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L&M have been involved on the Shotover since 1980 when we joined Jack and Barney Ryan, who had started in 1972 with gold at $45 per ounce after a successful career as roading and demolition contractors in Christchurch. The first 85 tonne plant was a typical NZ trammel-riffle table plant with an armour plated hull for surviving Shotover floods, and was fed by a 53 tonne UH20 excavator. All this gear had to be carted in over the Skippers road on a small truck or sledge for the heavy loads. This operation was successful and generated the cash flow to sample the lower section of river and plan a second plant. To reduce fine gold losses this was planned to be a jig recovery plant and also included a vibrating screen which saved space and weight over a trammel. There are five flowlines of primary jigs and one secondary, followed by two Knudsen bowls for cleanup.

Jan 1, 1985

By John K. Hammes

INTRODUCTION This introductory paper presents a description and definition of what the finance function is and what it specifically means for the mining industry. In its simplest terms, finance is, "management of money matters". As an area within the discipline of business administration it draws heavily on the related fields of economics and accounting, and to a lesser extent on marketing and production. MINING FINANCE DEFINED In preparing to write about what finance means to the mining industry, I asked a number of mining people the question, "What does mining finance mean to you?" Most responded that mining finance was "How a company borrowed money for mine development", and perhaps half those questioned included "raising equity" in the definition. It is not surprising that the mining industry concept of finance is the providing of funds needed for the objectives of the business, for that was once a view shared by authorities in the field of business administration. Further, it is certainly the area where much of the emphasis has been placed in the past ten to fifteen years as the industry struggled with the development of more remote and more refractory or lower-grade orebodies while profitability and internal cash flow were below expectations. No wonder project finance became such a popular topic. Twenty years ago it is probable that the emphasis would have been on mine valuation, for that subject was the area of finance then most often examined in industry publications. Papers concerning the pros and cons of payback, internal rate of return, and discounted cash flow appeared regularly. Let's examine the following situations, each the result of a financial decision: - Funding the exploration program in a developing country was accomplished by buying the next six-months budget needs in local currency. One week later the currency devalued 30 percent. If the purchase had been delayed or the local currency borrowed short term, a substantial saving would have been made in funding the program. - A major mining company borrows heavily to finance both expansion of its primary mining business and its entry into several new industry segments. When markets for all of the commodities it produces turn down for a prolonged period, there is concern over the adequacy of cashflow to cover debt service in addition to other company needs. The company's financial officers, however, had arranged very large committed credit facilities from numerous financial institutions which assured the availability of funds for several years. This enabled the company to implement a strategy to conserve cash, sell assets and survive until conditions improved. Further, short term suppliers of credit also were comfortable with the assurance that longer term credit was there to support them. -A medium size mining company financed several mines independently with limited obligations on the part of the parent company. The company decided to refinance the operations under one agreement. More flexible terms, lower interest cost and a longer tenor financing were achieved in return for assuming the risk as a direct obligor. - The exploration and development group of a large mining company proposes to develop a new mine in a country in which the company does not presently operate. When the investment is rejected they are advised that one reason was that the reinvestment assumption inherent in the discounted

