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By John R. Dudo

The Bureau of Mines Morgantown Petroleum Research Laboratory, with the cooperation of the Penn York Oil Company, cored the Dewdrop, Bradford Third, Lewis Run, and Sartwell sands in the Sartwell oilfield, McKean County, Pa. This report contains a review of the geology and depositional history of the field and an evaluation of the feasibility of secondary recovery of oil from the Bradford Third and Sartwell sands by waterflood or gas drive. Core analysis, geologic data, and electrical and radioactivity logs were used to evaluate the reservoir characteristics. Reservoir geometry, rock properties, fluid characteristics and saturations, and relative permeability-saturation relationships were used to assess the floodability of these two sands. The results of this study indicate that between 53,000 and 61,000 barrels of oil can be recovered by water or gas injection. The success of a waterflood or gas drive will depend on the field injection rates of the reservoirs comprising this oilfield. Following an economic evaluation, additional field work is recommended to further test the floodability of the reservoir.

Jan 1, 1967

Copper ores from small mines in the area south of Tucson, where the Twin Buttes mine is located, were first operated in the 1880's. Today this area is one of the great copper mining centers of the world. In 1963, Anaconda Company acquired the property from Banner Mining Company and in recent years joined with AMAX in a 50/50 partnership to work the Twin Buttes property. From the beginning, Anaconda had relied on conveyors to remove overburden, oxide material for eventual leaching, and ore from the open pit. In the large st preproduction stripping program in mining history, Anaconda in a four-year period (1965 to 1969) removed 266 million tons of overburden of an average depth of 500 ft (152 m) lying over the ore body. The alluvium overburden was stripped by scrapers carrying 70 to 80 tons and push-loaded by two D9 tractors operating in tandem. The scrapers delivered their loads to bins which fed a 60 in. (1.52 m) conveyor having a capacity of 8500 tph. The 25% slope belt conveyor, which was 2100 ft (640 m) long, transported the material to the brow of the pit, where it was transferred to an 8300 ft (2530 m) surface belt to a 1000 ton loadout bin. At this point, the overburden was trucked to the sites of the tailings ponds, where it was used for dam construction. During 1976, the one billionth ton of overburden was removed from the Twin Buttes mine. The Twin Buttes quartz monzonite porphyry contains only scattered mineralization of which chalcopyrite is the most abundant mineral, associated with chalcocite, covellite, minor bornite, and several oxide minerals. Oxidation has progressed to variable depths of up to several hundred feet below the base of the alluvium. Because of the depth of the sulfide and oxide ores and hard rock waste, two in-pit crushers and conveyor systems were also installed for their transport out of the pit; and in 1976 a third crusher and conveyor system was installed lower in the pit for waste rock only. The two initial crushing and conveying systems were designed to handle any of three functions: crushing waste to be disposed of by a rail-mounted stacker -conveyor, crushing oxide ore for conveyor and then truck transport to stockpiles for future leaching, and primary crushing of sulfide ore for conveyor transport to the two 30 in. by 70 in. (0.76 by 1.78 m) secondary crushers and the two 7 ft (2. 13 m) standards and four 7 ft shortheads in the third and fourth stage crushing plant. A third standard crusher has been in- stalled recently. Mining is done by 15 yd (11.5 cum) shovels which load 100- and 150-ton

Jan 1, 1978

By Jerry C. Tien

In 2009 China mined 2.695 billion metric tones (Gt) of raw coal. It is estimated that only 3-5% or roughly 135 million metric tones (Mt) of these were mined from 300 some surface operations. Except for a dozen or so large modern operations, most of China's surface coal operations are small by western standards, with annual production ranging from a few thousand tones to 300,000 metric tones (mt). Depending on the size of operations, equipment used range from small trucks and shovels to large bucket wheel excavators and draglines in sizable pits. This article provides a brief overview of China's surface mineable coal reserves, mining methods commonly used and increasing environmental concerns; introductions of several large surface operations are also provided.

