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MICROCOPY RESOIUTION TEST CHART
ANSI and ISO TEST CHART No 7'
1.0
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140
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^ APPLIED i rvMGE Inc
~^S f^ochcster. Nrw torK M609 USA
THE ECONOMICS
OF MINING
/ BY
T. A. HICKARD H. C HOOVER
W. R. INGALLS R. GILMAN BROWN
And other Specialists
EDITED BY i. A. RICKARD
00. ^ \ 2^1 1
FIRST EDITION
1905
THE ENGINEERING AND MINING JOURNAL
505 Pearl Street, New York
20 Bucklersbury, London, E. C.
c
c
G
c
r.irvKH.iir, igns.
The F.Ni^iNti-RiNu »^<
MlNISu IcIUKNAL
CONTENTS
PACK.
Cause; of Failure in Mining ( IVrcy Williams ) 1
The Valuation of Mines (.liditorial; ^
Ore Sorting (Editorial) ^
Sorting at juhannebburg ( T. Lane Carter) H>
Cost of Shaft Sinking by Hand 15
Gold Mining as an Investment ( iiditorial ) 17
Mining kiiks (Editorial) '-20
Mining Methods at Johannesburg ( T. Lane Carter) 2VJ
Notes on Zinc Mining (W. Geo. Waring) '^^
Gold Mine Accounts (H. C. Hoover) 34
The Payment of Extensions of Mining Plant out of
Revenue ( Edward Walker ) 38
Ore Treatment at Kalgoorlie (H. C. Hoover) 44
Gold Mining Accounts (Chas. V. Jenkins) SO
Mine Valuation by Government ( Editorial) 53
Cost per Ton as a Basis of Mine Valuation (R. Gilman
Brown) ^^
Mine Accounts (Theo. 3. Comstock) *>'-
Ore-Breaking and Sorting on the Rand (H. S. Denny) CK
Mining Investment (Editorial) ''7
A Card System for Mine Accounts (F. W. Denton) 80
Investment in Mines ( Editorial ) 8"
Gold Mine Accounts (R. Gilman Brown) 91
Card Systems for Mine Accounts (Theo. B. Comstock) 94
.Appraising Futures (Editorial) 9*^
Appraising the Value of a Mine 101
Mining Costs at Cripple Creek (J. R. Finlay) 103
Some Aspects of Mining Finance— I (Editorial) 110
Some Aspects of Mining Finance— II (Editorial) 115
Some .Aspects of Mining Finance— III (Editorial) 119
Some Aspects of Mining Finance— IV (Editorial) 122
Some Aspects of Mining Finance— V (Editorial) 125
Mining Finance 1-"
Resuing in Underground Work (F. C. Roberts) 131
IV
CONTIiMS.
K.)l)crt>).
PM'.E
Mnunfi and M.llmg m the M-Javc IK^.rt ( Lugu, ^__
Co.';;"i:un;zincO;V;nU;;j::plinU.:tncMW. Spencer ^^^^^
Hutchinson) ■,,■■', )<'•'
RcMTVcs ( H. C Hoover I . ■^■- ■■■ ■ jy„
K:.pn,en.anaOr.Ke.rve^n.^ ,,,
Minc Enn.pmen, and " " . Benj' B. Lawrence) . . . m
Mine Equipment and Ore-Kt^cr\e> lotnj. ^^^^^
Another Aspect of ^'''''f .f!'"^'"" ,,■ Ca.nchy ' to ' Ore-
The Econonuc Ratio .-f 1 reatment Capacty ^^^
Resrrves ( W «• IuR:'"^' o„o
Mining in Rhodesia ( F. C. Roberts) _ ^^^
Secret Re>ervcs (Editorial) ■ 206
S.cret Reserves ( F. H. BathursO . -^ • ■ ■■■■ .^U
The Valuation of Gold :^.u:s^( H^ C Hoo c ^ .^^^^ ^^^
Treatment Capacity and Ore-Keser%es ( i^. .^.^^
Amortization ( F. Hobarl) ■•■•••■ '^ ' , 005
Valuation of Hold ^;-;;^ ::,^;^:r'rBancroft): ^ . 227
Mine EMuipment and Orc-Re^cr^ s '^ •',„,n,, to Ore-
The Economic Ratio of 1 reatment Capacit> ^^^
Reserves ( G A. Denny) ; ■ „. ,
Enu^ment and Orc-Re.r.e.-^Ml^dU.r,a,) ^
Enuipmen. and ore-Reserve.- f-'^\"" ' -JlO
Ore-Re.erves in Gold M.m. (J. H- Curk) ._,,^
The Personal Equation ( Editorial ) ,^„
Ore-Res.rvcs (H. C. Hoover).^.. .. • ,,,,„
No-Liability Companies (C. S. ";^^^^*^\-^ ,, ; ; . . . -jci
Engineers- Estimates of Costs W. «■ '"S?^ o,s
Gold Drcdsins in Cahfornia (Cuis. G. \ale).... ^.^
Minmg in Missouri ( W. R. Ingalls) ,_,,,
Gold Dredging at Orovillc (H. D bmitn.
ill'
il \'.ilm- (
F.il'i'I'"""' ■'"'! t)rc-Ki.--
Li-aMiiB :il Cni'p
Crce
Sicrccy in MmitiR ( F.d
Mine \'.ihiation ( I-^Jito
Mine \alii;ition ( l^ 11
(iravclMimni; Co^t^ ii
((.lu-tir \V. I'lirin
The Cost
>f M
iiiinK (
The Cost of MuiiiiR— I (
The Co^t of Mining (.1.
Mine Rcservfs (I'. 11.
The Cost of Min:.iK ( I'
The Cost of Mining (K
The Cost of Mining ( F.
Cost of Chlnrlnatiiig Cri|
Cost of Mi
(1 M
He
by His Own Petar
Dredging at Orovillc (L. J.
The Cost of Mining ^E A F
Some Pumping Data (R. Cili
The Cost of Mining (James \
The Co-;! of Mining ( Fditori
Deep Mining (Filitorial) . . .
Notes on Mine Reports (Che
Mine Reports (Editorial) . .
The Interval hctwccn Levels
The Cost of Mining— II (W. R. Ingalls)
coxT/.xrs. V
,,lit..rial) 300
crves (C. S. Palmer) 302
k (J. K. Fm'nyt 3il5
litorial) 309
rial) : 311
W.) 313
1 Alaska and Nortluvcsl Canada
gton) 317
;diiorial) 323
(\V. R. Ingalls).. 3'24
R. Finlay) 333
Batluirst) 339
all ) •■M2
Brown ) ."MT
:,) 350
; Ore, (Philip Argain... 356
I Cr.int I •■«9
rial) 364
I) 367
lys) 37?
Brown) 378
■s) 384
387
390
F Lee) 302
398
itorial) 400
403
RAYMOND LEBI.AMC
C
PKOFtSSEUR TlTliLA.
POLYTtCHNIQU!;
t
PREFACE
TilK pages of this Dook furin>li a reprint of a r.iimbtr
of articles, bearing upon the cost of iiiiniiig, which have
appcarcil in i'nt ICNiiiM.KKiM. and M'NiN(i Joiknai.
between January, 1903, and June, 11^5, a pciiod of two
and a lialf years. As affectinj^ the economic aspect of a
world-wide problem, I have included a luiinber of articles
dealing with thcjse ethical and financial considerations
which are no less important to the industry than the
'Cientitic principles underlying the actual breaking and
milling of ore at the mine. I-'or the editorial comment I
am responsible; some of it, in the light of ampler evi-
dence or maturer thought, I would like to change; but
anv alteration would involve a recasting of t'.ie material
tletriniental to its value as a record of professional dis-
cussion during the period mentioned.
T. A. RirKARP.
New York, June 30, 1905.
CAUSES OF FAILURE IN MINING
(January 31, 1903-)
To The Editor:
Sir— It has been estimated that 95 per cent of the com-
mercial and industrial enterprises which are started every
year ultimately prove unprohtable. Such business fail-
ures are primarily due to incorrect estimation of the trade
conditions which obtain in every field of commercial oper-
ation. These conditions are innumerable, intricate and
constantly changing, but nearly all of them are the result
of merciless competition.
There is relatively less competition in the business of
mining the precious metals. Yet even with competition
largely eliminated, I do not believe that mining enterprises
have scored any less percentage of failures than the purely
commercial, w'ith their increased attendant hazards of
endless competition constantly accelerated and intensified
by cheaper processes of manufacture and various trad-
combinations.
In weighing these opposing conditions it would appear
as if the investor in mining enterprises should have a
better "run for his money" than statistics would seem to
indicate.
What are the causes of unsuccessful mining?
There are many causes, some of which might be elimi-
nated if the investor could be slmwn them. Nearly every-
one has, at some time or another, bought mining stock
or "taken a flyer" ; yet how many of those whose invest-
ments have proven disastrous have re-invested or "tried
again"? Their speculative fever subsides after the bleed-
ing. As a result, mining engineers are far less busy than
they might be, and die development of the mineral re-
sources of various parts of our country is thereby much
retarded. A discussion of these conditions, their causes,
2 THIl ECO sum IC^ ul- MISIXG
am! ihcir ultimate cliniinaUuii woukl be timely, and it
might she V many unsuccessful investors the proper way
to try again.
After a good many years of a'-tivity in the mining and
metallurgical field, I feel that I can iiiention a few causes
of failure nf mining enterprises and suggest a few reme-
dies. If liv writing this intrculuctory letter and inviting
the consideratitin of this subject I can induce some of my
fellow-workers to grasp their pens and express their
ideas, I believe that the investing public might profit from
the discussion.
I. — St.nrti.no Wrong.
Don't invest money on the strength of a printed pros-
pectus or the atlvice of an "interested friend" without
preliminary investigation by a reliable engineer.
Don't "take a t1yer" in mining, but invest your money
with the same care and discretion ymi would use in buy-
ing hank stocks, real estate or a silk factnrv.
Don't trust altogether to luck. Use a little sound busi-
ness sense.
Don't invest in a mining company that guarantees
dividends. Dame Nature has snniething to say about that.
Dnn't invest in a mining cnuii)any that is selling treas-
nrv stock and pa\ing di\iden(ls at rhe same time. If the
mine is earning dividends the company owning it seldom
has a legitimate interest in selling more stock.
n. — Txvi-..<Tii;.\Tio.\ AM) ?^1.\x.\(;f.mf.xt.
l^nless you have had stiflicient experience as a minrng
engineer and nietallnrgist. and if the amount of your con-
templated investnieiU is consii'.eraliK , einijlov a relialile.
exjierienced engineer to report on the property. Don t
dc-i this vourself unless you are born eternally lucky.
IZverv ni;ni to his trade.
Once vou have inve-ted in a mining enterpris<\ insist
C. I USES OP I-\ULURB IX M/XIXG 3
on frequent and complttc reports coverinfj; operations of
the mine. Employ a comi)etent superintendent.
Don't take your son or your nephew or your clerk out
of your store or business house and send him to Arizona
or Colorado to "run thintjs" for you at the mine. Sell
out first.
Once you are as.sured of their qualiiica:ions, put every
reasonable confidence in your manajjer and superinten-
dent. Give them a fair show to make a dividend payer
of your mininp investment.
If you are a director in a mining company, do not force
the manai^er or superintendent to find a job for all of
your unsuccessful friends and relatives. Let him hire
his own men. Don't convert your mining property into
an asylum for ne'er-do-wells.
III. — OrER.MiQN OF Mixes.
Don't spend all of your capital on top of the ground.
Do some digging. Don't buy too much territory. Mining
claims ;irc cheap. Con cut rate your operations and your
capital at the points where your orebodies have been
found. .Additional surface territory means nothing unless
it contains ore.
Don't expect your ore to grow richer with depth. It
may gain in quantity, but seldom in quality.
Don't Imild a mill or a smelter or reduction works until
you are certain ymi have enough ore available to keep
tlu' mill in ^^teady operation until at least its initial cost is
recoverrd, Tliis advice is ancient and worn from constant
reyictitinn, \et there are iniumieralile mills and smelters
dntting niir Western landscapes to-day which hardlv
turned a wheel because the supply of ore was insufficient
or unsuitable.
Don't build your reduction works until you have as-
sured vfiur.-^clf lieyond all doubt as to uhat kind of a jiro-
ccss your ore re(|iiires to yield np its values. "N'mi can
4 THIl ECOXOMICS Of MIMMi
adapt the mill to the rcquirciiK-nts of the (^re, hut you
cannot manufactuic an ore to run throuKb any particular
mill or smelter. Spend time and money m hndms nut,
fir.t what process is peculiarly adapted to ycnir or-, then
you will leave behind you no silent endurni- monument
to foUv. Employ a competent, experienced metallurgist
to practically test your ores hefore huildint; a mill. -Most
any process xvork^ all ri^dn on most any ore in a chemical
lahoratorv, hut in actual work on a commercial scale there
are other conditi.ms to contend with. It is well to tmd
,nit what these conditions are hefore spending m<iney on
reduction works.
I realize that the sugsestions I have made and the rem-
edies 1 have advanced with a vi.nv to insuring greater
safety in mining investments, are ridiculously simple and
self-evident to the veri.st tenderfoot; but this being the
case I will leave it to some.me else to slate why business
men continue vear after year to make the same mistakes
in their mining investments instead of proceeding along
these lines of greater sofetx. They do uot seem to learn
bv experience.' T.'/!V— I do not know. However, I would
'ike to sec these gentlemen have a better "run for their
money." Can we not help them?
Percy Willi.nms.
Prescott, Arizona, January 6, 1903.
THE VALUATION OF MINES
(Editorial. January 31, ly j)
In this issue a correspondent brings forward a per-
tinent qucrv concerning the unprotitable result of a large
per:entage of mining investineius. It is a broad (jiies-
tion, wiiicli niav be answered humorously, cynically or
>ti.iightfor\vardlv. aci Tding to the mood of the person
interrogated. We can only reply in all seriousness, for
it is a subject fundamental t.i the mining industry. Our
correspondent gives a number of indubitable causes for
failure, but we think he has omitted the most important
of them all. We refer to the over-valuation of mines.
In order to discuss the matter profitably it is neces-
sary to take the simplest case of all, a valuable gold
mine. Eliminate from the incpury the undeveloped
mines and prospects; disregard, for the moment, the
essential uncertainty of all the occurrences of ore in
nature and the difficulty of estimating the quantity avail-
able : restrict the scope of the investigation so as to avoid
the complications due to varying metal markets — so potent
tor good and ill in the mining of the baser metals: take
it for granted that you are dealing with a known valuable
deposit of gold ore which can be jirofitably worked under
the gi\en conilit'ons of time and place, and then ask;
What can make ii the basis of a losing investment?
The answer can include causes as numerous as the
many vagaries of human nature, but the principal source
of trouble arises, we believe, from over-valuation. The
appraisement of mines has undergone striking develop-
ment during recent years and it merits fuller discussion
than the present occasion will permit. A mine may be
said to be worth a given sum when it can return that
6
rilE ECOXOMICS 01- MIXI
sum as profit from operations covcriuj; a term of years,
plus the interest on the investment chuing tiie period
consumed in the return of the stated price. Wlien this
is translated into a share capital tlie condition"-- are the
same, aUhoDKh the amount of interest whicli should be
returned in tiie form uf dividends will vary in percentage
according to the lia/.ard of ditYerent kinds of mining.
Apart from specific causes, there are several general
iiuluenccs which militate against true values, 'i'here is
that expectation of better things, that resolute hojieful-
ness which is necessary to all exploratory work. We
cannot do without it, hut it slioidd be so restrained as to
regard the rules of arithmetic. It is natural to the owner,
to the manager, to the intending purchaser, to all the
persons to whom the success of the mine ministers, di-
rectlv or indirectly; therefore, all the more reason for
taking care that the valuation of the mine be iiUrusted
to those whose judgment is in no wise vitiated either
bv sanguine sentiment or that disturbing influence which
is covered by the term participation. To sunmiarizc,
mines are often over-valued bee.iuse the valuation is
usually done by people who are interested in getting a
maximum ap]iraisement.
There is another far-reaching factor; m nes are fre-
quently I)0Ught to sell. It i< a cynical truth that more
money is made by selling mines than by buying them —
because tliev are so often sold for more than they are
worth. Therefore it happens that althmigh a property
niav be recognized as worth a stated sum, nevertheless
shrewd persons will be willing to pay a larger amount
because thev Iiavc a reasonable expectation of selling
it subsequent] V for still more. If this is brought alwut by
further intelligent development, by solving knotty prob-
Ictus of ore treatment, by a new equipment which minim-
izes working costs, that is, by engineering talent nf the
best kind, then assuredly the enhancement in price is both
TUB VALUATIOX OF MIXES 7
warranted ami (k-sirvcd : hut wluii it merely presumes
upon the i<,Miorance of imlividuals <ir of shareholders it
partakes of the practices which slide imperceptibly into
acts that are di-honest.
The result of thcsr tendencies is that it is hard to pur-
chase mines at a fair valuation — that is. we repeat, a
valuation such as is likely to ^'ive a return of the pur-
chase price, plus a reasonable interes. on the capital in-
vested. The supplv of fjood n^ines is far below the de-
mand; in addition to those who are shrewd enouf:;h to
recnsTuize that ^old niininjj. if properly safeguarded, is
the safest industry extant, there arc ? larfjer number who
see the advantaf^e of tradin.LT upon the sanguine tempera-
ni.nt of human kind, and there is also annther class of
people who rush in where experienced men fear to com-
mit themselves. Thus, if a mine is worth a certain sum.
as nearly as tlie fact can be determined by skillful and
trained sjiecialists. then the iirst cjroup described will pay
that nuich for it. while the second will pay more accord-
in.f,'- to the jiiipularity of the locality and the attractive-
ness (if the scheme, and the third .croup, of innocents,
will be deluded into par.insj with a price wliich, humanly
speakinf^. promises a loss with deadly certainty.
These are some of the reasons why miiiinp ventures
prove unprofitable; they are such as time alone can re-
move — time and the education of the public to a realiza-
tion of the fact that while no industry affords such rapid
and remunerative returns as legitimate mining, none
atifords so readily the facilis descensus .-iiTriio which
awaits the greedy or the foolish in the financial arena.
ORE SORTING
i KilitiTial. 1 Ltiruary ;. lyuj)
Tilt' article on ore ^ortiti;,' uhicli \vc i)ubli>li in this
issue deals with a subject ul very practical importaticc.
Ignorance concerning the proper ])roportion of poor rock
whicl; il is desirable to take out oi the veinstuff has
made failures of good enterprises, and the overK)oking
of this factor in luining has been at the bottom of many
inexplicable over-valuations of property. Whether to
sort or not, is a (jueslioii vital to the eco.A)iiucs of a
mine; it may mean the choice between a small yield of
high-grade material or a large output of low-grade, an
alternative which immediately affects all the operations
carried on at the surface, as well as underground. In
regard to estimates of the future production of a mine, it is
not too much to say that the tonnage taken out of the
workings is nearly always greater than that calculated,
because it is found by experience that such estimates,
based as they are on a few regular stopes, are likely to
be pitched too low as regards tonnage and too high as
regards assay-values; therefore, the stojiiiig wid'' - which
are determined by actual measurement should ha\e added
to them an allowance for breakages of rock from the
walls of the lode and the accidental inclusion of waste in
other ways.
The best place to do your sorting is at the working
face, if you can; this is t(j be done, either by judicious
blasting, wliich removes the maximum of clean ore and
the mimnnim of wall-rock, or by eliminating the large
pieces of waste which are always serviceable for loading
the stulls. .Ml sortini; at surface is made more ditticult
by the mixing which the particles of ore and waste under-
go in subsequent handling, either while being b mailed into
ORE SORTIXG
9
tlif cars or (hunp(.'<l into tlic orr lionsc, Tlic Cornishiiian
wlio rcMus,' tlial i>. stri])s tin- lode by .shootintj duwn
tlic adjoining wa^^tc-rock pnvious to breaking down liis
ore. M'paratilv and i-kaii. jirfsfnts one extrenif ot llu'
methods possible under.irroiind : while the man who need-
lessly blasts a narrcnv and clean streak of liiL;h-,i," 'i-' ore
ioL,'ether with several feet of adjoinin;; barren ■. mitry.
Miily to give emii'oynient to a nmnber of men at snr-
face who separate what could have been kept apart in the
slope, illustr.ites the other ■.xtreme. It is not a mathema-
tical or >cientitic (|uestii>n, and on that account it is insuf-
ticientlv appreciated, but. like many other problems aris-
ing in dailv work, it demands that fundameiual science
which lluxlev defined as organized common sense.
SORTING AT JOHANNESBURG
i;v 1 . Lam. (. akii k.
( I iliriMrv 7. I'). .1 I
riic (|ucj.tiiiii of r.iiMiiK lli«-' j^radi' <>\ the ore by surliny
'lUt tlie Uarriii (|uart/iti' is >>uu that lias icciuihI ^rcal al-
tciitinii on the Witwalcr.-raiul, so tlial a wi-ll-c<iuipi)<..l sort-
iiis^ house i:> now looked upon as one of the nece»ary
leaiures of a complete plant. Sorting' by hand i.-, tin-
method pursued, it bemj,' out of the (lue^tion to use >ueh
eoiitrivanees as jif^^s for this i)urpo>e.
I'lirmerlv, the waste rock was con>idered (juite barren,
and therefore of no value. A different opinion prevails
now. It has been the custom, ot course, to take samples
of the rock which is thrown out. but such samiilin^' is
almost n>eless for practical luirjiosos. It '.■-. in fact, im-
possible to determine in the ordinary way how much the
waste rock is worth, for it consi.^ts of piece> ran,t,Hn<j; from
I he size of an c.^l; up to 1,0 or 4()poim<ls. One method is t'
take a hamlful from each carload of wa>te liefore it is
sent to the dump, and throw thi- sample into a Ixix.
W hen the box i> full the man in chari;e of the .sorting
plant takes a sample of a few iHumds in weight, and sends
it to the assay office to be assayed.
Now, it is curious how the value of this sample varies,
accordintj to the man who is responsible for it. It is pos-
sible to obtain :i reliable return from the assayer if the
rock is iirojjcrlv crushed and (piartered. but the (|ue.-^tion
is: Does this sample pve a true indication of the value of
the rock which tjoes over the dump .•'
The only iM.ssible way of ijettinL: at the value of the
waste is to cru-li everythin.L; to a uniform small size, and
then quarter down carefully. This is a cumbersome oper-
ation, and i.^ not practicable. The writer has known of
SORTfXG .IT JOn.lXMSIil'Rh
11
cases u
lure an assa\ of tlic waste, wliicli was put down
as 4\ <h\t., liad a rtd ink liiu- drawn tlirungli it
luuli
HI a\itlMri;\'. w
lor tn
to lie
liave luen wron^.
Ii\ tiitise
illi the i< mark that "it was ini|i(i-Mhk'
sii rieli." and that "the sainjile inu>t
I'.ut it is just jMissihle tliat in snnie
cases siuli a hii^li vahie was actually in the rock ( 'n hik'
mine, known to tile w ritei . liie in.iM,i^;eineiU took the latter
view, and let out a contract to an experienced man to re-
sort tlie whole dump. 'I he contractor was ^dven alioiu $4
jr ti 'U lor e\\r\' tc m o
f cleai
■hi
ed out, am
a surjirisc how main- tons of ])ay-ore were olit;iinei
1 it
1.
A rather pr.actical test is
trieil on two of the hi^
i'Vi.r\ thiiij
cept. < if C'
that
o attempt is m:ii
fe t.
irt
It the waste:
L's from the mine Ljoes to the null, ex-
irse, tlu' rock from en
cut-
le value per
'11 crushed has falKii, hut the ni;ni;iL;eineiit helieves that
under the I.
ircunistances more jirotit
de 1
i\ not
irtiiiL
Tl
le w.av
the
ik at it is t
his : A calculation is
de of tlu' cost of handliiiLr the ore after leaviii.iL: tin
s' 'ituiL; tahle :
.•iiid lioisti'd t
sup])ose it is detiTtninei
1 that havintr mined
le ore
.and hrouuht it to the mill it p;ivs to
al
crush aintliiUL: over i.ii
dwt.
d th
stcdi
Iwt.
hen it is hetter to
run tliroUL;h this J,\ dwt stuff,
even if onlv 1 shilliui,' ])er ten ])idth is made, rather than
han,^ up a
'iiher of stamiis for lack of
It is not held that sortiu!:,'- does not pay. hut under some
conditions it nii,i.;ht he preferahle not to sort. Take, for
instance, a hattery of 200 stamps. On account of the
scarcitv of lahor. onlv ahout To of these stamps can he
su
pplied with sorted ore at the iiresent ti
l'ii(kr thesi.
conditions it is advisahle to put throiiLrh every ton ot
material on which even a small ])rotit can he made.
To put the matter in a nutshell, the manasjers make
profits the has
>f
ore cms
is of calculation . rather than yield per ton
•hed. If lahor were plentiful, and a mine with
200 st;nnps had a -'iperahundancc of ore. the hetter policy
in
7//: licoxoMics or \ii.\ixa
would lie to r;ii--t' ilii L;iaili a>- iinuli a-. ]iii-'-ilili', even it
by >.(i dciiiii,' till' (luiii[) a»a\i(l ratluT lii);li. Hut it wtll In.-
niau\ nii'iitlis l)i.inro a niiiic \\itli jno >tanii)s will have a
su]Hraliiinilauri' ni (ire t'T tlu' uiill.
I In inilui>iasts <im sintiuj^ Idnk ratlur askance at ahaii-
cl(>nnu'iit iif siirtini;, hut it is an i'\]utiuirnt, and as -.iii-h
is iiitiTestiiiLr. It will he iK.iiii'd that _' ', ilwt. wa> ]nit
down as thi' \ahu' ni the wa-ir rnck. 'I hi> niiL;ht -iiiu
hif^li. hut (in sunk' niini,'^ it i^ tlu- ri'iTrct \alui-. An in-
vcstij^atiitn has slmuii tlu' iau-.r hI it. Tlu' (|tiart/iti' ci'tui-
iry is harrcn, it' ^anipU'd a Idnt \riu\ thr iwi it \iin. hut
sometimes in tin imiuidiatc neiuhh' Thdiul of the reefs
careful sami)lint: will ~liow that the MipposedlN harren
rock carries i;old. as^axin;^' in laie case a>. hi;:;h as i oz. per
;on. 'i'he underj;roimd manat^er of one of the Rand
mines told nie that in his mine there wa- a tin\ jnrite
-cam, ^oiiie di>taiice from the regular lea<ler, which as-
sayed 5 o;^. to tlu Ion. Ill the orilinary course of e\'eiils
this cotmtrv rock w.iuld he thrown out.
'idle fore^iiins,' must not he taken as dispara^ini; the
scheme of sortini;. for there i> no douh; that sortinu;, if
carefully walcluil. and done liy ^killed men. can pla\ a
still preater part in the future of the Rand than it has
done in the past. Like ever\ihinL; else, however, it needs
careful watchini:;: if it is not doue properh'. an actual loss
niiL;ht iie the result. ;i~ has heeii alre;id\ indicated.
In the future it is possilile that hetter sorters than
Kaffirs will he employed. .\n earnest attempt will he
made to s^et at the acttial value of the waste rock, either
hy occasional trials in the mil! or h\ careful sampliiiL::.
( )n some mines an attempt at rouj;h sortins.;; is tnade
underLTround. the lartjer pieces of waste hein;,'- put in ])ack
walls. In the >oriin^' Imuscs one of two schemes is
adopted, h'.ither ;m endless belt, such as the Robins belt-
conveyor, mo\is ]ias' the sorters, who throw out the
waste, or a revolving; t.ahk', rin,<j;- shaped, about ,^5 to 40 ft
.SV>A'//.V(, .// Joil.l.WESBURG
in (lianictcr. willi a inripluTv 5^ in it ft wn
13
U' M 'Ti-
ers tlirou li
aste into l)ins hclnw tlu' i;
Tl
\\ aiir tor
uasliinij tlic oil' is. of cnurse, ust<l iiKiitiiullv
It may l)c nf iiittrist to j^ivo an ixainplr ni Imw the
question of sortin;; attut^ tlic wiliiat
1> ill n| a
(it mo
in tlic mine. Sii
pP'iM- w c havi' a hlnc
k of K'rounil ,J,o<) ft.
loii^' l)y 120 ft. on tllc (lip 1
f(
.f tlic nvi. It
Is (l(."-tr(.(
1 t(
orm an ostminto ni the mmilxr <it ion-
the valiK'
iircad (tut ami ih(.-
per ton in this block. I he a.s.say-plan i>
assavs taken, as tlicy are maiki:l. all aroinid tlie per
ter o
1 tlic block. ( Ml the .assav -plans 01 main niiiK:- the
assa\' \altH' o
f the .seams of ijnIil-heariiiL; mater
lal am
1 th
a(hl
1 111 llK'hes are h
raekdeil thn-
I 5 in. .'It |() (1\\ t.
4 in. at ~^ (lut.
All these values are taken ddun aii'l the averat^e fmiml.
Suppose the result comes out thus:
20 in. at to (Kvt.
<■' in. at (>o (hvt.,
which we call jo in. at jS dwt., the ;i\er;!!:c vahie of the
'1 ne stopini; width c;in. for example, he assnnied as 42
in. Since we lia\e j6 in. at jX dwt., then for a width of
4J in. wc have 4J in. at 17..^ ilwt. To find the numher of
tons in the block
300 X 120 X 3.5
13
=9,692 tons ; 9.692 X 17.3= 16-.671 (hvt,
the sold contents of the block."
\\"e will assmne that 35 per cent of the ore will hi
hrok-en .'IS unsortal)le tines, and tliat 20 i)er cent will b'
so
i.0.?8
0.f)Q2
rted out. The bli>ck can tlun he valued as fo
fines
.]«!.
= 58.(^.85 ( I )
= j.r)07 ( 2 )
— iry>.o70 (,,?»
= i6;.(.7i
* Tlir fiiture 1.1 is assitmerl .is the mimtier nf cvit'ic feet of nro in place
e<itiivalcnt to r^nc tnn. — KHitor.
tons
tons
tons
14
THE ECOSOMICS 01- MIMXG
r>y oimhinin:,^ ( i ) and (3) \vi can rtcknn tliat tmin
thi> l)l(n.k nt yrduml tliirc will he scm ti> ihc null 7.754
tons at 21.2 (hvt.
Xotifc tliat the waste rock is nut cnnsidereil Iiarrcn.
but is put down at lA dwt., which is a normal value.
COST OF SHAFT SINKING BY HAND
(I'lliruary -■;<, i9uj.)
Mr. Ivhvard H. IJcnjaniiii contrihutts to the Pacific
C(hist MnuT an iiiti.Tt'>tinu; stateiiicnt rcsjjardin^' thu cost
of shaft sinkini; by liaiul in Cahfortiia. The table l^elow
^ives the record of wnrk in the last 130 ft. of the vertical
>haft at the ( idjden |-".aL;le nnn
the i^rcperty u
f the L;
issen
La^^en (, oinily,
Miiiin,!.^ (.'niniiany.
C'al.—
Mine
Shi IN
l'n<
TotnU
(<,).
TippuKMi (J) <M J-Soprs
4J,^ $.vooi)'r s'ft. $i.J(x)0O $8 4(10
ft.
-•.i5oo
i.^oo
■.iij.;meers
(-'I.
I'.l.n-kNiir.tb (i).
l-'nrfinan (I ) . . .
y4 .voo ]) r s tt.
3.50 i)'r s'ft.
100 ])'r ino.
28J.M l..S,So
1(14.50 l.o<;()
i;j.3o 1. 149
Total
$j.irj.8o $14,151
TimI
1.
KT
iKk'lllg
l^iiiuig lioarcis
Cordwood (lilockiiig ) .
Wedges
• ■ ■ 705
Quantity.
lo.or^ft. $13 per M. $14-'/)') $o.<)5i
j.5-'oft. .^5c, a pii'cc MS JO o ^S8
j.j;oft. $14 per .M.
5 cords $3 JKT C'lrd
3.000 ic. a piece
.V
.78
1500 01 IK)
3000 0.200
Total timber.
Wood ( fiR-n 25 cords $3 per cord
( 111 aiiil incideiUals
Total puwer cost.
Coal
$.t.l5
Candles cases $0.40 case
Total ilhiniiiiat
Powder .
Fuse
Caps
fioo 11). 14c. per
$.V)7.''7 $-'.051
$75.00 $0500
$90.00 $0.(100
$24.1)0 $05(10
,if^40
5(>
500 ft. $3.70 per M.
$(13.30 $0 422
$84.00 $o.5('io
9-5
0t)()I
550
625 per .M. 3.44 02 5
Total
explosives.
$96.(K) $0,044
$2.(180.4(1 $17,808
Total cost of 150 fcit of shaft
-Mr. r.eiiiamin adds the f( >llii\\ iiiij dct.ails : "W'drk
wa.s
ci'iiinien.-eil ai a piiiiit 7 ft. heli'W the 4ik) levtl and the
shaft was smik i ;o ft. helnw th.at imint. The wnrk '.vas
16
I III-: lA uxoMii s oi- Mi.\ i.\(,
(IniK- by liaml drilliiiL;. \vi .rkiiit,' llircc S-limir vliifts,
wiili thrt'c nun on ;; -liii't. I lu' s^r'ntml \\a> taken (lul
7 l)v ij I't. ill liir ckar — fur a ilinihk-foniiJartnKiit shaft.
1 Idistiiit; \\a> ilmu' with a bucket. The cimiitry rock was
hard aink'^itc, .\'i waicr \\a> iiiii innlcreii. I he shaft
was tiinhered will: lo 1)\ lo-iii. sawed timbers, end-platcs
and eetitrediraees .Inwtailed in. and eentie and enrner
]i<)sts gained in. The sets weri- pkieed 5 ft. between cen-
tres, tilled .ind lauded sdlid bchnid timbers .and each cmih-
liartinent was lined with 1 by ij-in. linin- boards set 3
in. apart, llu- wurk was CMmpleted. in 47 sJiifts. makiiiu''
an average i>f _^._> ft. ] r -hift, lini^tinL^ Jo tcms of material
prr >hift. be-ides pnlt^'e^' in timber-, '1 lie timber.- were
framed liy liaiid b\ ''• toreman, who directed tlie work,
i'.iulileeii holes were >..-ilKd for each round. Xo. J Ciiant
piiwder was nseil. 'The ^ronnd drilled hard, but broke
well. I'he out>ide huK'S were keiit Iiiyh and the centre
broke t'lrst. 1 dio not know of anv work dt)ne by liaiid
where a lutter reo^rd has luen made."
GOLD MINING AS AN INVESTMENT
(K.liturml, March ;i. i9'i3)
We iintc tiiat our London contemporary. The Econn-
»ust. wliic
oiirnaliMn.
li rei
h
iresents the bc~t tradititjns of financial
fnii^lied tl
publication ot a series (j
l)V 1
ts "Sju'cial Mining Conunissioner," under
ze<i the trenciiant stvle
articles
wliich title wi' have easily reC(.ij;ni
and fearless expres>i()n of opinions which characterize
our friend. Mr. J. il. Curie. 'Ilie concluding article of tliis
he found on another
series,
111 a
l)M
ract oi wliicli uil
page. uiiuU up with a few home truth> and that under-
current of depre;
itr f'"anki!css which we have learned
to associate \\i
th Mr. Curie's writings.
The burden of these recent contributions to the pages
of 'lilt- liioiioinist has been: Cold niiius are, witli rare
except il
the ri>k and are
ins. nnicli o\ervaliiei
liareiiohlers do
not realize
atished with a rate of interest which
is too small, considering that risk; thes are careless re-
rardiiu
(liiestions o
f ore re>
bv over-rating their mine.'
erves ;
and, i
th
nd
inevitablv
conscfiuence.
tl
lev
.'culate foolisl
iiv.
