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By J. L. Huiatt, D. G. Foot

The Bureau of Mines, U.S. Department of the Interior, investigated methods of recovering potash values from process and waste brines. Laboratory pan evaporation of four chloride brines produced crude salts containing predominantly sylvite, halite and carnallite. Six sulfate- chloride brines produced crude salts containing primarily schoenite, kainite, leonite, sylvite, carnallite, and halite. Potash grades ranged from 7.2% to 22.2% K20, and recoveries by crystallization ranged from 85% to 99%. Sylvite flotation from chloride evaporites with amine collector, recovered 90% to 97% of the potash in a concentrate containing 54.3% to 60.3% K20. Fatty acid flotation of the high sulfate evaporite recovered 78% of the sulfate minerals in a 28%-K20 concentrate. Flotation of the remaining chloride minerals with amine collector recovered 80% of the potash in a 59.7%-K20 concentrate. Solar evaporation of 37 854 L (10,000 gal.) of brine recovered 99% of the potash in a crude evaporite containing 24.5% schoenite and 20% sylvite. Flotation in a 45-kglh (100-lblh) continuous flotation unit recovered over 95% of the potash in schoenite and sylvite concentrates, containing 28% and 62.3% K20, respectively. An economic evaluation is included.

Jan 1, 1985

Jan 1, 1985

By Ian J. Smalley

"Quickclay is an extreme case, it is by far the most mobile of all the common solid materials on the earth's surface. It has both a high water content and a mineral texture that allows it to flow with the utmost ease. A mass of quickclay that has lain undisturbed for thousands of years can be jarred into motion by any sudden shock." The quotation is from the paper by Kerr called, "Quickclay," which was published in Scientific American in 1963. This was probably the most widely read paper on quickclay ever published. It was reprinted by Fred Betz in his Benchmark collection on Environmental Geology (BM 25), A quickclay is an extremely sensitive soil. The sensitivity parameter is produced by dividing the undisturbed shear strength by the remoulded shear strength. If a value greater than 50 is obtained, then the soil can be classified as a quickclay. True quickclays are characterized by a very low remoulded strength of the order of 0.5 kPa. The classic quickclays are found in Scandinavia and Eastern Canada, but the 1964 Alaska earthquake revealed a considerable quick¬clay deposit underlying the town of Anchorage. This was discussed in a classic paper by Kerr and Drew in Engineering Geology in 1967. The Kerr views on quickclays were perhaps most clearly expressed in the paper with Liebling in Geol. Soc. Amer. Bull. in 1965. They suggested that the major critical conditions which contribute to quickclay movement are: substantial quantities of layer lattice silicates of colloidal size (about 40% or more by dry weight), sub¬stantial pore water (44%), a reduction in electrolyte concentration below 5 g/l of salt, and addition of a dispersant. There is still discussion and disagreement about the nature of quickclays and the mechanisms of quickclay slides; the "clay mineral"-based views favored by Kerr still find support, although an alternative "primary mineral" view suggests that it is the finely ground primary minerals