Jan 1, 2012

By B Clements, G Lane

The operations and project environments are very different, but overlap in many areas. The development of mineral processing projects is goal oriented, is schedule focused and is a contractual environment. The operating environment for a mineral processing plant is oriented around longer-term commitments, focused on delivery against budget expectations, and an environment heavily influenced by long-term personal relationships, community relationships, and people issues.Further contrast is evident in the way expenditure is managed. Projects commit large amounts of money quickly to meet schedule-based objectives. Operations manage expenditure to minimise operating costs and are able to, or are forced to delay decisions on large expenditures. However, these two environments need to come together in many ways, ranging from greenfields plant handover to a new operations and maintenance crew, to day to day interaction and management of brownfields projects, often in close proximity.This paper considers the different perspectives people bring to projects and early operations, including the advantages and disadvantages of æoperationsÆ input to a project and models for managing value adding during project development, implementation and debottlenecking.CITATION:Lane, G and Clements, B, 2012. Operations versus projects - How do people think and what are the implications?, in Proceedings 11th AusIMM Mill OperatorsÆ Conference , pp 11-16 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Oct 29, 2012

By George S. Rice

A novel method of extinguishing a mine fire in a stowed or gob-filled area by employing liquid carbon dioxide under high pressure eras used recently with success at the President (Prasident) coal mine, Bochum, Germany, as reported by P. Cabolet in Gluckauf (Apr. 24, 1937, p. 393) The use of carbon dioxide gas as a fire-fighting agent in surface plants and in ships is now general practice in the United. States, but when it has been tried for extinguishing fires in mines in large areas more or less confined by stoppings it has not been successful. Examples of the latter method of attempting to fight mine fires are given in Bureau of Mines Bulletin 229, Fifty-Nine Coal-Mine Fires; How They Were Fought and That They Teach, by G. S. Rice, J. VT. Paul, and 14. VT. von Bernewitz (1927). The reason for its nonsuccess may be either that the stoppings are not tight or that the roof and pillars are more or less fissured and enough air passes into the area to sustain a slow fire, whether of spontaneous origin or produced by gas explosion or other source of ignition.

Jan 1, 1937

By R. V. Lundquist, A. E. Morris, E. L. Singleton

This experimental research was performed to determine rate - of - reaction constants on the MnO - C and Mn , C₂ - 3MnO systems at 1,100 ° , 1,150 ° , and 1,185 ° C. Reactions were conducted at atmospheric pressure under controlled flow of purified helium through the furnace chamber . The weight - loss method defined reduction percentages , and reaction products were identified by X- ray methods . The system Mn0 - C followed a linear reaction rate , and experimental results produced an apparent activation energy of 55.8 kcal per mole of Mn0 . The system Mn, C - 3Mn0 followed a parabolic rate of reaction law and yielded an apparent activation energy of 114.4 kcal per mole for the reaction .

Jan 1, 1964

By C. H. Wyndham, N. B. Strydom

Discussion C. G. Hinds (Member): The climatic chamber at Kloof Gold Mine was built to the design referred to in the paper presented by Professor Wyndham and Dr Strydom. As no suitable underground facilities existed for the acclimatization of labourers at the rate required, mining operations would have been severely restricted had there not been a climatic room timeously built on surface. The climatic room can accommodate 120 labourers per 4-!-hour shift. The standards laid down by the Human Sciences Laboratory were and still are being adhered to as strictly as possible. Through a shortage of European personnel the recommended degree of white supervision could not be adhered to and the use of Bantu assistants with a minimum education of Standard 8 was introduced. This is considered to have met with sufficient success to warrant acceptance as policy. The climatic room was brought into operation on the 1st September, 1967, i.e. two months after stoping at Kloof was commenced. The figures quoted herein therefore pertain to the period between that date and the 31st March, 1969, when the main shaft and the main surface fans were commissioned. The areas worked were sited between 5016 ft and 6 365 ft below surface. Virgin rock temperatures ranged between 92°F and 99°F. Stopes are cleaned by hand lashing. During the 20 months of stoping prior to the commissioning of the main shaft, mining operations at Kloof were effected through the Harvie Watt shaft of the Libanon Gold Mining Company Limited. In this period 10 452 Bantu labourers were acclimatized in the following categories: Experienced workers 7 326 New to the industry 2 086 Re-acclimatized 1 040 It will be noted that during the period, labourers 'new to the industry' averaged 22 per cent of the intake. This percentage fluctuated from time to time and reached 42 per cent. (The present percentage is 60.) The greatest number acclimatized during anyone month occurred in February, 1969 when 1234 Bantu were treated. The greatest number of Bantu acclimatized during any 8-day period was 411. As many as four X 41/2 hour shifts were run in 24 hours. The number of men found to be heat intolerant over the period of 20 months was 33 out of a total 9 412 Bantu. The following tabulation illustrates the history of the build-up of manpower and the climatic conditions under which they worked: The average dip of the reef is 35°. The number of heat stroke and heat exhaustion cases during the period of 20 months under most difficult ventilation conditions was Nil.