.\
s a coro
It IS >UgL
Mr. Curie that a certain rate of divii
(lend.
sted b
a certain pro-
portion ot (jre reserve
s and a lie;ilthv cond.iiion of de-
•lopmeiit are essential to any mining enterprise
to be re;iarded as an investment.
iliich
W
ule we aitiireciate tlu
service done to the public
and. no less, to the industry by advice of this kind, we
consider that it tells onl> half the story, and is calculated
to create a wrong impression concernin
ikl ininiiu
Legitimate gold mining is not necessarily an invest-
ment, nor indeed does even so conservative an industry
far
nuii<r Come al\\a\
mdir this label. 'I'liere ar
types in tioih industries which ]iroceed along >iicli we
11
18
rilE liCDXOMlL S or MISISG
ordciod lines anil with such c<in.--i.cuti\c ri^ularilv of
production that tluir carnin;^ capacity can he safely pre-
dicted; hut each exhibits variations of prucedure which
arc both protital)le and ri>ky in ;i jjroportionate dej^rec.
In this country ^old luinini;- is not rankeil with railroad
bonds, save b\ the unthinkin<j;. it is true that there are
a few properties which havi.' becdine developrd ti> such
an extent that, like the mines on the Rand, they are,
humanly speakinjj, certain to return a stated sum in
ca[)it:d /-///.v a definite interest duriui,' tlie period of ex-
traction, but they are so few that the tinj^ers of a man's
hand suttee to count iIkjsl which he can tpiole im-
promptu. The moneyed man who i^-^oes into minint; to
make more money kucnvs this. He does not expect to
find a Ibjmestake or an .Maska-Treadwell, and if you
cross-examine him xou will |)rol)ably discover tliat he
(i ot want that type of mine so nuich as he seeks for
a \ •' riltsburi;, a Chrysolite, a Yankee (iirl, a Ciranile
^lountaln, an Indei)ender.ce, a 'ron(3pah — that is, the
superlatively rich ore deposit which makes as much
money in a month as the ste;idv ]iroducer earns in ti\e
years, in other wnrds. the speculative side of miniii!.^
has an attractiveness which is at the bottom of the
energy w'th which it is prosecutid, and when you bring
it to the deail level of ;i stead v investment you will find
that the man of ordinarv shrewilne?s will save time b\
going straight to his briiker and buying bonds or con-
sols.
The Rand — presenting an unsual type of gohl min
ing, minimizing risks anil at the same time limiting po>-
sibilities — has run awa\ with our cautious adv'sor. ( )rdi-
nary gold mining can ne\-er come to a strictly investment
basis; from the time of the .Argonauts to that of tape
Nome it has been, ;ind will continue to be, an ad\entnr-
ous ])ur-uit, attractive to the liold and av(rlded by tlie
timorous.
(,"()/-/) .i//.\7.V(; .;.v j.v ixriisiMiiXT
1!»
Strike out tin
niiiii's uiucli arc not sound iuvi'stnients
from the undertakings into which a sensible man sliould
put his money, and you •shrivel legitimate mining into a
drv 1)
\\
hiel
1 wo
iild
)n wither from want of life.
r.efore the in\estment basis is reached, the best mining
undertaking nuist as surely pass through several stages
>•'{ comparative speculativeness as a child must run the
datu
ers of mt-ask's and
ium]>s. The biggest fortunes
are made during the earlier stages of development: more
Pl.v
monev is ihade b\-
h
ling than bv buviiu
nunes, sun
■cause the final r)r iinchtment stage of a rtrst-cl
ass nunc
briiiL
rofit. while it n
issetuial ha/arc
Mininfr unde
rtaki
ever can (juite eliminate the
conic to grief so often, not si
much on account of failure to attai
n an investment basi>
but because they are not put on a business basis. People
[ilay the fool and exjiect miracles to happen. Tlie same
I)rocedure would ruin a grocery establishment. Because
the occurrence of ore in nature is uncertain, and mining
as a conse(juence must necessarily be speculative, there
IS no
reason for piling human foolishness on the top
na
ture"s niggardliness. ( )'i well-conducte
Oi
(1 mining enter-
l)rises it can he said that they meet with a perceiUage of
success as large, if not larger, than any <ir(linary manu-
facturing undertaking. The smashes are more spectacu-
the f
ormer
lar and the successes are more magnificent in
case, but the average .esult does not. as a rule, favor
the apparently safer f<irm of industry. We are glad to
be able to Ixlieve, with The Iicoiw>iiisl, that mining meth-
ods are becoming more sane; and we recognize that this
consiunmation is quickened by tin good sense contained
in such eontriinitions as those to which we have been
referrincr.
MINING RISKS
(Eililorial. April 4. "Oii.t'
Actuarial calculaiiiMi-- tiavc been succLSsfiilly adopted m
estimating tlie value of the mines on the Rand. Such a
method of a;)praism- mininj; property may not be applica-
ble to the palpitatinj; uncertainties of ortlinary Rold veins,
which, while they miss the comparative uniformity of the
jjreat Main Reef' series, yet possess possibilities of bonan-
zas, the like of which are unknown at Johannesburg.
Nevertheless, the introduction of the actuary into the
proverbial uncertainties of mining would have seemed a
curious departure twenty years a^'O, and it carries \\ith it
a certain suf^^estiveiiess which can be expressn! by
simile.
Mines are comparable to humanity. The new discov-
ery of a prospector is like an infant, born to-day, which
may die to-morrow, leavint: no record, not even a name.
.•\ prospect resembles a youn.^r child, rich in possibilities,
but bedimed around with all the uncertainties of imma-
turity. The promising prospect may succumb to the
measles of ba<l management, or the whooping-congli of
iiiesperience. In spite of care and equipment neither
child nor prospect may survive long enough to make a
mark, or, on the other hand, they may i.ntlive the dangers
(if adolescence and. by rea-on of inherent ([uality, they
may develop intcj a mine and a man w hich outdistance the
expectations <if their best friends. Again, a child grows
to manhood ; a pn^pcct develops into a mine. Tiie young
man reaches the threshold of a career full of promise and
distinction, or. he already manifests the evidence of an early
decadence of great natural powers: .-.o. too, the prospect,
iiaviiig passed through the changes of early development,
niav afford proof of oiieiiing ui> into a jiropertv of im-
MI.MXi, KISKS
21
|](irtaiiL-c, or, i iW cdiitrary. it may have hcen dcep-
iiKtl to tlic waiir k'vcl utily to disclose llic fact that cither
the sulpliide ores are less rich than the oxidized product
near the snrfaee. or that tlu' material, iiitherto docile to
simple millin-, lia> lu'Come too refractory for profitable
treatment. .\iiother >tai,'e uf develo])ment hrinijs the
man to full matnritx . with a past of fair achievement and
a future of contuuied usefulness, or it may exhibit the ex-
hausted eneri,'ies of a waniiis; career: similarly, the mine,
haviii,^ achieved celebrit\- by rueans of a prolific output,
U'ives assurance of eoiuimied productix'eness. or. it may
be. already shows sijjns of approachinsj impoverishment.
I'inallv, both become old. the man and the mine: and,
whether it t>e lont; in years or deeji -n feet, we predict
with ceri:iint\ the eventual exhaustion of splendid powers.
Mi'ii think ,ill men mortal but themselves: they also realize
that all mines nuist sjive out at last — all save their own.
Thus does the melancholy actuary drive home his sad
philosophy.
MINING METHODS AT JOHANNESBURG
Bv T. La.ve Lakh k.
TlR. c^roatrst .xprn.Hti.rc of lal.,,r ,„ ,|k- „,in.s of the
Kan.l ,. n,,.,,i„. Uu- n.d. fn.n ,iK. Mo,K. ,o the n^^^
•" tlic level. 11,0 ainuum .)f work miuircd to shovel a
•^'" of tock from a Mope into the ears depends „pon the
cond„,,,„, oi^taitnuK' n. duYere„i ,„,„.,. T,„ ,,„,,
j;''ld nnnes, uhe.e ,l,e d,p :. as f^reat as 70 , have a Kr.at
advatua.e over the <Ieep-level con,pa„ies. where ,he
i^tope> treqnentlv tlatten ...t to ..5 . This llatte„inl,^ taken
wnh the broken foot-uall. makes it necessuv t,.\hovel
over and over a.L;ain, every hit of rock, before u tinallv
Kets uitu the ear.
I" tlH. ,leep-level n,i„..s, a ^ood ntanv inchne-plancs
;''^;l'-n ....tailed ■„ the Hat slopes, so" as to faohtate
"'^' '■•'..dh„^.,,ftheore. The ears are loaded at a„v poim
" '/ ' ''"f- '""' ■■''^' "'^" '"^^^•'••■'' ■- ">^' ic'vel'helow
iu-y are then detached fnm, the rope and pusiied to the
;-'>nc_at the land..,, station, where the rock ,s dun.ped
llu. mstallation ,,f a., incl.ne-plane is bv no means as
^^a>.v as the san.e nnd. rtakin,t,^ would be in a coal mine
li.e n.ad-bed Itas t., be blasle,! out, an<i the whole con-
tr:va.,ce must be p.-oteclc-d a.Lrainsl violent blastin- IIow-
^■ver, M. much .shoveling' is save.l bv mstuutin^r ,l,,<e
c.mruances that it pays to p„t them in ntost stopes of
25 . :n spite of the ,mi,al heavy cost. In the.se days of
labor scarcity it is doubly imi)eral.ve.
It may be of infe.est. seeinc; that so much Iias been
said lately conceniii.f,. labor cnn.litions, to mention the
methn.l., 01 nmrniih,^ the wnrkmen. Since ;l,e .killed
white man receive: so hi.^h a rate ,,f waj,^., it i.^ n.cessarv
to get as much work out of him as possible. Most Jf
MIX IXC Mr:! lions at joii.ixxisnrRc 2:?
til
uiiiliTj^ii iiinl is iIdiu' 1)\ tin- iMtitract sv^ti-ni,
allhoiij^li a t\'\v ot tlk
iliiii,^
niiins '>i)rratr (.■iitirrK mi
tl
Wlun
s ill Nii'MU', tlir (.■li.iiai'trr of uiuirr-
(lay s pay, and serin satislicd with tlu'ir results.
K- (la\ > ])ay system i
L;r'iniul uperalii iiis deiiends, in a iari^e extent, nii the
mine eaptain and tin- slnfi Imsses. If ihes are inferior
(ir inaelive men. the rmii'iiiit nf In.-itinL: whiei'
oi's (in IS
siirprisin^^.
If.
jver. amine is fnriiinate eiioiitrli t(
have .a thnrMtii^liiv capable mine eai)taiii. ulin lias the
i^ift iif nianaj^mi; men. and the shift bosses under him
are al.si) alert, the day's-|)ay svstem makes a verv ^"^nod
sh
The eiintraet svstem. huuever. setiiis the better of the
twt
11
le eo
mjianv never appears to lose bv it, .althoujj^li
some ot the miners reeeue iiearh twice ;is bit,'- \va<res
as they would at da\'s p:\\ . ( )ne ,id\;mtat^e arises from
the fact that tl
K- mine eiii])Ioyme
the contract svstem at-
tract'' tilt
St \vorl<men. who realize that bv this metlio<l
tl
< \ ,-ire thrown en
tireh
111 their I lU 11 resonrces. wi
th tin
chance of t\-nniiii; bit; waye.-. if tlie\ work both witli their
li:i
th
leir heads.
tl
he iiioditications of the contract systcn are lA prac-
fi ir instance, employ
I'.'il importanci'. .Some manasjer.-
it throULjhoiit the ii
imc, except, ot course
for ti
nii)erinen,
trackmen, jiiimpmeii, etc. I
rcjck is broken b\ contract,
il
n such a case every piece o
lien there arc mines iisinpf
a combination of day's pay and the contract sy.steni ; those,
for instance, which are traversed bv dikes and broken
country,
contract.
rendering it ditficnlt ti
)rk th
Hind on
I here is. of ctjurse, a limit to the amount a contractor
IS a
11.
to make
this limit \aries in
it?.
rent
mines, and at diff
erent jieriods in the liistorv of the same
mine,
when till.
liefore mill
in.sj; oiierations commence, for instance
re is great earrerness to push the development in
.■tioiis as rapidlv as possible, the contractor is
I
■21
nil: LtUXu.Mli^S Ui- MIMXG
allnuiMl to innkr a liaiuisoiiu" sum, iiioiitli MWr iiinntli.
uitlintu i\ai Ml' a cm. CJii one In- mine luTr, ht'forc the
"■"■- 'I lii'>i"ii|4li|y coiii|iri(. lit 111' ■, r con], I makr I'rom
^,v"3 '" s^5"<> I"-!" month ihirinj,' thr (kwlopiiKiit sta.i;f,
1)111 ulicn the mill conmu'iiced o[)frations this fill a <;ri-at
dial, >o that on ihis [jioprrty .Sj^o |nr month is now
ahoiit llu' lii^di-water mark.
I".vi'n attiT the mill starts crii-liiiii.; it {.■, consiikrcil no
more than lair that rontrai.-tor> in driits and .diafts should
be paid liij.;lRr than mcii en.iiaj^cd in stopinj;-.
I'. rc(|uircs coiisiderahli' skill and experience to manaj;e
tile contractors to the hot ailvanta^e. The mine captain
.-hoiild 1)1 an exptri jiid-e of -round, ;iiid he careful to
ha\e the price iieiilier loo hi-h nor too low. He must
he just, i he writer once worked with a contractor in a
dri\e. It w.-es iiolic. il that for three weeks in the nioiith
he Worked like ;i Trojan, hnl dn! very little in the latter
part of llie nioiith. 1|)mii heiti- i)res>ed f.ir an e.\|)lana-
tioii. it wa.s foiiii.l th.it lie calcukued he would he (jut if
he worked .strenuously all the month, so he took it ea^v
after bein^r sure he had done etion-h to -et a -ood wa<;e.
In tins case the jirice was e\idently too hi.^Ii. .\'or
should the price be too low, f. ir if too -real a cut is made
an etticient man is liable to Ka\e for another mine, where
he can make more money. ( )iie basis of calculation is
that a contractor who works hard everv dav. and inan-
a,L;es to ilrill 40 to 45 ft. ;i ,la_x . ami to hhist successfully
all the holes, should be allowed lo make about SJ50 ])er
month. Will, such terms a man must w.irk dili-. lUly.
]f he lu-lects his work, or is not iiitelli,miit about it. he
s the risk of In 111- in di bt at the end of the month,
there are times, however, when the mine c.ipt.ain recoin-
mends that the pay of a contractor wh.o has done poorlv
be bn)UL,dit nj) to day's pay, and in such cases the man
receives niori' than he has really earned. Discretion lias
to be Used, for if ih- contractor tliinks he is ;ilwavs sure
.l//.\/.\(, Ml.lllUD.S A I JUll.l.\.\l:.SliL'Ku j:
tif ;it lia^! il;i\'~ p.iv !n i^ ajit in Iwiiij;^ hai'k with hu
In slope contracts the ii^iial iin thml is to pay so imioh
per sr]ttnrc fathom. | ilu umi kudw ,if any niiin ■• hire
wlurr ihr nulhiMl ni paviiit; mi iinuh jut tun l)r(ikrii is
,,,1
eiiiplov eii.
Ill iiiiiu ■^ that an- run "ii the inntracl
tein, iiinih n\ tJu' re>iiiinsil)ihty i^ taki'U Iroin tile shoiil-
(Krs I if thr mine cajitaiii and ])iit iipun tlie survey depart-
IIKIII. w
hu-h
-piin--ilin- iiif the uua'-iirinLC I't tlie
rroimi
1. T
IIS
)f St(
(I
ope iiiea>nMni,'-,
ittit tlie [
hut
iiaee
o enter uittj a (hscussion
trust
a (lescriptiMU of the methnds u^
liall l)e ahle to write
at some future (kate.
'1 he prices paid for stMpiiiL;' \ai \ . of eoiir--i'. in the chlTer-
i nt [larts of llie mine, and dept nd npon the ediaraeter
I't tile rock, whither the slope is uiiilcrli.ind or overhand
lii.U'.t
est ranije
I
^iiow ot. ill aii\ one iinne, is troiil
$14,30 to $17.50 per s(|uare fatiioni. In other pro])er-
ahhouirh there is proliahU not
ties tl
!>ricc
htter.
stope m tile (hsiriet. at lerst in the c
deep
mines,
that
IS
\\o
rked for less than Sij.^o per S(|uare
fathom. ( )n the averaeje Sifi can he considered the
prevai
liiu
)iitract(
])rice aioni; the Kand. at the present time.
s are provided with Kat'tir labor, for which
lev
)a\
per (lav
per man.
Th
e\- are eiiarLTetl
or the stores t!ie\' use. sueli as dMiamiti
use, canities.
itc. and at some pro])erties tliev e\en ])av for the shar])-
eiiiut,'- of the drills.
\\ li.at is a L,'ood month's work for a contractor? The
number of S(|uare f;itlioiiis stojieil out with two air drills
(.and it is almost the universal practice for each contractor
to run two drills exceiit in the drifts) varies as much as
the prices paid ]ier -cpiare fathom. hVoiii j8 to 46 stpiare
fathoms erives an i(h;i of tlie rani:;<'. About 36 scjuare
fathoms, with two machines workint; a sinsjle shift, niav
be Considered ltoocI work. The slopes averat;e 4,75 ft. in
width. In driftiuL; there is considerable variation also.
!
.'«
THE LCOSOMliS Ol- MI.\/.\C
III scum- drifts a rmmd of (v,.lvc 5i-it. li,,k-s is made,
wliilc oilicrs ncumc \(, liolcs. A man working will, one
itiacliiiic in nnfavoiahli- j,'roini(l, nut- shift per <la\, is
(loinK fjoo.l work if lif makes 40 ft. [ht niontli. ['w\cr
favt)ral)Ii' rnndituMis lu- may niana.i;f 50 ft. pir iiionili
Tlie prices for driftiiij; vary from $<) to $10.50 per foot.
< 'w nit; to tlu' scarcity r,i iluap lahnr tlicrc arc few
sto|H.'s hcing worked li\ li.iii.l drilk i v It wmdd tie advan-
ta.ui-ons in most stopcs to suhstitiit. .Irillin- l>\ liaml tor
macliities. and wlunevcr it is po^sihie it is done. A ulntr
niiiuT i,. -iveii cliar^e of a mnnlier of Kafiir';, 30 to 40,
and works the stope on r( niract
'I'lie contract system, ulncli I liave trie<l to describe,
li. riainly not tile doctrine of trades-iinionisni, winch
Iiie.ulies tli;it ever> man ij.iiii- the >anie cla^s of work
should receive the >ame wa-e.-, \n\- day. Hut llure is a
certain anionnt of trailes-iii.ion feelincr even .iiimho ,]h.
coiitr;ictor>. It i> ^eiurallv un<lerstood that ;i da\'s work
consi.sts oi piittiiiL; III 4 hiiiiv 5^ it. dee]., pir inacliiiie.
When the men are on contract they sti^-k to ihi- >taiiil-
ard, and only in a few c;i-e> d.j i1k-\ tr\ to dnll nmre
than four holes fur each machine. It has nitin lueii tried
t'. ;ie->;i'ade them to drill nior.-, l,ut ilicy ar^^ue in the usual
way, an.l do not chaiiLje. \\ hat. ilien, is the ad vain.", l;-- ■■<
nsin.i;- the cuuract s_\>tein. 11 the men do not drill nn-re
holes th.iii they would ,,n the day's pa}? In the lirst
place, the men ii.-e their heads more. lo see [he care
with which a successful cmtractor [dtcho hi-, holes, so as
to break the nui.ximum amount of rock, makes one reali/e
the ditlerence between a contract<ir and a waj^^e miner.
Then, to,., the conir.ictor is miuh more careiiil with hi>
stores, d\naiiiite, candles, etc. ,ind waste is thus reduced
to a minimum. Ami a-.-iin, the contractor does not loaf.
He attends strictlv to business.
Many a mana,i;er has been surprised to tlnd how early
some of the contractors finish their drilling i,,r the da\'.
Mixixc Ml. I Hops .11 Jo/i.i.wnshCh'
l.s lint all Ulllri
i|iKiU niiiirrciui' I. J I'mil a mnuailni,
makiiij; nojcl pay, rtiiish drilliii),' dpcratioiis Ijy 2.30 o'clock
I'Viry (lay. Ulastiiii; is imt allnwcd hcforc 5 oVIock, and
except the prcjjaration nf tiic cliar^'cs, the cnntractor duc-s
nothiiiR from 2.30 iitml hlastinp time It i> naiural iliat
.1 maiia^'er should try u, (levi>e a sclieim uianhv the
i(.tii|,any may i,'et the advantaije of thes, idle junirs. At
tirst the iiifii
well a
-krd
an 1 \tia
hoi
e, wtieiit Mr
P
lailu
sih
e. tile promise Iniii},' j^iveii that tiie rate per square
stopcd
it the selu III
IK 'II
Id Hot 111' ledticed. 'i'liey t'oii.t,dit shv
pieterrtd to make less, r;
itlier tlian
overstep the hcimds of liie reeoj;nized day's work. Thei
the selunie was tried. ,iiid i s'ill lieint; tried mi a sm.i
scaK
e, 01 payinp the coiitratiors -o nnuii
d!
tier to.it
drilled, in i^rdir that eaeli man mav drill the maxiiiuith
luimher ot Irtt p( T
tractor is ii^ed a- a
doiiht
lilt. r.\ this arran^'eiiKiit the con-
IrilKr If the plan works well, no
rejjtil.ar hla-ters
havinp iinthinn- ti
le employed, the eontr.'ictor
o uiih the hlastini; o])eralions.
method of workinj.; roiitr.iets seems to have met with
This
con-
siderahle success in oil
success has attended it here
ur jian, of the v.orld. .So far littU
the first place, by ailopt-
iiii,' this arran.uement. the responsihility f.ir the contracts
shifted from the snrvey cUparinient to the shift ho:
sses,
and this is undesirahle. Th
the scheme as
leti. again, the miners oppose
iieiii"; an innovation.
It look
s as it in the
tiiture. as in the p.ist. the general \\;iv (
contracts in the Witwatersrand <;;old mitn
basis of area
>I carrxiiiL; on
s will he on the
stojied out, without any reference to the
amount of drilling;, or the thickness of the slopes.
■ y[>*'
NOTES ON ZINC MlNiNG
Bv W. LiKci. Waking.
(July 4. nyoj.)
I'dluatioit of Zinc Oics. — I'lic vahir ni" anv ^inc ore
(lilRiids, ( i) upon its i)(.TCinta,L;v cmitciit <<i niL'tallic zinc;
(.J) up.'ii uln-iliiT the rr-nluuin left after simltiii.^- f(.r
sjic'Itcr i.r for /iiic nxidc can he ])rotital)ly treati-d fur i^dld.
silver or cupper, ur, as in the case of fraiikliiiite, fur nian-
ganese; (jj upnn its ])erceinai,'e cunteiit ni deleierimis
eleiiKMits which either det-ric irate the pmdiict ur increase
the expense uf reduction. Tims, lead and iron in con-
siderable anKJUnt detract frum the value ni ore fur the
latter reason. Zinc-hlende is deducted as an ulijectiunaMe
clement in calamine ores, and calamine when found in
blende ore is not paid for. Cadnnum is deleterious fur
certain purposes, also antimony and arsenic. Sulphur,
which coniposes about one-third ( '^ tlh weii^ht of pure
■jack' or zinc-blende, is not considered as an element of
value, becau.se the cost of converting it into sulphuric acid
(a .lecessity at some works) leaves little, if any, profit.
The price paid to the ore producer per unit of metal
(a unit here meaning jo lb. or i per cent of 2,(xxi lb.).
therefore, varies with the (|uality of the ore. Thus in
Missouri, wlu re the "as-ay basis'" is .S,^() jn r ton for
blende concentrate containing 60 per cent metallic zinc,
concentrate^ containing only 20 jier cent zinc are abso-
lutely unmarketable; when the\ contain 40 per cent zinc
with little or nu irun they are worth _>-, . per miit of metal,
or $10 per Ion ; with Oo per cent zinc the unit jirice is 50c..
and when they ,i>say ()4 [)er cent zinc the value per unit is
53ic., or S_u I"r ton.
ft fuiiows that the miner who fails to clean his zinc ore
up to the economic limit, which for zinc-blende ore is held
NOT PS OX 7. IXC MIX IXC,
t. < iiK'an that from 2 to A per cent of sand or earthy matter
max nniain in the concentrate, is throwing away value
when lie sell;^ the iii>uftieientiy cleaned material. I'or ex-
ample, 1 ton of the 40 per cent ijre above cited is worth
but Sio; if it can be cleaned to as^ay (jo per cent, even
allow inj,'' a reasonable waste of 10 per cent in tlie opcra-
ti'ii, It will proiluce i.joo lb. of (jo ]Hr cent ore, worth
3i<S, a j,'a;n of $S. If cleaned lo as>a_\ 04 per cent, the
pnnluct would wei^h \.\2^ lb., and would be worth
The only fair and efjuitaljle method \et discovered for
ascertaininjj; the value of any metallic ore is l)y assay.
Iluur and seller are a.like protected by this means, even
against (hrect fraud, jjrovided the u-nal jirecautions are
taken. These precautions are; ( 1 ) That ilie sampling be
thnnnighly done as the ore is delivered, and in the pres-
ence iif both bu\ir ;uul selli r 1 ir their resji' iii~ible .'igents ;
(2) that an umpire sample be sealed at the time of sani-
plinu : (.^1 that the percentage of moisture in the ore as
delivered be ascertaiiud iniitu duaielx ;itter the weight i-
deterniined. The la-t jirnxi^n i> necessary because the
assay can ''■\^\\- be made uji'in the dried sample, and there-
fnre rt'presents the percentage comeiU nf tin ore U'.inu^ it-
moisture. Obviouslv, in settling, it is immaterial whether
the ilednctioii for moisture be .'iiijilieil to the gross weight
"i the (ire, or to the ()rice to be ]iaid, pi r ton, or to the
product of the weight by the jirice ]ier ton. bm it c.amini
be applied to reduee the as^ay valuo.
fft'f<,'/(/ (;//(/ ri>litnii- of Zii'C Cov.rrutratc. — The dry
weight of a bin of ore or concentrate m.iy be estimated
ver\- rl'><el\, if the s])ace occupied liy the ore be meas-
ured and the weight of the ore per cubic foot is kno'i:'
The following dat.a relative t.i the speeific gr:i\it\
weight per crbic foot of zinc-lilende concentrates and two
or three othc ■ itunion constituents of Mi-;^ouri and
Kititiu'k\- /mc tivc^. were nbi.-iined from careful te^ts
su
THE ECOXOMICS OE MlX/.w;
"la.lc in tlu- l,-.l„„atnrv nf W-.^uv^ & Son. at WVI.l, C,t^
Al".. and arc lum Lu" tin- lirst tune uade pnl.lic.
IlK' nmurals i..t.,l u.r. pure massive blende from
rn.pcniy. Aj,,. o.ntainiiiy (,., piT cent zinc, with about
1 per cent at sulphides ,,t ca.Iminm, e.q,prr an,! ir,,n and
havmn. a .p,.„f,^ ^^avity of 4.05: marca>ite (coekscoml,
pyru. I irom tlie sime place; j,valena from \\VbI. CitN
AJo.: clean tlint from the same place, and avera-e tluor-
.<par iron, Livingston comuv. K^. The sample, were
cru>lu.| to 5-mm. size , 1-5 „,. , and fmer. then as.nrted
by siltmj,' mto 4 sizes, namely. 5 mm. t<, j mm. ( 1-:; i„
to i-ij m.) : 2 mm. to i mm. 1 i-i.> in. to 1-2^ in. , ■
I nim. tn „.J5 „„„. ( i-_.5 in. to i-ioo in.. : la^tlv" mi.ler
0.25 nm,.. or o.oi in. The wei.trht in pounds „f a cubic
foot of each sized material, closely p
down, was then ascertained
packed and sh.aken
. . -Ti'' last'v the weight of ,a
cubic lont „t e(|u;d parts ,,f the various sizes, mixed was
determme.l. The specific gravitv oi each mineral was
then ascertamed. a-^ given in cohmm t<. below. .Since the
weight ,.| a cubic f..ni of water i> verv nearlv 62.5 lb the
weight ot I cu. ft. of each miner.al in tlie snlid -late
was found In multiplying the >pecific gravitv bv 6^5
g.vmg the figures of colun.n 7, The increase'in volun;.'
brought abnut by crushing each mineral to the above
fineness is shown in column 8. the figures of which are
found by dividing those ni column 7 by those of column s.
.Material.
•s. -
■r, -
Ll>.
'7. -
I.!).
4< =
- 2
l.li"
= .iS
I.Ii.
d
■n
1 1,
Pure Cilen.i.
.M;irca>iti'
-'5««
-M«3
-'.si J
JOl J
.U';o
738
1 11,
4i'l
1.442
(nuimlic). .
Pure Blitide.
I'liiorsp.'ir . . .
Clean Idiiit..
I IV.s
IOO()
77.y
11,? 1
1 ^oo
97.S
754
IJI ')
71.0
100.7
75 1
i(k)7
170.7
i-'7'i
4 ,sl4
40.S
.^'4
jS2
-'5.!
l()(,
Kit
' 7.^5
1 .4.'^^
' .S.U'
I 7(,s
XOT/-:S ox ZIXC MIX/XG
31
The common statement tliat vein material oecupu?.
twice the space aftiT hreakint; is. therefore, not c|uite true
of rather finely connnimited minerals: and. as the al)ove
resnhs show, the increase in vohmie varies acccjniing to
tile shape of the panicles, since tile Hint and niarcasite
lirea!< into scales and elnn<,^-lte(l ani^nlar frau'ineiUs, while
the particles i.f the other niiiuniK are luarlv i-niiKtric.
I'yrite and hornite wonld no floiibt j,dve verv different re-
sults from those olitained with niarcasite.
Specific Gravity and Coiuposilioii of Zinc Minerals.
I:tc—\n the followin<j list of ziiic minerals, and other
minerals nsnally associated with ores of zinc, the order
followed is that of their specific irravities, be.t^innini,^ with
the heaviest. The .sjiecilic .q-ra\itie> -iven are compiled
from si,-|„dard authorities. The percenta<,a' compositions
are, houexer, specially computed, usin.t,' the International
Atomic Weights for Kjo,^, and refir to the theoretically
pure minerals. It must be borne in mind that some of
the minerals named are very rarely found in a state nf
IHTtect imvitv. Thus blmde nearlv alwavs contains from
O.J to I per cent of other sulphides than that of /mr.
while marmatite. pvrrhoiiie ;uiil chalcoiiyrite are very
vari.ible in compi isiiion.
Assay ResiiUs as a Gi' - in Ore Pressinjr^ — Ti,e assay
of a sample of zinc-ore concentrate, showintj the per-
centage r,f each metallic element, as zinc, iron, lead, etc..
.mves the mine mana.i^er a means of .letectinij defects in
the mill work. It the character of the minerals compos-
iiii; the ore l-i known, the percentatre of each mineral, of
which OIK elemeiu is determineil bv assav. may be com-
puted from the data of the lasi cohmin in the preceding
table.
Ihiis i„ ,-, lot of concentrate consistint^- of blende,
pynte, -alena and sand or earthy matter, the peiventaf^-es
of zinc, iron and lead bein;? known by assay, the propor-
tion of bleiule is fom^d bv multiplyinirthezincby looand
Tim JJA).\UM/CS (>/•■ MIXIXG
-I
00 >•
•— C
>, in
s = -^
c » .■•
s s ~ = '>
.J J ■■- o ■- £
_• ^ X ^ -^ n
' U y o y O u
e X 5
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= -.2> » =
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^ — ir. ^
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?: tl =
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USUI.
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tic
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A'OTI-S (>\ ZIXC MIXIXG
33
Ei
'■K
(iivuliiii; li\ iIk- ])iiix'm;i!L;' uf zinc in blende (67.10),
ami -iniilarly t'nr p\nte and j^akiia. The snni uf the per-
centai;es so found, deducted from 100, shows ahov.t tiie
proportion of sand nr earthy matter in the material, a fact
ofli'u \ery desir.ilile to k-imw.
Another method i.^ to multiply the perceiitacfe of each
element found hy assa\, hy a factor obtained for each
mineral bv diviiliii- its molecular \\eij.;ht into the atomic
\\eiL;!u uf the elenieiil.
d'he following; incMmpktt list of such factors, also spe-
cially CMiiijjuted from the International Atomic Weij^hts
fir 1003. will be found of use to mill luaiia.L^ers as well as
assa\ers :
Metallic zinc
Mot.illic zinc
Met.illic zinc
Metnllic zinc
Met.illic zinc
Met.illic zinc
Metallic znic
Met.illic iron
Metallic lead
Metallic lea.l
.Nk'talhc lead
X 1.49
X 1S44
X 1.9174
Metallic copper .X 2.8.S7
.Sulphur X 3.04
.Sulphur X 1.8718
Sulphur X 7.4.1.?!;
l.iinc
Lime
Lime
= Zinc Mende,
= .Silicious calamine.
:= Smithsonitc (car-
bonate).
=: W'illemite.
=: Hydro, incite.
= Zincite Czinc o.\ide).
= l-Vanklinite.
= Pynte.
— (ialen.i.
=^ An){leMte
= Cerussite ( Icac car-
bonate') .
=: Cbalcopyrite.
=: Zinc blende.
= F'yritc.
— (ialena.
X 1.7S5O (or'""r,ii) =: Calcite.
'*- '.^45 = Idiiontc (Ikiorspar).
^ .! 0"-2 = Selenite (>;yp>iini).
X 17064
X 1.0526
X 1.2446
X .S.385
X 2.144 <'>r 2'.t)
X 1. 155
X 1.4(14
X 129
GOLD MINE ACCOUNTS
(July II. 1903)
77/t' lliiiior:
Sir — 1 am ,l;I.ii1 tn acccjit ymir iiuitatii'ii to iiia'a' sntnu
remarks wi; the subject uf ^uKI-niiiic accnunts. All effi-
ciently maiiaj;ecl mines these chiN^ ha\e s\ stemati/.ed ac-
cmiiUs ^hiiuint; in result the wnrkiiij; cost ]ht ton of ore.
r.ut there is a most hara'-sini; lack of tmiformitv in the
methoil hy which the last result is arrived at, anil in this,
some iliscussiun in your esteemed JoiuxAi. coidd lie most
useful.
1 ir>l and T'lreniost, mme accounls >hould he >\stt'uia-
tized in ^uch a niaiuier as t" firevent fraud, and should
hi,' so jiresented as t(.) carry conviction of liouestv to
the owners. Second, the accoinns should he jirepared
in such a way as to show- the e.xix'nthture in varior.s de-
partments on s(nue unit basis, so as to enable the iuana.[::er
and his >taff to compare rt'sulis of various departmetUs
and various periods within his own mine and also to
compare restilts with his neiij:hi)nrs, that he may be as-
sisted in hi'- intermediate campaimi for economy and im-
pro\ement. Third, t'l be presented in such a way that
the owner, director, shareliolder or what not ma\'. for
himself, b\ comparison, determine somethinc^ of .!ie cfti-
cieiicy of the mana.q'er.
At the out>et 1 do not want some ii:ilf-baked person to
rise and ieinin<l us that the varvin^T conditions (under
which mines of dilfereiit countno work, or mines of the
sanu country, for that matter, or e\'en mines on the same
vein, or evi'ii different jjartsof the same mine) may render
comparisons misleading-. We all know that the factors
which i^fovern workinjj;' costs are labor, su])i)lies, size
of orebodies, character of the ore. volume of ore treat-
ed, de])tli, etc., etc., and that these factor^ are never pre-
corn Mixr. .iccmwrs
36
:isii\- tik
aiiu- in am- tuc iiiiik'^-, imr tur aiu' two m'l•lth^
and iliat {'ro-i<>nii,i .nni|iai i>"n> 'na\ .^ivc iln tn^t man
a hku'k eve and put an nifttii-icnt man nn a lii^li i tdi'.^ial.
r.nt all tins dm.-, m-t rrndir CMnijiari.Mins \ahK'lt.->-, tnr in
tlu hands (if the man wIid kncws the riinditi"n> tlir^e
same vvnrkinj; costs enalilc tlu- manaijc' to determine very
i|iiit'''!\' tiu' a\emu'-- t'nr impniNin^^ the efticienex of a de-
Darti'.ent. vr ])ermit the dwner of the mine to determine
tiie etiliciencv of the manaijer himself. The rivalry j^rowint,'
nut of snch ei imi)ari>i Ml-- in its ineeiuiw t" ecin^iniy and
liiL;hest el'iieienew when teniiK-ri'd wiih capaciiy. has heen
hy iM means the lea>t faetm' in red mi;,' u'ild minint^
from an ahsolute Sjieenlatinn tn an in !al enterprise.