Jan 1, 1985

By Joseph W. Siefke

Jan 1, 1985

By Peter J. Maxworthy

INTRODUCTION There is no hard and fast rule on whether functions within a company, diversified or otherwise, should be strongly centralized or decentralized. In all diverse organizations, there are certain basic functions which remain common (or central) to each element of the business, viz: Personnel Management Cash Management Taxation Management Legal Planning Accounting Standards It would follow that each of these common factors requires some supervision at a central level to ensure that overall group objectives are met. It is true that other functions including: Industrial Relations Marketing and Distribution Production Research and Development Purchasing Management Accounting may also be common to each element of the organization. However, there is far less commonality in the degree to which these functions are central to the efficient performance and financial well-being of the business. Role of Operating Units The resources of operating centers may be viewed as a bank of funds, the nature of which can be changed from time to time, but the employment of which must provide for ongoing increases in the net worth of the total enterprise expressed in terms of market values. Operating units are required to continually review products, methods, and opportunities and to monitor avenues for incremental investment--all with a view to attaining the necessary additive net present value of future cash flows of the enterprise. Operating units should be permitted sufficient autonomy to enable the best use to be made of the skills and experience of the people it employs in order to produce a return appropriate to the value of assets employed. Role of Head Office The head office will typically comprise a specialist group--the leaner the better if one strongly adopts the decentralist approach--often acting as Service Centers but also performing a control function in the corporate sense. The head office function is a cost center. It may be instrumental in developing strategies for increasing revenues or reducing costs on a group scale, but it does not generate revenue. Every dollar spent on this function is an extra dollar to be generated by the operating centers in order to achieve an increase in corporate wealth. TREASURY MANAGEMENT Treasury management is concerned with the provision of finance, cash-flow management, and risk analysis. Each decision taken within the enterprise has a cash implication. It follows that a well-integrated central Treasury function can, in all likelihood, produce economic benefits. The degree to which the function should be centralized depends largely upon the unique nature of the operating units it is servicing. Levels of ownership, the calibre of unit operating managers, and the nature and geographic distribution of the business are all factors determining the degree to which the Treasury function is centralized. In the case of Peko-Wallsend, the Treasury Department is small, comprising four people. While divisional cash-flow management is largely decentralized, Treasury is responsible for the daily management of funds surplus to the immediate needs of operating units. Treasury also operates as central banker and provides funds to

Jan 1, 1985

By B. R. Berger

The Getchell area in the northern Osgood Range, Humboldt County, Nevada, was first prospected in the late 1800s for silver, copper, and gold; the first recorded mention of mining activity concerned a silver discovery. The September 17, 1874 edition of the Winnemucca Silver State notes that the Crystal Mining District was newly organized in the Fremont Range (as the Osgood Range was then called) to include discoveries of silver, lead, and antimony made on the Louisa claim. The name Crystal was derived from the plentiful quartz crystals found in-cavities near the prospects. This same area, occurring on the northwestern margin of the Osgood granodiorite stock, was later mined as the Richmond tungsten property, and crystals may still be found there in cavities in a massive garnet tactite. By 1878, how-ever, the name Crystal had been abandoned in favor of Potosi. The next flurry of activity in the Osgood Range was reported in 1899 when a copper strike on Granite Creek in the southern portion of the range received attention. The copper occukences were in a granite contact zone on the southeastern edge of the Osgood stock and, in 1916, the first tungsten in the district was discovered in the same deposit. During the last part of the nineteenth century, cattle and sheep were brought into the Kelly Creek Valley east of the Osgood Mountains by various ranchers. Alphonso and Adrian Bernard were among these ranchers, and in the first decade of the twentieth century, one of them recognized the altered rock where the Getchell Center it is now located. A 3-m (10-ft) deep prospect pit was dug on the outcrop, but the highest assay ran about $11/t ($10 per st). No further work was done on the gold-bearing rock. In 1934, Emmet Chase of Battle Mountain and Ed Knight of Golconda prospected in the area of the Bernard prospect pit and located several lode claims. At this time, Noble H. Getchell, a state senator, was looking for new mining opportunities to develop. He held interests in the Gold Circle Consolidated at Midas, which was becoming a losing venture. Chase and Knight brought their discovery to his attention, and he grubstaked them to prospect further in the area. In need of financial backing, Getchell solicited the help of George Wingfield, Sr., who held a minor interest in the Gold Circle. Wingfield was a successful banker and mine operator during the heyday of Tonopah and Goldfield, and he had become good friends with Henry C. Frick and Bernard Baruch. Wingfield let Baruch in on several very successful mining ventures in Goldfield, and Baruch returned the favor by underwriting the financing of the Getchell mine. Eleanor Roosevelt and Jack Dempsey were early stockholders in the Getchell operation. George Wingfield brought his brother-in-law, Roy A. Hardy, a consulting engineer who had constructed the American Flat mill near Virginia City, to look at the property. Upon inspecting the Chase-Knight claims, Hardy declared the whole area to be mineralized. A crosscut was driven to check the extent of the ore, and the results were better than anticipated. The locators were reportedly given $50,000 for the claims. The Getchell Mine, Inc., was organized on November 5, 1936. A small railroad that ran from Battle Mountain to Austin was purchased, and the ties and rails were moved to Getchell to be used in underground exploration. Enough reserves were found in the Center and South pit areas to construct a 40 t/d (44 stpd) mill. The financial and engineering help for the mill was provided by the Newmont Mining Co. for a 17 1/2% interest in the corporation. Newmont set about trying to solve the metallurgical problems with the sulfide ore, and also directed the early development work. Newmont wanted to grind the sulfide ore underground and oxidize it in the atmosphere by spreading salt on it. Detrital Flat in Arizona was purchased to provide salt for