Jan 10, 1969

By R. K. Logric

Bor flotation tailings are very interesting from two reasons: first, is having due value presently, and second represent serious pollutant into this region of Balkan. This paper is only one small part of investigation about processing of valuable minerals from tailings, and desulphurization of this biggest pollutant in the same time, by refloating. The main objective of this work is to pay attention on this problem for resolve greatest environ-mental problem of Serbia and Balkan in the nearly future. Bor is potential regional risk spot, since that failure of its tailings dams would release high amounts of toxic materials that would reach the Danube River. The basic goal of this experimental investigation was finding some possibility for flotation tailings treatment by classical froth flotation. In order was obtained material effect through copper recovery, and environmental protection by moving the rest of reprocessing into the safe place. The work present obtained results of laboratory tests in two laboratories: laboratory of mineral and recycling technology at the faculty in Bor, and laboratory of department of mineral processing of ITNMS in Belgrade.

Jan 1, 2014

By PáDeáBosscher, A Bruwier, M Weidenbach, C Philippe, T Ly, A Van Den Bosch

In the mining business the cost of grinding media represents up to 40 per cent of the total milling cost and therefore grinding media optimisation has a direct impact on the concentratorsÆ bottom line. In the process of optimising grinding media alloys, Magotteaux developed its own methodology which consists of a series of analyses, tests, calculations and evaluations and assist the concentrator in optimising their processes.This paper presents the Prominent Hill case study where this methodology has been applied on both the secondary ball mill and regrind IsaMill«.The analysis of the wear conditions in the secondary ball mill allows Magotteaux to select a series of grinding media alloys to be tested to reduce grinding media consumption. By marking these different grinding media types with a unique drilling pattern, one can quantify the relative wear performance and cost effectiveness of each grinding media type within the same milling environment. After selecting the most economical grinding media composition a full scale industrial trial, involving topping up the selected grinding media is carried out and the media wear performance closely monitored and analysed.For stirred grinding mills, suppliers propose different grinding media, mainly ceramic beads, with specific properties and cost. Therefore the concentratorsÆ choice is a compromise between grinding efficiency, wear resistance and cost. The selection of the correct grinding media for stirred milling and the assessment procedure will be presented in this paper. The test results of the new stirred grinding media type in the regrind IsaMill« at Prominent Hill are presented and analysed.CITATION:Weidenbach, M, Van Den Bosch, A, Bruwier, A, Ly, T, De Bosscher, P and Philippe, C, 2012. Forging ahead - A collaboration between the OZ Minerals Prominent Hill Concentrator and Magotteaux to improve plant performance, in Proceedings 11th AusIMM Mill OperatorsÆ Conference, pp 105-110 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Oct 29, 2012