In nrder that these \aliial>K' inlluences .nioidd have fnll
pkiv, iliere is a er\iiiL,' need fiT t.'Teater nnifnrniitv in the
formnkation I'i mine aecMimts inli' llii- nhini.itc re^tdts
of wcirkiiiL; costs. 'i"hi> i> imt a new idea, hii' the n>efiil-
iKss of it is nvrv evident tlie^e lairr w.ars. In eatise nf the
constaiitlv ineri'asinLT ])nliliiily t^iwn ti> workitiL,'' resnlts
1>\ reason cf the lar^i- ]iroportion of mine dwiiership 1)\-
luibhc stock com[Kmies. Tliis pnl)lieit\ uf accounts ren-
ders results available for comparative ])iirposcs.
The lir>t purpose of accmmts recpiires im discussion
here, for it is a matter <>i competent hookd<eepini;. and
ilrlleetioii'- are matters for the police to look into. The
tise fulness of the second an<l third purposes depend for'
tluir i^reatest possibilities upon uniformit\ in the same
mine and on neit^hliorini:: mines, and still better, on all
mines. As said, all \vell-manas:;ed mines show results
I 'f I xpendiinres in wurkiiij^ costs on toimai::!.' basis, but tlie
\ariation in method of allocation of expenditures to vari-
ous departments differs most harassini^ly. In tlic first in-
stance, iti America and South .\frica the short ton is used,
while iti .\tistralia and India tlic lone; ton is u-;i'(k and
therefore the latter are lo per cent different. In most
F.ncflish-owned mines exiK'iidittirc is divided '.nto 'Capi-
:!»;
////•. liCUXOMIi .s Ol' MIXIXG
tal' and 'Urviinu-.' ilfvrlopiiunt and cmistructinn hi'in
i;cnrialh rhari^i d tu liu' fornKT. anil written oft the lat-
liT and ilui- ti' \M>rkin!^ costs, 1>\- ri'dcniptidn nr ik'pri'cia-
tiMU, and ; \\i<li' variation tN:.~t-> in both the c'naraftcr
of the r\]K [diturt, cliar^i'd to cajiital m tlie tirst instance.
and in the amount char^'ed off afterwards, for nistance.
in development, some managers charj^e \\in/e> and raises
to development, and nilurs to Mi .pin,L;". Some even charge
repairs an<l renewals to ra])ita!, on the theory that they
kee]) the plant uj) to a fixed state of etfieieney. In writinj,^
develi']}ment ' dt liv redemi)tion mt deiirec-iation, >ome enm-
panies do it on the hasis of the avera^a' cost i)er ton
developed, others, to heat the income tax commissioner,
write I'tV all he will allow. Some companies write off
depreciation of plant im a known life for the mine, others
on a hoped-for life. Some comi)anies distrihnte a part of
the i,'eneral charges over capital expenditure, others
char!j;e it all off to revenue at once. Some managers
charge pumping to ore extraction and some partly to de-
velopment, while others charge it partly to milling, as
being the sour e of mill water hi or-' treatment. ..onie
companies give cost of treatment on one generalized
tigure, which is valueless for comparison, because one ore
niav involve "tie operation, while another may involve five.
Most eoni|)anies distribute treatment costs over the whole
tonnage milled, yet the proportion of tailing treated by
cvanide, for instance, may vary from 50 per cent on one
mine to 100 per cent on another. Some i lanies deduct
the cost of realizing bullion from their receipts, while
others charge it to working costs, etc.. etc., ad infinitum.
In a few instances there is evident intention on the part
of the management to obscure real costs, but in nifjst it is
merelv difTereiice in method and oi opinion. Another
feature worth discussion is how far expenditure for ilissec-
tion of costs is warrante<l by results to be attained, and
how mucii detail can be used within tlie realm of accu-
Ca)I.I> mix I: ACCOVSTS
87
r;n\ . it is nn tlu^c iiiattiTs vvluTi-, if ;m ajjfrccMiicnt couM
hf reaclu'd. discussinii wcnild lie most \alual)lc. It mi,i;ln
l)i' a work f(ir tlu' Aiiicricaii Institiitc nf Miniiif^^ l'-"Ki-
inrr> and tlic l-.iis^lisli lnstituti(i!i of Miiiiii)^ and Mctal-
liir^;\ ti> ap|)iiint a cctiiinissidii to furmulatf sniiK' plan cf
v\(irl\in,L; oust statcmi'nts, as a result ol sucli discussidiis. I
am sure tlu' profession would loyalK introduce and adluTc
t(i ^ni-li a plan, and it would meet the ajiproval of the mine
owner at the same time, for the nsnlts could not hut he
lieiieticial to him in the end. II. C. Hu(j\'ek.
Luiiduii, June 16, iye>,j.
THE PAYMENT OF EXTENSIONS OF
MINING PLANT OUT OF REVENUE
Hv l',l)\VARU W'ALKtK.
1 J UlV 11. I 'i^^^ )
In ;i rrrciU 1,. iniKiii Ultrr 1 fffimil t" tin.- pniK-ipk'
laid '1..UI1 b> Mr. C. .\l}4i.r;i(Ui Moriiiip at tlic niri'tiiif;
of ^hariliDldi.T.'- iif (ircat Ini.yall loiisnlidatrd, tliat all
CNpi-niliturc (in i!i.vi.lii])nKiit of a niinr and (.-xtensioii
(if nRlalluruical ]ilanl .-lnuild in- paid fur wliciu'vir pns-
?.ibU' out of rfvi'iun . 1 lu- (|ut.■.^tloIl ijcforu the sliart'-
liii!(K't> ua> ulictli' lu nru plant .should 1)l' fiaid for by
addnii'nal caiHtal r.i.Mil liy tin- i-^iu' nf new shares, or
wlKlIier tile large balance of divisible protil (some £loo,-
ocMii shiinld he devoted to tiiat purpose.
■j'he ineidi nt npeiis np the .i^itieral ipn-stion of the
suitabilitv of the ordinarx methods of accouniinL; to the
special case 'if mining, and some discussion of the sub-
ject VMiuld be opjiiirtune.
The inetli'id of kecpini,' accounts of minini; companii'S
as ado])ted in i.ondon. differs in r.o \\a\ from the stand-
ard system fur connnercial ami manufactnritii; eiUer-
prises. All preliminar\ expenditure on pro])erty and
plant. sub~e(|uent expenditure on extensions, and the
cost of sinking shafts, are charged to ca])ital ; and current
expenditu!\- i m labor, supplies, mainti nance, and renew-
als .re ciiarged to revenue. This is the theoretical prin-
cijile. but the method of carr\ ing it out de])ends ujxin
the circumst;mces of each individual case. It need bard-
ie lie said th;it the great de-ire of directors is to show
that tluv can declare a dividend, and whenever extra
expenditure iiecomes necessary for tlu purpose of sink-
ing ,1 new shaft, or ])ro\iding additi'inal or improved
plant, there is always an inclinatieui not to interfere with
.i//.\7.V(; I'L.Lxr i:.\ I rxsioxs
39
tiu' iliviilriiil
hut t
II i^^tii- lu'w .siiarc-
It
tlu' niiiiiiiLr
markit i;. l)ri>k, ami if the directors arc lu'ld in l;.hi(1
I'^ici'iii, owitiij tn llu'ir siifocssful iiiaiia'jit'im-nt ni the
]irii]Krt>, then' is vrrv little (lit'tii'nll\ m r;;' ■ tlic ad-
ilitioiial capital. If. Imucvn. the market is depre-sed,
and the directors do not. for one reason it another,
care to a>k for snh--criiitiiins to new >harrs. then the
e,\tra expense is met out of re\t'mie if possible. In
other cases, when it is imp. issihle to issue new shares
an<l when there is nut sutticient accumulated profit to
Hurt the reijuireil e.\pi inliluri . tempoi'.irv loans ai^aiiis;
the ore reserves or a,t;ainst the j^eiieral assets of the
company are made by directors, shareholders or others,
.ind the loans afterwards p.iid 'Hit nf revemic.
Typical exami)les of tin \arious n-ethods of meeting
extra exiienditure ma\ be i;i\en. The iiutliod of pro-
viding- lor it by the issUe of new capital is well exesn ■
phlled by the case of the \;irions ^old luinint; c(jmpanies
"p' ratinu; in the Kolar Di-iriit of India, under the man-
a,L;enient of Messrs. John Tavlor \: ."^oiis \\liene\er
nione\ h;is been reipiired for increasiui.; the plant it has
been raised by issuin;.,' new shares, althoiii.;h tlu' mints
.It the time may ha\e been yieldiii;.; profits lar^yer th.-m
tin- amoimt rt'(|uired. h"or instance, the Mvsore i iolo
.Minint.; Company has paid over three million pcnmds in
di\i(lends, but <lurin^ its dividend-paylnt;- life no less
than £()45.()(x) has bet-n raised b\ the issue of niw shares
fiT the purpose of meeting; expenditure on additional
plant, nn the fjeneral overhaulint,'- of pnjperly. and on
sinkinL,-- nciv shafts. The orii^dnal ca])ital of the companv
was i'i35,(xxj. and at six difYereiit times new shares have
been created of a nominal value of / 122,500. As these
shares were all issued at substantial premiums, the cash
received amounted to £645,(X)(). as above mentioiu-d. Iti
aildition to these shares issued for cash, shares of a
nominal value of £32,5015 have been issued for tlie pur-
4U
THIi ECONOMICS OF MIMXG
rliuM- 111 ailii'iiiiiij: pH'pt rtiis, xi tliai tiic iioininal capi-
i.il til till' mmpaii) at tin proiiit tinu- is £jyo,ocxi.
riii> piilii\ has alwnvs htin uiiaiimuiu^ly afjrccd to b>
sliari'lmliliT- iii ilu' Indian ^mouii. ami as a matter of
tad llu iKu ^liari'> ari' usu.ilU al)>iirtitil hy sli.nTlicild-
crs /Ti' rata.
An ilhistratii)ii of tlu' sn-oiid iiu'tliod of pasin^ for
fxliiisions is to 1)1- met witli in tlu- case of the (ireat
l-'iii^al' Consolidated, already referred to. !'.xanii)Ies of
this ix)lic\ are also to l)e f( mid in I'le conipanus con-
trolled by the I'.xploratioii ('.nnp.inx. 1 he 1 oiiilioy
Ciold Mines, Limited, was floated l)\ the iCxplor.itioii
Compain in iX()<;, witii a capital of t\}oo,(xX). In 190J
additional plant, to the extent of 60 stamps and acces-
sories, was erectetl and paid fcjr uitirely out of revenue.
In addition to this, when the original l\)niboy Mine
showed signs of exhaustion, new properties adjoining
wi-ri- acquired out of revenue, without it beiiif; neces-
■-arx to issue aii\ more shares. 1^1 ( )ro Mining: & Rail-
way L'oiniiany also presents another example of the
policv o .le I'.xploration Companx. .\n ;iddition of IiK)
stamps is now beiiij; provided from revenue. In this
case, adjoinint; properties were actiuired by the issue
of new shares a> purchase price. These new propertie-
added to the capital vsluc of the possessions of tlie com-
pany. The ori}.;inal property was showing; no sifjjns of
exhaustion, as was the ca>' with the Tomboy, where
a new property was acquired in place of the old one.
rather than in addition to it
.\ gopd example of the third way of providing exten-
sions is to In' found in thi' ( ire.it I'.otilder Perseverance,
Mr. Frank (iardner's chief West .Xustralian property.
Tliis mine was originalb- Il'iated in ;8o5 with a capital
of £175,000. .Alter the tirst three vears the oxidized
ores came to an end. and gieat difficulties were experi-
enced in finding a suitable process for treating tile re-
A//.\7.\7, PL.IXT liXTENSIONS
41
fractory ores, riurc were lui xuriilii-. profits available
for ex]Hiinifm or for crcctiii;; a larf;c plant. The cost
was cntrels borne h\ Mr. Ciardrcr and bis friends, and
the amount, sormthing li^t £i5i),(xx>. Iia- >-incf been
niiaid out of prortts.
Ilavinjj mentioned the usual inetliods of mininp-com-
pany finance adopteii in Londdn. 1 will proceed to discu>>
the general (|uestioii a^- lo llie .ipplicability of the ordinary
methods of accouiitiiij.; to the s|)ecial case of riiinin);. It
i^ held 1)\ a j,'reat many pri i|es>ional men coiiiucted with
mining that far less expenditure ^lll.nld br ebart^ed tr>
capital account, and that lb<' fij^aires at which the oris^iiial
value of the pro()erty and plant stand amoni,' the as.sets.
-ln'ulil be reduced as r.qjidly as possible .\ mine is not a
permanency like real estate, and the value of the machin-
ery dejjends almost entirel\' nn the supi)lv of ore. Some
alteration --honld there f.Te be made in the u^ual practice
of enteriufj up the price paid for the property and ei|nip-
meul at unalterable figures. It is true that mn>t nf the
carefully manaj,'cd mininj; companies make allowances
every year for depreciation of plant, but few make anv
provision for the depreciation of the projierty itself. The
conseciuence is that sharehoUlers receive dividends which
they ref.;ard as profits, and concurrentK the value of the
-hares decreases. The real profit of the transaction in
iiuyinj,^ mining shares i- the difference between the orif^i-
na! purcha-e i)rice of the >hares and the sum of the total
diviiknds added to the eventual price of dis] >al of the
-hares. We have the continual phenomenon in l^)ndon of
profits to mining shareholders concurrent with a gradual
or suddi'u loss of capital.
Such a method of mana.eing mining compani' -' finances
is illogical. Some part of the profits nf cacj-, year's work
should be devoted to the reduction of the capital account,
and all expenditure subsequent to the initial cost <u' the
property anil equipment of the mine should be paid ou;
42
THE HCOXOMICS 01- MIXIXG
ni the rcveniu-. The method of reducing the value at
which the property and original plant s'-^.nds in the hal-
ance sheet \ luUl depend largely on circumstances, it
might he agreed from the first that, say, one-fifth of the
value should be written oft' every year, and when the total
a.ssets had thus i)een replaced by cash, there might be a
return oi capital. Another plan would be to have a re-
valuation every year, and. if the value of the ore reserves
was less than at the beginning, to replace the deficiency
with cash from the year's profits.
It might also be suggesteil that the nnniinal capital at
the end of every year -hould be rearranged so as to rep-
resent the actual value of the properties, but this scheme
wduld lend itself to nuich abuse, in addition to which tiie
legal fees and government taxes would swallow up far t(K)
nuicii money.
It is not often tliat a n-arrangenient of the nominal cap-
ital of a mining company, so as to bring it nearer the real
value of the prciperty, takes place; as a rule, it only hap-
pens when a mine has become exceedinglv prosperous
and the dividends jiaid are so high that the market (juota-
tioii for the shares is greatly enhanced. Then, for the
purpose of facilitating market dealings, the nominal capi-
tal of the company is expanded so as to bring the current
([notation nearer par. Recent examples of the capital
being reduced, when it was found that the properties were
Hearing exhaustion, are to be found in the case of Mason
t*t Ilarrv, and the Mountain Copper Company. In the
former case cert;iin proportions oi iiroti".- were distributed
to shareholders, not as dividends, but in reduction of the
eajiital, while in tl.e case of the Mountain Copper Com-
panv, the company v>as reconstructed and the shares ex-
changed for debentures which are redeemable out of tb.e
lu'i ifits.
Discussion on the subject would not be complete with-
out a reference being made to the incidence of ihe income
MIXIXG PLAXT EXTEXSIONS 43
tax on the profits of iiiiniiig coinpaiiics. As in the case
with directors, so it is vv ith he income-tax commissioners.
They like to be able to siiow a large profit. They are very
jealous of the allocation of profits to what they call capital
expenditure. \ery little is allowed in the way of writinj;
off for depreciation of plant, and profits applied to the
extension of plant and the sinking of new shafts
are invariably assessed. In the case of the Mysore com-
pany, if the extensions had been paid out of revenue, in-
stead of the profits being divide<l and new capital issv.rd,
none of the profits tluis allocated would have escaped the
income tax. Similarly, the profits of El Oro and the
(ireat l'"ingall, used for the purpose of extending the plant.
have been assessed. The conniiissifuiers would never
dream of accepting the proposition I have made for con-
ducting the finances of a mining company, but that is no
reason why the system should not be adopted.
This subject is capable of considerable discussion, and I
hope that your readers will contribute theii opinions and
experiences.
ORE TREATMENT AT KALGOORLIE
(August 15, 1903.)
The Editor:
Sir— in vour issr.u ut July 11 Mr. Philip Argall con-
tributes sonic valuable discussion regarding the Uiehl
process as relating to Cripple Creek ores. As Mr. Ar-
gall's information regarding the progress of metallur-
gical practice at Kalgoorlie stems to be three years
behiinl. and tlierelore his basis of argument wholly er-
roneous, 1 trespass upon your space to give some recent
and detailed costs. Aside from other matters, 1 think I
can show to Mr. Argall that he is wholly unwarranted
in believing that the roasting processes must ultimately
prevail at Kalgoorlie. Much progress has been mad
in both processes at that place, and Mr. Argall's figures,
which were taken in the early stages of sulphide treat-
ment, do great injustice to both methods.
I think 1 can do no better than to give the detailed
costs in the Lake \iew mill, choosing that one because
it is treating an ore of similar character and a tonnage
more comparable to the tonnages handled by the large
roasting plants at Kalgoorlie. The Lake View mill,
however, will not ultimately be the best advocate of tlie
wet-milling bromo-cyanide method, for it is an adapted
plant V, !th a stiimp-mill of bad design and construction
for a basis, and the accessory plant is not arranged to
best advantage. Moreover the power plant on this mine
(now under construction) is the worst on the field. Yet,
even with these liniidicaiis, the results are far different
from those upon which Mr. Argall. ])robably for lack of
more recent data, has formed hi> judgment
1 have taken the month of March as an average
period, because, since that time, experiments with a 50-
ton daily plant of another process have been in progress
ORE TRI-.lTMEXr AT K.ILGOORLIli
11(1 1
lavc
s tin
.(.■n iliargcii into costs, soniewliat coiif
cost
s t-ivcn,
liow
ever, arc a
fa
ir avcraL'c.
usin^
1
Iiavc reduced all tomia,c:cs and costs mentioned in this
ccjninuinicatioM froni the lonj; ton to the short ton, so
(3n the footing; of American practice,
nnt; the month a varying portion of a 70-stamp
as tti
1)1
treated 8,444 '""s with a duty of 5,191 ton
[XT
-.tamp per day. The costs include superintendence, etc.
I)nt nut depreciation. Water does not include boiler-
feul.
which is included in power. The costs of mill
md concentrating 8,444 tons were, per t
mg
on:
.Milliiic—
and waKo-
$0 0<>)7
' '-"■" ""lli'iK $0.6722
Coiicciitratnitr —
Salaru-, aii,l wages $0.0896
^^■•"^•,': 0.0257
^."'•'■"•^ 0.00J8
'"'•■" o.040t
■■^^^•'>"'« o.ooi.;
Total i-oiirt-ntralint; ^ ,g,2
rolal, JILT ton inilKil $0 S'u
riie cost .-.f treatment of j.t)62 tons of tailing were
as follows, per ton:
Salaries and waRc- jo ^
;"^''^""" '•>;"i"'^- o:,^M
l'.r..iiin-o\ani(lc „ ,__
l.une ,", °i"
-/ , 00^2.'
Suplmru- ,acul ^, ^^^
OtlUT Mipphos O
^, V^'7 0.027,
4t;
/■///; i.coxoMics or mimwj
■I'lUal. piT tdii ni tailing $_> -715
'1'Ik' cii>t> ijf nia>tiiii; and c_\aiiiilin_L; 4SJ tons of coii-
cciilraK- w (.Tc a> follow. ■>. \kv loii ;
Koastincc—
Salaries aiul wages $0.9407
I'ucl 0.3157
Siipi)lies o.o.V*'^
rrau^pcirt and (lr\ nif; nf ore 0.4050
Mainteiiancf 0.0443
Power o J^^\
Assaying 0. 0?<47
■|-..tal
$j,07if)
Cyauuling —
Salarie- aiul watres $0-539'
l'i)las~ium cyaimle 0,^1/(13
Siilpliunc aeiil 0.01113
l.inie 0.0! 14
Ziiic shavings 0.0314
Water 0.0X50
Otlier supplies o.iSoj
X'aintcnance 0.351:?
Power o.()OJi;
Assaying o . 14 j3
Total $2,640?
T'ltal cii-t, per vm ni ecmcentrate $4.7209
Coiiihiiniii; tlust.' stalcmiMits of cost, ami reducing all
the a\eraj;i.'s to the jjai-is of tons niillcd, \vc uhtaiii the
follow iner results:
Milling anil eoneentrating $0.8531
2.14JJ
iiK'eiitrate o._'(«)9
Treatnuiit of tailing.
Roasting and eyaiiiding
Tiit.il co-t per ti'ii niiUed.
Rovaltv
o. 1069
Total co-t $3 37 -'4
The yield wa- ahout S14 ]>er ton. the extraction 92
per cent, and of this 65 per cent \\a> secured iioni the
concentrate and tiurefore did not i).iy royalty. Tlie ile-
fcctive arranijeineiit and construction uf the mill and
ORE TRRAi'MEXT AT K.lLCOORUr. 17
I>uucr plant resulted in a cost for
power and niam-
tenancc alunc in excess of tlle^e co>is on the Urova
iiruuniiill of 38.5c. per ton, altliout;li the latter treats
but 4,o<x) tons per month, so it must he obvious that a
well constructed i)laiit on the Lake \ lew u(juld work at
t of under S3 per ton. The Ivanhoe plant, now in
a co>
course of alterat
ion to treat iJ,ooo tons per month, will
vurk for not over S- 75, iir()bahly ,'f_'.5(). The Oroya
irownhill mill is n
jw in cour>e of enlarijement and al-
teration, and when complete, aIthouf,di treating the most
re on the field, siunild show also good results.
difti
II
cult o
owe\ er
the figure of S3 above is sufficient to show tl
le
■ousness of the figures of S7.86 i
plus rovaltv in
c- —
VD//
for tln' 1 )iehl cost.<
in one instance and
another, as quoted by Air. Argall
Lack of ecpially recent and detailed data from the
larger roasting mills at Kal"oorI
:)f co.sts difficult.
renders comparison
for 1902 shows the costs on that
lie .uuuial report of the ( ireat Uould
er
mine to be S
S5 per ton,
but this lias been somewhat reduced since, I believe
ig about 12,500
witli the
'erse\erance, ireatin
Tlie (ireat I'.oulder 1
liort tons per month, gives the latest result,-
^3(^5 ■ In
what items
largest tonnage on the field
are included I d(j r.n know.
Ilie ua-milling l)io.:K)-cyaniding method requires
about 20 per cent less power than the dry-milling roast-
nig method, and involves less cost of maintenance, and
also involves not over yo per cent of the fir>t cost, and
thertfore less depreciation; and above all it avoids dry-
ing the ore and roasting 04 per cent of it. These
economies are accompli-hed practically at the e.xtra
expense of concentration, bromo-cyanicie and rovaltv.
I he use of bromo-cyanidc partly replaces potassium cy-
atii.le otherwise required, and altogether on the Lake
\ lew these special items involve about 70c. per ton.
( )n the other hand a
crushing mil! uf the same
48
/'///■ l:C()X().\HCS Ul- MlMXu
toiii:a-e. treating Lake \'inv ore for extra drvin-, extra
power, extra roa>tnig, extra cyanide and extra wear atul
tear, would iiivulve fully $j jht ton
There is iiothin- very novel in the Diehl proeess be-
yond the well understood methods of stamp-millinR,
eoncentrating and cyanide treatment of gold ores, ex-
cept the grinding ,.f the entire tailing to slime' and
the addition of bromo-cyanide. The rationale of the
process makes niueli toward economy and steadv im-
provement. The royalties expire in another four years,
but aside from this I think I have shown that there is
no prospect of displacing the process in that region in
favor of dry crushing and roasting, especially as the
comparative extraction seems to favor the wet method.
Many details of Mr. Argall's understanding of Kal-
goorhe practice are altere.i by present practice, more
especially the fact that the dry-crushing roasting mills
grind all ores to slime for t^lter-press treatment, instead
"t treating a portion by percolation as he states. The
wet-cru>hing mills do not return roasted concentrate
to the battery. Kalgoorlie metallurgists do not have the
same apparent aversion to filter-press treatment of tail-
m.g as Mr. Argall. The economy of percolation of
sand over agitation and filter-nress of slime for a pe-
riod of six months on the Iva .hoe is but 40c, per ton
beside the cost of grin.ling, of which a portion would
disappear in the greater economy of filter-pressing if
the whole product were so handled. The compensating
advantage, in extraction by fine grinding, considerably
more than makes up this difference in either process.
As to the relative merits of the two processes, as ap-
phed to Cripple Creek conditions. I am not sufficiently
mformed as to the character of the ore to offer a judg-
ment, having only been on that ground for a few days-
but I might point nut that power costs at Cripple Creek
are not 15 per cent of that at the Lake X'iew mine, that
ORL Tia-.ITMHXT .IT K.ILGOORLIF.
\'.\
the cr.t of v.atcr noiild h: almost nil. the cost of cyanide
and other su n;:^., 'uss, and that the treatment of c.n-
CL titrate wniml he nn.ch niure ecnnnniieah Tliese nnir
items vvoidd Meiiiiit treating Lake \ iew ore un<ler Crii)-
ple Creek c.)n(hti.n. with a u 1 11 e< instructed mill of,
say, 8,5CX) tons capacity, for not over $2 per ton. A
point worthy of con>i.kTation by Cripple Creek opera-
te. rs is the adaptability of this process for erection on
the mines themselves, and therefore the avoidance of
i.i^ht chari^es and cnstnms-mi!
Ijnifus and esjiecialiy
the possibility of modifying the practice to take advan-
tage of some of the more favorable characteristics of
Cnpple Creek ores, as compared to those of Kaltrnor-
lie.*
London. July 29. 1903. H. C. Hoover.
, 111 a fnrnuT article on tl,e M.hjert Lake \-iew co^ts we
K.ven, ,nrlu,l,n« tran-port to tlie mi.I ; in thi. statement for co,
p.-jranve- purposes they h.-,ve t,een omitted. F, i. e.pe ;,I v no"
'•-1 out agani that tlie above eo-t. are upon a .hort- on ba -1.
re
coni-
point-
GOLD MINING ACCOUNTS
Till' Editor:
I AuKU't 15, I'JOJ.)
SiK— 1
n vilur i.sMi
c of July II, Mr. 11. C. IIodvlt.
f.
_\iiur rr(iuc'.->t. (>i)(.n.-> fur (li.>cu.->iuii the >ul)ject of j^nld
niiuiiij.; accDiints. Ik'inj; associaud with tlu' niaiiagiiiunt
if a mnnljcr of very prospcron.s iiiiuos in variou.s parth of
tivj woricl, .Mr. li(
i\cr sp
ak.s
iih li
iL' atitlioritv of one
111 a positiiin to kiinw and one who appreciates the vahie
if luiifiirmu
V ni tl
treatment of exinnditiires of capital
mil
ol re\ei'lie
ami
tl
le keepuiL; ot nnniiig-cost.>^
accounts.
In the business of niininj,', custom has not yet estab-
lished a uniform method df char.i^dnf,' ex()en(litures for <le-
veji ipiiKnt or
f.T tl
le t'xteiision, renewal and niaintenance
f machinery, plant and ei|uipment. ( )w
iiu
to the varv-
iiii; eoniii
tions under which
nlo^t minm'j ventures are
tinanced and mana,i;ed from the head ot'fice — leavint; tli
varyiiii; conditions at the mine out of the (|uestion — it i
doubtful if
le attaiiui
umtormity ui tlie^e particulars can, or ever wil
1. Hut it
is po>Nibk-. and (|uile within the pro\-
ince of the profession, to urj;e a con.-isteni det^ree of uni-
formity in the practice of statin.!?, if not of keei)iiis.
wiirkmsj; costs.
Tl
le SUL
'cstion that a
mine
mimission 01 the
tichnical societies be apix'inted to take up this work ouLjhi
to meet with favor.
Discii.i.-ion of the feature
■-u.UL^ested as to "how lar ex-
penditure for dissection of costs is warranted bv results
to be attained and with bow much detail it can he done
within the re.dm of ;icciiracv" niiLiht lead t<
a more gen-
eral discussion of the whole subject of cost keeping.
The results to be attained, or in other words, the ben-
efits realized liy a frequent, regular and systematic dissec-
tion of wirking costs, are comnioiilx acktiow ledi^ed.
ilil
.f
Goi.n Mix/xc .iccorxTS
momics arc accompli.slKd, and a material rcdiicti
mminp; costs is cllirtcd in tlic
ind nuiiicy. It is ix)s-,il,Ic to secnrc
saviiij,' of time, inertly
1 formation of tli
■•picifi
(IctaiK
c ciKts of work at tl
Its
U' iiiiR' nt, and durinj,',
ts jiro^'rcss. A better opportunity is afforded for maknit:
a critical discrimiiiatuMi lietwe. i capital and revemie e.\-
IK-nditures, as tlie legitimate operating exiutises are writ-
ten off cacii month. And the maiiaj.;er. dependin<,r with
full confidence up-'ii his monthly cn>i-slieet, is relieved
of a mass of detail and his mind is free and clear for
planning for the future.
mo>i imp,,rtani result, and not so "cn
directinfjf current operations am
lint prohalily the
erallv understood.
IS tiK
th
orou,i;h industrial orjjaiiizat
liromot'.'d by the conservintj intliience of a system of
keeping. A department for finding costs must 1
loll
^t
)c sup
xeijuiar
ported by the various operating departments. I
written reports — the cement of commercial organization-
are re(iuired from foremen, time-keeiiers and others, froii
which arc secured the d.ita for recording, segregating am
distributing the "ex
expenilitures
for 1,
ilior.
R
records from the store
eports and
s (lepartment maintain a svstemati
and complete control over the distribution of
ppli
In this way responsibility is fixed, co-operation is secured,
the active interest of every employee is enlisted, and a
criterion of efficiency otablished. I'pon the theorv that
the person who lacks enthusiasm in 'himself can never
arouse it in others, this effectual inter->tafT collaboration
is preserved in the knowledge that tl
lallv
interested in and carcfi
ic manager is per-
scrutinizcs each
month's statement of costs. And the best of it is that bv
■>ame organization, of which cost finding
virtue of thi
but a detail, these result
ts and benefits are secured at
tically no expense whatever. That
hen
maintained at no increase of exi
prac-
is to say, a compre-
sive system of co.>;t-keeping may be establisherl an
peiise tor clerical assist
ance or otherwise.
tl
le work .as it comes into tin
////■ /:C c'.VO.U/f.S ()!■ .l//.\7.V(,
.■n.-C(v,iiitiii- (ltiMriiin,iU can lie ^' > iiu tliM.h/i il ili.ii the
ivj^tilar >iaiY iiMiall> iinph i>cil at ilir iiiiiu ultui' can racily
lianilk- It, .\> 111 li' u I lalnirati' a piMpiT <li»cctiiin nl d'sls
can lie iiiaiU-, u can I ■ a>-crli.l with rca^ .lahlc a'-Mirancc
that the ilcvilciiiniciit "1 a -\.-icin i>l' c^-t liinlini; luid
<lelii nil imh npnn the anmnnt mi' .Ktailnl ml. rni.itU'ii that
can he n^e(l h\ the nianamnunt. 1 he aeiiial uperation
of a praciu-al sx -leni "l' nmie ace iUnt.nu; in etieciive
-ervice at tlie War l'-a-;le ami i iiiier Star 'niiu-, < -i Iviss-
l.-md. !',. (.'.. li.i-> prMM.l ihi>. And ilie .-anie esperience
ha-i ilenv'ii-iraled thai ~nch a system can he pertected and
ccinlncted which will exhihit in ai'^niMle (Klail, Inun ink
to interest, the -i L;ri -ali. 'n ><( e\pi ndiinre-^ fiT lalmr.
snpplii's and imlireci e\pen-e-.. and their ileterininate
all<icatiini tn eacii and e\er\ sni]ie. ihit'l ^r nilkr headin,L;.
-e])arately. in which w.iik i- in ]nM-re--.
This experience and tin- -taiuneiil relati\e tc the ex-
pendimre necissarv [n carry .mt an elTectual -.\ ~ieni of
cnst-keepin.tr IS stihniitted in the hi pe that, with the ed.L^e
taken nff the (itiestinn nf expense, a nmre L^eneral discus-
sion of "tiler and ninre inipnrtanl jihascs .if the snhject
will fnllnw. CiiAKiJ.s \'. Ji;nki\s.
Rnsskand. P.. C, An.uMi-t i. iip3.
i
i
MINE VALUATION BY GOVERNMENT
vl-^UtuIlai, .\u^'lI
Anil
I ill \ari(it:s projios
als I.
I' IMllllliJlIU
llic duties
if a patiTiial t;n\unnuiii. ilir iima -tartliiij^ up ti> date
s tlial wlmdi wa-- scTiniislv madi' in l.iindoii i)v tlie
'rc"-uit--iit I't till.-
(. nuncil I'l \\ > -t A
iis'.ralian
M
I1H-(I\VI1-
tTS, wlu) sii;;f;i.>tid iliat a miicral iiis])i.Ttiir dl iiiini'.-- he
•PP
ilctl I)
ical visits
till.' Mate
for till- ])
'nviTiiiiuni will)
a viiw to
irpoM' lit s.impliiij,' and (.■Iki'U-
iiir KVL- ix-<r\t> and otiinatmi; tlic \aliic nl the |)rn-
du
cinfj mines.
h'urthi
rim ire, thi> in>])i'eti!r was to re-
ceive a salar\ whieh >hiiiild "plaee him l)e_\(ind tlie |)ale
At the uRethiLr, Mr. 11. (_. IhKjver
it temiitatinn.
lininted uut the aii-uriht\ nt tii'.
idea, hut it seiins ti>
liave hecn takin ^erimivK h\ a iiumher dl tlmsi inten^ted
m West .\u>trahaii mnie^.
The avowed imrposi.' nf this innovation, as stated hv
Its j)r(ipo>er. \\;is to <\n away with "thi' intris,'
lie an<
maniiiulatiiin
if
rket
I 'perati irs
lor
tl
leir own
hasc ends, lirihe the (itticiT'; m eharL;e of tlie mine- to
work the hatter in tile interests of the marktl." etc. It
must i)e confessed tliat the
(liver<ience t
n the
esti-
m,ile> of lire re>i'rves h\- dilTerent eiii;ineers. wiiicli has
clKiracttTizei
i tl
it seiisa
tional tluctuations in the sh.ire
i|Ui itaticiiis iif the K;\lL;oiirlie mines, does justify criti-
cism and warrants tlioiit,ditfiil iMii^ider.-ition. ()i, several
(jccasions diiriiii.,'- the Ia>t ten \(ars the sliaie market
has het'ii rij.;j:;ed Ii\ concerted action hrtween managers
and ojuratcirs, se ne of whom liave l)een d.irectors; in
part, this is ixplained li\ the fa^ t that tlu mine-owners
)f the l)oOi
iccidetitalh
pen
rich iiKMi
ii.'iM menu
if 1
iiw anteci
ari"' projiortion of
.iits. X'.irious
coterie.; have striven in turn tn iiu--t each ot'ier mi order
W
m
i\
54
////•. /:c ii> ().\!U S or MlMXu
to nmtrnl llu i.iii >>i |iiiMlin.tii)ii and S()iirc(.'> of iiift)r-
nialii)ii .11 till' ininis. Sfvi ral ititaiMDii^ rpisodt's havf
di.>>j;raciil tlu- hi-ti)i\ of ilh Ix.ilj^oDtiic iniupaiiics. and
it has t\iniiir,| iiuu h l;.i(m| h.ird W' rk m ri^i"ri- West
An-'traliaii nmiis i.i tin |ic]>i!iiiii .i| it s|nH-|,dili' iiiM'st-
ini.!it- whii'li ni,in\'nf iIk'ii! nnu (ii'i'upv.
