program are documented for use by evaluators and management when assessing past and future investment proposals. Such data should be particularly useful in evaluating new and developing types of operations and in activities where companies repeatedly reinvest. The primary purpose of this feedback system is to sharpen estimates to assure that they are realistic and attainable. The appraisal program also provides assurance that consistent evaluation procedures are being used throughout a company, leading to improved procedures

Jan 1, 1985

By D. J. Spottiswood, C. N. Robinson, D. E. Spiller, E. G. Kelly

This paper describes the performance of a new design of spiral that is optimized for fine coal cleaning. Reduced Performance (Tromp) curves are presented to compare this spiral with the older design, as well as with other commonly used coal cleaning equipment. As an aid to equipment selection and circuit design, data are also presented to show how variables, such as flow rate, pulp density, and particle size, affect efficiency and the separation specific gravity.

Jan 1, 1985

By Thompson IR, Solomons SS

Underground mining with the cut and fill method has been declining during the past decade or so, being replaced mostly by sublevel open stoping methods. During 1983 the Australian Mineral Industries Research Association Ltd. (AMIRA) commissioned a review of the method, with the aim of compiling the state-of-the-art, indicating future trends and recommending topics for research that would be needed to support this future mining. Mines using the cut and fill method in Australia and three other countries were visited to compile current practices and expected developments.Cut and fill is mostly used where geological and ground conditions are unsuitable for open or caving methods. These range from narrow, irregular orebodies to wide, massive orebodies where pillars are retained in ore. There is significant potential for improvement and further development of the method. It may then be used in a broader range of conditions and for orebodies that may not otherwise be viable to mine.

Jan 1, 1985

By H. F. Ghezzi

The indirect method of drying coal fines is applied to filter cakes which ordinarily contain 22 to 30% moisture and are not readily transportable. The "Thermal Dryer", which operates on the mass transfer principle, has found wide use in coal preparation plants. The thermal dryer is penalized in operation by the necessity of adding coarse coal to the wet fines before entering the dryer body in order to produce a permeable bed, and thus enable hot gases to uniformly contact the wet mass. The ratio of coarse coal to fines varies from 2:1 to as much as 4:1, depending on the average particle size, moisture, and ash content of the fines.

Jan 1, 1985

By Arnold R. Pasieka, George V. Sotirow

"The object of this paper is to outline a computerized net cash flow approach for practical cutoff grade determinations. A cutoff grade carries not only geological but also economic value, in which costs are balanced against revenues. For different situations, cutoff grades are a &apos;standard of value&apos; that are determined for the purpose of classifying economic or uneconomic mineral reserves in a specified time frame. In a constantly changing technical and economic environment, the decision to develop or maintain a mining operation at its best economic potential, requires an appropriate cutoff grade strategy, a strategy consistent with short- and long-term operational and corporate objectives and one based on realistic marketing and metal prices forecasts. The use of a project evaluation computer program, in combination with specific corporate net cash flow requirements, shows the most promising and flexible team approach for cutoff grade optimization.IntroductionThe recent recession has had a devastating effect on the Canadian mining industry. Exploration and mining R&D expenditures have been critically reduced and now are believed to be below healthy levels. Ore reserves, mine life and cutoff grades are careening in several directions because of low base metal prices, relatively high costs and sensitive precious metal prices.These conditions demand an improved understanding of the terms ""ore"" and ""cutoff grades"" as they are applied to the planning process and day-to-day operations. ""Ore"" or &apos;ore reserves"" is a dynamic concept, reflecting a cumulative effect of changes in geological, technical and economic conditions in terms of material which can be mined at a potential profit. By contrast, if economics are not the primary consideration, the term ""mineral reserve"" or ""mineral inventory"" should be used to describe the mineral deposit. For different situations, cutoff grade is ""a standard of value"" determined for the purpose of classifying mineral reserves as economic or uneconomic in a specified time frame. The question of mining at average reserve grade or low-grade material during high metal prices is of paramount importance for cutoff grade strategy."

Jan 1, 1985

By Kawatra SK

The incentive to control coal flotation circuits arises because of disturbances, from plant operating practices and variations in feed coal characteristics, which result in large amounts of fine coal being lost in circuit tailings streams and lower grade concentrates being produced. Additionally, the flowrates and compositions of con-centrates and tailings streams can have significant effects on dewater-ing brocesses. A universal control strategy for these circuits cannot be developed. Rather, three major groups of variables must be con-sidered during strategy development: coal characteristics; circuit design and operating practice; and the variables selected to control the process. The second. and third groups-are discussed in this paper and examples from studies in operating plants are presented.

Jan 1, 1985

By D. A. Gulley, L. J. MacDonnell, William A. Vogely

INTRODUCTION Environmental impacts are most commonly associated with air and water pollution. Not- withstanding this fact, to many people the primary disruption caused by mineral extraction is the change in the character of the locale. That is, the environmental impact of mining includes, but is not limited to, the generation of residuals. The dramatic transformation of wilderness or rural land often creates strong reactions to mineral development. Thus, the basic issues of land use management are a useful addition to environmental discussion. In this section, we take up a discussion of federal, state, and local land use management regimes, along with a brief introduction to the potential role of economic analysis. Elsewhere in this volume, land management issues are discussed from other orientations, and the interested reader may wish to look there as well. Locatable Minerals on Federal Lands Legislation and Administration: Access to hard-rock minerals on the public lands is governed by the General Mining Law of 1872. This law declares that "valuable mineral deposits in land belonging to the United States . . . are hereby declared to be free and open to exploration and purchase . . . ." In order to initiate rights, prospectors are required to physically stake claims of specified sizes and shapes following basic procedures set by federal law which may be supplemented by the individual states. Rights to these claims are protected at the exploration stage so long as actual possession is maintained and diligent exploration activity is underway. If a valuable mineral deposit is discovered on the claim, the claimholder earns the exclusive right of possession as against private parties so long as the claim is properly maintained. To maintain this exclusive right the claimholder must per- form $100 worth of labor or improvements, known as assessment work, on each claim every year and make related annual filings with the U. S. Department of the Interior. If the existence of a valuable mineral deposit can be demonstrated, and other legal requirements are met, the claimholder may receive a patent giving full title to the claimed land, including the surface in most cases. The purchase price is either $2.50 or $5 .OO per acre. The Mining Law has remained largely un- changed by legislative amendment during its now more than 100-vear existence. However, while the law itself has not changed, its interpretation and administration have changed considerably. Written at a time of rapid western expansion of the U.S. following the Civil War, the intent of the law was to promote mineral development by inviting unrestricted prospecting and by selling the lands containing mineral deposits at a minimal charge. As federal land policy shifted from one of rapid disposal into private ownership to one of retention and management for a number of uses, mineral patenting requirements have been administered more strictly. The most critical issue concerns what must be demonstrated to establish the existence of a valuable mineral deposit. The so-called "prudent man" standard was established in the case of Castle v. Womble (19 L.D. 455 (1894)):

Jan 1, 1985

By Treglown N

In any mining operation the curtailment of rising operating costs is of prime concern to management.One area of activity where costs are often disguised is that of longhole secondary breakage.This paper outlines sane operational techniques that have been considered and tested, resulting in improved fragmentation fran longhole stope blasts at New Broken Hill Consolidated Limited mine, Broken Hill, NSW.

Jan 1, 1985