Jan 1, 1985

By J. Vakili

The objective of this paper is to present a practical method for calculating minimum safety factors of rock slopes with a horizontal layer of weak material. It is demonstrated that the most critical failure surface, in this case, is a bilinear surface composed of a horizontal failure surface inside the weak layer and an inclined surface inside the rock. The model presented in this paper shows that with a good approximation, the change in slope for the bilinear failure surface may occur directly below the slope crest. This assumption simplifies the calculation of safety factors considerably, because the most critical failure surface is located directly, and the trial computations for a number of failure surfaces are not necessary. Special parameters involved in slope stability analyses of highwalls in open-pit mines are discussed and, by an example calculation, the applicability of this method is demonstrated.

Jan 1, 1985

By A. M. Johnson

Dewatering is a major operational cost at some mines. Under certain conditions, costs associated with water disposal may continue beyond the productive bye of the mine. For mines with mineralized waters, this is of special concern. Since 1974 experience has been gained from examination of a number of closed underground metal mines that exhibited drainage problems. It was observed, in certain cases, that had appropriate steps been taken prior to closure, the resulting drainage problems could have been largely avoided. Reclosure steps would have involved alteration to the 'plumbing system" of the mines; i.e., the drifts and crosscuts interconnecting the mine workings. This could have best been accomplished by the placement of bulkheads and/or selective drifting. In addition to reconfirming that hindsight is 20-20, a lesson learned from these case studies shows that a relatively simple hydrologic evaluation prior to mine closure may avoid a troublesome and costly drainage problem.

Jan 1, 1985

By F. L. Rip, B. C. Haydon

Manganese silver ores are well known to be refractory toward cyanidation. Roasting and sulfurous acid pre-leaching have been suggested for improving their amenability. This paper describes the development and implementation of the sulfurous acid pre-leach process for retreatment of manganese silver tailings at Tonopah, Nevada. The history of the material is summarized and the mineralogy is described. A brief review of an earlier application of sulfurous acid pre-leaching of a manganese silver ore is presented.

Jan 1, 1985

By V. Miller

Highly variable milling procedures within a geologically complex porphyry copper deposit owned by Kennecott Corp. in Nevada made it necessary to estimate copper recovery and concentrate grade in areas where actual test data was lacking. Estimation was made by first determining the relationships between desired metallurgical properties and the ore's petrology-copper mineral type, rock type, and copper grade. This relationship was then combined with previously estimated rock type, mineral type, and copper grade data in the mineral block model to predict milling properties.