• >l (-''urst', ilu' idc;i oi a i;i 'M rnuuiit ni-|»xtiii, 1m
\aliK' the niiiu- a- an indipi'nilnn a|i|irai--ri. i> \\liiili\
taiininl; the inst i pf -amplntL; lli<- lari;c niiins nf nin
ili-tiiit al.inc, thai !■', Kal,L;i h >rhr, w.aiM iim inio hall
a nnllKiii (l<>llai>. a- Mr. iioowr .-aid; ilt mii<t tlir
(.■Icnunt of liiiK' \>c I'l pi -■ iiirii ; it wonM takr a ip ini|K trni
(.•n!.'iiUHr at Ka-l ihr.'c u'ar- t.p pin tlip work tlioronj;hly
at l\al.L;piorlir alppiu-, aiipl n is s.n, i,, va\ that -luli a iiiaii
U'Uild ni.\iT In- alik' tpi krr|i pacr with ihc <lr\ rh )|inii!ii
t.lklll^ pLui- rWll 111 a l\\\ pp|' till larL;r-! inilU-.s ipl W'l'-trlll
Australia. Mpirrpi\iT. >uc\\ a man. mile-- ajip. iinupl lUr
lifi'. UppiiM hi' till >|ipirt ppf ppplitii-al iniriL;nc. and it lii> |)p isi
lippii win- -ate l)i\oiid di-nii--al lii- ppiwir wpuild liu -lu h
a- 11 I- niaphi-aliK tpi (Uk^au- rxerpt mukr eoiidiiioii-
f"r wliiih thrro i- no pptlur rnnipK.
lint tlnrr i- aiipptlur ninvdy. l.rt it hi- rvc iLjni/.cpl
'li.it it 1- a- nn]irpit\--.-ipinal t'o'- iii^iiuir- t.. traftic in
miniiij; -han-, i-pn'ial]\ tlipi-r of luiiu- iiiipKr lluir
inana^'. limit, a- it i- fp.r lir.ikir- tp) hm aiipl -clI -r-
turitiis fppr ihiir own accp ui;U. i.i\r nj) the idea that a
man i- a hritir inana^xr li\ hic. 'iiiiiiL; a stockholder :
rccopni/e that hi- jiid-iiieiit hec. .nie- \itiated l)\ lieavv
IinaiK-ial panieii)atiMn ; pay him Iiaiipl-p 'iiuh ; iMt fpir pni-
U\\<: lip the price p pt -iiares. hnt f.ir hrin-in- the cpi-t-
<loun; and when tin, ha- hien d(pne, turn rpiinipl tpi head-
(|iiarter-- ami till the direetppr- that tlu \ are nrp-'-L; when
tiicy j;ainl)le in tlu -hare> of the epinipanv who-e trus-
tees they are: lei them puhli.-h all infpprma!Mn fip in the
mine promptl\ aiul lu fore tlie\ n-e it f. ir their piwn ad-
\antai,'e; kt it he hem ath a plirectpir'- plii^nitv to sneak
Mixr. r.uj'.rrinx nv coi-i.rxmi-x r
.•ii-'Uiiul llic rMimr with a hi: of nftirial iiil'ornialii mi ])^■-
fori' il 1^ !'■ iriiiall\ |nil)li^!ifl : aii'l tlicn. a-, a liiial sti|)
cali'iilali'l tn It ~-('ii tile \aL;arii V .if hit t-^iiinatrs, iK I't
(liri'i'ti 1I-, wliii h.iw li.iil ^iii'lit Kill cNiH riiiuc in the Imsi-
IK'SS iif niiniiiL,' to Ik ia|ial)lr .if (.-11111 jsini; c ,n;|Htriit
liianaL:.ls jnd (if -iipiiorliiii; tli. 111 InwilK when muT
chnsciK Tlii. v\j|l In- imu-h (luaiur than the app'iint-
nu nt 111 the iinpiis^iliK' iitVuial sn^Lrcstcil 1)\' the I'rcsi-
(Knt ni" the liinncii of Wot Australian MiiiL-i iwncrs.
« i
IN
:tt!|
m
COST PER TON AS A BASIS OF MINE
VALUATION
By R. LiiL.MAN Bruwn.
( AuMu>t j(^ lyj I
llarclls sccuiul in iniportaiiLC tu tlic dctcrniination of
value iKT tun, by careful and s_\ stcniatic sampling, is the
(kterniinatinn of cust per ton from tlie mine accounts.
The object of sampling lias been atta'ne<l when the gross
valuable content <n the ore exixjsed in the mine has
been determined. Ihis. for the sake of convenience in
sulise(inent calculation is usually reduced to value per
t"n. Ironi this ,L;ro>s \alue ])er ton must be deducted the
total cost per ton and the loss per ton in treatment, tiic
remainder being the net value ])er ton. Obviously an
error in cost per ton is just as im|)ortant as an error in
gross value per ton, so that it is nt ary to exam-
ine with as careful s^TUtiny the method of obtaining the
one as of the other. Se\-eral ])it falls have been pi d
out recently in the columns of this Jch'H.nai, which will
be ignored in tli's present article; or, ratiier. they are as-
sumed to have bei-n satisfactorily avoitled, the desire
being iku to obscure another factor in valuation which
ha ^ iieen touched ujjon but lightly, if at all.
It is not intended in the present article to go into the
(Kiails of mine accounting, but it will be assumed that
in some way or other ihe enLiineer has obtained ci tain
seL;re,L;ated totals represeniing the expenditure during a
cer'ain piriod in the various opeiations connected with
mining and beneticiating the ore. and that the simi total
of these segregated accounts represents the total cost of
operations for the period in (|uestion.
It is usual to divide these segregated totals by the tons
of ore trcited iluring the -^ame period, and to call the
(|uotients the cost per Ion for the various departments.
BASIS OP MIXE I'ALUATIOX
111 a certain sense the sum of these is a cost per ton,
thiiuj:;h not prupirh' to he considered the cost per ton,
as the result is rather a hazy approximation representing;,
perhaps. averai;e work for the mine, liut not sufficiently
definite to he used wiili contidence in the delicate work
of valuinj:; ore reserves.
Let us assinnc certain natural divisions of the accounts
into stopiIlJ,^ develipmenl, reduction and j^eneral ex-
jjcnses. All tho sei^reRations can he easily grouped under
tiicse headings; and this would naturally be done in the
process of arriving: at the c(.st, in the manner to ho tle-
scrihed. In the inexact method commonly empl(\ve(l,
these totals would all he divided l)y the same tonnage — •
prohahly hy the tonna<;e reported from the mil! or reduc-
tion works, whereas, tlii- would i^ive true results only for
the last two items, namely, reduction and general ex-
pense. l'"or sloping, the result might he a])])roximate ex-
cept in the case of a mine carrying a considerahle amount
of ore in the stopcs. I'or development, it could give the
true value onlv when the >;mie amount of ore is stoped
as is developed during the period. If development falls
heliind. the result per ton would he too little; if it ex-
ceeds the output, it would he too much.
This is the general statement of the matter, but it can
he made cl'are. by considering a concrete case. It is
proper to say that this, though based on practice, has been
elaborated, with the assumption of certain values, to suit
more general conditions.
The period is 12 months.
Tons treated, 30,000.
Total return per ton. $5.26.
Total loss per ton. ri4c.
Total gross value per ton in ore. $5.00.
Herewith are given in tabulatcfl form the costs of the
various departments and the costs per tun, as commonly
calcidated :
..s
rillL ECOSOMICS UI- MIM.W;
m^
^i
Tntal.
■"^I'^piiiR $5S.ooo
DtvcUipmciit 50,000
Dl-dlKtliJll CIJ.OOO
GoiKTal i'xin'ns(.s _'j.ooo
Total
Tlio foUuwins.
^JJJ.OOO
tonnages are also given :
Per tun
basis
■■1 tMllS
$1 . 16
I 00
1.84
■+4
$1.J4
T..n.,
(Jrc broken in llic -tiipi-^ 10.000
Ore siaiuiinK, blocki-il mit. ready for bri-akiiif,' 100,000
Ore rcasoii.ib!;- expected, but partly, if at all. developed.. 50.01K)
'I'ulal l()0.ooo
'1 hese arc tlic (|iiamities assumed to be found by the
engineer on iiis invL>tigatinii of the property, and the re-
coverable value per ton will be taken at the average of the
pa^t year, which we will assume to have been determineil
to be the fact by careful sam])ling. The most natural
way of calculating the value of these reserves would be as
follow s :
Total recoverable value of ifio.ooo -tons, at $526 $841,600
Co.sts on i'x),ooo tons, at $4.44 ;io.400
.Apparent proia in reserves $i.?i,2CX)
Ibis is manifestly incorrect, otoping ami development
should not be charged against ore already broken, nor
shciuld development be charged to that standmg blocked
out and ready for stojiing. The estimate should read as
billows, assuming the figures for cost per ton to be
C( irrect :
lo.txjo tons broken in stopcs. at $.' 28 per ton for milling
and general expense $22,800
roo.rtxi tons developed, readv for sloping, at $344
($i28 + $l.i(,) :... 34_,,ooo
S0.0(>() tons, reasonably exyiectcd. but not doveloped, at
*-t 44 222.000
Total costs S5H8.SOO
Uio.ooo tons, recoverable value as .ibove ,S4i (kx)
^'*;t_ I'r"!its 2.S2!soo
The cause of the great ciitTerence is t)bvious. It sin mid
be noted that in the accounts, transportation and haiuUing
B.ISIS OF MIX I, r.UM.ITIOX r,!t
costs are assuiiu'd to belong in general expenses. TiiL'
above figures must be taken as tliruwn in, apart fmni the
fuiulainental matter with whieii this article openeil, and
they contain errors, as was indicated in our opening lines.
Reduction costs and general e.xpinse are properly re-
duced to the per ton basis by dividing bv 50,000 tcin>. l>ui
stoping anil development cannot properly l)e so rcdui-ed
until we know whether 50,000 properly represents the
tons sto])ed and the tons developed. In what follows we
are using some (|uantities that an engineer examining tiie
property can scarcely have C(Mne at directly, ami indeed
he will be fortunate it he has them at all ; but. rectignizing
their importance, by iiKpiiry and estimate, he must arrive
at some sort of a probable value for them.
We have, as a general proposition, that the actual
amoimt of ore broken during the year is e(iual to tlie ore
on hand broken at the end of the year, plus the ore treated
during the year, and minus the ore on hand broken at the
beginning of the \ear, in the same way the ore devel-
oped during the \ear is e([ual to the ore blocked out' at the
end of the year, plus tlie tons of ore broken during the
year, and minus the ore standing blocked out at the begin-
ning of the year. Applying this to our concrete case, we
will assume the following values for tonnage at the be-
ginning of the year :
Rrnkcn in tlie "stopcs 20,000
StaiuliiiR l)lockc(l nut Ijo.ooo
Reasonably expootecl 6o.oo<i
Ten thousand tons plus 50.000 minus 20,000 etpials
40,(XX). which turns out to be the actual ore stoped during
the year, so that the true cost of stoping per toti is 58.000
divided by 40.000. eipials $1.45 per ton. In the same way
loo.fxXD plus 40.000 minus 120000 equals 20.000 tons,
the actual ore developed during the year; and $50,000, the
tiital spent on the de\elo])ment. divided by 20.0<;x) tons,
e(pials $2.50 per ton. the true cost of developing a ton of
cd ////•: i-.coxiuins ui- mimxc,
ore. IiKiNimich as no costs arc credited in tliis discussion
to tlie ore reasonably exiucted. we need nut carry tins
further. tluiuf,di tlie same reasoning; would Imld in rcjj;ar(l
to it. Collecting our true cost per ton, we have ;
StopillR ^', -o
I )cvelc ipiiK-m - ■ i; ^
Rciluctii'ii ■_
(u'lu-ral iNiR-n-c- ""
Cii villi; llic till': Intal cci-t in r tun at $<>-3
This -hi.ws that the ore at this mine will not actually
pay expenses for handlini; unless greater economies can
he' practiced; whereas, our first calculation gave a profit
per ton of aliiiut 8oc. To a certain extent, then, the
matter concerns the mine manager as well as the examin-
ing engineer, though it is in the interest of the latter in
particular that this article vvas prepared.
Proceeding next with the valuati<in of ore reserves, we
repn.iluce our earlier figures with the corrected costs in-
tn (luced :
lo.ncx' t,,ii., l,r.il<on. at $-> -'."^ l"r mn • • ■ ■ • $-'-;.8x)
Kio.i . Ion-, (Irvi'ldiKil. ready fcir brcMkinf,', at $3/3
I jj jS - S I 45 ) lurti'ii ^ 37,^'C;JO
50.CXX1 t.'iix ,,n.-, rc.i-Diiably expected, at $(iJ3 3"-500
•Pclal $707,300
RccovoraliU- value-, as ali.ivc S_ii.(kX1
Nvt valiK- i.;i the rcM-Tve^ 134.300
111 order li> lay the whole matter nmre clearly open and
even at the risk of heing tedious, it is worth our while to
make another assumption regarding tonnages at the be-
ginning of the jieriod, as lielow :
Broken in tlu- -t..pc ^""'^■
SlandiiiK rcad\ !■ 'V brvakii 80,000
The tonnage and cost per ton follow in summary :
'InniiaKL- Cost
f,>r yiar. per ton.
StoniiiK 'xi.ooo $097
UfV<-l..pnK-nt ^-"^-^ " ''-.
Reducii'iii .and Kvncral expense, as lietiTc 50.000 ^.-m
Total $3-87
B.ISIS OF M/Xli VALUATIOX
01
On this l)asis, tlic \aliK' nf the ore reserves is :
lo.ocw tuns, lirokfii iii ■-tiiiH-^. a- iH'fore $_'2.8tio
loo.ooo tons, ready fnr >ti>))ini;. .it $325 ($228 + 070 )
piT ton 325,000
50.000 tons ore, re
asonalily to l)c expected, at $3^7
193.500
Jtal charnes $.Ml..V!0
The trross recoverabli- v.iUu'. a^
ln'fore
rolits ni ri'strves
Th
le (htfireiiees >h(i\\ti chneh tiie siateiiie
til
S4I.(«X)
300.300
L'tit with which
th
1;- ])aper 1 'i>i'iie(
A
s a siimni;ii\ nt' the ;'.linve tliere arc two general prin-
ciples til l)e eimneiateil
(.■\) (,'nst
JUT tun IS the (|nntieiit ol tntal d 'st divu
led
hv the aeiiial tdimaoe re-iiltinj^ imni that e\pen(
litiire.
( r. ) Net valtie ;
ler tun i> tlie "ross rec iveral)le value
]ier tini. less est pt r t.m for those nattiral (livisi()ii>
tile wi'rk still to he ])erl'oriiiefl U])!)]! the ditYerent clas
of ore.
o
f
.\lth
the ahove prineiples are fundamental, like
11 i/cneral stateiiieiits tlie\ niae easih he pre:
to ex-
ift
uiei-r, alter analvsis o
if the
treines, and it is for the enj,
situation, to decide the particular extent nf their ajijiiica-
tion; a failure to reco.t:^nize them at all. on the other
hand, tnav invalidate the conclusions drawn from other-
wise reliahle work.
^
Tit
I
i
iWliNE ACCOUNTS
(AnRiist J.), 191,5.)
I he Editor:
'"^IK — Ilk' (.■niui.M' and iTcaiiiy iironiuu.,111 of the 1111-
piiriant Miiin'ct .1 },'iihl iiiiiK' arc(iiiiu> liy Mr. 11. C.
IIddvit in a wwm iuuhIilt uf tlir jm rnai/ k'avcs inc
little clianci i.i ^11 a ,L;(i(.(i Imld. I'.ut the nccu^ily fnr
(lisi-us.-.i(in cif an i.^.suc nf >iu'h vital niuiiK'nt to the nniniij.;
indn.stry luad^ nic to vonturc sniiii.' Cdutrihutinn at this
jinicti..
Mr. lliKiwT <iMi> M'liman survici' li\ .-luittiii^ olY at tiie
iintsi-t till' pmrilc piva nf diversi.' cnnditiniis. which has
t(») 111'tt.n hern tlk' (.-xrusi.' icr such wouful cliaos as j^ructs
till.' invr>tii;atiir wlicn he l)eL;ins to attempt tlie arranj^nni,^
of actual methods into xnne show of sy>iem. 'riie difticiil-
ties in the way of imiformily lie mainly in tlieory and ni)t
HI practice, arisiiiL^ not from varyin.i^ conditions, so nnicli
as from lack of method or of clean-cut ideas concernini;'
the ends to he sought in s\ steius of account. I presume
that many engineers will >nnle at this statement, at first
}.;l.'ince, liecause there can he no serious ditYerenci of opin-
ion amoiif;; well trained luemliers of the ])rofession as to
what ou.i^lit to l)e shown hy the books. 15ut, imfor-
tnnatily. the enforced examination of the accounts of
many toiuipanies proves to the writer the very inade(iuate
manner in which the expected information is ohtaiiiahie.
save in excejjtional instances.
.Mr, Ihover la\ -^ d iwn three methods, or principles,
which should u; 'Vern a proper -v,tem of accounts. In my
own practici', I haw al\\a\s reconniu iided '-ncli nii'asnres
as would eiisuri' these same result-, hut, perhaps, from an
atlitudi' n. t exactlv similar,
I. ••7o pvi'iriit fraud * * * ^,„j to carry conznc-
l'..,i;c 44, July II, 1903.
.i;/.\7: .u'coi'xrs
63
ticn of honesty." 'I'liis practically rri|iiiri's the kcepins:;
of all ri'ccrds and liic siniitiiariziiif,'' of tlu' .saiiu' ri >ticli
inaniKT as to (.■ii>iiit adiiiuaii' rlu'ckini,^ of one ofUfcr 1)\'
anoiluT. This not onl\ L,'narils against frauihiKnt intent,
hut it also protects servants hy verifyiiiL,' their rieords he-
l'(jre the opportunity to correct possihk errors lias p.issed.
2. "To sllo\' ixpcnditurc * ♦ * „,, viu/;,- itiiit
basis, etc." ihis iniportatit eii<l can he acconiplisl'.id only
hy tile III st detailed accumulation nf data from all
sources, and this '- the directioii in which looseness is
most commonlv (iiscerne<l. Discrepancies ari>e not so
much from misconception or 'itTereiices of opinion on
methods > t' seL;re,L;ati' n. as from inal)ilit\' to comprehend
the correct iirinciples underlying'' mine aeeounts.
3. "To he presented in siieli ci :e.;y lluil the owner, di-
rector, sluireli<ilder. or ■;elhit not. lUiiy * * * determine
soinetliini^ oj the et'tieienev of the inivnii^cr himself."
Here is a suhject which demands careful handlinj;'. The
i)est system of accounts for a ,i;iven hii^mess is one capa-
hle of viel<lin<j minute cost analyses at the li.ind of an e.\-
])ert. hut at th^' same time adajited. to comprehensive sum-
marizing for home office use. Some comiianies sacrifice
everytliinsj else to fancied econome, hy ^atherin^ only
totals in the accountant's .hiioks. tin renderini,'' \ery diffi-
cult the task of analyzinjj costs. ( )t; he otiier hand, not a
few aceunndate details in such iieterciiienei lus fashion as
to make it impossihle to readily obtain i^rouped footings
when required..
The llritish system, if we may proj)iTly a])])ly this tirm
to anythiiifx at all, has. I think, develojied a niorhid ten-
dency to extrenu' simplitication of the ij^eneral leds.^^'er ac-
counts. Mr. Xicol iirown has linallv evolved a plan hy
which four main accounts, with ehietly annual .ir month! v
entries, carry nearl\' all of the husiness. in lumj). l'>ut
this necessitates a voluminous and e^ 'ni|>licated svstt'in of
sc!ie(lules to lie m;ide up from departmeni.al report>, ,tnd in
M
-I
St.
t;j
77//; I:C().\\>MIL'S ()!■ MIMXU
nianv rcspi'ci,- tlic >cliemf is nmrc ciimlicrsijme than is
accvptahlc to AiiKrican iisaiii'.
In Mexico, a plan (kviscil for ilic Lonipania Metal-
hir^ica and ni n.-t.- t.-l>c\\li<.rv ni that country ni more or
less nio:litieii lonn, has features whieli overeoiiic some of
the objections to the I'.ritish st>le. Hie princii)le is to
carry on the i;cneral ledger a moderate number of promi-
nent accounts, to which totals are posted from journal
and cash book, usin.i,' a subsidiary leil,L;er to ' 'ke ii[) item
ized se^'rei;ations which may be specialized i any extent
deemed d( -irable. With this system, the accounts are
numbered serially ami all employees concer led are pro-
vided with printed books, '/w'mii the complete classitica-
tion by numbers and titles. In adapting' it for use in one
instance, we have arrant;<-'d the i^eueral ledger to furnish
information ordinarily liable t<i be retjuired by the home
office, which receives the monthly trial balance. A quar-
terlv report of audit of the books aLso goes tn the home
office, with an analysis of costs, made independently by
the consulting engineer. The subsidiary ledger furnishes
the materia! at once itir such analysis. I'.ut the imi)ortant
point with this, as with any system of accounts, is the
manner in which the records are kept and assembled for
entry in the accountant's books.
i do hol know that it is fair to talk of an American
svstem of mine accounts, only we may note the trend of
practice in the rnited States to be toward labor-saving
devices in b'lok-keeiiing. 'Ihe ..tandard card systems,
filing cases and automatic ilevices are mostly flexible and
well ailapted to the gci'hcring of data and their preserva-
tion in convenient for.n of study. lUit comparatively little
has thus far been done towards applying these aids in
mine accounts. The writer has used such appliances for
several years, under a variety of conditions, and always
with success. The real work consists in preparing the
forms. After that tin svstem almost works itself, and
MIXl: .iccncxTS
65
t'Vfii prejudici'il lur-' iis scuii coiik' to esteem tliu incllii><]
and to operate it \sitli keen .sati^lactinn.
If it be possiljle to formulate a standard s\steni of
accounts adaptable to all needs and so planned as to
give comparable results as between different operators
I take it that some agreement must be reached regard-
ing a number of [XjiiUs on which practice now differs.
These matters once adjusted, it would be wise to pre-
pare a skeleton, which, on broad lines, should be very
simple and compreiiensive in its segregations. Iiacli
main division ought then to be divided and sub-divided
to give operators free choice of subsidiary accounts.
What are known as Capital accounts' over sea, as
distinct from cost and revenue (profit and loss) ac-
counts, have not been as clearly defined in American
practice. This is due (i) to differences in tax collectors'
methods, which, on this side, are variable and rarely in-
trospective; (2) to the difference in attitude of home and
foreign investors: { j,) to ditTerent methods of stock dis-
tribution here and there, and (4) to rigid auditing abroad
and the sad lack of it at home. These items, however,
need only be stated as causes historical, and not as
raisniis d'ctrcs in the premises. Moreover, Mr. Hoover
appears to have found his discordant elctucnts largely in
a country which is supposed to set the pace for us to
follow, for there is no doubt that the liritish ideals are
beyond and above us in their appreciation of the value
of accounts. Once let the spirit move us to 'get to-
gether' in the matter. 1 venture the prediction that we
will evolve a svstem less cumbersome and unwieldy to
accomjilish the end in view.
Duly crediting Mr. Hoover witl. the original sugges-
tions that the Institute of Alining and Alelallurgy and
the American Institute of Alining Engineers appoint a
ioiiU committee to fornuilate -onie plan of working cost
statements, after discussion of the subject, 1 would
•'?
1:
e.
Si
Si I
C6
////: r.COXUMICS Ol' MIMXtl
\v\n\\Tv to siifj'jjf^l ri II
lilu
prop.
as |(illnw>
\xl ilu- In-tituic <>l Mining; ami Ak talluriiy and thr
lii.-tiliilii'ii (if Miniiif,' lini^iiKiTs ai)])nint a joint coiii-
iiiitttc of till (live from c';k1i organization i to ait a- a
r.riti.sh hiilj-Loinmitttc to corroiioml and colkit (luali-
tk'd opinion^ from tliiir nund)i.Tsliip, an 1 to clas>if_v tin.-
anie. witli ricoinnu'iulations.
Let i;
Aiuciican lii>ti-
tuio of Mininj; I'.n^inccrs appoint a similar committi^
of till to act indtpciuhntly on this side in the sanu'
manner and uiili a similar purpose. After a iriveii jie-
1 of deliberation, let each committee o. ten select
rio(
iriiin Its iiwn iikiii
I.er>l
lip t\\(i ]ii
ersons to i.^-n a new
opin
littce of four, to Ije charged with the duty of devel-
com-
^ a plan from liie final rcpor's of the larger
mittees.
Meanwhile, the free discussi^
)f tht
II
its bearings need not be restricts. ' in any (
bject
Icgree.
I respectfully submit this first draft f a plan vvliicl
:n
niav well be nioditied in
detail
IV wiser heads.
lie prin-
ciple of the idea is one which might also be npplied to
many other topics ui interest; and the fact mat many
mining engineers are now euro
lied
111 the respective insti
tutions on both shores suggests the propriety ot estabhs
ral
iiig one or more j" it >tanding-committees on gene
issues.
In the United States we have not been accustomed
to draw the somewhat arbitrary distinction which is
made abroad between 'gold mine accounts' and mine
accounts in general. The former reipiire in reality
but the simple fiamework about whii li may be built
up the more complicated systems rendered necessary
by products reqti ring amplified processes. lUit, if the
necessity exists for standard sprciilntions in the one
case, so nnich the more are they called for in the busi-
ness of mining and treating complex ores.
The differences in modes of writing up particular
items, as mining development, etc., with, "ther varia-
MINP. ACCOrXTS
(>7
tiiiii> ill praciuc iiuiili )iu «1 l)y Mr Iliiivir. uIm tlu
qiK'stions raised by your Lumloii C' irrcsiKiinlciU. in an
•irticK- HI till' sa^iiu' isiR' ni tti( Joi knai.; all serve to
show the present lack of uniformity in method. To
soMiO extent, it mav 1)( feared that Cdrrespondinj; dis-
crei)ancieb in purpu>c ni.iy also be iliscei nible. I can
(iiilv add at t'ii~ writing ihat my nwn ])rai'iit<. lias en-
countered somewhat equivalent diver>ity of need in
varying circumstances. l!ut the jijeneral plan which
covers the systems adopts. d is susceptible of adjustment
to these several requirements, and the books of any
corporation using the method will yiehi cost analyses of
a typical form, however much the details may thus be
modified. Whether the particular type form is the best
for all uses, and how nearly this plan will approximate
til' standard to lie liiially a<lopted. are ver\ open (jues-
tions. It is t » be hoped that the whole subject will be
amply discussed with a view to the eventual ad iption
of definite standards by the profession at larf,;e
Til '(I. 1. Com STOCK.
Los Angeles, Cal , .August 14. 1Q03.
tt
I
■ •
Mi
' Thp P.Tvment of I",xtrn=ion- of \f)ninR Pl.-nt Out of Reve-
nue,' by E. Walker, this Journal, p. 48, July 11, 1903.
1
ORE-BREAKING AND SORTING ON THE
RAND*
Bv li. S. Uennv.
(Scliti TlhiT 1';. i'>",i )
111 all iIk iumu, (jh tln' Kaiicl llu' nrr i)'-l'cirf hrmi^
sent t" till' Mirfacr IS ir-uIaU'il tn a nrlaiii iiia\iiiimn
^;aiii;f li\ an arraiit^ciiKiit "i ^'v/a\u^ liars t'i\ril mvit tlio
stalidii i.iii.-- at the shafts. ['hv dliji-ct, pi iiiiaril\ . is
til n.tlin.1.- llic iarj.;i.st jiiixH-.s nf ore Ici siicii a i;au.i;c
tliai tluTi' will he 111! lial)ility to clioke tiic oiitlLt from
tlu liiii; hilt It -serves al.vj tlie seeomlarv ami euiiially
iin])nitaril imrjiose of jirevemniL; roeks , if too great a
si/e fioiii i)a>>iiig tu the ore-sortiiig iiouse.
1 lie ore when delivered at the .surfaci is usually clas-
sified into 'tine' and 'cnarse rnek' 'i> dnni|iing the
skiiiload onto a grizzly in the headgear; tlu fine, hcing
nnsortahle, go direct to the mill, and the coarse ore is
seiu to the soiting h'Ulse.
The rock in the sorting hmise is siihjccted to scrutiny
either on lloors. revi living t;,hle> or traveling belts, and
the rejected waMe gees to the (himii. rile sorted ore IS
fed into eire-hreakers for fiirtlur rediu'tioii.
The breakers may be classitied into two generic types,
the gvratory and the crank motion type, the former be-
ing largelv reiiresinted by the dates and the latter by
the r.lake machine. I'^ach tyjie has its supporters, but
il is geiierallv considered by the moderates that the
fi'mur is the belter m;ichine when niiit capacity is de-
manded, and the '.-itter when miillipli-ation of machines
* .Mi-lr.ict from ..dv.nncc sheets of paper entitled 'Ob-iervation^
on die .Melal!iiri.'K-al Practiee of tlu Witwalersran.l,' by II- S.
Denny, read before tlie C'lienuc.ii. .\Ktalliiri;ieal and Muiini; Soci-
etv oi .South .Africa.
o K i:-n Ri: .iki.xi, .imj s < ) r ti.\g
GS)
is lint I iiil)arras>iiiy In llu- }^i ikimI iU>i^ii. ;is its, niainlf-
iiaiicv i.ii.--t i> ks>.
.It.' f^iiural xMpi I'l till' n !iK liiiaki T i> id rcdiK'c t'.U'
(.n HI ahoiit a _> iii. cu\>v lulnrc ili lui riiijj; to ihc mill.
Iiut llic avira^i in Uk' iiiiil liins ^viU l)c tMiiinl l"
ixcxi-i! tlii> j;.iu^;r. (iuuij; In u>.ii in tin. ( r'l^liinf,' par; ><i
the lircikvr.s. In llu- nir^i ri'init practiiX' il i> v<.-c>i'^-
ni/t(l tlril tluTr i> an aiKaiita^^f gained by Milijectin^
till.' <iri' to a pnliiiiiiiars lirrakiii;; that is. to ri'ilmrc it-
MZ',- lu'l'iirc- pa>sin^ it to 'lu -utinj; liuw.sc- in order that
llurt' nia\ hi.' iIumt iinifMiiiiit) in tiK' -i/,i s of tlir iiicvcs
of oil.' iliat arc -nWjutid to tin sortin- o])'.Tation.
It i>, 1 tliink. doiilitfiil wluiliiT llu- jiractici. of ore rc-
diKlion ill br'.ak(.r> is carried siitVuRntls far. It would
appear tliat a material iturcase iiia> Ik olitainetl in ilie
^taInp duty if tliere were a succession of. say. three
breakers, tach reducing the ore to smaller gaup' 'ban
the last, until the tin.-il ])n'duct did iioi e.vcced an aver-
a.L^e of, sav. half-inch cubes.
The line of deiuarkation defining tlv point where
<irdinary breaking should ce.i-e and milling begin, has
never vet been accurately <leterniiiied. and this limit
should be ascertained by actual experiment.
Kecentiv there has been nitu 'i discus-ion rcganimg
the question of sorting, and in scjiiic ])articular c;" fs
where sorting bad been practiced bitlurto it has bee-i
decided to abandon the operation, as it is claimed that
more favorable results can be obtained without it. '1 here
.are maiiv aspects of this (luestion which lend themselves
to conthcting conclusions, but that there are some cases
ill which the operation is highly beneficial, there can be
no doubt. To sav that sorting is an operation that
should apply to evcrv proposal >s. in substance, to claim
that tile -^ame conditions are presented in each case.
This we know is not so, and. consequently, the opera-
tion will more particularly apply to one case than to an-
'^
7(t TlfE ECOXO MIL'S OF MIMXC
otluT, anil thcrt.' will be limits at .vhicli it uill reach its
liig' ;st efficiency and its lowest.
1 propose to take a case representative ut certainly the
majority of the mines on the Witwatersrand, and will deal
with it both on a sorting and a non-sortinj,' basis.
Assiune that we have a mill of loo stamps, a ])roperty
of I or claims and 40,000 tons per claim. The total ton-
nage would be 4,000,000 tons. Suppose each ton of ore
delivered at surface to have the following value: 50 per
cent fine, 12 dwt, per ton; 50 per cent coarse rock, 12
dwt, ; 100 tons contain 1,200 dwt,, worth, at $1,008 per
dwt,, $1,209,60, equal to $12,096 per ton. Without sort-
ing we get, say, 80 per cent extraction, equal to $967.68,
from 100 tons: that is, $<;.676 ih.m- ton. Assume costs at
$5,76 pei ton, divided as follows:'
Mining $^ .=;.i ptT ton milk-il (' 15.000 ton--"t $,^".800
Cru>liin(,' o.!J ■■ " " \.H(X)
.Milling o.()0 •• ■■ " O.ww
CyanuliiiK' o.fXD " " "^ O.txx)
.Slime luiiulling o.u " " " i,8co
(H-iUTal 0.72 " " ]' 10.800
Head I .' ■(.• o..?6 " " " 5.400
Minc-dcvclopmoiit re-
demption o ;j " " " 10,800
$5 . 70 $80,400
Leaving a profit of S3.(;i6,
One hundred heav\ stamps crush 500 tons per day, or
15,000 tons per month, e(iual to 180,000 tons per annum.
Life of mine equal to 22.2 years. The net profit made in
tliat period is 4.000,000 tons ?.r $3,916 per ton, etiuat to
$15.^)64.000. The present value of that amount at 5 jjcr
cent compound interest is $5,470,663.73. (In this calcu-
lation I have not allowed for amortization of capital.)
With 20 per cent sorting we have the following state-
ment : 50 tons fine at u o ..I., e(|ual to f)00 dwt. l"rom the
remaining 50 tons, containing <kxj dwt.. we discard 20
' In tlu■^c calcul.iti.iii- tin- £1 -terlinR i'; taken at $4.80; i slnlling
at -'4 cent>.
ORE-BREAKISG G.\ Tllfi R,L\D 71
tons carryint; 2 dwt., equal to 40 dut.. leaving 560 iKvt.
contained in 30 rcmaininj; tons. We thus have 80 tons of
ore cont-ining 600 plus 560, equal to i,i6o dwt., eiiual to,
at $1,008 per dwt., $i,i6<j.28. eciual to $14,616 per ton;
80 per cent extraction eejual to $ii.(jy4 per tun.
The costs in this case would he as follows:
MiniriK $.!.'.t I'^t ton niilloil (' 15.000 toii-'l $47.J5n
CrushiiiK 0.12 " " " l.l^oo
Siirtinn o. 12 " " " i.«(W
MilliiiK o,f)0 " " " 9.000
Cy.inidint,' o.(w " " " 9.000
Simu' iKindliiig 0.1 J " " " 1,800
r.ciKTal 0.84 " " " 12600
Hoad "ffico 0.48 " " " 7.200
MiiU'-(kvol"|inK'in re-
demption o go " " " l,V?oo
$().93 $I0.V950
It nii;,;ht he argued that mining costs should lie taken
lower in this case as against the first, seeing tliat the fair
proportion of general charges is spread over the larger
tonnage mined. The statement would leave a profit of
$4,764 per ton milled; 18.750 tons ])er month, equal to
225.000 tons per annum: life of mine e(|ual to 17.7 years;
ti'ii'- iniiled ecjual to ,3,200,000. at $4,764 per ton; net
protit equ.-d to $15,244,800 earned in 17.7 years. The
present value of that amount is $6,429,644. or a difference
in favor of sorting of $058,980. In this comparison we
have the same sized plant milling the prochut of 18,750
tons mined in the one case as against 15,000 tons in the
other.