Jan 1, 1985

By F. D. Ball, D. E. Gemmell

"Coal mining in New Brunswick dates from the year 1639, when, as today, coal was produced from the area surrounding Grand Lake near the geographic centre of the province. Current production by N.B. Coal Ltd. is approximately 453,000 tonnes per year and comes from a single, thin Pennsylvanian age seam. The history of development and understanding of the geological setting of New Brunswick coals is discussed, beginning with the work of A. Gesner in 1839. The lithostratigraphic sub-divisions of the Pennsylvanian strata proposed by various workers are summarized and the present hypothesis that only biostratigraphic subdivision is possible is detailed. The Pictou Group, which includes the New Brunswick coals, consists of repetitive sequences of sediments consistent with flu vial and upper delta plain sedimentation. The development of coal mining in the province has progressed from horse-powered stream-bank stripping operations prior to the late 1800s through to the present use of open stripmining techniques utilizing eight walking draglines of various sizes. During the intervening years the introduction and eventual phasing out of underground mining occurred with the near termination of the coal mining industry in the province prior to 1973. The coal seam worked by N.B. Coal Ltd. averages 46 cm in thickness, has never been found to be more than 76 cm thick and has both high ash (12.4 -31.1%) and sulphur (4.9-7.8%) content. The wide variety of coal beneficiation studies and tests completed on New Brunswick coals have lead to the conclusion that a washed New Brunswick coal product could be expected with 10 to 12% ash, 5 to 6% sulphur, and 30,225 to 31,388 1/gm. Recoverable coal reserves, including those in the area licenced to N.B. Coal Ltd. and those licenced, although not yet in production, to both the St. Lawrence Cement Co. Ltd. and Provincial Holdings Ltd. at Lake Stream and Beersvil/e, total 60 million tonnes. At present, coal in New Brunswick is removed from prospecting and staking and all existing and future coal exploration and development will be administered by agreement under the Mining Act. Based on the results of a recently completed drilling project undertaken by the Department of Natural Resources, seventeen coal exploration blocks which carry minimum work commitments will be offered to the New Brunswick Electric Power Commission on a sixty-day first right ofrefusal basis. Those blocks not taken up by the Power Commission will be offered under the same commitments to the private sector."

Jan 1, 1985

By A. Darragh

"Past Growth The Canadian coal industry has grown rapidly during the past two decades. Coal production increased over four-fold between 1965 and 1982; consumption almost doubled, imports remained relatively flat, exports soared and total demand increased nearly two and a half times. Coal production grew during this period at an average rate of 8.60/o, compounded annually; this remarkable performance is shown in Table 1 and Figure 1. The relationship between production and consumption is shown in Figure 1, where in 1981 the total Canadian production of coal for the first time exceeded total Canadian consumption. ln Figure 2, the relationship between imports from the United States and Canadian coal exports is shown; in_ 1981 again for the first time, exports offshore exceeded imports into Canada. The rapid growth in Canadian coal use between 1965 and 1982 followed a major decline after World War II, as the country moved rapidly to an oil based economy. Changes in consumption patterns between 1945 and 1982 are shown ~n Table 2. Railway consumption of coal was reduced to zero m the early 1960s. The industrial and domestic consumers market share fell from about 660/o in 1960 to 6.70/o in 1975; this share, however, appears to have stabilized in recent years and actual volumes can be expected to increase in the future. The steel industry's share of the coal market fell over the same period, but the volume in recent years has remained fairly constant at about seven megatonnes per year.Perhaps the most significant change in consumption is in the share of coal consumed in the generation of electricity; this has increased from 80/o in 1960 to over three quarters of the total Canadian coal consumed in 1982. This increase in thermal coal consumption has been supplied by indigenous coal, and was accompanied by a decreasing share for coal imported from the U.S.A. into central Canada. It is expected, because of the nuclear power commitment in Ontario, that this share will continue to decrease, although the total volume of coal imported may increase slowly over time. This will likely also have a dampening effect on future coal sales to Ontario from western Canada."

Jan 1, 1985

By John R. Bartels

This report discusses an improved method for rerailing underground railcars devised in a joint effort by the Bureau of Mines and Hoesch MFD. This improved method utilizes a lightweight hydraulic ram with hand-pump activation to move a bridge-mounted roller carriage in conjunction with steel-reinforced air-lift bags. This method provides a lightweight portable system in which only two workers are required to perform the mine car rerailing operation. Because of the very narrow confines in underground mines, use of overhead cranes and other surface rail techniques is not possible. This new system is designed for very low profile work, and provides the necessary lifting force from light- weight compressed-air bottles.