Jan 1, 1985

By J. Trevor Eyton

This paper addresses some of the financial risk hedging mechanisms available to a corporation contemplating entering the mining business at a significant level of investment. The approach which I have adopted is that of a case study relating to the risk hedging aspects of Brascan Limited's acquisition of 46% of Noranda Inc., formerly Noranda Mines Limited, followed by some remarks on options open to mining companies for reducing financial risks. To appreciate the rationale for Brascan committing over (Can.) $800 million to the natural resource sector, some knowledge of Brascan's parent company, Edper Investments Ltd., is required at the outset. Edper Investments, prior to acquiring a 48% interest in Brascan, controlled Trizec Corporation, one of the world's largest property companies. Edper also was involved in the financial services sector through Continental Bank of Canada and Hees International Corporation. For some considerable time prior to Edper's investment in Brascan, Edper felt a need to provide a better balance to its portfolio of property and financial services. Brascan was rich in cash, relatively unleveraged, and with important existing holdings in natural resources and consumer products. The acquisition of a controlling interest in Brascan provided an opportunity to balance Edper's portfolio of property and financial services with world class acquisitions in natural resources, supplemented by consumer products and financial services. The end result of Brascan's activities over the last few years is illustrated by the following analysis of the book value of Brascan's assets at the end of December 1983. [Can.$% Millions _ Natural Resources81748 Consumer Products 654 38 Financial Services 157 9 Other Operations895$1,717100% ] Source: Brascan 1983 Annual Report. The large emphasis on natural resources came about from the fact that for Canadians operating mainly in Canada, natural resources were attractive. We were impressed by Canada's position in the world natural resource industry as illustrated by some of the following statistics: [CommodityCanadian Estimated Production In 1983 As % of World Total Newsprint 30 Potash 21 Uranium 18 Molybdenum 17 Zinc 17 Pulp 16 Nickel 16 Saw Logs 11 Silver 8 Copper 7 Lead 6 Gas 5 Oil3] Source: U.S. Bureau of Mines and Brascan estimates. In addition, the quality of Canada's reserves looked good to us. The polymetallic nature of many of Canada's orebodies offered a hedge against risk relating to any one metal. Put another way, the by-product metal credits offered a net operating cost advantage with respect to many of the metals mined. Our energy costs also appeared to provide Canada's natural resource industries with an advantage. We considered Canadian mining expertise as amongst the world's finest, as were the exploration equipment and technology developed in Canada. In addition, Canada offered a stable political climate and one we knew. Further, we felt the Canadian Government's future role in the industry would, on balance, be benign, partly because the Canadian content of the mining industry was very high in contrast to the petroleum industry. Granted, we could find cheaper sources of copper; however, to do so would involve venturing into regions where country risks were higher.

Jan 1, 1985

By James H. Boettcher

INTRODUCTION There are many and varied sources of finance available to the mining industry for exploration, development and/or the operation of mining projects and companies. These sources include equity from major as well as "penny" stock exchanges, precious metal mutual funds, private investor groups (from "grubstakes" to tax-oriented limited partnerships) and banks. The variety is representative of the fact that the world's capital markets are segmented and stratified according to risk-reward characteristics. This interrelationship is summarized in Exhibit I and 2 which relate (very approximately) various sources of finance to a typical mining project's life cycle and risk-return characteristics. The objective of this paper is to introduce, as it applies to the mining industry, a somewhat recent phenomenon represented by one of these capital markets segments referred to as "venture capital." Venture capital investing per se, which today is a multibillion dollars per annum investment business, goes back as far as Queen Isabela's backing of Columbus' "wild ideas." The real institutionalization of the venture capital process really began in earnest, however, after World War II. Today over 700 private venture capital sources (and more government related ones) exist providing funding to a range of industries, but typically related to the "high-tech" business. The table to the right shows industries financed by venture capital funds between 1980 and 1982. Conspicuous by its absence is, of course, mining which is not a great surprise since typical mining projects up until recently were large, required long lead times and were undertaken by established mining houses. Also, as most of you can appreciate, successful investing in the mining business requires a great deal of experience and understanding of the industry which most venture capital funds do not have. TARGETED RETURN The rate of return objective of most venture capital funds is, according to the legalized version, to realize a return which is "substantially in excess of that obtainable through conventional equity investments." One may say that a common objective of venture capital funds is to realize a 20% to 30% compound annual internal rate of return on capital over their life which is often ten years. [ ] This objective has been recently more feasible in the mining sector due to the development of smaller precious metal projects which cost less and are quicker to generate cash flow than the behemoth projects of the 1970s. In addition to precious metals, venture capitalists have invested or looked at a variety of other mining projects including ones as prosaic as a high margin "kitty litter" operation, sand-gravel and other industrial minerals operations, the leveraged buyouts of coal mines or mineral divisions of major energy or mining corporations, and even in in-situ copper or gold leaching ventures. A typical investment is in the range of $100,000 to $3,000,000 although some can go as high as 5,000,000. This implies a project size up to, say, 30,000,000 if a venture capital fund does it on its own. Larger projects can be done if the equity portion of the investment is syndicated with other investors.