.\gainst the extra cost of mining to pn.duce 15,000
tons for the mill when sorting, we have the extra cost of
milling, handling and treating the extra sand and slime
which we should have to incur without sorting. It must
not he forgotten, too. that in the case of non-sorting, every
ton of waste rock has to he jinnided with 10 tons of
water, and the cost of up-keep and cleaning out of slime
pits will he increased In- reason of the extra tonnage. I
72
////; LlUXUMICS <)!■ MIMSC.
have assumed the cost of milliiii; t^ lie \.Vx same in hotli
cases. The diiIv extra capital (.xiJeiuHlure lor the case in
uhich we adopt ^ortini:;, is the sortirt; phmt. It has hinii
argued tliat, if tiic mill capacity were increased to an ex-
tent sufficient to cii|)e with the extra tonnage, this woiihl
he more economical than sorting.
Takins^r the casi - above cited, we must increase to 3,750
tons more: as one st.ani]) will crush 150 tons per month,
this is e(|nal lo _'5 stamps more. \\ iih the increased ton-
nage workiuL; costs nnyht he reduced to, >a\". $3.28; hut
a correspondint; increase in the mill when sortinj; would
also show reduced workintj costs, and therefore the com-
parison would onI\ increase the favorahle aspect for
sortini^.
'The rock discarded I li.ive estimated at 2 dwt. in vahu',
Sj.oim per 'on. We <^.'\ So per cent extraction from this,
equal to $1,613. It has to he crushed, i.'c.; milled, Txic. ;
cyanided, ()OC. : converted into slime and handled lJi\ ;
t'ital $1.44; and the mari^in in proln would not cover it.>
•-hare in dejireciation of plant and tlie loss of water in-
S'lhed, while at the sani( time it is j reventini^ the treat-
intiit of more v.ihiahle ore if --orted ; r.ncl all this, too, or.
the assumpt'on th.at its corresponclini,' residue would only
lie 0.4 dwt., and nothing;' in the slime, wliereas. it is jiroh-
ahle that the sand residut^ and die slime from it would he
the same as the rest < f tiie ori'. and. therefore, more th;in
0.4 pciiiivwei!j;'ht.
I .-nil ]iresup]iosin^- in thest.' illustration:^ that jo '.vr cent
^'TtiiiL; is not onlv pos-ihle. hut easy of actual Inlliliinriit.
There are, however, main variations in the case-- to which
sorting is applii'd, and e;n-h ca-.e nnist he judfj^e'i on it> in-
duidual merits. These \ari;uioiis mpv he expressed as
lyins.; mainly in tlu faciov oi reef thickness.
I'or instance, on a reef 3 in. thick, where the slopes
a\erai,'e, sa\. 4_' in., the reef i'\atter in every ton of ore
niiiud i^ onlv 7 jiir ciiit, and, ;i--^uminL: th;it we have 50
i\i-
ORi:-nKi:.iKixc ox rm-. r.ixd
T.i
tons of fine, containing; 3.', terns of ruci, we have 50 tons
of coarse rock containing:, the same proportion. In such
instances it niiijht he jx^ssihlc to sort 40 tons of waste rock
in everv icx) tons from the mine.
( )n the other hand, we may have 12 ft. of reef matter,
of which we mine. say. the central 8 ft., and as the whole
of our prodiict would he reef, no sortinj.; would he pos-
sihie.
Tliese are two extreme cases, and hetwecn their limits
will t)ccur the variations hetween notliini; and 30 per cent
sorting'.
I have thus far assumed 50 i)er cent as representing^
the averag'e percentage of fini- m ore from the mine, hut
naturally there are im])ortant variations in this factor
depe.ident directly on :
( 1 ) Setting of grizzly hars.
(2) Method ot stoping.
(3) Xature of ground.
II machines are used exclusively fur stoping. the per-
centage of the hue will he high, while if hand Ijihor nnly
is used the percentage will he low. On many mines a
comhination of the tw is resorted to; 30 per cent, how-
ever, represents about the minimum and 60 per cent the
maximum, and something i^etv ecu the two, say 40 to 50
per cent, will be the average.
With 50 per cent fine it is neci"^-;ar\ to cnrry out an
actual 50 per 'x-nt table-sorting to represent J3 per cent
on the tonnage mined.
On the above showing it is clcai' that, where it is
possible to sort out w.'iste lock of an average \ahie of
_' dwt.. it is a highK protit;d)le proceecling. It is
possible, however, to sort too little or too much. On a
Vin. ri'ef, with ;i 4-ft. stope ;uid 40 per cent tine, 20
per cent sorting would be tar too low, while on 3-ft.
reef-; and 4-ft. slopes, .'dlowiuL; 30 per cent tine. ,20 per
I
>i ii
r4
TUB rCOXO MIL'S 01' MIX IXC
cent would be far too high, and tlie average vaUio of u>e
(Hscardcd rod would rctlect this.
Kach case must, as before stati d, be figircd out on
the particular circumstances regarding rcc! and slope
thicknesses which obtain.
In some cases on the W itwatcr-rand i .. ivc heard it
argued that the ([uartzitc.-. immediately overlying or
deriving the reef carry >ut^icient gold to make their
treatment profitable, but 1 have not met any such cases
])ersonally, excepting iri some isolated sectioi ■. where
the occurrence is too linuted to inllm-nt the gencr.il
f[uestion.
Naturally tiie object of sortini is to discard rock
which cannot be treated profitably, and if the vahu of
the waste rock at any time exceeds this 1 iting factor,
then the operation is done at a loss. That limit will vary
according to conditions, and must be computed iiide-
])endent!y for each proposition.
It is not an easv matter to arrive at the value of waste
rock. I know of no method of sampling in vogue to-
day which could br called accurate. Tiie best check on
the work is the recovery set against the value in the
mine, and uie discretion of tin- managrr must be relied
upon to see that there is a prop' r corrcs,)ondence be-
tweti these two points.
There are metluxls which suggest themselves cer-
lainlv, and of these, either ■ if the two following n.i^lit
be ado])ted :
( 1 ) .\ certain |)erceiitage, or even 'he whole of the
waste rock coming from the sorting i)lant. to be
])asse(l ihrougli a set of two or more bieakers and re-
duced fine enough to he sampled. Sami)les to be taken
constantly over a juriod of one nunith and the opera-
tion to be repeated every few months.
(_') Five or lo stamjis to be occasionally set aside
entirelv fr)r waste rock, and tin crushed prodict to be
I
ORL-BRIi.lKl.W; OX Till-. R.\SD 75
treated iiulepciKlcntlv uf tlio ore ])assiiij^ t'r.roui;!! the re-
iiiaiiid' - of the mill.
I )f these two alternatives the tirst is the nuire feasi-
ble, although the secoiul i.^ undoubtedly the more accu-
rate, but the expense attacliing t(j the latter method
proliibits it. if a mine is nut in a position to keep its full
mill going, it might use some of the idle stamps for this
purpose, an<i instead of treating the resultant pulp sep-
arately, siniidy take a careful series of screen samples.
Another point ( which has arisen and wiiich bears very
directly 'in our present condition wherein, owing to
shortage of labor, we are, in some cases, able to mine
only sufficient ore to feed a p<»rtion of our battery) is
whether it is not of greater advantage to run tiic whole
mill on un.sorted ore than to .-^dopt sorting and keep
stamps Iving iille.
Take the case of i mine equipped with loo stamps,
where only 500 tons of ore can be milled per day. If
J5 ])ir eeiit sorting is adopted only 75 stamps can be
run, whereas without sorting the full mill could be kept
running.
.Assume the ore consists of 30 per cent coarse rock
and 50 per cent fine, and is worth, delivered at surface,
14 dwt , and that ,>e secure 80 per cent recovery in
either case, and tluit the waste rock discarded in the
case of sorting is 2 dwt., we then have the following
comparative statement:
Case for Sortiiiii —
lew st.iiiips will crii-li 500 tiiiis iif iiri' per <l;i^.
-'50 tons fine at 14 du t ,3. 500 dwt.
IJ5 ton, vdrtt'il cue .11 _>() d" .^.^SO dwt.
Tiital y-^ t.ins of ore ,it iS (!wt ''-750 dwt.
Eighty per cent of 18 dwt. amounts to 14.4 dwt. at
$i.ai8. e(iu'l to $14,515 recovery.
fi.vf'nuliture —
NTiniiiK $v,?6 per toil milled ( 375 toii^ ) $I,2^o
CriisliiiiK 0.1 J " " " 45
Hlfi
76 TllL RCOSOMICS 01' MIX'XG
Sorting; o. U jur tnii imllod (,!75tons) $45
Milliti^i o.(«) " " 2-3
Cyaniilnit; o.(k) " " " 2-'5
Slinu' iKiiuiliiij; o. u " " " 45
General 0.84 " " " 315
Iliad ol'tice 048 •• " " l8c
Miiio - (Icveiopnieiu re-
ik'iiiption o.iX) '■ " " 360
I'rofit S7.315 per toil, fqiial to $-'.743,125.
Ciisc for A oii-Sortim:, —
I'ivu huiidrcil tons .it 14 ilwt. njiuil to 7.000 dwt.. So
per cent ot 14 ilwt. cfjual to ii.j ih\t. at $1,008. i'(|ual to
$1 i.jSij per ton.
Ilxpcnditurc —
Miiuiin $j.5J piT ten luilk'il (500 tiin> ) $l.-'()0
Cni-limK (I ij " " " '")
Milliiitr o.<iij " " " .Vio
Cyanidiiii: 0.(10 " " " .VX)
Siimc liaiidling o ij " " " 60
General o 7 j " " " j6o
Head (iffire o.^O " " " '80
Mine - doveliipnicnt rc-
ileniption 072 " " " .?6o
$5 . 7() $2,880
Profit $5,520 per ton; 5(K> ton.>< at $5.52') equal to
$2.7^)450. DitTcrciice in favor of non-sorting. $21,375.
in tlic latter case, however, there is an extra chartje
for K)ss n\ uaier and fur de])reciation of the extra
stamps t(j he run. and if these ;illo\vances he made there
is in the com]iarisiin ai)ove made riT.iark.ahiy little dif-
fermee.
riie whole issue liint;;es tniallv on the value of the
rcick discarded, if that value is niiK i dwt.. then sort-
ini; will pruve ad\;mta,i;x ais, hut if we a'low 3 dwt. for
the waste nuk. ilicn it would ])a\ to rini tin- idle -i.'uiip--.
and it is nn the deteiniination of this factor th.it the
])iilic\ adopted must he guided.
This cupip.arison must in no way he confused. Iiow-
ever. with the c|iK'stion raised in the first illustration in
wl: ■ ;i the tonnages i-ushe<l .are ofiual.
MINING INVESTMENT
(KiJiiuria!, Scptcm!>rr .'•6, 1903.)
(Jur frieiiil Mr. J. H. Cii-K' has born writing- a series
of useful article.-, in the Lmidnn luinuiiiiist : hi.s utterances
have been CDUclied in very plain lanj-uiaj^e, and have
conveyed a large measure oi unadorned fact intended
obviously to puncture some of the filmy sophistries
which obscure the business of mining. Finally, at some
one's suggestion, he has given the readers of The
Ju-i>)ioniis! a (.lose of ;idvice which summarizes a go(id
deal of what he has i)reviou.-ly said. Wiih the general
tenor of tluse abitcr dicta we do not (luarrcl: on the
contrary, we welcome the introduction of so mucli good
sense into mining matters, and congratulate the author
on the excellent results likely to accrue from his out-
spoken ratiocinations. However, as wc ourscKes live in
a country where mining is still VMung and Impcfu:. with
some of the exaggerations of youth but with all of its
vigor, we take exception to certain of his conclusions.
The latter nndtiuhtedly suffer from brevity: uiiqualiiied
generalizations are rarely impregnable, and in this case
they are obviously endangered by the enormous range
of conditions covered by the mining regions (if the wor'd.
Mr. ('uric says: "iJon't invest in coppir, tin or s'lver-
Icad mines, but -tick to gold inine>." < )f currse, this
advice is intended not for nn'ning operat.ir.'- or well-
informe(l |)eopIe, but for the .average inv-.,>tor, \i.l'.o, like
an innocent child, i^ supposed to wade on the edge of
tile sea of tinancial s])ecnI,'ition. "Cold has a fixed
value." he goes on to say, "where.as violent tluctuations
in the prices of other metals u]>set all ( stimate- of the
earning capacity of the mines producing tluin." W'liv,
tlicn, should one not avoid risk of nnv kin.l and buv
78
/■///: liCOXOMICS 01- Ml.\l.\u
Consols or L'liitid States Iximls, or cohm rvative bank
stock or (k-hcium'fs of tlic most f^ilt-i-il^i-il varutv?
\\ li_\ : Siiiiplv In'^aiiM' [iicipli' ulio ^n into niiniiiL; <lo
so htcanM iluy want a bij^t^'cr rriurn fwr tluir money
and i.\iHi.t to j;(.t iIk' bcnctil of a ,spti.ulaii\i iiibance-
nKMit oi tluir principal, lliiii).; niiniii},' to ihc >trictly in-
vestment baMh (if wliich Mr. Ciirlc writes .-o much, and
it .•~liri\els to feeble dimensions indeed. The investor
wlu) \\ant> to elinnnate all ri-k in mining is like a man
wiio expects to M-d br.thing without gettint; wet. Such
ideas entirely mi>inter])rei Miv s])irit of leL;itimate mining.
\\ liat shareholder, we wcukl ask. wants to fore,c;o en-
tirely all the possibility of favorable de\clopment or of
new disco\ery?' it is the chance of enhancing- the
value of liis holding which gives zest to the business
of mining. Such pos.dhility of further discovery entails
inevitably the ciinal [)ossibilit\ of disappointment: the
■mcertainty cannot in' all in one direction. In other
words, the mining investor only asks that he may get
"a run for liis money." in (.'ornwall siiareliolders are
known as 'adventurers,' tiot with the modc-n ineaning
of irresponsible schemers, but with the old l-dizaljcthas
idea of ni'Mi who go on a venture, take a reasonable risk,
and are hopeful of a favorable return.
.Mr. Lurle has ex|)ressed great respect for the good
sense of .American engineers and mine operators; we
feel -afe in saying that these men lieartiK disagree with
any such sweejjing statements as the foregoing in re-
gard to mines producing metals othe'- than gold. Of
course, when the product of a mine is liable to tinctuation
in market value, the i>urchaser of -t, or tiie stockholder,
will expect a larger diviilend to compensate for the
adili'd risk. Markets varv: even the purchasing power
of gold is not constant; but ti ■ conclusion 's not to try
to get rid entirely of an essential .'actor — risk — but to
recjuire a proportionate return in the rate of interest.
MIMfXG fXrnSTMIiXT
n
Tlicre arc many of diir reader*^. \vc fctl assured, wlin, if
aski'd to clioost' I)tt\v(.i'ii a gold mine yitldiiij^j a small
rate (if intcrist with hut little risk (such is tlu' mint Mr.
Curie recommends) and a silver-lead, copper or tin
mine with a larger risk hut with a hig<,'er return for their
money, will select the latter. The idea that all pold
mines must have 60 per cent of their market valuation
represented hy net profit on ore in reserve and nuist
yield lo per cent on their investment price is the
dream of a doctritiaire. .\ few such mines are c|uoted
on the exchanf!^cs, and tluy exist just now mainly hy
reason of a Inisted hull market and an unusual condition
of financial depressioi . When better times return, even
these shares will rise to a fic;ure at which they will cease
to fulfill the requirements which Mr. Curie exacts; and
then the economist of The Economist will have a theory
with visible means of support.
A CARD SYSTEM FOR MINE ACCOUNTS*
i;v I'', w. Ui.M
I IN.
Since tlic tir^t nt t!ic pri-^iiil \i'ar a vanl .s_\>tiiii has
bicn 111 LiM' at till r.altk- iiijiiKr iiiiiif iit cmiukcimii wiili
tlic i-iKTal .--upiiU acciiuiit, I lie >\>tnii li.i- iirovcil
^ali.->iactor\ . [\\o s^l> ui (."aid.s arc i-iii|)lo\ iil, ( (in.- ^i t
is rilaiiKil in tlic >ii]ii>iy ciL'ik'> nttii-'i' and i> l^tpt ii|i tn
(latf i)\ iiiiii. anil llif diIkt m. t i> kv\n in ilic main ut'ticc
anil i> uritun np 1)> tlic iiiVici' ckrk>. 1 lu- caril> an- 3
1)\- 5 in. a,ui 5 1)) 8 in. r(.>pi.cti\cl_\ , ainl arc rnlci! as
>lici\\n. Ihc ililiiTcncc Ijilui-vii llic iwo >• t.-' i> as I'ul-
l<jus: (Jn tin snpiily clerk's card, I'ij;. 1. cinly the date,
balance tm hand, (iuaiuii\ received, and i|uaniity used
are recorded, while mi the clVice caul, li^. _'. all nl tlu.se
ajipear, and in ailditiun the initial.s ^>i the tirni >npplyiii^
the j;oods, cost, value nf ainounl.s consnnied and the ac-
cunnt.s to which the supplies are charj^cd.
i he incthud nf Using the card.v is as follows: When
tile tluplicate bills for sn])i)lies are received one copy is
sen' to the sup]il\ clerk, who clucks the hill ;inil enters
the quantities on his cards. .\s supplies .'ire issued <lur-
iiig the month a iiunuirandum is made in ;ui iirdinary
book in the usu.-il manner. .\i ilic i-nd nf the inonili
the sn]ip!\ clerk pre])ares fioin his m'-inorandnni book
two reports, one of which is arranj;ed iiccordinj; to the
e\]jen-e accounts and the other .'iccordinj^ to the kind
of supplies. That is, on <iiie rtport under each e.\]Hnse
account will be put all nf the sU]iplies charj;ed ai,'ainst
that accoiMit for the month, ;ind on the other report.
i'aper read liel.ire the Lake .Supermr .Mining; lii~titule, Aii^;u^t,
I'JO.V
( .lUI) S)Si;..\l luR MJ.\L .ILLUUM^ 81
iiinkr i!ic ihiiuc ami .sizi' of lach article, will l)c j;ivt n tiu-
i(K.il n)ii>iiiiii)tii)i\ ui that article. I'iiis last niciuiuiKil
^lH^■ial rrji'Tt assists the ofticc force in writing up tlic
otticc card-., riicsc nport^ arc tiinud nvtr lo the i^cii-
cral (itVuc.
At the end of eacii innnlh, when all uf iIk Mipi>l> I'lHs
h;i\e luin receiveil anil chvckvd. the ot'tice clerks enter
the (|iiamities and c '.-.t> on llic proper canl.s and conipnte
a new ivtra^e piiie li necessary. 'Ihis average price
may be computed a> clo>el\ a> iK.sired.
.\s soon as thi- pay-n.>ll i> lim^hed at the first of the
tollouini; nuinth, heforc which time ihe ^njijily ehrk will
ha\e MMit ill hi^ two nji'irt--. the uttiee I'nrce takes ihe re-
]iort of the s'!ppl\ clerk and ennipletes tin- eiitri s on
the ot'ticL car.l-. d'hc special ri pnrt of tie >iii)|)l cKrk,
shiiwiiiL; the total amount i^sned ni each kind (if .Mip-
|)lirs, is nsed to clieck the work I'f pickinj^ out the in-
dividual records from the detailed report arraiif^ed 1)\
accounts, and iiiMires all entries heiiif.^ maile (ui tach
card at the same time. When the entries are tini^heil
on a card, .'Ui<l before retiirninj.; the card to the drawer
the resiH'Ctive (|uantities useil diiriiif^ the month are
multiplied by the averajje price and the amounts entered
in the jiroper column on the card, ami also in the proper
place in the snpply clerk's report. The balances of
(|uamity .and value are then brouL;ht down on the card,
and the work on that card is finished. I'.y coiiyiii'.^ the
'otal \alne of supplies coii>unie(l from the cards to the
^np])ly clerk's special report ami afterward checking; the
footins; of this report with tliat of the detailed report, a
^M)od check on all the ckricil work but the nuiltiplication
IS (ibtaiiied, ami the aver.ine price checks that near
enouj;h.
The v;dnes having- been obtained in this \\a\' for the
>iipply cKrk';- ri'purt. the main functioii (if the car(l
ceases as far as the mine bonks are concerned, and the
iJ;
MICROCOPY RESOLUTION TEST CHART
ANSI ond ISO TEST CHART No 7'
1.0
I.I
m Ilia
if 1^
III 2.5
|| 2.2
2.0
1.8
1.4
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^ .APPLIE D IIW1GE Inc
=1 ■ - ? Las! Mij.'-. Sf'se!
r^= -hester. Ne* YorK 1 4609 uSA
~~ ■fi't Afl? - nwin - Chnnp
82
Tllli liCOXOMICS OF MIMXC
sui.ply clcrk'> report is then used in the usual manner.
If anv allowance is to be made for freight and other
exi)en.se connected with sujjplies not covered liy the
original supply bills, such allowance can be made oy
adding a certain ])ercenlage to the footing on the su]!-
ply clerk's report.
.\t the ISaltic the sujiply account on the ledger will in
future be charged with the anmunts of the supply bills
only, and credited with the amounts as figured from the
cards.
The cost of handling sup])lies to and from ware-
houses, the cost of heating ;nid lighting these buildings,
and any other expense connected with the caring for
supi)lies, are all charged oti' each month as they occur to
one of the general expense accmmts umler the name of
caring for .supplies. The freight bills paid each moiuli
for supplies are charged ofT the same month to the vari-
ous ex]jense accounts in i)ro])(irtion to the values of the
supplies used by the.se accounts. This method of liand-.
ling freight and otlur e\]Hii>e connected with supjilies
is as fair as any other in general use, and has the fol-
lowing advantages: l-'irst. the balance shown by the sup-
ply account on the ledger should check witli the balance
shown bv the cards; second, b\ keeping the expense of
caring for supplies by it>elf. this expense stands forth
conspicuously each month and can be looked after the
same as any other operating expense.
ihe time re(|uired to write up the cards is not as
much as one might suI■)pl•.^e. At the Ikiltic 4S air drills
are in ciperation and al)out 750 men ire employed, (In
Jime I there were in use S~I cards i<\ each kind, and
the vahu' of the su|)plies on hand shown by the cards
was abimt $jS.o<xi. which dees not include fuel. The
monthly consuniptinu ,,f supplies cuvered by the cards is
about $8,500. With this amount of business our ofTice
1
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Tllli HCUXOMItS or MIMXU
f^rcc C(in>ists of a chief ^'Icrk. niir a>si>laiu, oiu' tinu-
kocjuT and niK- >v.])\'\y cUrk. It tako llir ckrk and hi-
a>si~iant alxml i ;l dav^ m uriu- up tin. i.-ar(U aftir tlic
snpjilv L-'urk'> nixirt.- arr nccivcd, -\~ previously
stated, the data taken from InlN are eopieii on the eards
at the eiiil of the month when the office work is li,i,ditest.
Wl-.at are the advanta,i;e> of the card >\stein:' L'nder
our old method the >ui'ply account \\a.> chart;ed with all
expen>e coimecled will) the supplies, and then lo i)er
cein was added to a jjncc list to m>ure a balance on the
sile .-ide of the account, dhe list of i)rice> could not he
ke])t correct, hecau.-e jirices chan<;e. and the avera,L;e
])rice of the .--tock on hand \va> not known: therefore,
the prices were seldom ri,!;ht. and the lo per cent addi-
timi to this ap]>ro\unate ]irice only served to iiisurc
char,i;ing utf enough.
When the time came for taking an inventory these
])rices would he put on the list turned in to the ottice.
and if the total \ahu' was -utficiein to balance the ac-
count, evervthing wa> considered satisfactory. ( .eiier-
.allv there was a •uri)lus, bnt ju>t where it came in was
11, ,t kno\Mi. If there was a diticit, anotlier round of
warehouses and surface would be imnle and each trip
would result in tinding something that had been omitted
from the original inventory. d'liese tinds might bal-
ance tlu' account. if the^ did not, then tlie .Uhcit
would be charged off and another \i'ar started w-ith-
out knowing just where the deficit oci iirred, Tuder
the card .\stem the balanci that shoiihl be on hand is
shown on the first of each month and this can readily be
clu-cked, m most ca-Ms bv in-pectiou, if de-ired. In any
I'vent, the cards cluck the consnminion, because, when
a n(|uisiti()n is j)Ut m for more of a given article, the
cards should show the stock of that particular artich- to
be ii-ed up or nearly so,
r.v cuterinu- the exact bill-cost liU the uftice cards and
i.lIW SVSTr.M FOR U/.V/T .iccorxTS srj
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86
77//: r.COXOMICS OF MIXIXG
ccinipuliiij,' tlio avrrai;!.' price each inontli if iifccssary,
tiu' supplies an- cliarj^cd nfif at exactly the pnjper price.
With certain sii])i)lies winch are bought in bulk and
issued in small (|uantities that are not accuratelv meas-
ured, such as waste, oil, etc., the (piantity reported as
consumed can be increased, and the price kept the same
and chances of a deficit avoided. l>y charging only the
bill cost to tile supply account, the balance as shown bv
the cards slundd check witb, the balance shown by the
account. When the inventory is taken it is onlv neces-
sary to determine whether tlie balances called for bv the
cards are on hand. If there is any deficit or surplus it
is known just where it occurs, and the trouble can be
located at once and a remedy applied. I'.v this method
the exact cost per ton for supplies is known from month
to month, and the average for the year should not be
atTected by any surplus or deficit.
In addition to these advantages there are other im-
portant ones, especially wliere the purchasing is done at
the mines. It can readily be seen that from time to time
as supplies are purchased it is easy to run over the cards
and make up an order covering a sufficient quantity of
su])plies to ofTer an inducement to dealers to figure
close. Then, too, by studying the consumption of sup-
])lies as shown by the cards, it is often possible to sim-
jilify the stock carried, getting rid of some sizes or
ado])ting certain standards.
In conclusion, I wish to state that the successful intro-
■ luction of this system at tlie P.altic mine has been due
largely to the capacity and energy of the chief clerk.
Air. William C. (./ole.
INVESTMENT IN MINES
(tJitorial, October 3, 190J )
In our last issue we discussed the general advice on
mining investments which has appeared in the London
LaDwinist from the pen of Mr. J. H. Curie, the Special
Mining Commissioner of that most excellent financial
chronicle. Mr. Curie himself has done excellent service
in clearing away cobwebs from the business of mining,
so that his ideas come as from one having authority and
not as the scribes of the daily press. Nevertheless, we
think some of his sweeping conclusions go beyond the
mark; for instance, the dictum that "there is only one
correct way to value a mine — that is by its ore reserves.
Any other basis of valuation is wrong." As an antidote
%o the twaddle of descriptive matter which used to form
the larger portion of mine reports not many years ago
such a statement as the foregoing is distinctly bracing,
but Mr. Curie is giving his patient, that is, his client, a
corrective which will produce spasms if taken without
dilution.
We are all agreed, all of us who want to see mining
conducted upon the principles of sound business, that
the determination of ore reserves is fundamental, and
that the amount, value and profit to be derived from
such reserves must be the basis of any appraisal of a
mining property — but that is not the whole story, by a
great deal. One mine may have $500,000 of ore in re-
serve with a net profit of $300,000, while another may
have only $200,000 gross, with $100,000 net profit as-
sured, and yet the latter may be worth more than the
former. One mine may be like a man of advanced years
with a fine record of achievement and great capacities
apparently unimpaired, but still with the certainly of
////: .':C (^\U.l//C.N Ui MJ.\I.\(,
a pruxiiiiati' ccssaticjii in lii> aiiivitics. wliilc aiioilur
mine may Ijc cuiui)aral)k' to a youiij^- man with \\"\
niucli tu spuak of in ihc i'. :.\ of work done, but with
j^nat powers and ihi- promise of a fmc career. W'e re-
niendjer a mine whicli wa> carefully surveyed and
samjiled. with the rcMilt that il showed ore which wctdd
vield $436.iHH) net protit, but most of the heading's were
poor and the ore bodiics were evidently erratic: such a
property was worth no more th;in the net vahie of the
ore. if it were wnrth a> nnicli. the interest on the money
invested durint; the period re(|uired to take out the ore
reserves beini; balanced auain-t the sli.ijht chances of fur-
ther successful development. .Another mine with $80.-
000 of profit assured was sold for $250,000 cash, and
subse(|uentlv made three men millionaires. Of course.
Mr. Curie is addressing F.nsHsh investors in mininp:
stocks and not expectant purchasers of mininpf property;
nevertheless, the same consiilerations hold <:];ood. W'e
mi.i^ln instance the Tondxiy mine, situated in Colorado
but owned largelv by I'.ritish investors. That mine was
bought mainly on the fine showing made by o/c le-
>erve^ which were over-rated and. as a consC(iaence. it
proved a disappointing investment: beyond the original
ore blocked out at the time of inirchase very little more
was ever opened up. Subsecpiently. thanks to an ener-
getic manager and a capa!)le directorate, the company
purchased an ailjoining young mine, practically a pros-
pect, which, though secured for a fraction of the sum
paid for the original 'I'oinboy mine, has since turned out
a much more valuable property. It is a fact that the
Tomboy shares were worth more on the purchase of a
jirospect than on the acquisition of a well-developed
large mine.
( >re resiTves are not everything: expansion ami de-
velopment are of the essence of successful mining. It
has been pointed out in these columns >hat a mining
L\'n-.sTMi:\r i\ Mixr.s
89
prnponv iiiav bt.' ruiiKd l)> liaviiif:; too imu-li .)rf-l)car-
iiiL,' ,L;roiiii'l ii|niuil up. Itir the co.si ni kiipiiiL; the
kvcls uptii, (liaiiiiiij;- (.■xti.'iisivc opening's and ruiiuwiiip
tlic linilnriiiL: iii,i\ irpi\M.'in a hij^li rale "f iiitiTi.st uii
till' capital Imii.l; (I'uniant in tlic on; reserves. Tiiis re-
fer"- ]iarticul;irl\ Ui iron and eoal properties, but it may
verv well ajjph to laVL^e l(i\\-,i;rade j^old (le])osit> such as
those of the Kand i>r inin,> belon^'inj.; ti the cla-s nf
the lloniestake and Ala.-ka Treadweil. In Mther worils,
it is not ])rotitable to o])en u]) ore risirve> nnieli in ex-
cess nf the tnnna^H' e(|uivalent to the output f.ir a cer-
tain time. That period may be iletermined by the expense
of niaintenance. as already described, and the character
of the ore deposits; if these are erratic or s])ora(lic. it is
obviously nece>sary to ".i^dve liosta.t^es to fcjrtune' and
ensure regularity of production by averaging a large
nund)er of discoveries and stopes of varying; tenor.
Mininix would nut engage the energies and interest of
so many if it were but a question of running a tape over
blocks of ore and testing their value by sampling: all
this is, we repeat, fundamental, and Mr. Curie has done
well in emphasizing this basic fact ; but. beyond such
necessarv procedure, it remains a fact that the attract-
iveness of mining, that feature of it which reipiires the
most judgment, is the weighing of probabilities in future
development. It is on the chances of this that men buy
and sell mines, taking bigger risks than Mr. Curie is
willing to face, but expecting larger returns also. We
venture to doubt whether lo per cent investments on a
basis of ore reserves will ever be a leading feature of
gold mining activity; rather, it is the 20 to 25 per cent re-
turn with the chances of n speculative enhancement
which engages the mine ojierators who are most suc-
cessful. .After all, the best kind of mining is that actu-
ated hv the combined skill and spirit exhibited by the
Cornish 'tributer' nr more modern lessee, or 'leaser,"
i 5i
|i
I'
'.Ill
/■///•. IaOXO.MH S Ol- MIMW;
who sizi'S up a certain i)()rti<m <if territory m a tnitio and
lakes tlic risk of lU Mlnpint; it. iiui on ore to l)c- SL'tn
in plain view, but on the reasonable expectation of rind-
ing soniethinp^ pood. It is the experienced tributer's
sense and not the money-lender's cantion which ha>
Imilt np inininp in the past and will make it the great in-
dustry in the future.
GOLD MINE ACCOUNTS
y/if Editor:
Siu — It ih, iHTha])s, not astoiiisliin^ tlial so little has
hcon written on this discussion which Mr. Hoover so
comprehensively opened on July li, but, none the less,
1 nun to a disappKintnienl which inii^t be .shared b)
an iniporta t cuntinjjjeiit of the profession.
The snijject is sn lari,'e that eiif^ineers may well hesi-
tate to attack it in the limited area of Di.scussion,' and
>et 1, for one, believe that nuich can be gained by an
imlimbering of ideas upon the subject.
Ildokkceping pure and sinmle is a matter of arith-
metical accuracy and has been developed into a science.
Acccjunting is a broader term and depends for its value
upon the proper segregation of items. The subdivision
of Mine Accoimting (1 take the liberty of dropping Mr.
Hoover's word '<ii>ld." which seems to draw a distinc-
tion scarcely necessary in this country at least) is one
of the tools of the mining engineer and one that nowa-
days is of increased importance; and it certainlv seems
that the developments in other lines, in Mine Surveying.
for instance, or Economic (ieologv or Metallnrgv, have
outrun those in this no less impcjrtant one. It would
seem, then, that a discussion of the subject could not
but result in a clearer appreciation of the needs of the
case and at least a nearer approach to uniformity in
practice, though it is scarcely probable that anything
apiiroaching the tmiformity of surveying methods could
be hoped for.
Mr. Jenkins has indicated how easily segregation can
be accomplished, and 1 for one can bear witnes.s to that
from personal practice. Probably the niajoritv of engi-
neers would cordially adhere to a practicable uniform
f)L'
I'lir. F.COSOMhS ()!■ MIXING
system i'mt slii,-. Mill, it i.-^ ildiiUii'iil ii .ni> Usn iii.iii.iuiT--
(li-sirc, (>r many niiiR-> (Uiiianil. liu >.iiin ilt;.;rn ..r kiinU
of segregations ui costs, so that any universal' sy>lini
must be one of great elasticity. VVc can scarcely expect
iliat mine managers will fa\i'r am s\~tuii that ilemands
the earr\iii}; nf ai'Ciiuiit> Wn wliuli they see iiu use, so
ih;it our ])r(ipnsc(l >.\siiip. Iml^t he e.'ijiahle nf simplifica-
tion tu a few I;a>al aeenimt- a.-- well a> nf iiitinile elalm-
ratinii. 'I'lure are ca>es where, tn iirn])erl\ man:ige ;uid
check up a hu>ine--s and tn carry nn 'lie ■■iiiterminahle
c;mipaign for ecniiniuv and improvement," the manas^'ir
may have to subdivide extiMisively. and it is almost cnii-
ceivahle tliat there are other cases where the "■morbid"
iiii>applicatinii nf (iiiiend l.edt^cr Accnunts, spnken nf
b\ Mr. C'oni'-tock. (|uite tills the need; ami this diversity
nf need must he duly considered in devising an/ general
system.
IJut there is a ])articu]ar class of accounts that have
ahvavs been a stumbling blnck, in the h.-'udling of which
there are serinus and fundamental ilivergences. Mr.
Ibtnver has referred tn ihe;-e in llle .^ecnnd C(jlunm nf
h'\> discussion, and mi anntlur ])age of the same number
of the JorKX.M. are tw. i .-md mu-half cnhmins on a simi-
lar subject.' 1 he .L;ainiit nf common vari.atinns is clearl\
and concisely run u]) bs Mr. Hoover, while Mr. G. A.