Jan 1, 1985

By A. W. Randall

Geological Aspects of Ore Reserve Estimates of Pine Point District Zinc- Lead Deposits, N.W.T. Zinc-lead ores of the Pine Point District, Northwest Territories, Canada are hosted in paleokarst cavities within a Middle Devonian carbonate barrier complex. Of the nearly 100 deposits found, most are irregularly distributed along two main regional stratigraphically controlled trends. The ores, which occur predominantly as open space filling, form deposits most of which average one million tonnes in size with an average grade of 10% combined zinc plus lead. Geological features related to karsting control not only distribution of deposits but also their shape, size and grade. The higher grade ore in these deposits generally occurs in a relatively small core area. Consequently, accuracy of reserve estimation is dependent on drill hole density and understanding of karst geometry. Several case examples will be reviewed to demonstrate the relationship between shape, size and grade of deposit, geological reserves and drill hole density, along with a discussion of geological ore reserve estimation methods.

Jan 1, 1985

By Mark S. Sanders

The purpose of the present study was to develop and test improved Type V workvests for use on dredge operations. The goal was to design workvests that would be more comfortable to wear, would interfere less with task performance, and would better meet the needs of dredge workers. It was hypothesized that by attaining these goals, the resulting vests would be worn more often and would be kept buckled more of the time than traditional vests. The study involved three major phases. In Phase I, visits were made to dredge operations and a definition of the problem was developed. Problems with current vests were identified and working conditions and tasks surveyed In Phase II, prototype vests were developed and laboratory tests were per-formed to assess comfort and interference. In Phase III, the prototypes were modified and field tested with actual dredge operators and workers.

Jan 1, 1985

By W. J. Fotheringham

This paper deals with the mining techniques employed at Canada Tungsten's northern Canadian operations, particularly with respect to their effect on productivity, safety, and stability of relatively large underground openings. The ore body was originally mined commencing in 1974 using conventional pneumatic jumbos in a topslice and horizontal benching room and pillar layout. Pillar stability became an increasing problem as mining progressed, leading to a re-examination and ultimately a conversion of mining method. Rock mechanics considerations and the effect of extraction rate on ground control costs and conditions are analyzed. Other areas discussed concern the results acheived through the use of large diameter I.T.H. drills, radio remote controlled L.H.D. units, and a unique system of hydraulic backfill placement.

Jan 1, 1985

By Robert G. Paul

President Reagan's Exclusive Economic Zone (EEZ) Proclamation of March 10, 1983, extended United States ocean jurisdiction 200 nautical miles offshore our coastal states and territories. The accompanying policy statement noted that this action was a result of recently discovered deposits of polymetallic sulfides and cobalt-rich manganese crusts, which could be a major source of minerals important to the U.S. economy and security. Within these 3 billion acres of exclusive economic jurisdiction, the United States has sovereign rights to explore, develop, conserve, and manage the mineral and other natural resources of the seabed. The President has directed the Department of the Interior (DOI) to encourage exploration and production of minerals from this area. The DOI, through the Minerals Managment Service (MMS), is responding to this presidential directive by developing a leasing program for nonenergy minerals in the EEZ. The authority to develop this leasing program is the Outer Continental Shelf Lands Act of 1953, as amended in 1978, which authorizes the Secretary of the Interior to grant leases for oil, gas, sulfur, and other mineral resources on the Outer Continental Shelf (OCS). The Solicitor of D01 has determined that the definition of the OCS for legal purposes extends at least 200 nautical miles offshore of our coastal states to the EEZ boundary. Section 8 (k) of the Act allows the Secretary to lease minerals, other than oil, gas, and sulfur, on the basis of competitive bonus bidding and under such terms and conditions as he may prescribe at the time of offering the area for lease.

Jan 1, 1985

This publication summarizes the research (in-house and contract projects) programmed by the Bureau of Mines for fiscal year 1985 (October 1, 1984-September 30, 1985) under its Health and Safety Technology Program. The objective of these projects is to provide an ordered and sequenced advance toward the Bureau's overall goal of providing the system technology required to create a more healthful and safer working environment for the Nation?s mining and minerals processing workers.

