The Economics of Mining (Paperback)

This historic book may have numerous typos and missing text. Purchasers can download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1907 Excerpt: ... The development in the bottom must be good; 2nd. The mine must pay 10 per cent per annum; 3rd. There must be 60 per cent of the price of the shares in sight. In other words, with favorable geologic conditions, Mr. Curle estimates in general that extension in depth is worth 40 per cent of the whole value, or 66 per cent of the profit in sight. I take it that these schemes of valuation refer only to the safety of the original capital, and do not include interest thereon, it being considered that the profit of the transaction shall arise from the possibilities beyond recovery of capital. I am not disputing the possibility of thus covering the necessary profit, but there seems something wanting where there is no expressed basis for calculating the time, etc., to gain a certain interest as well as recovery of capital. Theoretically, at least, any scheme of valuation of extension in depth, based upon ratio of ore-reserves or profit in sight, is wholly wrong. The quantity of ore in reserve is a matter of management not necessarily dependent on the size of the mine. A mine may have a reserve so large as to imply an extension in depth beyond all reason, or, on the other hand, a mine may be extremely valuable, with no profit in sight at all. No mine starts out with an ore-reserve, and upon this basis of mine valuation the whole of prospecting ventures would be eliminated from 1 The Economist (London), Sept. 5, 1903. legitimate mining. This basis of valuation also fails to take into account the great variability in geological character between different mines and different districts in relation to probabilities of extension in depth. Moreover, if I am right in the "economic limit " of ore-reserves, as stated in a previous article, to be in the most cases fr...