Denny, in the 'Deep Level Mit.es of the Rand,' ex])and,<
the matter mnst lumiiiniisK . I am reierring. of course,
to that list of accounts that includes Capital, Deprecia-
tion, Maintenance. Reserve Fund. .Amortization of Capi-
tal and Mine Development Redemption, to use Mr.
Deiinv"s own headings in the latter half of Chapter X
of his book.
I am not so foolhardv a^ to open a discussion on these
vexed (piestions here, but the arguments stated by Mr.
' 'r.iynient of Rxtcnsinn of Mininp; Plant Out of Revunuc' By
J. 11. Curlt. Ihis JoLRNAL, p. 4.S, July li. 1903.
GOLD Ml.\
ILLUI .. / S"
9H
I), nnv t>'" 'i"J <■"" show most tlcarlj irate views
iliai iii.iy lu^jically l)t' held. In vifu ^i iiu--. tluii, ''
WMiiM sicni tliat tile iiiD-it that coulil i)f iloiic in regard
til iliis system of aci.i>iiiil > 1)\ any such joint coniinis-
.-ictn, as was ijrojmscd l.v Mr. llooviT and sccondi-d witli
fhd)i)ratiuns hv .Mr. ('()ni>t(K-k. umuI.I he tn urL'i' the
general aduptinn 'if eertai'i l)niad jiriiiiiple'- invi''-in,L;
ihe (Uniand fur an e.xplieil statement in eaeli insianee
as tn ju.'-t what eaeli accDiint included. In regard to the
< •piratint,'' .Vccutnit--. si'Rrcgatiwns shmild he so niach' in
tile hooks ui first entry, evtn tlion^h imt carried intu
the ledpjers. that ex{)ert examination could re-apportion
costs at am time.
I )n lines such a> the^e it .'^eeins tn me that a rcasnn-
ahle iiniitirmit\- enuld he expected. I'.esond that it wunld
scarceU he ])iissihli' to '^u.
R. (jir.M.w F'.RowK.
San Francisco, Sept. i6. ifjo^.
li
4
I
I l\
CARD SYSTEMS FOR MINE ACCOUNTS
The Editor:
Sir — Tlie use of card svsiciiis in niultitmliiious varia-
tion in alni()>t I'vory liiu- of hnsincss except niiniiii,' has
now become a recognized essential to proper accounting.
W'c have hooks of great value explainuig in detail the aj)-
plication of such systems to factory costs and to classi-
fication and summarizing of expenditures in mercantile
houses; the keejiing of records in accessible form for
practical business purposes is used by banks, trust com-
panies, msuraiice companies, libraries, physicians, den-
tists, mercantile agencies, real estate agents, telephone and
telegra[)h coni])a;ues, gas companies, attorneys, collection
agencies, manufacturers, railroads, churches, architects,
Iiotels. publishers, societies and by almost every conceiv-
able class of industries, except those connected with min-
ing and metallurgic practice.
There are some important mining companies, smelting
works and mining engineers that have taken advantage
of the ready supply of filing cases and card stock in the
market to make more or less desultory attempts to im-
prove upon the common slipshod and ineffectual modes
of accounting which jjrevail in these departments. That
this practice has n(jt become general is attested by the
experience of the writer in consultation on the subject of
mine accounts, and very recently by the reading of a
paper by Mr. ]•". W. Denton, which was published in this
JoiKN.SL. September 26, 1903, p. 471.'
Without desiring in any maimer to detract from Mr.
DeiUon"s paper, I merely wish to refer to it as proof that
tJie mining fraternity is far and awav behind the times
* '.A C:\rA Sy-tcm fnr Mine Supply Aooiuntv' l!v V \\ Ocn-
ton. P;iper rt-rnl licforc -.lie Lake Suinrirr Mitmii; In-titntr,
August, If>5,?
CARD SVSTRMS FOR MIXE ACCOUNTS 9.",
in failing x.< -dopt modern approNcd methods in the
countintj hou .e and alioui the works gi.nerall> . For tliere
is nothing different in the lorins and uses outhned in
that paper from what are ordinarily in op'ration at thou-
sands of well-ref^ulated commercial establishments not
en<jaf,'ed in mining. That the me' hod is new to mining
men may be inferred from the fact that tlic present writer
lias never run across it in such cases, except where he has
himself instituted it, alviys with gratifying results.
There are features of Mr. Denton's paper which fur-
ther illustrate what 1 have found to be the most stubborn
prejudice to overcome in installing such systems at the
mines. This is the inability to understand how a method
which records the minutest details can be made really to
save labor and time in actual u-e. ( )ur author is evidently
not aware that the plan adopted at the Baltic mine for
supply account.- is but the simple beginning of reform,
nor does he appear to realize that his method of writing
up the records is but a slight improvement upon the
wasteful methods of the majority under the ordinary
system.
After a number of years of successful emplovment of
the classified card principle, not only with supply ac-
counts, but with pay-rolls, assays, surveys, the details of
niine work, mill work and all other branches of the busi-
iic^^s, I do not hesitate to say that it provides fully for
every detail in such manner as to effect remarkable econ-
omy in time, cost and labor, at the same time insuring
accuracv, proper checks upon individuals, and, above all,
the iilacing of the accounts in a form to be serviceable as
truthful exponents of profit and loss, readily imderstand-
able bv manager and directors without the aid of expert
accountants as interpreters.
The plan given bv Mr. Denton does not appear to ccou-
nmi/'e time materially over the ordinary method, although
lu deems it necessary to emphasize the point that it is iio
i
!tt;
run EcoxoMics or mimxc
less prompt in npiTaliiin. Ikrc a,L;ain 1 have Inuiul great
ilittkiili}- at the start in cniivineinj;- oUl aceoiintaiits oi a
tiiiirinit;iil_v proved fact, that the records can be so en-
tered as to save time ahiin(hmtl_\ . and so as t i do away
eniirel\ with the htter wo'k of 'writini; up." My strict
injiniclion with all card systems, in practice, is do it
;;('<\'. This .^ives the da_\'s own record a completed
character, which has untold value in wa_\s <Mily to he ap-
preciated from actual experience. Mver_\ nit;ht the -uper-
xisintj officer on the ;L;roiuid thus jjossesses ineans of
checking expendiuu'e .it any point or at all points. It is
a wcinderfid incentive to high ideals, a certam assurance
of prompt detection of error and inelficienl service, and it
breeds habits of economy and devotion to company in-
terests.
In the Ikdtic case Air. Denton uses the card in connec-
tion with memorandinn books. 1 he_\' ihiis beconie a mere
adjmiC! to the old method. instead of a short-ctit method
in ihemselves. My plan is very ditYerent. In general out-
line, this is the iiiolif. Mach and e\cry officer of record,
be be foreman. timekeei)er. supply clerk or other agent.
wlietlier receiver, distributor, consumer or producer, is
su])])lied with cards .adapted to his work, and each records
his own d.-ita without knowledge in common. Some pro-
vision is made to check the report of one by that of
another. Daily reporl- are tiled at the c flice. from every
department, on fdniLs csf'Ctiuily l^rcparcd to cpitoiiiicc or
classify the diiy's hiisiii.-ss. In the office a set of forms is
provided to i;ike u]> >tnnmaries of each clay's report, on
sheets with cohmms for each suniniary accmmt. .ind hori-
zontal ntnnhered lines from I to 31. The sim])le adding
of the columns gi\es tot.als for v:\ch accoimt for the
month, or for an\- minor period, if desired at an\- lime.
Cohmms are provided for values by day and by month,
and c;t'y\tliiiii^ relating to the business for the month
is in the hands of the accoimtant on the last dav <'i the
r ■
CARD SYSTIiMS I-OR MlXr. ACCOUXTS ttT
iimiuli. Till' niana'jji'r \m> a.ailahlc each iiiglit a correct
replica of the (la\ 's business, and can readily .-.trike leak^
and lapses at once. Moreover, the whole of the month's
business is ref^istered in convenient form for immediate
transmission to the home office. This is not a theoretical
statement, l>ut one verified thorou.L;hly in my own prac-
tice to the full satisfaction of all. from directors and share-
holders down to the Inuiiblest employee at the mines.
< )ne point must be made perfectly clear, and that is all
that space will now allow. The one secret of success in
this line is to substitute forms for clerks. The old system
of accounting employs cumbersome hooks of record ar-
ranj^ed only by the dates or page numbers, re(|uirmp an
index or a s\stem of back references, 'i'he modern i)lan
here advocated classifies all items immediately, makinij
well-devised forins and self-indexinL; appliances replace
clerk hire, in larpe measure. I'.y this method, jjroperly
handled, I have been able to .<;et lari^e pay-rolls readv with
all details of work done, deductions for rent, hospital,
store account, etc., within r)ne day of the close of the
month, besides havin.c: at the accountant's elbow a suffi-
cient daily record of every detail of each man's employ-
ment, indebtedness and balance due him beyond chance of
dispute. Tt is surnrisint:; Imw simple and accunite the
method is, once the pro])er forms have Ijcen worked out.
Here is where the ^'''-''iter part of the biain work must
be applied. Common sense and the faithful recordinL,' of
details 0)1 the s^ot, with a filint^ of forms each eveninLT,
will accomplish all the rest, pnnided that the forms them-
selves be prepared by a master hand. Perhaps some fur-
ther illustration may he forthcoming: later, if your readers
evince sufficient interest to make it profitable.
TriEO. B. COMSTOCK.
T.os .\n,c:e!cs, Cal., Oct. 3, 1003.
;
APPRAISING FUTURES
( KiJiIurial, Nuvciiibcr 7, iyuj.>
( )n anmlicr paj^c wc jmhlisli a letter from an exper-
ienced .shareholder concerning the appraisal ol the poten-
tialities of a mining property. I'.xcept in the rare case of
a mine which has been bottomed, or one the ore reserves
of which are restricted within an area already fully
tested, tiiere is a "sdmething more" than the ore reserves
which has to be included in any valuation, llow much
value to attach to the varying chances of further success-
ful deveIo])ment is a problem which always comes up as
soon as the measurable ore reserves have been determined.
From the very nature oi the case, no rule can be laid
down. How much usefulness and beneficent work would
you estimate to be includid in the future of a capable
man of 40, 50. 60 or 70 years of age? While the amount
may be inferred from his performance in the pa.it, never-
theless the acconi])lishment already to his credit may have
been won at the expense of his vital powers, and the
measure of it might be merelv a subtraction from the total
to l)e credited to his whole career. Obviously this reason-
ing will depend upon whether the man is 40 or 70 years
old. .It any rate, the simile is not without its counterpart
in the case of appraising tiie future of a tleveloped mine.
A well-known Tasmanian mine has just been made the
basis of a com])any formed in Lonuon. The (iroperty is
capitalized at £500,000; the report of reputable engineers
states that it "should he capable of producing a profit of
from £((5,cxK) to £i(X),(x» per .lUnum, assuming thai the
reef maintains its size and value." Should certain exten-
sions of levels and cross-cuts meet with the success an-
ticipated, the ore reserves will amount to a tonnage ecpial
to three years' production on the scale outlined. The
APPRAISIXC. rUTURES
9!)
mine is worked out down t;) 718 ft., it has an ore-body
abdiit 1,500 ft. ionj,f. wiiioli iia-- iieen cut. but not proved,
at 1,000 ft. Of ore blocked nut, tlicre is only 8,500 tons,
equivalent to a net profit of abmit iy.ooo, and lla esti-
mates of future production are based on tlie e.\,)ectati()ri
of uninterrupted persistence and continuity. Even these
estimates show a return of only 60 per cent on the capital.
so that a shareholder is taking a fair risk for 60 per cent
of bis money, and a long shot for the balance. And this
is without retjard to interest on the investment. In this
particular instance, the probabilities of future successful
develnjinient must be weii;hed ai.:^ainst extremely heavy
pumiiinLj costs, the full extent of which is a matter of
uncertainty, thousjh the tjovernment j^eoloijist, Mr. \V. TI.
Twelvetrees, who doubtless expresses local ojiinion, has
arrived at the conclusion that the ijunipiui^ i)lant, to be
installed accordint:;' to the plans of the company, will
prove inadequate. At all events, here is a factor of im-
portance wliich nnist offset even the apparent persistence
of the ore-shoot ui)on which the estimates of profits are
based.
As the flotation is an honest one throusjhout, and the
undertaking: is in the hands of thoroutjhly capable men,
it affords a i^-ood example of the ideas of different people
upon this difficult question of mine valuation. We would
hazard the opinion that, as a rule, with everythincf lonk-
infj favorable, a mine in the viirnr of its life is worth about
half as nuich a,L,^ain as the net profit in si<;ht, but this re-
fers oiilv to n.ines which have apex rights and can po
down indefinitely on the dip of the l<ide or have ample
territory for further ex]ilor;itii>ns : moreover, it is but a
rouph approximation of the chances, iust as one miijht
sav that a healthv man of 40 can reasonablv be expected
to en(,'ai;e actively in his profession or business for twenty
years lonjrcr. In practice, the cnerinccr will weiqfh the
evidence in each case — and it will never be the same
I
i t
lull
JUL LICOSOMICS (J I- MIM.W,
in aiiv two mines — and he will realize that a prcjperty i>
ixpeetcd to return not the capital alone, hut a hit^h rate
111" interest during the time reijuired to ^et the retum of
iliat capital. This refers to lar^c developed mines necessi-
latiiii; heavv capitalization; the question of the price of
unproved prospects, or likely looking young mines, allows
a scope for appraisement beyond the restriction of any
:..;eneral rule. Then comes that insistent and final factor
11) all these ratirtcinations. namely, the personal equation
Hut that is aniither storv.
APPRAISING THE VALUE OF A MINE
The T.ditor:
Sir.— Your editorial in tlie issue of October 3, deal-
ing with Mr. Curie's system of valuing a mine, opens
the way for a discussion on a point which is often raised
in London. Among mining engineers and others fa-
miliar with mining operations there is a desire that some
system should he adopted for appraising the speculative
value of a mine, in addition to the value of the ore
blocked out or exposed When a property is offered for
>ale. the vendors naturally stipulate that something
ti.orc than the ore reserves shall be considered when the
price is being arranged. This extra value of the mine
is at present appraised in a haphazard way, and it usu-
ally amounts to just as much as the vendors tliink they
can squeeze out of the purchasers or the public.
It is quite impossible to lay down any hard and fast
mathematical formula to meet the requirements of the
case, because the chances of the continuity of veins vary
with practically every imlividual mine, or at any rate
with each particular geological district. Also, the spec-
ulative value varies relatively to the value of the ore re-
serves, according to the amount of development done.
In the two extreme cases of a prospect and a limited
proved deposit, the relative values differ widely, for in
a prospect the speculative value is everything, while in
a property, like some of the Johannesburg mines, the
speculative value is at a minimum. In spite of these two
very obvious obstacles, I think some general agreement
might be found among mining men for dealing with
this factor in the value of a mine. Some standard sys-
tem for reporting might be adopted, so that the opinion
of the engineer as to tlie money valuv of the chances
KIL' THIi liC()\'()MICS (>!■ .\//.\7.V(;
of further oic l)tinc: discovered witli developiiKUt mij,dit
1k' {.'iveii without hein^^ iiiismidcrstoi)(l. 1 am aware
that many engineers will object to a proposition which
wotdd saddle them with sucli a prave responsihiHty, and
I aihnit that, in the Iiands of men of no professional pride,
this mnction or duty would i'e wasted and perha]>s nu,>-
used. TIk mininjj profession is so strong in influence
for good nowadays, however, that tlie responsibility
might i)e safely undertaken. I'.oth Tin-: Encinijckinc
AN'ii W..s\yr, Journal and the Institution of Mining and
Metallurgy have done excellent work in checking the
abuse of "ore in sight' by inducing engineers to adopt a
more definite plan of rcportmg on ore already blocked
out and developed, and the further step of giving an
opinion as to the possibilities of the future, over and
above the ore actually discovered, would still furtuer
assist in suppressing rotten tuiance and over-capitaliza-
tion of companies.
I give this suggestion for what it is worth, and hope
it will receive the attention of luining men.
SHAREHOI-nER.
London. ( >et 14. 1903.
II
MINING COSTS AT CRIPPLE CREEK
(November 31, 19"3 )
The Editor:
S,R_Thc peolopy and vein structure of Cripple Crcik
have been described almost ad muscam by many writers,
but so far as I have obscrvc.l, little has been said to the
engineering public about the very vital problem of how
to make money out of these much-discussed deposits.
The impression seems to prevail among mining men out-
side of tlie district that Cripple Creek methods are crude
and operating costs high. Now, while glaring examples
may be produced, in the district, of almost every fault
that coulvl be mentioned in the management of mines. I
think that the conditions under which the Cripple Creek
mine superintendent labors are not thoroughly under-
stood, and that the methods employed, while they may
be behind the times in some respects, are yet fully up
to the average in others, and even ahead of the average
in regard to certain features of mining practice.
A man brought up in the Lake Superior region, where
iron and copper ores are mine<l from undergroun.l at a
cost of 75c. to $1 per ton, is apt to smile at mining costs
of $10 to $.5 per ton. even after making every allowance
for differences in the prices of labor and supplies. 1 he
conditions, however, are so ra-lically different that any
comparison on the basis of tonnage is (luite worthless.
Before the Lake Superior man can arrive at any under-
standing of mining costs in Cripple Creek, he must
realize the two following facts :
I. M\ ores shipped from Cripple Creek are concen-
trates produced bv hand sortiuix. ^
2 The amount of development work neces-^ary to fii^i
the ores is , robablv 50 or 100 times greater than in the
Lake Superior mines.
104
/■///: /;C().V(;.i//c-.v ()U mixi.w;
At tlu' lar^,'iT ludpi rtifs of LrippU- Crick tlie co^t cif
mining tlic tulal iinidiict of ore and waste is only froni
$-'.50 to ^3.50 |HT till, tlii> cn>t fuvcring all tlie outlay
<jf tile conipaniis for all pnrp<»es, including taxes, in-
surance and general expenses. This co>t does not com-
pare unfavnralily with that of mining in such places a-
Butte, tile C leur d'Alene. ur e\en Lake Su[)erior, wlun
it is con^idered that labor at Cripple Creek costs 4_'.5c.
an Imiu-. as against probably 2J.5C. in Michigan. It
nm;it be ren!end)ered that the above cost, of 5^250 U>
$3.50 for crude rock, includes the cnst of sorting the ore,
which is C(|uivalent to that uf milling in other camjis,
and is fully as exjiensive.
It may be said, theru'nre, that nn the basis uf crude
rock hoisted the Cripple Creek mines have no reasun to
h'- ashamed of tlieir costs, as compared with those of
other places. This is I'mjihatically the case, in view of
the fact that the specific gravity of the Cripple Creek
rock is much I -s than that (jf lead, cop])er or iron ore;
that most of the rock is broken from shafts, drifts, raises.
or from stopes cut out as narrow as po-sible; that these
working places, from their \ery nature, ])rcclude the uso
of appliances designed to handle material on a large
scale, and that the suriace ])Iants are hampered by the
fact that, wlun the mines were i^tarted, uo attention was
paid to any future necessities, and consecpientiv the e(|uip-
ment has been built up niec<.nieal, and is verv far from
being economical.
I hasten to state, however, that a low cost per ton,
cither of crude rock hoisu'd or of sorted ore shipped,
does not necessarily indicate either good mining or good
management, and is nearly as apt to indicate the con-
trary. Two mines may be working in exactlv the same
kind of ore: and one may ship ore at more than twice
the cost for mining that the other does, and yet be doing
better work r.nd making larger profits.
MINING COSTS AT CRlPI'l.E CREEK 105
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lOtl
TllV. liCOXOMICS <>!■ MIMXC
To clear \\p tlii> paradox, it i- lU'cos.iry i<< call atten-
tion hastily both to the cliaraeicr of tlic ore hoilics, ami
to the coiulilU)ii> of ^ale ai"l treatment.
t ripple treek has aK\a>- been ilr-criheil as a hi^'h-
^raile camp. 'I'hi-- is partly true, ihe ore occurs m a
multitude of small veins, eiilier siiiKle or in aggregates.
In the small seams which constitute either the vein it-
self, or a comi)oiunt pan of it. th.e ore is rich, but the
rock on the walU, or between the seams, is either wholly
or partly waste, Tlie rich seams may vary in thickness
from a mere crack to a foot or two, and for these widths
may carrv from one to several hundred ounces per ton.
There are no large orc-hodies in Crijiijle Creek. It is
doubtful if any si.igle ore-body, or even any .single vein,
has priiduced icxi.oo) tons of shiiii»ing ore. The largest
and best veins have been found in the granite, where the
rock-walls tliemselves are sometimes uniformly im])reg-
n.ited with r.ick vali.e for a width of .v "r 40 ''■ '" ^"^"'^
jilaces large amounts of cie;!n ore ii.ive been miiud and
shipped without sortii-g. but only in the swells, when
the veir. narrows down, it is always necessary to break
some waste, in order to make room to work.
The ore. therefore, is mined from vons of such a char-
acter that it is impossible to get it out without mixing
some worthless rock with it. Tlie problem of handling
this ore economically depends ,.n the cost of treatment.
This cost is at present— an ' is likely to be always— so
high that it becomes very essential to throw out as much
waste, or low-grade ore, as pos>ible before shipping.
Could the ore be treated for a dollar or two a ton. the
proposition would be entirely ditTerent. The rich seams
in tlie veins are always so friable that a large part of the
value goes into tire, and can be saved bv catching the
latter on a griz.dy. generally with about ^-in. space be-
tweeen the bars. Sometimes the proportion of value
that can be saved bv this method will be as high as 90
MIMXG COSTS .IT CRIPI'I.Il CRI F.K 107
per cent, or fvi'ti ninn- of tlu- total guM in ilic vriii
SoiiH'tiiins it iiia\ 1)C' Dill} -'5 p<T cent. It !ia-> aNo Ixcn
provt'il possible to save coii-iiderahle on , simply 1)\ wa^h-
iii^' the (hi.^t otT llie wn^-te rejected fn,m the ore-house,
ami colicctiiiR this dust in the form of slime.
It will be evident to anyone who considers these facts
that tile proI)leiii of niininp ("ripjile Cnek ore i^ not so
much one of breaking tons, but of savii't^ value. It
must be obvious, for instance, that in a vein ulure the
value Ro into the fine, it may be very ea>y to l)reak t'To
much into fines. It may l)e far preferable to take less out
of a .slope at a greater cost. It is eijually fibvious that,
after the ore is brout,dit to the surface, it will pay to reject
bv sorting, even at considerable I'xpetisc. all rock re-
maininpf in the ore that will not pav for frei!.,du ami treat-
ment. In other words, the pmbleni is n>)t simpK'. but
complex ; it is a questi<in of maxima and n^inima, in which
the maximum required is the lart^est amount of net profit
from a piven amount of pold in ihe deposit, while the
variables are the cost of freight and treatment, of minintj.
of sorting, and the value of the rejected waste.
Let us take as a practic.il example a body of lo.ooo tmis
of ore. running; i oz. gold per ton. This ore can be mixed
and shipped without sortinic^ at a handsome profit, as
follows :
Gross \aluo of ore Sjoc.oO';
Cost of minintr in.mxi torii. .it $( por ton .10,000
Frriglit .iiid trcitmont. $S. J5 82.5fX)
Total cost $li2.?0o
Profit $.H;,50O
r.ut suppose we reject half of ibis ore by sorting? By
so doinix we throw away 3.000 tons that will average
$2.50 per ton. or $12,500. The cost of sorting, at 50c. per
ton. will be $2,500 more. Then our shipment will be as
follows :
III
iii> ////: /:'c(;.\(;.i//c:v ()!■ mimm;
5.000 ti>n>. at J,^r 50 l)i-T tMii S187.500
Cost of 111 in lilt; ami -drtint;. $(1,50 iht ton .S'^-Soo
I'rciKlit aiul trcaiiiit lit, :<il J5 5''.-S<"
Total cost $S«.750
Fn.tit $0«.750
Jn dihcT wurd;-, tlif i;r()?s rcccipi> in thl^ ciibc have
fallen SiJ,5(J0. The ocist tnr mining,' per tun i^ mnn.- than
twice as .qriat; the ci)>t fnr frei,i;hl ami treatment per tcin
IS .i^j Ljreater; the apparent siidwint;' 1)\ the superintendent
very had; hut nevertlieless he has made fur the eumpany
•Si i,J5o clear iirufu m the tran>actiuii.
In the first case mir lutal cu>t i"r minin.t^. frei.t^ht and
treatment is onlv Si 1 .J5 per luii ; in tlie >ecu!id ca;-e it is
S17.73 jier ti>n. Imt tlieri is mure muney in the hi her
cost. 'I'his is an example that has heeii wurked uui in
practice.
It should ],': very plain, theti. that nuthmi^ cun'd he
mure aliMird than tu juds.;e the merits uf a superintendent
in Cripple Creek merely hy the shipiiins; cost ])er tun of
his ure. .\ii\ iijiiniun inn>t he funned un a j;uod many
otluT ci 'n>iileratii ms.
Mere. 1)> the WAV. 1 wish tu avuid RiN'ini;^ the impre--^ion
— which wiitld he a satistactiun tu many — that it is nut
wurtli while tu keej) a close recurd uf the costs oi mining.
On the contrary, this is unc puim that is tiiu often over-
looked. Costs can he kept in the fullest detail at a merely
numinal expeii-e. .\ sjciud system uf cust-keepiiii; is so
ah>olutely essential that no property of anv size can be
run successfully witliuut it. Xu matter how able a man
may he. he can ltc t in iter result-^ if he knuws just what it
c(5sts him to do his work, liut the costs, once obtained,
must be used with discretion, always bearing in nn'nd
that the desired result is the greatest net profil in dull.irs
and cents, and nothing else.
To give a better idea of the coni])lexit\ and cust of
MIMXG COSTS .IT CRIPTLI: CRJITK Idi'
(iIxT.itiii,- the larger mines mI the :anip. the fuUow.nt;
staleiiieiil uf operations at one ui the largest prnpcrties
(luring one nmnth may he of interest ; i.S.ijio tons of rock-
were mined from 40 ditYerent and separate ^topes at a cost
of ^^Jo; per Inn, nr S,59.(j<jS.3ij. The following develop-
ment wnrk was done in addition to the >top.ng: 2.237 ft.
of drifts, cross-cuts, winzes, and raises in 4') different
headings, at an average of $6.91. $15,455.21 ; ore-snning
and loading cost, $S.ij</).ij8. This made a total of So^.-
523.58. The total amount nf mck hni-ted. l«uii from
slopes and dewlopment work, was 24.<)3i tnus. at $2.55.
wliich was reduceu by sorting to 7.093 tons of shipping
ore. at SS.()().
I think it not unfair to say that these costs are good,
considering the conditions. The rock is not excessively
har<l. hut it cannot he called soft, i'art of the rock is
ordinary, unaltered granite, and pa.t is eciually hard
porphyry. Wages will average S3.40 for eight hours,
(."nal C(--^ts .ihnut $4.60 per ton, and timl)er averasjes $20
per i.ooo ft. J. R. Fi LAY.
Colorado Springs, Col., Nov. 9, 1903.
1 1
SOME ASPECTS OF MINING FINANCE— i
(Lditurial, N'-vcinbcr ^y. lyujj
There i< a crond deal in a uaiiiu. It mju call a company
'A Syndicate fur Moatinj; Mines' vr 'An Assdciatiun of
Mining Underwriters' you will do for it what was done
to the proverbial ddj; or the infant wIki siicciinibed to a
shower of ill-assorted names — drowned, as it were, at the
\ery christening;. So relief is obtained by a euphemism;
the term 'exploration company' is comprehensive and
includes all surts of concerns, from those tliat start out
to develop the waste places of the earth to those wdiose
purpose obviously is to test the resiuirces of a credulous
public. They have lieconie an institution and plav an
important part in the development of the mining industrv.
l-^.xploration companies are intended in the first place,
one may well pre.-ume. to cxj^lore potential mining
rcgiems; hut their activity cannot operate in this direction
for long, because no organization can continue to pav out
money indefinitely : either the casli. which is the tirst
requisite, gives out before any valuable tiiscovery is made,
or such a discovery, perhaps several of them, is made,
and then it becmes necessary to subdivide the interests
into subsidiary companies. Broadly speaking, therefore,
the exploratiiin comi)any liccomes a financial house, which
itself, (ir with others, underwrites nii.iing issues and di-
rects their p(,licy afterward. The Londun firm of Juhn
Taylor & Sons ha- been quoted in Xew York in litis con-
nection, but litis is an error, fcr ih;it h^use is a private
concern wliieh undertakes the management of mines on
the basis •<( a percentage of the profits.
I-or in-tanee, in the case nf a well-known rasinaman
gold mine — named the Ta-niania — which has ju^t been
brought nut in I.ondnn inid^r the ;ui'-pices of this firm.
soMF. .isrr.CTS of mimxg nx.ixcn in
it appears iruni tlic pr^l^pcctus that thu nominal capital is
placed at 500,000 shares of £1 each, nf which j 10.000 are
(iffercd to the puhlic at par; the price paid to the local
conijanv owning- the mine is £20,000 in cash, and £_mo,ooo
in fiillv ])aid shares. Intermediate agencies and uiider-
vritin^' commissions hrin^^ the ])urchase consideration up
to £320.000 in cash and shares, that is, £90,000 more than
the amount actually passed over to the owners of the
mine; the remaining £180,000 rejjresents working capital,
subscribed in cash to an issue of 210,000 shares otYered on
the flotation of the company, the difference of £30.cxx3
being cash used in making some of the payments specitied.
The contracts are in the name of vendor syndicate,
which pavs the expenses incidental to the examination of
the mine and the formation of the company ; this syndicate
gets 247,000 shares and £19,500 in cash, out of which it
pays for the mine, giving one agent 5,000 shares and
another intermetliary. mentioneil by name, another block
of 5,000 shares. The vendor syndicate is practically
identical with a Colonial Mines Syndicate which under-
takes to subscribe or procure subscriptions for the 210,-
000 shares, offered for subscription by the prospectus, in
consideration of getting £53.505. payable as to £10,500 in
cash and £43.000 in shares. There are sub-underwriting
agreements between the Colonial Mines Syndicate and
various other parties at a commission of 25 per cent,
payable as to one-fifth in c.ish and the balance in fully
paid shares. Thus it comes to this, that the vendor syndi-
cate receives 37,000 shares, out of which two of its agents
get 10,000, and a commission of about 25 \kt cent for its
services in giving a guarantee to place 210,000 shares.
The directors are holders of stock in the syndicate and
participate largelv in the profits of the flotation, wliile also
sub'^cribing (under sub-underwriting arrangement,-) for
the shares now nffered. .\11 the contracts are t;iven in the
prospectus in a manner which exemplifies the beneficent
112
////:■ liCOXDMhS Ol- MIMXG
"licrati'in of thr toiiipanio Acl^. l-"ii;.illy. it i,-- .stated that
John layliT iS; Sons, whu inili\ ichialK ari niL'nibc-r.s of the
syndicate, ami two nf whom are also ilirector.s, have
ajjrecd to serve the eonipanv a> nianas^'ers and consnltini;
entjinecrs in consideration nf receivini,'^ £850 per aiinutn in
salary, office rent. ttc. "and in additi"n j.l jier cent of the
net profits distnhiued hv the coni]);m\- in every year,
whether in th.e sliai)e of ca>h or shares, hnt such additional
ri niniuT.'i'ion ■-hail not exceed in an} nne ytar the sum of
£2,500." It appears to us that the terms and coiulitions
arc fair enough and that the jirofessimial services of the
enL^ineers are secured ^n a decidedlx reasonajjle hasis.
Concerniiiu the value of the mine, we cm express no
opinion.
Jiihn Taylor & Sons has existed for thn.e tjenerations :
the Hrm bet^an by undertakinjL^ the direction of mines, and
eveiititall\ also, in certain cases, as wf have seen, it has
assumed [lart (jf the resjmnsibilit} of lindint; the capital
necessary for their development ; thus the t'ni;mcial side
<:;re\v out of the professional. With il;e l-.xploration Com-
pany. Ltd.. the purcha.-e nf proi'it.able luim'S led to the
technical manaseiiu'iit of them <iftcr their ac<|uisition.
lliuh companies, the one distinguished bv the possession
(if a lot of old-fashioned, but sound, niininp experience,-
the iither assisted ' \' the capit.al of a ,!;rt;it Jewish family,
have been distinctl\' successfid. The Exploration '.'om-
pany is a limited-lialMlitv company which makes a busi-
ness of jiromotinti; minins.;^ jiniperties. I'.ver since ll.'un-
ilton Smith induced the Rothschilds to take part m tlie
organization oi this company and it was followed by the
Mining' and l-'iiiancial Trust, the Mines Developnient
Company and other similar undertakings, there has been
a steady -rowtli in exploration companies uf every kind.
\\'e refer, of course, to those interested in \iiierican
mines, for Soutli -\frican linance covers a field cpnte aj)art.
In London the formation of land and finance corpnra-
soMii .isrr.CTS nr mixim; rix.ixcn n^
tiMns has ,.rnc.c>l<.l uiih-ut limit, a lar-u pait ni liio in-
diurstihlc tinaiu-ial paiuT n^w lluuvriiii,' in lluii city Wm^
orihis description; l.ut it is nulv nf late that the same
manifestation of mininir activity ha^ heo nie apparent m
New Ynrk, There are so many ■American' an-l ■rnited
States' ami Mexican' Finance. I'.Nploratinn. Develop-
ment, Secnrities, Investment and Trospectins c.mipaiues
is extremelv diffuult t.. i)revent eunfu.Mon, thnai-h
ilaritv of name, hetween the few snhstantial con-
hemeral creations. This
that It
mere sinii
ccm,s and the larger mimlier of e]
activity in the financial incubaf-r is due lar-ely to the suc-
cess of the h:n,t;lish companies, hut more particularly to
the conspicuous position anpiircl l.y the ( hiLT-enhenn h.x-
ploration Companv, one . f the many channels tlimu-li
which llnw- the irr'.pres.-il.le tinancia! ener-y of a lari,'e
family <'\ extremely clever mer. 'Iheir success has
rtjanize for the same intrixises. Min-
m
prompted others to ore
en-ineers who have -rown t;Tay in active service nave
vie-we.rwith chat^rin the wealth aoiuired hy nne or two
of their own profession wh.mi financial p.articipatinn has
made rich in a few ve:irs. and have come to the conclusion
tliat thcv. too, wnnhl take their part in the ni-re lucrative
liranchcs of that manv-side<l. diversified and, elastic occu-
pation which is covered bv the comprehensive term of
"the minini,^ business.'
Hence the partnerdiip between eii-ineers and bankers,
en'dncers and promoters, eii^in' crs and adventurers, eii-
<ri,?eers and irresponsible .schemers, until the financial
arena has bec.nne as much nf a medlev as Hie sta-e of an
opera a^ the moment - 1 the -rand climax. A man a' b'rty
is either his own doctor ■ r a t". " '1 : an eii-incer who has
surveve.l mankin.l Irnni Chin.a to Pern needs n<. advice:
vet. could we but jireMime -n friend.diip. wc would ~ay
'to him that the prnm-tinn of companies is entirely outside
his professional trainin- and is best left to those that are
lired t.^ the business. Many a good engineer lias been lost
ii
114
77//: liCOXOMlCS Ol- MIMXu
in the un.>ucce>>iul i)r()ni()ti.T ; (Hic- iiiaii, with iiuiri' of the
financial instim-t tlian the prntVssiunal, wins; but lur every
such case a hundred wreck tlieir careers in their eagerness
ti) drive crooS-cius to weahli.
It is a difficuh problem; the engineer is entitled U< \u>
share of the profits of mining, and he should receive a re
ward no less than that of the promoter. Should he there-
fore become a partner with the capitalist? The same
(piestion has often arisen as between the architect and ihi'
contractor; an architect can join with the contractor in
the risks of the building trade; he may himself become
a contractor and, not content with making drawings onlv,
proceed to build the structures which he designs. Never-
theless, the <livision of the work and the .separation be-
tween the two occupations is to the gain of the individual,
no less than of the community. It is again a (luestion
whether the shoemaker should stick to his last or take up
a task which belongs, by fitness and by custom, to the
tailor.