Jan 1, 1985

By John R. Caldon

INTRODUCTION Leasing has become a major industry in many countries because of the advantages it affords. Whilst the accounting, legal and tax treatment of leasing varies from country to country, there is far more similarity than difference. The general approach to the subject is largely the same. This paper looks to the basic financial considerations in the decision to lease or buy. TYPES OF LEASES Before embarking upon the subject, it would seem appropriate to define a "lease". A lease may be defined as: "an agreement granting one party the right to use, for a specified period of time, property owned by another party in return for a series of payments of rental by the user to the owner''. Ownership, of course, generally entitles the owner to unrestricted use of the asset over its useful life in contrast to a lease which gives the lessee use over a limited period. The distinction between the status of owner and a lessee often is fairly small. In this case we are dealing with what is generally termed a "finance lease". A finance lease is one which substantially transfers the risks and benefits of ownership from the legal owner to the lessee. For example, a finance lease would exist where the lessee enters into a lease of an asset for most of its useful life and has an option to buy the asset at the end of the lease for a price which takes cognisance of the rentals already paid. Where a lease does not substantially transfer the benefits and risks of ownership to the lessee, i.e. those benefits and risks remain with the owner and lessor, the lease is termed an "operating lease" and is an agreement for the renting and usage by the lessee of an asset owned by the lessor for a limited period. An example of an operating lease might be where a tenant leases a building for a defined period say 6 years with the rent and occupancy subject to renegotiation at the end of the lease term. The economic consequences of the distinction between a finance and an operating lease is very important. With a finance lease, the lessee has a de facto economic interest in the asset and the alternative to a finance lease is some form of purchase; with an operating lease, the lessee does not have a basic economic interest in the asset and consequently a comparison with a purchase option involves far more than simply a funding comparison. Some of the principal differences between finance and operating leases can be summarised as follows: (a) finance leases: -the risks and benefits of ownership are substantially transferred to the lessee; -the lessor normally recovers his investment during the term of the lease; -the lessor in entering into the transaction is relying more on the creditworthiness of the lessee than the underlying value of the asset; - the lease is either non-cancellable or a large penalty will apply for unilateral cancellation by the lessee; (b) operating leases -the risks and benefits of ownership remain essentially with the lessor; -the lease rental income would not normally cover the recovery of the lessor's investment; -the lessor evaluates his risk in terms of the underlying value of the assets;

Jan 1, 1985

By R. S. Burns, J. G. Erskine

The performance of the nine 5.5 m diameter x 6.4 m mills (18 x 21 ft) initially installed at Bougainville Copper Ltd. did not meet the laboratory and pilot plant derived design expectations as measured by Bond Work Index. During the post-commissioning period, inefficient grinding of coarse material resulted in a build-up of large circulating loads and led to reduced throughputs because of pump and cyclone overloading. Installation of larger pumps and cyclones and development of an improved circuit control philosophy alleviated materials handling problems and permitted higher tonnages to be attained. Since 1977, plant throughput has been increased by installation of three additional mills. These are 0.9 m (2.9 ft) longer than the other nine and have a higher capacity. Developments in classification and mill speed-up, together with a finer ball mill feed size and substantial improvements to mill availability (99% in 1982) have further increased plant capacity. There is a continuing emphasis on improving grinding circuit efficiency in terms of throughput/grind. Current development work includes trials of graded ball charges, different liner profiles, and assessment of scalping/regrind proposals.