Jan 1, 1985

By Rod Heath

The Saskatchewan industry has the advantages of an ore body of a size and consistency unmatched anywhere else in the world, and large, efficient mines with production costs that compare favourably with those in other countries. On the minus side, Saskatchewan is remote from most major markets, and producers face a distribution challenge to reach the offshore markets which is the main focus of this presentation. One of the characteristics of the world potash business is that all of the major sources of production are located in the developed areas of the world, while there is no significant production in any of the highly populated developing countries. The major potash producers are located in Canada and the United States, in West Germany, France, Spain and the U.K., in Russia and East Germany, and in Israel and Jordan. There is currently no significant production in any of the countries in Asia (with the exception of Jordan where a plant is currently in the start-up phase), Africa, Latin America or Oceania, and all of these areas must, therefore, import a11 of their potash requirements from the producing countries.

Jan 1, 1985

By G. Gabra

"A process of leaching niobium oxide from pyrochlore concentrate using hydrofluoric acid is described. Variables such as acid concentration, temperature, reaction time, solid/acid ratio, agitation speed and particle size are correlated to the recovery of niobium oxide.The relatively low activation energy (1,86 Kcal/mole) and the dependence of reaction rate on agitation suggest that the process is diffusion controlled. The optimum conditions for extracting niobium oxide from the leach solution, using either methyl isobutyl ketone or tributyl phosphate have been determined.IntroductionMost of the commercial production of niobium and tantalum has been derived from the treatment of columbite - tantalite minerals.In recent years (1960) , pyrochlore mineral has been found to be an alternate source of niobium . This mineral varies widely in composition and contains in addition to the main elements of calcium , sodium and niobium, some tantalum, fluorine, rare earth elements, titanium, alkali an d alkaline earth elements.It is well known that the province of Quebec possesses several pyrochlore niobium deposits totalling approximately 151 million ton s at an average 0.45% niobium oxide(1). One of the deposits, the St-Honor carbonatite, was brought into production by Niobec Inc. in 1976. Flotation o f this material produces a concentrate of about 60% Nb205(2).In view of an expanding niobium market in recent years and the presence of large niobium deposits in the province, a research and development program was initiated at the Centre de Recherches Miner ales to evaluate known processes for the separation of niobium and tantalum from each other as well as their purification . Some work has also been undertaken at the CRM to develop an improved extraction process. T his work will be the subject of further communication s."

Jan 1, 1985

Contractors are used extensively in the development of underground mines in Australia. Often problems arise, some originating as far back as the feasibility stage of projects, through inexperience, lack of preparation and inflexibility by both parties.Guidelines are put forward for both principals and contractors which are seen as necessary to ensure that disputation is avoided and the full benefits of the use of contractors are obtained.

Jan 1, 1985

By F. A. Edwards

The Macassa Division of Lac Minerals Ltd. is a high grade gold mine that has been operating in Kirkland Lake, Ontario for the past 51 years. It produces approximately 120,000 tonnes of ore per year, averaging approximately 18.7 grams per tonne (0.45 ounces per ton) of gold. Over the years, the ore body has been developed to a point where mining takes place below the 1,220 m (4,000 feet) elevation and 1,830 m elevation (6,000 feet) west of the original shaft. The mine is currently serviced by two surface and two winze shafts. (Figure 1). The ore body extends below the 1,930 m (6,400 feet) Level which is the bottom of the existing mining operation. An ambitious underground exploration program has substantially increased these reserves. Concurrent with the discovery of greater reserves, has been rapidly escalating mining costs, particularly labour which constituted 66% of the total cost in 1981. These costs continued to escalate as the major proportion of mining was carried out to the west, far away from the existing hoisting systems. This required a three lift hoisting system for men, materials and ore. In addition to the increased travel time and ore handling expense, increased humidity, temperature, ventilation and compressed air losses have added to the inefficiency of the operation. As a result, studies were initiated in 1980 to assess the future of the Macassa operation. The results of the studies indicated that a new deep shaft with a potential to hoist from 2,135 m (7,000 feet) or below was the most attractive option. Detailed design of the shaft and associated surface plant commenced in January, 1982 and the following milestone dates were achieved: 1980 - initial study of hoisting and haulage facilities; January, 1981 - ore reserves in excess of 1 million tonnes of ore at 18.7 g/tonne (0.45 oz/ton) confirmed; March, 1982 - preliminary study of Macassa No. 3 Shaft completed; April, 1982 - permanent hoisting plant purchased; June, 1982 - site clearing commenced; September, 1982 - shaft collared; May 1, 1983 - shaft sinking commenced; February 11, 1985 - shaft reached 1,600 m (1mile); December 1, 1985 - shaft scheduled for completion.