By Brandon Buschmeier, Frederic Masse

"Inclusions are a type of ground improvement that provide an improvement of a soil mass by insertion of a material with better characteristics than the surrounding soils. There are primarily two types of inclusions: “Soft” inclusions which are constructed of granular material (Stone Columns, Rammed Aggregate Piers, VibroPiers...), and “rigid” inclusions which are constructed of grout inserted with or without pressure (VibroConcrete Columns, Controlled Modulus Columns, Soil Mixing Columns).While the central principle of the inclusions is similar (i.e., overall improvement of characteristics of the soil mass below the structure), the load transfer mechanism is radically different for each technique. Therefore, the applicable design methodology is specific to the type of inclusions and there exists no universal method of design which spans across all inclusions.This paper will present an in-depth comparison between the standard design methods used for “soft” granular-type inclusions (Priebe modified, Balaam & Booker, Goughnour & Bayuk...) and the methods used for “rigid” inclusions which mainly rely on finite element analysis. The paper will explain why the design for soft inclusion methods cannot be applied to rigid inclusions and vice-versa. Each design method will be reviewed in detail to better emphasize its limitations and advantages.Two case histories will also be presented; one for each type of inclusions in order to illustrate the concepts developed in the first part of the paper.1 INTRODUCTION1.1 GENERAL OVERVIEW OF GROUND IMPROVEMENT WITH INCLUSIONSThe use of ground improvement methods to provide the appropriate amount of foundation support is a growing and constantly evolving industry. Traditional structural foundation methods including ‘shallow’ and ‘deep’ foundations do not adequately address the wide range of settlement tolerances, soil conditions, and loading considerations inherent to each unique potential project. In some instances, ‘shallow’ foundation solutions are simply not feasible due to soil and loading constraints. Furthermore, ‘deep’ foundation solutions are used to ‘bridge’ the soft compressible soils, ensuring that the entirety of the load in the structure is transmitted through individual elements into competent layers below the ground surface (bedrock, dense residual soils). Highly concentrated structural loads are transferred into the individual elements by means of direct contact requiring the use of structurally rigid surficial components (structural slabs, grade beams, and pile caps).Ground improvement bridges the gap between these two traditional methods, offering adequate foundation support while using more costeffective techniques and design methodologies. Inclusions are a type of ground improvement used to provide a reinforcement of the soil mass through the vertical insertion of a material with better characteristics than the surrounding soils. Much like deep foundations, inclusions are installed through soil layers with high compressibility and/or low bearing capacity and terminated in a suitable bearing stratum. However, unlike deep foundations, ground improvement inclusions rely on a distribution of load between the soil and the inclusions. By doing so, some of the structural load is applied directly to the soil in a proportion equal to its bearing capacity and compressibility limits, while the rest of the load is shed into the vertical inclusions down to the bearing stratum. Load sharing is a critical aspect in the performance and design of the various ground improvement methods."

Jan 1, 2015

"AbstractThe Sedimentary Basin area of Western Canada, which lies between the Precambrian Shield and the Cordilleran mountain area, covers approximately 800,000 square miles. Sediments ranging in age from Cambrian to Tertiary are present and, of these, horizons in the Upper and Lower Cretaceous, Jurassic, Mississippian, and Devonian have yielded commercial oil and gas flows. Producing horizons in the Cretaceous and Jurassic are sandstone, while all those of the Palaeozoic are carbonate rocks such as red limestone or dolomite (bioherms). Shows of oil and gas have been encountered also in the Cambrian and Triassic sediments.The broad structural features of this vast expanse of sedimentary rocks are the Moose Jaw syncline, the Sweet Grass-Battle River arch, the Alberta syncline, the Foothills belt, the Rocky and Mackenzie mountains, the Great Bear-Slave Lake basin, and the Mackenzie Delta Basin area.This contribution outlines the .stratigraphy and structure of the Basin area, and gives examples of present producing oilfield structures and stratigraphic traps.Part 1.-Regional StratigraphyIntroductionThe vast expanse of relatively undisturbed sedimentary rocks of western Canada has long been recognized as prospective territory to search for oil and/ or gas. This search in western Canada dates back before the turn of the century, but, considering the size of area to be explored and tested, the effort an<l money expended upon it, which, before the recent discovery of oil at Leduc, Alberta, appeared large and fruitless, now seems almost ridiculously small. A check-up of effort and money expended prior to and since the Leduc discovery would undoubtedly reveal that more wildcatting and development has taken place during the last two and a half years than during all previous years combined. The figures would astound not only the average citizen, but many within the industry itself."