Jan 1, 1985

By Robert L. Akright

LOCATION AND HISTORY The Candelaria silver mine is located in an arid, isolated desert setting in Sections 3 and 4, T.3N., R.35E., and Section 33, T.4N., R.35E., Mineral County, Nevada (Fig. 1). Silver was discovered in 1863 by Mexican explorers, and high grade silver veins were mined from the early 1870s through the 1880s. Essentially all mining had ended by 1890. The veins were mined by underground methods typical of the period. As is the case in many mining districts, Candelaria was studied and explored by a number of companies. All these efforts were terminated short of mine development because of low silver prices and difficult metallurgy. On March 1, 1976, Occidental Minerals (Oxymin) entered into a Limited Partnership agreement, known as Candelaria Partners, as General Partner with Congdon and Carey Ltd. No. 4. Prior to the agreement, Congdon and Carey had acquired the candelaria properties as part of a bullish silver program and did considerable exploration which indicated the possibility of a large reserve of shallow silver mineralization. GEOLOGY AND ORE DEPOSITS Silver and gold mineralization in the Candelaria district occurs in high-grade fissure veins with silver values ranging from 0.6 to 7.8 kg/t (20 to 250 oz per st). These veins, combined with the low grade disseminated mineralization in the intervening material between the veins, form Manto- like deposits 15 to 46 m (50 to 150 ft) thick. Three such deposits are found in the Candelaria district: the Lucky Hill, Mount Diablo, and Northern Belle deposits (Figs. 2 and 3). The average ore grade of the Lucky Hill and Mount Diablo [ ]

Jan 1, 1985

By Kenneth A. Grace

Jan 1, 1985

By B. Thomas Mansbach

INTRODUCTION The Overseas Private Investment Corporation ("OPIC") is a U.S. Government agency mandated to promote the economic development of the less developed countries ("LDCs") by assisting U.S. private investment in the Third World. Generally, investment decisions turn on the optimism or pessimism of the private sector's financial analysis of a project, with market price of product a major unknown in a very chancy set of projections. Discussions with American mineral companies, however, show that, more often than not, in developing country projects it is the political risks of investing in mineral exploration and extraction that pose the most serious deterrent to investment. In several of the projects described here, investments would not have been made if OPIC had not been involved providing support to the project sponsors and their funding sources. Clearly it is not OPIC's business to promote U.S. investment in a project which is not commercially viable, but OPIC's programs can neutralize the political uncertainties which act as disincentives to investment in otherwise commercially viable projects. That is to say, OPIC's programs are designed to reinforce market decisions and not distort them. Although OPIC is an independent agency of the U.S. Government, it is managed by a Board of Directors, the majority of whom come from the private sector. This, coupled with the statutory requirement that it be self-sustaining and operate with due regard for the principles of prudent risk management, requires that it operate on a business-like basis. Although established as a development agency, to the business public OPIC is both an insurance company and a lending institution, with two major programs which are available to U.S. investors in the minerals sector: its political risk insurance program and its finance program. Each has been specially tailored to the meet needs of the mining industry. The insurance program provides coverage against four basic types of political risk: Currency Inconvertibility, Expropriation, loss caused by War, Revolution and Insurrection and Interference with Operations as a result of an act of War, Revolution or Insurrection. Coverage against the risks of Civil Strife can be added to both War, Revolution and Insurrection coverage and Interference with Operations. Inconvertibility coverage provides protection against a deterioration in an investor's ability to convert local currency into U.S. dollars. This deterioration can be the result of either active or passive delays. Active delays consist of a change in exchange laws or regulations that leads to inconvertibility delays of 30 days or more. For example, if the exchange regulations at the time of contract execution allow an investor to transfer earnings equal to 18% of its registered capital per annum and the government of the host country later changes the law to allow conversion of only 12%, the insured would convert the 12% transferable under the new exchange regulations with the government foreign exchange authorities, delivering the remaining 6% to OPIC for conversion at 99% of the then prevailing rate of exchange. (OPIC does not cover devaluation risks.) Upon delivery of the local currency to OPIC, normally at the U.S. Embassy in the project country, the insured's account in the U.S. would be credited with dollars. Delays can also result from what is termed passive blockage, which includes administrative delays of more than 60 days (sometimes longer) caused by the bureaucratic tie-ups or pigeonholding of transfer requests, as well as delays suffered simply because the government of the host country does not have sufficient foreign exchange. The transfer procedure is the same as with active blockage - the local currency is delivered to OPIC in the project country and OPIC provides dollars in the United States at the then prevailing rate of exchange. The second coverage -- Expropriation -protects not only against the loss of the investment due to the well-known risks of expropriation, nationalization or confiscation by the host government, but also against