Jan 1, 1985

By R. W. Metsger

The metamorphic zinc-iron-manganese ore in the Grenvillian rocks of the Reading Prong m Sussex County, N.J. is unique. The singularity of its mineral composition and associations has fueled controversy among economic geologists and mineralogists for more than a hundred years. The silicate-oxide ore, in two synformal concentrations has been mined since about 1838. The Franklin mine was depleted in 1954, while the one at Sterling Hill is still producing. Although the two mines are perhaps best known for their almost three hundred mineral species and have been a mecca for collectors, they -- as importantly -- have provided a window through which to observe more than a billion years of geologic history. When pieced together, studies reveal a sequence of probable sedimentary deposition, intense folding, pseudo- viscous flow with attendant negative diapirism, uplifting, erosion, karstification, hydrothermal alteration, burial, faulting, igneous intrusion, uplift , saprolitization, and glaciation.

Jan 1, 1985

By H. T. John

"The objective of this paper is to demonstrate how the optimum cut -off grade can be calculated for typical large tonnage openpit mines. In the examples, it is assumed that the concentrator tonnage is fixed and that there are no market restrictions. The mining rate is assumed to be variable. This is usually the situation at an operating property.ModellingA model of the ore body is required to examine alternate cutoff grade strategies. The model must be accurate in its relationship between grade and tonnage. Table I shows a typical relationship between ore tons and grade for various cut-off grades. The average strip ratio is also shown. For higher cutoff grades, the ore tonnage is decreased and the ore grade is increased. Strip ratio increases with the cut-off grade.Using the relationship between ton s and grade, and assuming a homogenous, long life orebody, a simple calculation of the optimum cut-o ff grade can be made. The objective is to maximize the present value of cash flows. For the long life homogenous orebody example this objective is satisfied by maximizing present cash flows.Cash flow is calculated by subtracting operating cost from revenue . Operating cost will increase with the cut -off grade as the strip ratio increases."

Jan 1, 1985

By Louis P. Gignac

The Lac Shortt gold deposit is located in Northwestern Quebec, at some 115 km west of the Opemiska Division and 380 km northeast of the Lac Dufault Division, as shown on Figure 1. Falconbridge's exploration crews drilled the first six holes in the gold-bearing ore zone in 1979. After further diamond drilling from surface in 1980, the decision was taken to carry out an underground exploration program. A three-compartment shaft was sunk to a depth of 340 metres in 1981 and 1982; it was followed by an extensive exploration program, which included 1073 metres of cross-cutting and footwall drifting, 645 metres of ore drifting and 11 200 metres of diamond drilling. The underground work was completed by mid-winter 1983. It was followed by a complete feasibility study of the Lac Shortt Project. After some $Can 14.2 millions in exploration expenditures, the Board of Directors of Corp. Falconbridge Copper approved in July 1983 additional expenditures of $Can 45 millions to bring the Lac Shortt Mine in production at the capacity of 261 000 tonnes per year. Gold price was $US 425 per ounce at the time.