Jan 1, 1950

By C. Zhou, R. Jacksha

This paper reports measurement results for radio frequency (RF) propagation around 90° corners in tunnels and underground mines, for vertically, horizontally and longitudinally polarized signals. Measurements of signal power attenuation from a main entry into a crosscut were performed at four frequencies — 455, 915, 2450 and 5800 MHz — that are common to underground radio communication systems. From the measurement data, signal power loss was determined as a function of signal coupling from the main entry into the crosscut. The resultant power loss data show there are many factors that contribute to power attenuation from a main entry into a crosscut, including frequency, antenna polarization and crosssectional entry dimensions.

Jan 1, 2016

By K. J. Palmer, D. A. Silva

"Evaluating resources and reserves requires the reliable modelling of geological domains and their grades. “Multiple point statistics” simulation is a relatively new geostatistical method to generate complex, high-resolution geological models by extracting high-order spatial relations from training images. A method based on combining multiple training images is developed to obtain the correct amount of large-scale continuity and short-scale variability. A calibration process matches the geological spatial variability between the final realizations and the drillhole dataset. A case study with data from the Red Dog mine, Alaska, United States, shows an appropriate reproduction of short-scale variability along boundaries between geological units.RÉSUMÉ L’évaluation des ressources et des réserves exige une modélisation fiable des domaines géologiques et de leur teneur. La simulation par « statistique multipoint » est une méthode géostatistique relativement nouvelle pour générer des modèles géologiques complexes à haute résolution par l’extraction de relations spatiales d’ordre supérieur à partir d’images d’entraînement. Une méthode basée sur la combinaison de multiples images d’entraînement est développée afin d’obtenir la bonne quantité de continuité à grande échelle et de variabilité à petite échelle. Un processus d’étalonnage fait correspondre la variabilité géologique spatiale entre les réalisations finales et l’ensemble des données de forage. Une étude de cas avec des données de la mine Red Dog, Alaska, États-Unis, montre une reproduction adéquate de la variabilité à petite échelle le long des limites entre les unités géologiques."

Jan 1, 2015

OBJECTIVES ??REDUCE OPERATING COSTS ??INCREASE LIFE COMPONENTS ??EXTEND LIFE of THE DOZER ??REDUCE MAINTENANCE COST ??REDUCE DOWNTIME ??IMPROVE DURABILITY & RELIABILITY ??IMPROVE BOLD JOINTS PREFORMENCE ??IMPROVE SAFETY

May 1, 2004

By B. Clermont

Ball mills are usually the largest consumers of energy within a mineral concentrator. Comminution is responsible for 50% of the total mineral processing cost. In today?s global markets, expanding mining groups are trying to optimize mill performances. Since comminution is concerned with liberating valuable minerals for recovery in the separation process, it is crucial to run the mills at the best operating conditions which lead to good liberation at competitive throughputs with minimum costs (energy and wear). The high availability of the equipment is also essential to maximize production and profit. To reach this key objective, continuous and reliable information about the mill operation is vital. An innovative tool which can deliver information about in-mill dynamics has been developed by Magotteaux. It can provide online and accurate measurements of the degree of grinding ball fill and pulp position for timely decision making and actions. This tool could be used on its own or linked to an automatic grinding ball loading system named Magoload. Therefore, ball load could be kept constant by using direct measurement. This article describes the Sensomag and presents some of the major improvements that can be achieved with it. Some other promising avenues are still to be explored. Keywords: Comminution, process control, process optimization, process instrumentation, online analysis.

Jan 1, 2010

By A Golev, G Corder

The concept of the circular economy has been gaining traction both in Europe and China.In Europe the Ellen Macarthur Foundation see their mission as accelerating the transition from a linear take-make-dispose economic model to a circular model that is restorative and regenerative by design, and aims to keep products, components and materials at their highest utility and value at all times. The Chinese Circular Economy initiative is effectively a sustainable consumption and production program utilising cleaner production, industrial ecology and life cycle management approaches to meet the national challenges of maintaining rapid economic growth while simultaneously enhancing environmental quality and maintaining social progress. A key characteristic of both of these circular economy initiatives is to design out, reuse or minimise the generation of waste.The mining sector, by definition, is represented by linear rather than circular activities, by supplying resources to society. However, being one of the world’s largest waste generators, the sector can adopt similar logic to that of the circular economy to improve its sustainability performance. Waste is a critical issue along the whole metals value chain, from mining waste to eventual end-of-life products, such as scrap steel from construction and demolition waste or the growing problem of electronic waste.CITATION:Corder, G and Golev, A, 2016. Can mining be part of the circular economy or is it squaring the circle?, in Proceedings Life-of-Mine 2016 Conference , pp 121–123 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Jun 28, 2016