Jan 1, 1985

By Ross Glanville

INTRODUCTION The Optimum Production Rate (OPR) is one of the most important parameters in the evaluation of a mineral deposit. The OPR can also be expressed as the Optimum Mine Life (OML) in years since the expected mine life is determined by dividing the OPR per year into the estimated ore reserves. Unfortunately, very little time and effort has been directed towards the determination of the OPR. Instead, "rules of thumb" are often applied to select a mine life without due consideration of the economic implications of such a selection. A "justification" for a particular production rate is often based on a pre-conceived arbitrary requirement for a mine life of 5, 10, or 15 years, for example. In this paper it is demonstrated that such arbitrary selections for high-grade/low-tonnage mines (such as many underground gold/silver deposits) often lead to sub-optimal results. In fact, an apparently uneconomic deposit at an arbitrary production rate may be economic at the OPR. Consequently, investment opportunities may be overlooked if one analyzes mine properties based on arbitrary production rates. This paper analyzes the interrelationships of variables such as production rates, capital and operating costs, cut-off grades, discount rates, metal prices, etc. The analysis shows that the OML for high-grade/low-tonnage deposits is often in the range of two to four years. Although such mine lives intuitively appear too short to many individuals, it should be noted that, in the past, much of the mining industry became familiar with the economics of large scale mining operations. The rules of thumb developed for such large scale operations should not be applied to high-grade/low-tonnage mines such as many of the underground gold deposits. DEFINITION OF OPTIMUM PRODUCTION RATE The OPR is selected on the basis of maximizing the net present value of the after-tax cash flows. However, as discussed later in this paper, the production rate selected for a particular mine may be somewhat higher or lower than the theoretical OPR as a result of other variables such as: 1) the probability or expectation of additional reserves being discovered 2) the likelihood of being able to custom mill nearby deposits owned by others 3) the configuration or attitude of the orebody, which may place upper limits on the production rate 4) the residual, or salvage values, of the mine/mill facilities COMPARISON BETWEEN DIFFERENT PRODUCTION RATES For an orebody with definite physical cutoffs*, or boundaries (such as faults or unconformities), the total ore reserves at different production rates may be identical. Consequently, for such an orebody, varying production rates result in differing mine lives. Although the metallurgical recoveries, the mine dilution, and other similar physical parameters may vary slightly at different production rates, the major differences are the capital costs and operating costs per ton. The ramifications of these differences are especially important at low production rates (up to approximately 1000 tons per day), but can also be significant at higher production rates.

Jan 1, 1985

By Bruce H. Gardner, Stephen A. Miller, Shosei Serata

The Bryan Mound salt dome in Freeport, Texas, has some of the largest and oldest solution caverns in the U.S. There are a total of five caverns of varying shapes and sizes randomly distributed throughout the salt dome. When the caverns were converted from a brine production to an oil storage operation, the effects on long-term stability of the caverns and inter-cavern behavior were analyzed to evaluate the future safety of the storage operation. The analysis was based on a worst-possible-case scenario, including accidental wellhead pressure loss. The impact of this pressure loss upon the thinnest partition between the two closest caverns was analyzed, using a case example of storing lightest weight LPG, thereby creating maximum differential pressures between these two caverns. The finite element method with the REM computer code was utilized for this analysis. Results of the analysis illustrate the basic mechanisms of the long-term behavior of the multiple caverns in the LPG storage operation.

Jan 1, 1985

By Ahmad Saberian

Five salt samples 20 to 40 cm tall, sealed on all sides except one, were exposed to a series of dissolution tests in various brine solutions and at different temperatures. Solvents were in the 50 to 96% saturation range and the temperatures varied between 40°F and 150°F. The collected dissolution data sets for vertical salt surfaces were analyzed and three were selected to be used for developing a general relation. After various curve fitting efforts, an empirical relation for salt dissolution rate as a function of brine temperature and salinity was developed.

Jan 1, 1985