{■':
SOME ASPECTS OF MINING FlNANCE-11
I K.litiirial, Hcccmher 5. I9uj)
\\\- have seen more than one [)r()s])fctu>. issued nf
late hv txi)l(jrati()n conipanii.>i (ir^'anizcd in New York.
in the pages of whicli reference has been made to the
suece.s>es oi similar undertakings in London and else-
wiiere. Several EngHsh organizations are ([uoted by
name as examples of this kind of business activity, but it
indicates how little is known concerning the ins and outs
of the Lordon arena, when three or four corporations,
of entirely dissimilar character and methods, are given
as models for American enterprise. ( )ii the other hand,
the me-c fact that London has been the leading mining
market of the world since the modern developiuent of
mining began, warrants our turning thither for examples
of well -onsidered methods in the management of finan-
cial organizat'ons. By the mining men of this country,
the Kxi)loration Company has long been held as the
typical London house making a business of promoting
ir.ining undirtakings. In many respects there is a war-
rant for this, altlunigh it nuist not be assumed that even
this highly reputable concern has been unifomdy suc-
cessful. A few y -TS ago it illustrale<l the dangers of
ill-considered and reckless finance, by taking up mines
in Australia, for instance, without much regard for busi-
ness caution: and finally embarked in tramway enter-
prises in Paris which entailed a loss of fully $3,500,000.
The Exploration Company has paid for its experience,
and in returning, of late, to conservative mining, it has
recovered nuic'i of the ground lost during a period of
poor administration. Experience teaches, and whatever
methods this company may now employ are those there-
fore which, after trial, appear most likely to eliminate
llt>
Tim LCUXOMJCS Ul- MIMXu
the risks u.' u unua a> imicli a.- po>MliU-. wliilc at tin-
same lime K'viiiy tliat niiiil pro quo wliicii i.-. the c.-.^cncc
of MJimil lui.MlR'SS.
Sunic ijf ihc rui-'MU meiliuils adoi)tcil in cuniicction
witli well-known mines will prove ^uy^e^live to those
wii'i ma\' Mt mil nn ilic .^auic ([iK>t.
When llie lixploraliun Luinpanv aci|uireil i^l ( )ro
mine lhe\ look an option lo purelia.-e, irom Mr. ll:iL;j;in
and hi» paruur^. ilie whuU' of the >hare.- of ilie Ainen-
ean .Mniiiii; L'ompan>. wliieli owned V.\ • )ro nnne, and
then formed ihe lul_l;ll^ll cnnii)an> willi a capital iif
i(juo,c_x)u; this repre>ented llie ca~li purchase C(jiiM(iera-
lioii fnr llie properly, plus workiiij; capital, and left Mime
few tlu)U>aiid --hareN unissued, in ihe hands of what is
now 111 (.)ro Mininj; & l\aihvay Company. In other
words, the i''.x])Ioration C'oiii]iaiiy tiinied over the pri ip-
erty complete to the luigli>h or<;anizalion at ah>olule
co^t and without adding a dollar hy way of profit, and,
in addilinn lo all thi^, it.-elf defrayed the co^-t of re,i;istra-
lion aiui all the expenses incidental to the formation of
the new comiiany. The Exploration Company then
solicited snb.-criptions from its friends in London toward
the capital of lil ( >ro .Miiiinj; iV Railway (_'oiii]iaiiy.
charging them 5 per cent, or one >lMllin_<; j/er share,
which r, pre>eiit>.d the I'.xpioraUon Loni]iauy's prolit;
hut iiiaMiitich as the vendors took a large number of
shares in lieu of cash, and could not, therefore, he asked
to i)av till.-' one .shilling ; r rhare. and as. of course, llie
aiiiouiit Mihscrihed by the l^xploralion Company itself
ilitl not represent "N' proht ( a> it also had to pay
commissions, expenses, tlotation charges, and so fi.irth,
out of the priilit il did receue in ihi-. ir.:inner). the net
gain of tills large transaction ilid not exceed ii5,(xx).
It is perhaps the only instance in which an Rnglish coin-
pan\' ha> aci|uired a properly at absnlute bedrock cost;
- - - • ■ ,.u .,f .1,,, ._,..,..^. ..;„,,
^uMi: .isriiCTs or Mixr.'c nwixci-
\v
It (.aiiiiMt 1r' >aia thai thi> nuth-l ,,i trratiiii; a pmiKTty
is a good prcccduit ^r a naM)naljlc husiia.vs propnsilion.
In the case '-f tin- iMinboy luiiu'. \\h- l^xploratioii
Company foUowr.l what i> knn'.sn in I,.in.l<,n a> ilu'
llanu'.tcm Smiili iiractuc; iliat i> to say, tlu'y purchased
51 per cent (It the -liar... nf the American conipanv, and
merely suh-crihed. and imhiced their friend- tn suh-
scnhJ. for the -hares m that C'.inpai.y. SvihsequeiUly.
finding this scheme <hd 11. .t uork at all. tluv jiersnaded
the American directors to sell out the uhole l)n>iness to
a comiKiny fornieil in l.oiidoii, and iIk- American -tock-
hulders now hold shares in the luiglish compaiu, iti-
-tead of the l-jiglish stocklndders holding shares in the
American. This i- also a ]iractice which doe> not at all
commend itself; for, while 51 per cent. -if course, gives the
control of a projierty. it is obvious that the sale of a few
thousand -hares vsill transfer that control.
The practice now ad-pled by the I'.xnloration Com-
pany is appro.ximately as follows; If a mining property
is brought to the notice of any one of it- represeiiiatuvs,
and he (an engineer) is satisfie.l with the i)reliminary in-
vestigation, they arrange to take an opti.m upon the
propertv, preferably for about three months; and if it
then holds up to a complete and searching examination,
they, prior to the expiration of the option, form a com-
pany in Lonilon to ac(|uirc the mine, making themselves
responsible for the purchase, ■-ttering to tluir friends a
participation m the und.Twriting, for which probably a
commission of 5 per eetit in cash is paid; then they make
a public issue, and if the business is of sufficient dimen-
sions, they reserve a certain number of shares tor prefer-
ential allotment to the shareholders of the Exploration
Company, should they be disposed to make application
for the same.
The capital of such a new company is fixed at the cost
price of the property, plus whatever may be necessary
I-
if;
ili
I I
IIS
mil hCO.\()MlCS Ul- .\lL\l.\u
lor workiiij,' capital ; and, ;n addiiioii, a ^inn from 5 lt>
10 iKT cent, accordiiii^ to llic .-izc of tlu iiropcrty, is
,si't asidf as tin- promotirs' ( Mx])lorali(iii tinnpany's)
prutit; iinlf.s.s a luiiK, on I'xamiiiatioii, sliow> tliat it can
stand siicli pronioicr>' p-otit, and ^till procnl a j^ood
mining ciiancc of j^'ivinj^ the sliarcliuldcrs tlicir money
back with a sul).staiitial rate of interest, it is not consid-
ere<l Ljood enough to ])iit on tlie market. ( )f course tlie
amount of commission winch the promoters should add
t(j the piircha.se ])rice wonid vers larjjelv dipend n|)on
the >!/(.■ of the ])roi)eit\. lor what nn,L;lil he a reasonable
percentaj^e on ;i ])iirchase price of $500,000 woidd be
excessive and unreasonable on a pro])erty of $5,(xk),(kx).
The [ihrase 'underw ritini; the capital' means that the
organization i)riii^inp; out a company with a capital, say,
of £i,fKK),ooo, would 1)\ thenisehes and their friends un-
dertake to subscribe for the whole or an_\ |)ortion of the
capita! not taken l)y tlie public, ami in consideration for
such j^uarantee they would be paid an underwriter's
commission of, say, 3 ])er cent. The forei^oin.ij, of course,
only applies to minini^ properties too i)i(r for the jiromot-
intjj orj^anizations to handle alone; but in the case of any
mine which ccnild be {)urcliased and e(|uipped for say,
$500,000. or even $i.o(xxooo, if the property was consid-
ered to have attractive prospects, the I'.xploration Com-
pany Would be much disposed to take the whole f<.ir its
own account, and work it as a private business.
(
SOME ASPECTS OF MINING FINANCE-IU
(l.-lu.irial. Dcccrnlitr i;. 19"J)
Wo havo ikscrihcd some of tlic imtli.HU adopted hy
conservative liouses engaged in the aciiuisitioii of nim-
iiig property. 'I'lure are several well-nianaRed financial
organizations in London, sncli as the L'on>oli(lated Mnies
Selection Company, uiiich do imt tloat mines 'ufT their
own bat,' as it were, because a single undertaking of any
magnitude would entail the absorption nf mo-t of their
capital; therefore, instead if u-ing up their resources m
one big deal, they participate in several ventures. Either
they obtain an allotment ..f interest in a business about
to be issued by another llou^,e, an<l, having had the
mine examined by their own engineer, they accept the
participation; or, their agent having secured an option
on a likely-looking property, they offer it to a larger
concern and obtain a consideration, as well as a partici-
pation, for their instrumentality in introducing a profit-
able deal. I'urthermore, many successful companies of
this kind do not buy mines at all, but purchase blocks .if
.shares on the open' market, aher their engineer has in-
vestigated conditions at the mines; that is. they maintain
a staff of trustworthy engineers and obtain correct in-
formation concerning the ore reserves and future pros-
pects of mining properties already listed on the ex-
change, utilizing this first-hand know!e<lge to acquire an
interest whenever the quoted price warrants a purchase.
Should their holding become large, they can usually ar-
range to obtain lepresentation on the directorate of the
mining company.
The Consolidated Mines Selection Company is the re-
suh: of the amalgamation of the African Metals Com-
pany and an older exploration company, organized by
If
ij
Si!
l•2^\
nil: IXOXOMhS (>/• Ml\l.\u
Mr. Uaiur AK Ultiii.:!, naiiu'l llii. Miius Si'lcctioii
Loinpaiiy.
TIic MiniiijT and l''iiiaiici.il Iru.st iiia\ alsi) be (lunicil
as liaviii;' been fuiiinkd iiii a >eii>ibli.- basis, ami. al-
tli'iiii^h it is a cuiicerii uliah lia-~ \\ith,lra\\n iiitd tlie
privaiy ul iiiaciivit\ . it |)la\nl an innmitant part in tlic
'levelupuRiit of many Mlcbratcd Anurican nums.
ain(iii,i( \sliitli the l)e Lamar, m Idaiio; th'' Mlkln iri. iii
^^)Iltana, and tiie liarijua llala. in .\rizi)na, may be iii-
staneed. Mr '1". A. Ccnnett wis the foniidi r iif thi--
conipanw lie i.;ave his services as mining en};nieer mh
the nnderstanding that he was to reeeive no salar\ or
retainer, but a lar^'c share ia a:i\ ini-ine>^ re-ulimt; ir^Mn
his active search for a pood nnne at a fair ])rice. lie
stipulat. d oiiI\ that his e.xpeii^i'S >Iiould be paid wlien
he ua> aetnalU' in the field. This was a fair and practi-
cal scheme It Worked snceessfuUy, imtd the di.sap-
pointnunt of the Hannia llala ^ave a severe cheek to
the further expansion ni the eoni[)any.
The Miiu's L'ompany, L.td., was another concern wTiicli
took an important part in .\nieriran minini.,'. It was
fornitd by Mr. jidn"" Darlington and others, and was
rispon.silile for biinL;inL^ out the \'ankee ( lirl. .\ew (ius-
ton and .Ini'. rican liille mii'.es at Red Mountain. Cohj-
rado, but it lo.-t its standing thronLi^h the over-capitali-
zatitjii which marked the last of these three important
flotations.
Then, there are all sorts of venturesome concerns,
which make a brief splash or a lonij-continued splutter,
following risky methods which may be described as
financing nn the edge of a razor. Lvery once in a while
they get a brief notoriety, commencing in the financial
press and ending in the police court. Several exposures
of folly and trickery have discrt-ditetl ruining during
recent \i'ars. hut the drear\ messes of liottcMiilev. Hooley
and Wright are brushed aside as episodes ' > be forgot-
sn.MF. .isrr.cTS or mixixc pinancf. 121
ten with ilu iiidc^-t'iu-v lit ;i Imrrir,! t'liinTa'. In truth,
they ri'iJrcMin but the iiK^rc (.xtrfinc luriiis uf r(.\kU'ss
thiano-, wliicli arc no m<5rc a part uf IcKitunatc mining
than thf iniquities nf thf race-course are necessarily a
part 1 t tiic business of breeding good hotses.
m
M
SOME ASPECTS OF MINING FINANCE-IV
(KJiturial, Iicttmbcr ^4. 190J.)
Many 'develoiJiiient' and ■(.xploration" companies,
wliich start witli t;ood iiuciUicjns, slide down an easy
desL-i-in into ur(ln,L;-l.loin,^^ nK-rily fnmi the lack of innd>.
Let tlie organizers of sueli enterprises realize this brutal
faet: \oU cainrnt finance legitimately without money. To
such gentlemen a> are organizing 'exploration" companies
we would give the advice which the Austrian general,
Monticucoli, is said to have given to Maria Tiieresa, when
he told her that three things were neces>ary for waguig
war succcssfuUv — the tirst was money, the second was —
money, and the third was— money! Unless a financial
company has funds sufficient to carry out its undertak-
ings, it will other he >(|ueezed again>t the hard wall of
adversitv, or it will .-loop to (piestionahle practices. It is
as difficult for a promoting concern to be tmiformly hon-
orable, when trying to carry out big undertakings with a
small capital, as it is for the wicked man to enter heaven.
Xo array of names, or nndtiiili.-ity of business interests,
will >ufficc. The iimliii' Jcs clioscs. which pursues the
p.mr financial comjiany trying to push large operations, is
one of the brutalities of existence.
( )n the other hand, the utilization of a very large capi-
tal, ni actual purchase of properties, is not within the
scope of the tvjiical exploration company. Such action
leads to a crippling of resources, because it requires the
further use of funds in the suj.iort of the market fo" 'ts
own issues. .\ comi)a,iy which brings out a big mine, and
becomes itself a large purchaser of the stock, is apt to be
tin- hint .-f surce--fid '',ar attacks, unles> it i> in a position
to jirotect its holdings. The story of Lake \'iew Consols.
Le Koi. and other mines which have sutYerL-d uueer vicissi-
SOMF. .ISPECTS OF MFXIXC FIX.iXCF 12^
tildes on tlu' stock (.■xchan.m-, illustrates hnw dangerous
it is for an issuin<; house to be 'lonjj;' on its own shares.
An exploration company, primarily, is not an invest-
ment cori)oration. hut a house of issue; its most profitahle
avenue of ener«;y is in scouting.: for good mines, in order,
hv siftinir ri large number of likely properties, to secure
the option finallv on one which, after thorough exaniin.i-
tion. it can commend to its clients. In this busines-;. as in
all others, it is a mistake to confuse the operations of a
broker with those of a principal. The exploration coin-
p.inv will find it advantageous to act mainly as a corporate
broker, for the buyin.i.;; and selling of mine-. Therefore, a
capital -ufficient for active scouting, and the thorough
investigation which comes after picking out the mines
that warrant it. together with necessary payments for
options, should suffice. .\ capital of £100.000. or $500,-
000. should be amjile for ,dl work of this kind, during a
period of several years, but it must be available as cash.
With such a capital, it is iiossible to pay a :;o per cent divi-
dend on the completion of a successful deal, while, at the
same time, there is money enough to meet the t'xpenses
of a prolonged and extensive search for that most desir-
able business — a profitable mine with possibilities of de-
velo[unent.
Having finally found and secured a good mine at a fair
]irice. the next ^te]) re(|uires as nuich judgment a^ any
which have precdled. Companies whicii trv to make a
gr. ij -onp on one transaction, regardless of rhyme or
f - I dwavs meet with a most miserable sma.sh sooner
or later— 'isu.allv sooner. In these matter-, as in nio<t of
the affairs of life, it i- both right and .good jiolicy to take
a large view of business, and build it up by uniformity of
fair dealing ;md ctuitious finance. .\ comptmy which c;ui
make two or three sound deals, without over-capitalizing
;i mine or sanddiagging ;i mine-owner, is tissured ol a
prosperous career, for such a reputation will bring to its
" >i 1
I:
L'l
run EcoxuMics ui- .i//.\7.V(;
iiIVr-i- a lar,L;i.' .'-liaii' ni lik- l)i->t mines that loiiiv I'j market.
I 'u the utlier haml, experience shows iliat, with rare ex-
ee[)tious, mu.^t liuaiiee e(jm])anies which have niade > iie ur
two successful tlntations hectjinc si > L;reeil\ that tiie\ pro-
ceed to over-capilah/.e their next issue, and s.rani to mai<e
so !ar};e and (|uiei< a protit as td end in a nnM.ralile liasco.
The American iieUe llotaiiou (which was liniU;;hl out
wiiui the < iu>t"n and N'ankee t lirl mine.- had \\<mi a re])U-
lati.-n fur ihe Ived .Mountain di.-trict. and to the CMUipaiiy
which issued them) is a case ii. point.
Ihit we are treachnt,'' in danL;erous Ljrnund. where
guides do well in w.irniiiL,r ihe wayfarer while refusintj
themselves to i;o forward. In tlie>e matters an intelli-
gent cojjnizancc of what lia- happened to others is nnich
cheaper 'Ikiu the hitler pill ' i ex])erience. which is the in-
evitable medicine doled out to the heedless and unwary
who tread along the difficult path of mining finance. .\! a
time whc-n U'w exploration companies of every kind are
heing organized in Xew ^'(Tk, it will not he lie'.d im-
proper to (hveil ui)iin tlic dangers which they may
encounter, tlie success which they nia\- win. and the
stiuiulu- tl.ev can ailord to legitimate mining.
m
SOME ASPECTS OF MINING FINANCE-V
( Kdltonal. December 3'- 1903'
One form of unpractical finance wliicli is prevalent in
this country is unknown in lingl.Mul. We refer to the
orgariyri'ion of cnnipaincs with a lar^e nMinnial capital,
-av, i.o(JO,ooo shares, a part of which is i,Mven out as
lullv i)aid stock in exchani;e for the mine, while the bal-
ance i.- peiliUeil ai a hi-" discount to the public in order
to secure workin<;- capital, and. mi many cases, to make
a qtiick pnjfil for the cnncu-n at the hack of the opera-
tion. Such practices are rendered imiios-ible in I'.nf^Iand
by the Companies .\ct>, regulations covering- the organi-
zation and procedure of corporate enterprise. Under
the lax statutes obtaining in several States a syndicate
can take t)ver a small nmie oi a mere prospect, organize
a $i.(Hj<j,0(X) comi)an\, pay the owntrs ( tliemselves, it
may be) 350,000 sharts, carrying no liability, and seb the
minoritv interest or remainder of the stock at 10 or 13
cents: sometimes even less, especially when a ■h.^ca!
agencv.' as the promoting concern i> apt to call itself.
represents a number of mines in com se of developu'.ent
and 'pooh' the various .-hare- so as lo make a combina-
tion or 'bargain' offer, in < rder Im ]irocure the money
needed to make mines out of hole- in the ground. 1 he
price of the stock is raised according to the circum-
stances, and among these circmnstanci - the needs of
the mine are apt to be less ,)f .a measure than the facility
with which the stork can be -old to simiile-minded \)vo-
ple in a fool's hurry to get rich.
There is an enormous amount of money subscribed.
and mostlv ]n>\. in this wav during llie c.uirse of a yi'ar,
especially among si rvant gnds. clerks, railroad conduc-
tors, tradesnieii and hard-wr)rking people with small sal-
m
V I
ii i I
lliti
/'///: EtUXOMICS Ul- MIMXG
arics. Juwa, llliiuiis. Indiatia, and tlic rct;i(jii.-> most uut
of tuuch with [jriciiius metal mining, arc ti.rtilf ticlil> i<'V
cntt-Tpribing organizers of sticii schemes. (Jt'tice-liuIiKrs
of local repute, or other persons of some nutoriet}, are
maiie directors antl are given blocks of stock, to the
intent that they may serve as lures to the people in vari-
ous localities. Then reports of ]irogress are sent in by
self-con^tltu;ed 'experts,' and 'divi(lend>' are declared,
out I'f the >ubscriptions, so as to lia>ten the instalments
on the -tiiek; for it is usually sold on this [ilan. so nnicli
l)er mi nth nut of the earnings oi cnniparativel\ pour in-
ilividuals. These are tlu' midertakings which are liber-
ally advertised in the dail\ jiress and in the illu.strated
weeklies.
I)ii;mg the recent [irosecntion of a not(jrious mining
promoter, it was shown that out of i,_'5o,(kxi shares,
valued at $i per share, in a company ojierating a mme
in ( iregon. there were is>ne(l, and held, 25 shares in
California, 14 in Lanada, n in Delaware, iu6 in Illinoi'>,
J5 in Indiana. 42J in \:<\\d. l<\ m Kan-as. i() in Maine, jj
in Maryl.'ind, f^T, in Massachusetts. 14 in Missi>si]ipi. 41)
in Missouri, 4S in Nebraska, iS in Minnesota, 16 in .\ew
Jersey, 68 in .\'ew \'ork, 1)3 in Pennsvlvania, 70 in \\ asli-
ington. 50 in Wisconsin, rmd ihe remainder in other
. States of the L'nioii. This di.^tribution suggests forcibly
what ettHrts nui^t h.'ue lueii made to sell the shares
wherever a gullible hea.l bolibed up.
The favorite scheme for ^ucli undertakings is a 'tun-
nel' or a<lit which is to jiierce <i mountain and imerce])t
large numbers of veins. A string of mining claims is
easily secured d'v a merely nominal sum in a half-de-
serted portion of some \\ell-kiui\\ n mining district, and
any iireseiit unproductiveness is extjlained by excess of
water, cost of sli.aft-sinking and nthtr ilr.-iwl)ack>, uliicli
are to i)e removed through the facilities afforded In-
such a drainage adit. Ideal cross-sections exhibiting a
I
soMi: .isrr.CTS op .u/.v/.vc; i-f.\\i.\cn n*?
multiiilicitv of veins, an extieniely steep contour of tin-
surface, and ore re-erve^ commensurate with tremen-
dous ''.lacks.' are added to highly colored descriptions of
the futnrc of the undertakin^^ Sliare> are offered at lo
cents, to be increased to ^5 cents within a spocitied pe-
riod, and other advances may ensue, dependent upon tiie
rephes evoked l.y the circuhirs which are sent out. and
the advertisements and favorable readins notices which
appear in all kinds of jiapers. rehgious and old-fashioned
periodicals bein- jireferred by ihi- type of promoter. A
rather unicpie method of advertising a gigantic minmg
swuuUe some time a.i^o was ihe sendiiii; of 'lecturers'
throughout the country on a special railroad car; tlu
duty of these fakirs was to tell the u-isuspccting inhab-
itants of the smaller towns \v .v fortunes had lieen made
by investors in mining shares, and to expatiate upon the
niillions that lay idle in tlic 'treastire vaults' of the
property, the stock tjf which was offered at 'rock-bot-
tom' prices. .\s the work at the mine ]>roceed~. the im-
patience of the ignorant investor is fed with accoimts of
rich strikes, veins one inch thick ■■ro>s!ng a working
5 ft. wide being likely to appear as 'ore 5 i',. across.'
while assays of specimens of walnut size are (juoted
under the guise of 'averages.' Wiien. eventually, sonic
of the subscribers cease to sef.d in their instalments, they
forfeit their interest, and the anxiety of the survivors is
allayed bv reports of 'well-known experts' and 'profes-
fors,' -vho are vouched for by State officials or country
bank-managers in a luagnificently vague manner per-
mitting of easy retreat. Sometimes a withered enter-
prise will receive a new lease of life by reorganization or
consolidation with another property equally worth-
less, and the un-ophisticaled :~h,ircholder is again called
on to contribute oy surrendering his old stock and pay-
ing an additional fee for the new shares. .\nd so the
mockerv of mini'iL' goes on. until the money suliscribed
m
ji-
IL'S
/■///: liCOXUMICS (>!■ MIX 1X0
lias all \n\]\ u.-id up in salarii^ for ilic insiders, and
linally a IidIc in i\\v .^imnul wiili a iluni|i is m'izliI l)y an
natf stuckhoUkr. whose first touch break.-, down the
uhole house cjf cards — marked cards, at that, 'I'lie South
Sea bubble and its associated frauds of ihe year 17J0 have
many a counterpart, even in this da\- and Lreneration.
What we chierty object to is, they are described as
mining.
MINING FINANCE.
The Editor.
SiK_l ho|je tliat \ciur artalcs on Mining Finance,"
recently ;niblislie(l in the Jolu.nai., will be uidely tvm\,
and uill >erve to i;ive the public better ideas on tlial sub-
ject, and especially on the proper function of exploration
companies. The public, even that portion which cmi-
eerns itself at all abnut the subji.ct, has very hazy ideas
of tnininj^ finance. 1 have even met niinmi,' engineers,
who were well ui) in their profession, but were rather
like a sailnr on Imrseback wlicn it came to the tinancial
l)art. If p^' pie who have money l<< invest U'.uld (jiily
look into this matter more, there would be fewi-r cm-
plaints ai)OUt mining investments. How often we have
seen f.iirlv i^ood minin.g propositions hampered by capual
out of all proportion to their value: and. on the other
hand, we have seen mines kept back in their development
for want of money, which culd be well spent ui)on them.
I was specially iiUerested in what you have said about
exploration companies and their jiroper functions. The
popular mind has been snmewhat confused on this point.
Ouite a number of pen])le, I hnd, have a .general idea that
;m exploration company is .somethintr bkc the •lioldmi;
companv'— that ])erniciou> modern device, which has
played such a malignant part in railroa<l and industri.d
finance, in the last two or three vears. W'c have one con-
sjMcuous example of the -h'.Min.i: company' in miiiin.L;,
which many investors know to tlieir sorrow. The less
said about it the better: it is certainly not an exploration
company.
The greater part of the public knows the exploration
companv onlv througli the glowing advertisements of the
promoters and sjnck peddlers, whose brilliant imagina-
tiinis have seized ujioii the idea of exploration and finance
130
rilL I-lU.\UM1lS Ul- MIXIXG
(.niiipanics as capital (kvice^ to aid in tk'vcini,' llic iinsus-
pcctiiij,' outsider. The very titles are alluring, and tliey
permit the use of ^orscuus pmspectuses, unhampered by
any rejjard Inr truth. If the ijmmoter lia> 'Hie particular
mine t(j de-crilie, he tiiid.^ incdnvenicnt limitations; the
possibilities nf lindini; an iiidelinite nunilicr ^ive his men-
dacity full scope, r.ut this is inevitable, since all pood
things mav be i)er\erted to evil ends; and this incidental
abuse does not destroy their real usefulness.
It does not seem to me that we have ever had a really
satisfactor\- niinini; market in this country. 1 do not
mean bv this a mining; stock luarket, Inu a market in
which mines, or pood jiroperties, can be disposed of in a
.satisfactory way. The jirospector, or the niinini^ en,t:;ineer.
who has a prondsiu},' mineral property, needinji^ capital for
its develoiimeiU. often does not know where to go. If he
ha^- no friends with niomy, it is not an easy matter to se-
cure his capital or dispo--e of his property. Too often
he falls a victim t'o the promoter or to a broker of the
consciencek'ss class, who reaps all the profits. The ex-
ploration company — or companies, for there is room for
more than one or two — of the ritjht kind would help very
materiallv in makint.;- the market that is wanted. Such
companies, too, when well established wonld be in a posi-
tion to command the attention of investors, larc^e and
small. Oi conrse, they will be liable to make mistakes
sometimes; but. with any sort of pood management, the
proportion of such failures will not be larpe,
I hope vou will be able to develop further these ideas,
whi'di I have expressed in wliat, I fear, is a rather incon-
sequent w;iy. I want to see general investment in mines
increase; for I know- that, if reliable ways of doinp it are
provided, such investments will ]>e far better for the pub-
lic than the putting of their money into Iilind pools and
watered industrials. Ixvicstor.
New York, Dec. C, 1903.
I
I
RESUIiNG IN UNDERGROUND WORK.
(December lo, ly^J.)
'I lie Editor.
Sir — The article appearing in your issue of September
12 (referring,' to the urigin cif the term Te.sue' as a[)pheil to
uiidergrouiid work) brings lu tniiiil j-onie jjractical e.\])eri-
iiieiits carried out by the writer a tew years ago, in whicli
an attempt was made to determine tlie relative merits of
this system of dealing with narrow' veins of high grade,
as against the method of breaking the reef and adjoining
rock, together with an id' a of sorting out a high per-
centage of the non-auriferi lus product. In the cases cited
the a<ljoining rocks, or wrdls. of the vein contained no
gold, the inclinati(jn of the vein was 85° from the hori-
zontal, and the section of footwall taken out in the
first instance was separated from the vein by a clear plane
and was broken without disturbing the ore. The average
width of heading or breast in the first operation was 30 in.
and the total width of stope after the reef had been ex-
tracted was 36 in. In the .ecoiid operation the maximimi
average width of stope was 30 inches.
The two methods were, resj)ectively. as follows:
\\ hen resuing was applied, the vein was first stripped
on the footwall (whicli, in this case, was the more eco-
nomical to handle) to a width of 30 in. This waste rock
was used largely as filling, although a certain percentage
was necessarily sent to the surface. When some 3.6o<t
sq. ft. of (|uartz had been stripped, this was broken down
as a clean product, so that no sorting was required.
In the second case, the quartz and adjoining rock were
broken together, and the fineness to which this product
was reduced allowed of sorting out only 5 per cetit of the
barren rock.
The following figures are compiled from those experi-
^\
;!:■
\:\-2
Jill: liCONOMICS Ol- MIXING
merits, and allhuUKli lli«^ ijcilhI ovii whicli llu- ivrnk was
fxtciulcd was of necessity linnltil, and is iHi»il)l> nnt an
absolute guide as to what the work should cost umkr
simi'ar conditions over lart;e areas, they indicate the most
pn.tital.lc method of handling ore occurring under thcsf
conditions.
r.xaiiiple A shows a loss of $23.76 on the operation,
while in r., where resuing is resorted to, a profit of
Si.4(iw.4n is made. In ixith cases 6 in. of quartz was
dealt with.
In the second comparison. C and D. a 12-in. viin \al-
lui! ;it ^n dwt. was worked, and while tlu- discrepancy is
not so m.irked. it is shown that mider these conditions
there is Mill a consideraliU- martjin in favor of resnini^.
'1 lu' last example, E. is pnrelv theorelical, a.i far as the
iHTcentage sorted is concerned, and is c^iven m further
support of the contention held.
CoDitirisons Between Strif-fhii: Xarrn:^' Reefs and Sl.'l^iiiS
Them '.eilh U\iite
Fxample .'\.— Width of reef. 6 in.; v.iluo. 50 dwt. Stopinir
wultli. .10 in ; v.iliie. 10 dwt. One ton contain.s 20 per cent of reef
and 80' per cent of waste: 5 per cent i> sorted, 5 per cent "t So
per cent is 4, leavina; 76 per cent of tlie wa-te. So that oO per
cent HOI'S to the mill witli a value of 10.41 <lvvt. per ton. Ri'cov-
cry e(|Uals 7, per cent of 10,41 dwt.; that i<. 7^ dwt. at io./t
which is $7,49. One hundred tons at $7.49 is $749- On a ba-i- of
100 tons nulled it is nice'-^ary to cliargc :
To mining 104 tons at
tr;ininunK 104
hni-inis4 104
millnijj 100
redemption
charses, general,
pumping
\.<M ?374 40
0^6 •■• .3/44
0.18 18 72
1.44 144 03
0.72 7|0r,
o.()6 "i" 00
0,60 <« 00
Total exiKii-o- for kk) tons ^""a «^
Value of gold rec<jvired. 100 tons 748.80
Loss 5523. ?('
Example B.— Stripping ,',0 in. of waste and mining 6 in. of
clean reef. Width of reef, 6 in.; value, 50 dwt p.r ton Rec(>v'-
cry. 75 per cent of .so dwt. ; that is. .37 5 dwt. at $o.<A or $36. On
a bu2l2 ul 100 lutt^ at -i\y ■;■.- ■ ■ -- *^-
h'usi-ixc IX rxnr.RGROUXi^ wok'K v'.-'>
To iimiiHK S""' ton- of wa'itc. at $J 40 $'■
■■ nulliiiK UK) tons (jf rtcf. at $,!(«
" llalnlllIl^; 1 10 loll", of wa^ti, at $048
" traniiniiij; 100 tons of rtif, at $0 V)
" hoi>titiK icx) tons of waste, at $18
■■ hoisting iix) tons of ri'cf. at $iS
■■ iiiillniK 100 tons of rcof, at $1 <)j
'■ rcdciniilioti, at $o.(X)
" cliarKi-. at $0 Kj
" pninpuig. at $0 7J
Total expenses for too tons
Vahif of n"'d recovered. 100 tons
$I.JOO
00
?(o
(Xj
5<i
So
.16
00
iK
or.
i«
00
||)-'
00
<X)
00
Xl
O.T
/ -
'lO
$J.l.>K 80
.^.fxxi
no
I'rolit by stripping Ji.tri^O
Fxample C— Width of reef. 12 in.; value, .^o dwt per ton.
StopniK reef and waste together .Vverane valne of .^o ni . IJ
dwt.; 40 p'T cent of this is reef; 60 per cent is waste; 5 per cent
is sortdl. equal to ,? per cent of tlie waste; leaving Q7 1«t i^^"* t"
mill, aveninmg 124 dwt ; 75 per cent recovery ..f 1J4 ilut is ii.\
Value of gold in 100 tons {•).>, <Kvt at J«S'M' is
Tons
Tcsl
Intnl.
dwt. per ton
Mining '103 at $,vf)0 $J7o «o
• o.?6 ^7 <^
0,18 ■« 54
1.44 14400
o.Oo 60.00
072 7200
066 66.00
tons $7'>8 .1-
«.).' So
I rannning J03
Hoisting iOi
Milling 100
Pumping 'oo
Redemption lo<>
Charges i«>
Tot.il expenses f ir
Value of gold recovers
Profit
$IJ4
Example D.— Stripping 12-in reef. V.iUic. 30 dwt.; 75 V^'^ "'"'
coverv. is 22.5 dwt., or $2i.0o Value of t'ol' in too tons at
recovery, is 22.5
$2I.tK) Is $2,100.
Ti.ns.
250 at
100 "
100 "
2.1 ■•
100 "
Mining waste
Mining reef
1 landling waste
llaiulling reef
1 loisting waste
Hoisting reef
Milling 100
Pumping
Redemption
Charges
Total expenses for 100 tons $1,461 18
Value of gold recovered ■ -■"'"■°°
Profit ^-^^
Cost. ^K.'T'"^'-
$2.40 $fi0O fK)
360 liO
11 . 04
.V) ■ 00
'. 414
18.00
192.00
72.00
96.00
72.00
.V'lO
0.4S.
o ^6 .
o.iS.
o 18.
1.02.
0.72.
0.96.
0.72.
134 run luoxoMics on mi\i.\g
l".\.iini)lc 1^ -Widtli '4 rill, ij in , v.jIiu', .fo dut per Inn
Stuping riif ,111(1 vvasli- tdKitlur. .io in. vvuli', and tlicn sorlini; JO
pir cent of till' ri)ck niiiud Value of rock before sorting, u
dwt ; after sorting. 15 dwt. ; 75 per cent extractinn )iive> 1 1 -'.■,
dwt. recovery; 100 ton> at 11 J5 ilwt at $09() etpiaU $l,oSo
Expenses.