By S. Kivrak

The firms in construction industry could not sufficiently adapt the rapidly emerging information technologies in recent years into their corporate structures. Therefore, in an effort to further exploit the benefits of information technology (IT), integration of the experiences and backgrounds of construction industry and the advantages of IT, is one of the most open-ended fields for improvement in this industry. Utilization of IT in the construction sites will positively affect the efficiency, productivity, quality and health & safety issues in the construction sites thus the cost and completion time of the projects. Within this context, augmented reality technology, which brings a new perspective into IT, can be put into the service of construction industry. Augmented reality which has been designed to improve the services in many application domains such as school education, military warfare, military trainings, industrial maintenance, retail and medical, can be defined in the simplest form as augmenting the real world with information from the virtual world. The main aim of this study, which presents an overview of an ongoing project, is to develop an innovative method by making a construction worker, foreman, equipment operator or a site engineer watch a very comprehensive and informative animation which will enable the said staff to perform or supervise all the phases of the activity he or she is in charge for in a more efficient, productive, safer and qualified manner by means of smart glasses using augmented reality systems. In this respect, training material related with the activities in the construction sites will be prepared and with a well-fictionalized scenario, animations exhibiting all the phases and details regarding the related activity (e.g. masonry, formwork and rebar works etc.), method of statement, correct and incorrect applications in comparison-wise manner, will be produced. Therefore, the user will be able to reach the training material, method statements etc. in the animations about the activity he or she is in charge for, enabling him or her to figure out the work as prescribed in the specifications. Basic trainings about the system will be given to target group, i.e. construction workers, foremen, operators, site engineers and managers working in the construction sites to apply the system on sites after all the system was tested. After the testings, to determine the effectiveness of this system, semi-structured interviews and survey questionnaires will be conducted among the mentioned target group. Therefore, the potential benefits of this system to the construction industry can be determined. The main target of this study is to implement an efficient, thorough construction management by orienting the staff in the construction sites to perform efficient, safe and qualified works by means of smart glasses that use augmented reality. There are relatively few studies about the implementations of augmented reality technology in construction. The outputs to be attained in the end of the study have the potential of improvement of time, cost, quality and safety parameters by ensuring a qualified, safe, efficient and productive construction management via augmented reality technology in the construction industry.

Aug 1, 2013

By D. W. Gillmore

Numerous orphaned strip mines and old refuse piles scar the landscape, contributing to stream pollution and degradation of the natural environment. Field experiments to reclaim acidic surface-mined spoil and refuse banks with fly ash from bituminous coal-fired powerplants were conducted at several sites in West Virginia. Fly ash served as a neutralizing agent and soil amendment, permitting vegetation of waste lands and disposal of large quantities of ash. Reclamation of land by this method is estimated to cost about $300 per acre of leveled site, depending upon the topography of the land and quality and availability of the fly ash.

Jan 1, 1972

By Kumar M. Lyer

Residence time distribution (RTD) of light and heavy liquids in a pyrometallurgical channel reactor was mathematically modeled by representing the reactor as a combination of ideal reactors. Cold model studies simulated the counter-current flow of slag and matte (or metal) with high-strength bottom gas injection. The experimental variables include flow rates, heights, density and viscosity of the two liquids; gas flow rate; injector diameter; and distance between injectors. The experiments covered a wide range, of the appropriate dimensionless parameter, including conditions in ferrous and nonferrous extractive metallurgy. Dispersion modeling studies were also carried out to determine the degree of backmixing. Results indicate that the degree of backmixing in the channel reactor for various operating conditions corresponds to that for 3-20 perfectly mixed reactors in series.

Jan 1, 1993

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&apos;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&apos;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&apos;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&apos;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