Jan 1, 1985

By Thomas W. Wälde

BACKGROUND Foreign investment has been a major factor in bringing about the substantial mining industries of Chile, Peru, Bolivia, Venezuela, Brasil and Guyana. But economic nationalism and sentiment against foreiqn domination of vital national industries grew in the 1960s and most major mining projects were transferred into state owner ship. Among the state mining enterprises formed were CODELCO - Chile, MINERO-PERU/ CENTRCMIN - Peru, CCMIBOL - Bolivia (in 1952), Hierro-PERU, GUY-BAU/BIDCO - Guyana, etc. New investment during that time was discouraged because it was subject to the restrictive conditions of the investment regulations of the Andean-Pact, a grouping of Chile, Bolivia, Peru, Ecuador, Venezuela and Colombia. The philisophy was that mineral resources were to be developed exclusively by national enterprises. Essential foreign inputs had to be acquired "depackaged" as separate purchases of equipment and technical assistance services. As a result of the worldwide economic recession which hit the mining industries in 1980-1982, many projects that were viable in 1970 were not developed by the new state enterprises due to lack of capital, managerial and technical abilities and due to problems with marketing. As a consequence of the long-term decline of metal prices, governments experienced difficulty in getting investment organized through national or foreign enterprises and have had to face up to the trade-offs between national control and active mineral development. A change has since taken place in governmental policies. The 1981 Peruvian mining law, the 1982 mining law of Uruguay, the 1979/1980 mineral promotion laws of Argentina, all witness the gradual shifting of emphasis from restriction to promotion. The investment rules of the Andean Pact have been progressively softened through national regulation and today are more or less irrelevant. Nationalizations and forced renegotiations have not occurred in the last few years. Countries have gone to great lengths (without much success) to re-attract foreign investment on terms that accommodate the political sensitivities of the South American countries and the practical requirements of investors and financiers. For this analysis, three contracts have been selected which reflect this accommodation in three South American countries, where miner a1 production plays a major role in the national economy. These con tracts reflect both the attitudes and traditions of the individual countries, but also mark the shift in mineral investment policies that has taken place. EL INDIO AGREEMENT The 1977 investment agreement between Chile and St. Joe Minerals marked a dramatic relationship between Chile and foreign mining investor s. In Chile, mining of copper has played a major role in the country's history. Large scale copper mining was initiated and developed by Kennecott and Anaconda. The nationalization of these two companies under the Allende government in July 1971 started a wave of nationalizations of foreign-held mining and petroleum operations since then in many parts of the world. The military government supported the new Chilean state mining companies ((30DELCO and ENMI) , but it also attempted to accelerate mineral development by prom ting foreign private investment, thus reversing the nationalistic policies followed by the Allende and the preceding Frei government. The new policy by the military government is expressed in Decreto-Ley 600 (1974) which governs foreign investment in Chile. Decreto-Ley 600 is

Jan 1, 1985

By T. G. Legare

It is now well documented that trace amounts of silver, gold, and platinum group metals occur in certain geothermal brine deposits. A significant body of literature has been generated over the last twenty years which describes attempts to quantify the frequency and levels of these precious metals in the brines. This literature is often confusing and contradictory. For example Barnea 1 states that the Salton Sea geothermal field carries 2 ppm gold, yet more recent data by workers at Lawrence Livermore National Laboratory2 (LLNL) concludes that the gold level in Salton Sea brine is <0.07 ppb. They report a platinum level in one well of 55 ppb. This apparent contradiction may be explained by sampling source and technique, but is most probably explained by difference in analytical technique. Analytical techniques and problems will be discussed in the next section.

Jan 1, 1985

By Gary L. Hundley

The Bureau of Mines has devised a procedure to recover chromium chemicals from low-grade domestic chromites, which contain silicon and aluminum impurity levels that are too high to permit processing by present industrial processes. The Bureau procedure consists of reacting chromite with molten sodium hydroxide (NaOH) under oxidizing conditions to form sodium chromate (Na2Cr04). The reaction product is leached with methanol to remove the majority of the unreacted sodium hydroxide, then with water to remove the sodium chromate and the remainder of the sodium hydroxide. The sodium chromate product is recovered by evaporative crystallization from the aqueous solution. This report presents results of laboratory tests to determine the optimum fusion conditions and the chromium extractions obtained from several domestic chrotdte concentrates. These concentrates are from a variety of sources, including the Stillwater Complex in Montana, Kanuti River-Caribou Mountain, Red Bluff Bay, Kenai Peninsula, and Kodiak Island areas in Alaska, deposits in northern California, and a nickel-cobalt laterite from southern Oregon. All of these concentrates were successfully treated by the Bureau procedure. The best chromium extrac-tions obtained for each of these materials ranged from 69.5 to 98.9 pet.

Jan 1, 1985