Mining Ij.i tons at $,! t« $-150 ""
I riniiiniiiK Ij.s tons .it $0 .}6 45 O"
lloiMin^; IJ5 "tons at $0 iH 2J 51'
.SMrliiiK' -'.S ions at $0(/) 24 (Xi
Milling' 100 tons at $1 44 ' U "<'
Piiiiipini; 100 tons at $of>o (lO.OO
Redciiiplion 100 tons at $0 72 7.' 00
Char^jcs [(X) tons at $o(i<> <><)"<>
lilted cxi)cii-c- for KX) tons $883-50
Value ol Kold recovered I.oSo.OO
Protii IkX' 50
Thcsf fioiircs ret1i-ct tin- iiniMirtaiicc of cari'tttlly wciph-
itti,' tlu' nn'rits of the two niethods of stopiiit; wlicii ikal-
iiij; with narrow veins. I'. I . RoiUiRTS.
lUihivsayo, Khodebia, Oct. 27, 1903.
GOLD MINING IN RHODESIA.
By F. C. koiiKKi.i.
(Drcci.:'jer lo. 19113)
Introductory. — i->in^ lietwcm latitmles 16" and 23"
south, and lon^ntudts 25" and 30 i'a>t, Rhodesia, winch,
a few years ajj;i), was almost wholly inhabited by
native tribes, can now luiisl of a while j)opulation of about
ten thousand. I'he country derives its name from the
jjreat founder. Cecil John Rhodes. In its phy.-.ical aspects
Rhodesia ditTers from most of the Western mining Stales
of America, in that few really high mountain ranges
traverse the country. The mining districts emiirace nu-
merous small hills which gradually fade away mto large
areas of, first, undulating and then almost flat, plains.
In the granite belts an independent tyjje of scenery is pre-
sented, consisting of wide, slightly undulating plains, dot-
ted with countless small conical hills (kopjes) varying in
height from 50 to ^(X) feet.
In but one instance in the whole of Rhodesia has it
been found advantageous to attack the ore-bodies and
veins through adits; practically every mine in the country
has been opened up through shafts. The gold mining in-
dustry at the present time is the only industrial source
of revenue, and presents certain aspects difficult to com-
pare with those existing in other countries. The vicissi-
tudes to which Rhodesia has been subjected have been
numerous, unique and costly ; they have militated against
the energy and enterprise which have been thrown into
the country, the progress of which has been sadly re-
tarded in consequence.
The internal system of railways, whicli is now being
extended over the country, will bring within easy access
of the centers, Rulawavo in Matabeleland and Salisbury
1=
136
lllL LlO.\UMIlS Ul- MI.MMj
in Mashonaland, every mininf; (li.-lria nf importance, and
thereby rem. ive the hindrance dne to iiruhil)iiive prices
and scarcity of wa^on transport. An independent hne.
200 miles inny, winch is practically the tirst lap in the
Cape to Cairo railway, from Unlaw ayo via \ iciorii 1-alls,
will tap the Wankie coal-tield hy tiie end oi November.
The Wankie cual will then be available for use in jjracti-
cally every minint^ dist.ict of l\hode.->ia.
c't-o/oi^v.— (ieolo.^ically. tho-e parts of Rhodesia which
have been at all explore' present much the same features
as other ^\\v,\nv. countries. In two instances, however,
we are favored with s;eoU.!,Mcal problems which promise
to be of especia] interest and imp<irtance, and in both in-
stances the commercial aspect of the in<iuiry will stinuilate
scientific investigation. 1 refer to an anrifemi-s diorite
in the one ciise. and an auriferous hornblemle ixirphyrite in
the other.
X(, ■.e(ilo_L;ical survey has yet been made in Rhodesia,
hence onlv a generalized description is possible. I'y far
the .greater portion of the country consists of t^ranite
rocks, in wide belts, liavint,' a strike somewhat west of
north and east of south. The .^old bells embrace ilie areas
characterized by slates and >chists, varyins;- in extent from
a fevv hundred yards wide by half a dozen miles in len.i^th,
t.. 15 miles wide by i,o miles in len.i;th. These metamor-
phic rocks are traversed hy nr.nierous dikes, consisting
nf tlu' nianv v.irieties of di. ,nte. In tl.e valle_\s, or small
^niK hes, oi the lull country, the dlnvinin is of very limited
extent. su,L;,s;esting a lack of tho-e e-treine climatic con-
ditions necessary to produce rapid ero>ion.
The i[uartz veins include ^e\eral distinct types: the most
common are the iiiterlaminated veiii>. which are found
abundantlv in the fcjliated rork~. tlmn-h nuinenius segre-
gated veins also exist. Tb.e ([uart.-^ "ccnr< generally in
leniicul.ar bodies, sometimes di>iiiictl\ isolated, but more
n-nalK 'n naralM series, exhibiting i.;reat v.ariations in
m
GOLD MIMXG IX RIIODP.SI.l
137
width and vertical persistence. On tlic wlifilc. the veins
are narrow and tlieir lateral extent is ratlier limited.
At the Ayrshire mine in Mashonaland an auriferous
diorite is under exploitation, but as yet little is known of
the genesis of this most intercstinir occurrence. .\ large
amount of \v>irk has been accomplished laterally, and the
vertical depth reached is over 600 ft. The irregularity
of the gold contents of the dike and various .ither char-
acteristics would seem to support the lateral secretion
theory."
The writer has lately discovered an auriferous horn-
blende porphyrite. This rock is most interesting petro
graphically, and is (luite uncommon in this country. It
consists, as seen under the micro.'icope, "of large crystals
of feldspar (chiefly plagioelase ), jrassibly with some
orthoclase and smaller calcareous pseudomorphs after
hornblende, retaining good crystal outline, imbedded
in a fine-graineil feklspathic ground-mass. The feld-
spars are somewhat crushed and the alteration of the
hornblende iniplies a certain amount of water action."
This body has recently undergone exploitation, and ap-
pears to predominate in the moulding of a small range of
hills rising 3CX) ft. above the surrounding country. In
close proximity to tiie porpb\riie are the crystalline
schists. .\ superficial examination shows considerable
variation in width, the maximum being about 150 ft.,
while the lateral extent will probably reach i.coo ft. <ir
more. F.nough work has not been done to decipher the
geological structure, nor can an intelligent idea, as yet,
be formed with regard to the origin of the gold content.
Samples taken over the varions widths exposed give from
2 to T? dwt. per ton. and although these re.snlts are not
' 'I lie KOld-br.irinj; (iinrite of tlie .Ayrsliirc iiiiiK- wa^ di^rus^ed
in ilii^ JiUKNAi-. iiiulir datf of July II. IQO,^. p, 44. ''.v Mr- ^- ^■
I'.errinRton. and. on Ortobcr 3, IQ03. by Mr. J, F.. Spiirr.
V.M
THE htOXUMlCS Of MIXING
representative, they indicate an occurrence of unique
character.
Ancient IVorktngs. — An interesting feature of Rho-
desia is the fact that every auriferous district has been
larj^ely worked by an extinct race, popularly referred to
as the ancients,' and although some relics left by these
people have been found in the bottom of old stopes lately
opened, as well as among the numerous ruins existing in
the country, no satisfactory explanation has been ad-
vanced touching their identity. The amount of work ac-
complished and the ([uantity of gold, copper and iron ex-
tracted bv th: n nnist have been enormous. While the
remains of these workings have largely aided the pros-
pector during the modern reopening of the country, when
conditions were more or less abnormal, there is little doubt
that their eflfect has tended to hinder the introduction of
a thorough system of prospecting, and has in a great
measure deflected attention from the large areas contain-
ing virgin reefs. Several calculations of the amount of
gold extracted by these 'ancients' have been made ; these
estimates are hypothetic and no accuracy is claimed for
them, but the latest reach $.^00,000,000. It has been the
custom to judge the value of a mining proposition in
Rhodesia by the extent of the 'oM workings," without re-
gard to geological considerations ; hence many disap-
pointments.
The knowledge displayed by the 'ancients' in determin-
ing the value of tiie ore was indeed marvelous. It is not
to be assumed that they realized width of vein as an im-
portant factor, but it would appear to have been a suffi-
cient encouragement to them that a vein contained, say.
a minimum value of 10 dwt. per ton. This work no doubt
extended over a very long period, tor wherever the rock
wa'i not readilv NoftetuHJ bv weathering, they built fires
against the stope-breasts and then threw water upon the
heated rock so as to induce fracture. In .some instances.
GOLD MIXIXG IX RHODESIA
mo
where it is evident from tlie contours that water was not
encountered, they worked to a depth of no less than 250
ft. on the dip.
Financial Considerations. — The British Soutli .-\irica
Company formerly had tlie ri^ht to demand up to 50 per
cent of the vendor's interests, but this right was seldom
exercised to its full extent : it has now lieen reduced to
30 per cent, and is pfenerally satisfied by the transfer of
the necessary number of shares in the new company.
The modus operandi obtaining; in Rhodesia, and adopted
by practically every financial house having an interest
here, includes many features which, to those unac(|uainted
with the local conditions and the market considerations,
would appear to cast an unnecessary burden of heavy
cai)italization up<.n the mines; but there are explanatory
circumstances. A mining claim in Rhodesia embraces
an area 150 ft. along the strike of the outcrop or old
working, by 600 ft. ; hence ten claims constitute a block
1,500 ft. by 600 ft., which is equal to the mining claim as
defined by the United States Mineral Code. The other
regulations contained in the Mineral Ordinan '■ are really
only modifications of the United States laws. What is
termed the 'parent company' in Rhodesia is a limited
liability company, with a capital of from $150,000 to
$5,000,000, formed for the purpose of acquiring mines,
lands, farms, etc., the latter being necessary m order to
secure timber. .\t the present time the timber consti-
tutes the only fuel of the country : the mining company
pays a royalty of $1.20 per cord to the farm-owner. The
number of claims controlled by these parent companies
varies from 100, in small concerns, to as many as 5,000
in the larger companies. The object of the parent com-
pany is to carry out a system of proLpecting and develop-
ment work, with a view to placing independent prop-
erties upon the market. It is obvious that, in a country
where development expenses are very high, there must
^1
m
I III
77//: IICUXOMICS OF MlXlXu
he a limit to tlicse oi)oratinns : t(ir if an attempt is made
bv ilie ]iarcm ciunpany to (kveiup trum l8 montlis to
tun \ear.^' supph cf ' ire. upon a miinher of claims, it
lieennies impossilde t'> tiiiaiice the work; hence it is clear
iliat the s;iil(l-niinin.-- ciiiiiiiany mu.st asMune hiLT resjx.n-
-ihililies, and therein lies the key to many failures. The
prohlenis with which the parent company is faced are as
follows :
la) Capital and shares involved in purchase of prop-
erty.
(h) Capital involved in i)rospecting and development
'vork.
(c) Capital involved i;i installation of temporary sur-
face eciuijjnienl.
(d) Intirvst accunntlatinj; iipon capital invested.
The chief ci niMilcrations of the L^old-minint; company
are as follows ;
(i) Capita! involved in purchase of property from tl'.e
parent comnany.
(.2) Capit;d involved in developnient work.
13) Ca])ilal or shares involved in conmiutatioii of
Chartered Company's ri.trhts.
(4) Capital involved in purchase and erection of plant.
( 3) Capital or shares involved in making provision for
possible extension of ])lant.
Assiniting a width of vein of 30 in., with tlic ore-bodies
not too scattered, it becomes necessary to make jirovision
for an ex])enditure of no less than $360,000. in order to
bring a. pro])erty to a milling stage and e()ui]) it with a
jo-stamp mill. c_\;inide jjlant. etc. This should, under
ordinary circuni>lances, gi\e 18 to 20 months' nni of
pay-ore. As a matter of fact, no mine in this countr\-
should cotiimence the reductitju of ore with less than
three year^' ore in .such a state of exposure as to be rea-
sonably CMunteil upon to return a margin o'er and above
the estini;iUil working ex])enses : for it i- next to impos-
'-^^^
GOLD M/XIXG IX RHUDLSI.l
II!
I
>ii)lc to kiop the (K'vcl'i]imt.iU wiirk as far ahead of th'.'
reduction plant as the constantly tliictuatinj; and inetli-
cient lahor-sujiply demands.
.Iss,iy I'ltiiis. — At nK'sl <>i those tnines, which have
reached an advanced staij^c of development, surface and
assay plans, as well a- section and stopin^^ j^lans, are kept ;
while the data inih. idied in the plans \ar_\ somewhat for
different mine>, the fundamental principles are adliered
to. The development assays as well as the stope-assays
are taken at intervals of 5 ft., and i)lotte(l weekly. The
])enn\ weiglns are shown in red and the width in inches
in l)lack. .Ml sam])les are taken over the actual reef-
wid.th, which fi.i,nires a' adjusted to an assumed stoping-
width in the assa\-ho(jk.
I;-, the opinion of the writer, the methods (often used
when the widih of reef is undiT an assimied stopiiiLj-
widtli) of sam])hnu; over the stoi)in.L;-w idtli, emhracing
both reef and country matter, are lialile to ])roduce in-
accurate results. It api)ears clear that where the char-
acter, hardness of the rock, etc., show a marked differ-
ence, it is almost impossible to obtain such a correct ])ro-
portion of each section as to insure reliable results. These
remarks are ])articularly a])i)lic;ible to this retrion, where
so manv small but rich veins occur, wiiich, in many cases,
have lent themselves more readily t<i oxidation than the
enclosint,' rock. Sectional samijlinir is lar.q-ely practiced,
not oiiK in develoiPinent work, but at .all stope-breasts. in
order to avoid the handlint,"- of ore which will not leave a
marijin over miniuL;' and millintr expenses. In this coun-
tr\ the imit of \alue is the tro\- penny wt'ii;ht. e(iual to
about 4 shillin,!;s, or one dollar. In order that immediate
apiiroximations mav he made of the stope-breasts. daily
samples are taken and panned; these furnish, after one
h;i^ become familiar with the character of the i;i)ld. etc.,
satisfactorv results; but the results plottcl always refer to
fire-assavs.
11:
77//: i:COXOMlCS ()!■ MJXIXG
For tlie purpose of avnidiiii; inaccuracies, the iiu;:v..iual
stojjcs arc plotted to lar)j;e scale upon separate blocks,
and these are used for calculatint,' tonnages. The usual
scale for imderijround jjeneral plans, etc., varies from
I in. = JO ft. to I in. = fro ft., depending; upon the extent
of the property
DcTclopi)\ci>t Work. — Generally speakinj^, the quartz
veins in this country may he r.aid to he narrow. The
lateral continuity varies greatly, and rarely exceeds the
full lenf,nh of a block (1.500 ft.) ; the prade (when the
widths are adjusted to a common basis and suitable areas
are used in calculations) ranges between 8 dwt. and 22
dwt. per ton.
At the \\'an<lerer mine, where a dry-crushing plant of
about 3(X3-ton capacity has recently been erected, the
average is under 5 dwt. per ton ; in this instance no un-
derground work is necessary, the ore being quarried. In
common with other countries where tb.e industry is onl\'
emerging from infancx. Rhodesian ventures have suf-
fered by the erection of reduction plants before sufficient
work has been accomi)lished underground. The period
consumed in reacliing the milling stage varies, of course,
with the width and lateral continuity of the reef in each
case, but it may be said that in Rhodesia it requires from
three to four \ears from the date that work is initiated.
The comparative cost of unskilled labor would suggest.
at first sight, that the costs of develcjpment work should
be very low ; this is not the case, however, for althf)Ugh
the native wage seems low, when the other expenses in-
cident to their emjiloyment are considered, it is foiii: 1
that they account for about 30 per cent of the total cost.
This is not clearh' reflected in the figures following,
as in this case the contract system is largely employed.
The costs of stores, nnning material, etc., together with
many other incidental charges associated with mining in
this comitrv, as well as administrative expenses, are very
GOLD MIXIXC IX RHODESIA
143
144 Tin- r.cnxoMics op Mixiyc
hi,.],. Tt i>. tl.Tof.,r. .-rnti:,l that lircrc footn-c^ be ob-
tamc.l M, Uial a vcax.nablc ,li.lril.utiMn may W uv.uU- of
ih. Tnnsiant^.- An analvsi^ nf tb. owt. nf clcv.lnpincnt
lip. .11 a Rbndcsian mine i-^ uu^n burrwillr.
Mine D.':r!»r'ncnt. ...,,,„,.
Milk-.l, :l>;i- of
Tntril Cost t-i"!"- *"'■'' '^"''•
Salaries $l.W)2.28 444 -'47
Whue wages -'.<;'' ^^ .',' ^ ,' o
Contractors 21.S8...-4 57..0 .^- ".^
Xal.vc wages ,?.'7".40 «-34 4 15
Xat.vc food ><>^«' :-^ -^
Maititenance 75')?° |~ \\\
Workshop- '."40.80 2.,4 ' -■^.^,
Xanve ho-pital -'87.14 0.74 o-
N-at.ve lal.or supply 74-40 O.lS O-^o
Putnpmu 4.439.52 1 .06 O-.o
Conipoun.l ^"4.08 -.20 I.-,
f„n,.r.~-or.an,lr..ck-ar,!l~, I0..VK*.74 43-08 -4.00
Win.lnig '."o--'^' i-':^ -i^
rmlcrgnninil tramming.... -'.7,U.S0 / ■ ^\ ■■< ^
.\ssav acoomit 0'>0.<J4 > '
Surviving and .^amplmg.... ;i-'-/0 -N 1.04
Rock-drilN and >liarpcning. 5.579.28 I4.0<' _»_^
Xyl;il $08,300.12 i7'ji 30 99.45^
The fontat^t' cxcciitcil ihirinc; the pcrin.l covered by this
expenditure amounted to 2.O77. repre^'iitin- a cost of
$26.50 per foot.
With haiKl labor, drivin.ir in fairly hard nrmund, 40 ft.
per month is considered -o,,d uork. while with machine-
drills So ft. is an avera-e. On the Rand, anytliit^tj: up to
200 ft. per month is made in driving: in shafl-sinkinti
also this rate is attained. TpMi one property with which
the writer was coniiecied in t!ie Tran-va.il about^ six years
asro. no less than 2r« ft. of sinkin-' wa.^ accomphshed^dur-
iniLjone month, i. .-.. from the 1.027-ft. level to the 1,287-ft.
level.
The smaller amount of work accomplished m this coun-
try is due lar-clv i-. tlu inferior eipiipment. both nnder-
t:roun<l atid on the surface, for handling large (luamities
of hroketi rock.
GOLD .MIMXU l.\ klluDLSlA
IJ.")
U'orkini^ lixl'L'iiscs. — I believe that, in Rhodesia, the
recjuireiiieiils of ;iii (.ir^iueer, in rtspeet to the nnnilier oi
l)r')[)erlies he is txpeeled to inana_UL. are mnisnal. it is
tlierefnre necessary that tletailed ami complete records he
kept. The comparatively hi,L;h ami con.>ta.Mly lUictuaiint;
jirices of mininj^ materials and ,sup])lie> make it essential
that constaiU (imitations of these articles he ijhtained and
tiled for daily reference, with the hope of et'ectinj,' econ-
onu in operating; exjienses, as well as tor the pur|)ose of
i^e'tinj,' i-iut estimate- which can he treatetl with con-
lideiice.
'Ihis also snt^.tjests the iinpe)rlance of correctly mea.-nr-
ini,' the lonn;i!j;es handled. The methods in vogue are not
conducive to accurate results; it is customary to count
the cars of certain calculated capacity as they are deliv-
ered to the mill or crusher-station: this, less the mimlier
of cars discarded as waste (in all cases estimatin-,' _'o cu.
ft. of broken rock = i ton), is taken as the tonnage
crushed. It is ai)parent that greater care is required he-
fore a comprehensive comparison can he made of theoreti-
cal and actual results. The almve methods would be all
riL;ht, if, after determining the lumiher of cubic feet to the
ton in individual cases, each car delivered to the mill was
of exactlv the same capacity and tilled to the same point,
and moisture samples taken. This, however, is not prac-
ticable. The stojie measurements, in some cases, are used
as a check, but it is hardlv -leccssary to state that only ;m
approximation is arrivt-d at. This matter is of great im-
portance, both as regards relative working costs as well as
relative stamp-duty : therefore, it is imperative that a
uniform svstem be adopted, at least in cases wiierc the
tl;.;nres are to be hied for reconl ;ind general information.
Scales should be used for automatically weighing and
registering the cars delivered. Then, if each car is tared
and periodic moisture-samples are taken of the ore, as
delivered, a correct idea of the tonnage will be obtained.
14tl
TIIL LCuXOMIlS UI- MIXIMI
}!illi„^.—l'hv imnHhiction of heavy stamps witli tl^c
,,l,jcct ni securing a lar-c >taiiii.-cluty >.cciiis tn liavc
rtaclicd its i)ractKal limits, thai is, at 1,45" "'• '" -^""'^"^
llu' mill is used mnrc as a crushing' machine than with the
idea (if effci-liiiK iKifcct amal^'amaiinii. and so Inn^ as the
ores lend themselves readily m sul.MMpuiit treatment hv
cyanide in the state of tiiieiiess pnuluced hy the use of a
low dischartje and a coarse screen (20 In 25-incsh), a hi-h
duty is well enough. The prevaihntr meth..d of operating'
a stamp-mill, in so far as the mechanical end of the work
is concerned, is as f.illows: Order of <lrop, 1-3-5-J-4:
height of droj), 8 in. ; number of drops per mmute. </).
As a further means of increasing the stamp-duty,
double crushing with rock-breakers is resorted t..; the
product being fed to the mill is cruslied in the first case
to about a 2.5-in ring and then passed to No. 2 crusher,
where it is reduced to 'ibout a i-in. ring. This method
might be economically extended to three courses of crush-
ing before being fed to the battery.
That most important branch oi the work, namely, sort-
ing, is almost entirely neglected in Khodesian mines, and
1 daresay many tons of mck are sent through the mill
which wi)uld not pay for the wear and tear that they are
responsible for. Over a period of \2 months, with rock-
breaking capacity sufficient to reduce the product to a
2-in. ring before entering the mill, an average duty of 5.5
tons per stamp I'er 24 hours has been obtained with 1,265-
Ib. stamps (an effective weight of 1,150 lb.), using a 2,5-
in. discharge, 20-mcsh screen, and the mill running .t u6
eight-inch drops per minute.
It is well known that a stamp-mill under ordinary con-
ditions does a large amount of uimecessary work, that
is to say, the product, when it has been reduced to the
fineness' indicated by the screen, is not immediately dis-
charged; hence a large percentage of the ore is reduced
tcj a much finer state of division than there is U'r^m a
II
GC
MIXIM, IX RIlODlisIA
147
criisliinp point nf view) any lucossity for In recent
years a fjreat deal of attention has been j;iven to iliis sub-
ject, with tlic result that the.e are now on the market sev-
eral classes of subsidiary crushers for use ni connecti<in
with the stanip-inill. As an illustration of the product
lurnished from a stanip-hattcry, it may be stated that the
writer has found, wiien usin^' a lo-niesh screen, that 87
per cent of the discharged product will pass through a
^omesh screen, and a duty per stamp (of 1,150 lb.) of
nearly 10 tons is obtained, with ordinarily hard (|uartz.
C\dHu{ation. — Cjem rally speaking, the ores of Rho-
desia present few dit'ticulties in metallurgical treatment.
In most cases the veins produce a typical free-milling ore;
at the mills with which the writer is connected the richest
tailing contains T, dwt. per ton. from an ore carrying 14
dwt. to 16 <Kvt. per ton. It the mill were operated with
a view to high plate-extraction, and the tonnage sacrificed,
the grade of tailing would be even less. The sand, if
fresh. lends itself readily to cyanide treatment at a
low cost per ton. while, if highly oxidized, as is often the
case when working in close proximity to the ancient
workings, a small additional cost is incurred in neutral-
izing.
The construction of the double-treatment cyanide plant
in use m this country presents no new features, and em-
braces the usual appliances necessary with zinc precipita-
tion. The time of treatment varies with difTerent ores,
according to the character of the gold. In one instance
the gold appears to be coated with a very thin film of iron
sulphide and will not readily amalgamate; numerous
coarse particles are contained in the tailing : and as much
as 10 to 12 davs are required to obtain a good extraction,
clthough the usual treatment covers three to four days
only.
A great variation is shown in the fineness of the gold
produced from cyanide slime : this is largely due to the
148 77//: l.(().\(>Mli--'S Ol- MIMX^i
fluxes iise.l. .ir llu' prdn.nn.:is x\ulh"d "1 mMtmnu : it is
,pnto pn,Ml)K. .iM.l n-t rxpniMNc. tn pi.HhKX' K- iM a. t.uc
fiusol hnnix, Ju m .,5; nuin;;:iiK^c .liuxwU'. -'o n. 4" •■ -""I-
15 t,. 40 iKirts. Till- i> a moditkalion nf uh.it ui c;illr,l
Crosse's llux at |nlu,uK-.burK. Tlu> cxa.i pP .i.-rtmn m
bnrax, niatiKaiu-r .lioxi.lc and .and i.> 1)> M dcU-nnnu'd
liy prai-tical U'st> ; >.iiiuamu> ihmr.par lalmui 3 part. I is
Tlic addition <>f a cyanide plant in a country nt •••■.-
nulling; nrc> mav lie qucMinncd, hut il i> cnntcndci lh..> it
the j;rade nf tailing; in tiie lirst ca.e will pay fnr treal-
nieiil. 11 i> a ilistinct a<lvaiita-e tn cyanide hecau-e m the
increased capacity nf the mill.
(„./,/ Nrlitnis'—M tin present lime all declarati-ms ni
qnld output I'roni the several pn.ducm- inuie. are made
in hullioi).
The Minin- Oniinance in I-IlmdeMa demand^ that affi-
davits shall he made to the -. a eriimenl, coverin- the
actual amount of -.^Id recovered monthly, hy the indi-
vidual companies, as uell a- hx private enterprise. Hence,
after each clean-ui. a declar.ition oi tlii> natcre is made,
ddie same form is reipiested hy the local t hamher ol
Mines, the latter or-anizatioii puhlishin- the return^.
rnf,.rttmately the unit used i~ the hullioi. ounce, sshich
luav varv fnnn 700 to 930 fine. It is (.•hvious, theretore.
that to make an\ comparisons without heint,' in po.sessi.'U
nf the hu'ures i;i\in- the exact fineness of the .^old is a
waste of'time. In cvanide -nld the discrepancies are even
m-eater. the fineness varvin- irnm J30 to 730. 1 he elas-
Ticitv attendin.i; this method, nf deahn- with -■ Id is verv
ureal, and cnuhl he utilized tnr intr))nses of much graver
rmport.mcc than appears on the face of il. It would he
far l.ett.r to olililirate the tn-v measure alto-ether, suli-
stitutin- shi!!in-s and decimals ,,f shiUinij;.. rather than
to continue the use of a metlmd so devoid of nlcaniIl^^
GOi.n i//\7.\7; /.v h'lioni-s-i.i
1 10
Tlu
R
miuilhlv ]ir(
(hut
'(111 (it ii(
\liii(k'>ia iKis n-aclK-'il J3.570 oz.
1 (or litillionl from
liL-n- art- two or tliric
iiTidi
■^triictiim. wliidi will add to the pro-
duction of luxt \iar. With this iiicri'asi- and the intro-
duction of a coiwtant supply of A-iatic lahor, the jirolia-
hiliti
arc that an (iut]ir* of 40, (xx) oz. will he rcac
ichcd
witiiin a vcar or so.
MINE LABOR AND COSTS ON THE
WITWATERSRAND
Bv T. Lane Carter.
(Ucctmber 31, 1903.)
The scarcity of Kaffir lal-)r on tlic Rand has made for
efficiency in its use, so that today the native workers are
handled ninre skillfully dian in ante-bellum days. At one
time too many Kaffirs were allowed for a job. whereas now
the number is cut to the lowest point. For instance, in
1899 machine drillmen were allowed six natives to run
two rock drills. Now the work is done by five Kaffirs.
The limit of efficiency with Kaffirs is soon reached because
of their refusal to respond to the contract system.
The following figures from a lar, gold mine, of work-
ing costs during a month before the war, and of a month
after war, are of interest :
In May, 1899- '" J""^' ">"}
Totnl mimher of K.iffir^ at work . 2,304 l.I.s6
AvfraKCMiumbtr of sick and idle. 4'i- "^''
Co>t of recruiting a Kalhr £2 lOs. 4d, £2 125. 3d,
Average wages earned per na- o ^ , ,
tive per shift io is. 8 70ld. £o Is. 8.6qid.
Average cost per ton of ore
broken in slopes by machines. £0 7s. 10 f&Sd. £0 ()> g.02d.
.Average cost by hand sloping
(Kaffirdriliers) 20s. (about) £0 lis. I .71 Jd.
.'\veracc number of tons shov-
eled per native per shift 2.164 2,246
.•\verage number of tons or' o a ■
lirokrn per machine per shift, i<.i't> H.6A)
Width of slopes in inclies 55 '" ?5 '"■
U'orkinp Costs Inclusive of Dc:\-loti>ic>il and llccid-Oificc
Cliargi-s, /rr Ton .V" i.
Mining (including all develop-
iiKiU or (levelopinent-redcnp-
1,011 charged io •:-. 7.8541 £0 lis ,,2J4,
Snrf.-ice transportation d 5551 , 3.'2.s»>
Sorting and crnshiiig ■* ",-^-'' 2171'
Milling -- -^■^''■\- ^"rVi
CN,u.iding ^^ "■■;^4l.. jv 0.380,.
General _^^j^84 1 d, I s^J_03od.
Total cost per ton ii 3S- i.45i<i- £0 l8s. 9. I38d.
!
inTir.lTERSRAND LABOR .-l\D COSTS l.ll
Tile minibcr of Kaffirs required to run present erected
stamps, on basis of milling 348 days per annum, and
maintaining ore reserves, is 2,5 '.
It will he noted that there is practically no savinp; in
Kaffir wages. The wage has gradually conic up to what it
was before the war.
The most interesting figures deal with the comparative
cost of stoping b\ hand pcnver and machine drills. The
figure as given was not accurately determined for this
month, and is therefore approximate. It has frequently
been maintained that, on the Rand, ore can be broken in
stopes ciieaper by hand labor than by rock drills. These
data prove the contrary ; true, the tonnage broken by hand
power in June, 1903, was small, and the cost would be
less with a greater number at work, but tliese figures,
and the figures of other mines, prove that it would be
uneconomical to substitute lir>nd labor entirely for ma-
chine drills.
In stopes of 5 ft. or more, machines are preferable.
The proposition is different when the reef is, say. 12 in.
wide, and it is desired to keep the stoping width narrow.
P>v hand drilling a stope can be carried 20 in. wide. Tut
a rock drill in the stope, and in most cases the width will
go up to 40 in. With hammers, the cost of breaking ore
in the 20-in. stope would be higher than in the 40-in.
stope, but in the narrow stojie the assay value o- the ore
trammed to the shaft would be nearly twice as high as in
the 40-in. stope. This question of 'hand drillers versus
machine drills" in stopes is a vital one for every mine on
the Rand. F.ach stope should be made a separate study,
before deciding to work it with hammers or machines.
It will be seen that the greatest reduction in costs has
been under the head of mining. This is due principallv
to two causes: (i) Cheaper dynamite; (2) labor-saving
devices underground.
-As regards the efficiency and cost of white labor, there
l.-,L' ////: /:CO.\O.W/c'.S- (;/■ MI.\'L\C
;s little iliaiit;c. .\> far as divclnpiiKiit work i;- '-■nn-
i-t.TiR(l, ihc standard is imt as lii^h as it was previous to
the war. llic iinprission lias i^'aiiicd i^round that in dc-
vi'ldpnu'Ht wnrk thiTc i> more dan^aT from miners'
phthisis, and the men are, therefore, shy of the work. A
sloper ean earn as mueh as a driver, and has less risks;
hence the hiil for the stupes. It may become necessary
to arran,!,^' pi .ees so tliat the man who drives, raises or
sinks ean earn more money than the man in the stope.
The eniplovment of white unskilled labor on these fields
on a iar^c scale is now iiraetically abandoned. The ex-
periment was a failure. Take these figures from a big
mine :
Kate per -hi ft to iin-killed wliito labor, e.xclmlitig food 5s. 8,;i?<l.
Kate. iiicluduiK food . 8>. 7,02-'d.
Average miniber of natives (li--iilaced by one wliite
man ( for thi.- nnne only, wliicli is above tlic avor-
aRc) ...... 1V4
Total increase in working costs and capital expendi-
ture in period (a few month-) if all* natives had
been replaced by unskilled white labor £30.046
It is said that there are at present 2,000 men out of cm-
plovment on the Rand. To hel]) tliis bod\ of men, the
^(ivernmcnt, which runs the railroads, is otTering to take
on unskilled, whites at ^2 per day.
Ouite a number of the unskilled whites were employed
as helpers on rock drills. After a few months' experience
they obiained blasting certificates, and as far as the min-
ing regulations are concerned, were the cijuals of men
who had been mining for years. These men went to other
mines, showed their blasting certificates, and were set at
work on rock drills. Needless to say, they were not ex-
pert. A first-class rock-drill man does not learn his trade
in two months.
( M' the large number of unemployed, it is safe to say
that 'in'v a small pereeiUage are really skilled men. '1 he
I)ig majority are either wit'nout a trade, or 'wasters.' 'this
is the crudest place on earth for both classes. First-class
WITlV.VrP.RSRAXD LABOR AXD COSTS l."):?
rock-drill men are hard to j^et. Eighteen niontiis apo it
was riiade known in America and England that 200 skilled
rock-ilrill men were wanted at 1 minimum wa_q;e of ii
per day. For that f,aiarantee 70 or iSo men only have
been obtained. Quite recently, arranj^ements were made
to pet out 70 Italian tniners from the Simplon tunnel.
Some of these have already arrived.
It will be seen that something; will have to be done to
meet any bijj demand for skilled rock-drill men in the
future. It is m\ opinion that the outside world can onlv
partially supply the demand. Therefore a percentage will
have to be trained on the Rand. This has been, and is being,
tried; but it is difficult. As intimated above, the learner
gets a blasting certificate in two months' time, and passes
as a skilled driller. He is a machine man. possibly, but a
very inefficient one, expensive to the company at any price.
A possible way out of the difficulty would be to have
different grades of certificates, making it compulson.- for
a learner to serve at least a year on machine drills before
he is passed as a skilled driller.
MINING COSTS AT CRIPPLE CREEK.
1 he Editor: ..I.inuar> ,-,. .g..4.l
SiK — Mr. Finlay's interesting comnninication (in tlie
Joi-RNAI. of Xovember 21 ) calls attention to an important
and mucli neglected tield of discussion. If detailed fig-
ures of mining costs were more generally available there
would be less misdirected efifort in mining. It is often
assumed tliat such figures are of interest only to the min-
ing engineer, to enable him to check his own work against
that of others. Their most important value is, however,
to the investing public. If >uch figures were more gen-
erally published, it would be less easy for an unscrupu-
lous promoter to impose on the inex[X'rienced ; and there
would be a better apportioning of credit to deserving
mine managers. Probably all visitors to mining regions
have been impressed with the number of idle properties
which, on inquiry, arc found to be idle because of lack of
working capital. It is the old story of costs under-esti-
mated, of a scale of work unsuited to the character or
size of the orebody, and of waste and fruitless effort.
The projectors of the various enterprises have usually
had utterly erroneous ideas of the cost of the work, and
disaster has been the lesult. Again, it has, unfortunately,
happened to many mining engineers that their best efforts
were thwarted by lack of appreciation of the significance
of figures presented, on the part of their own board of
directors. In the case cited by Mr. Finlay the fact that
low mining costs an not the only desiderata is excel-
lently shown. It is easy on the other h.uid to call to mind
dividi-nds paid !)v reason of tlu' richness of the ore-body,
e\en despite the absence of an, skill in actual manage-
ment.
It should be t!ie puri)i)se of all iiUerested in the mineral
industries to promote tlie economical and efticient ilevel-
oijment of our natural resources, and certainl) the frank
discussion of ci^sts is ;is ersential U> this, as discussion of
MIXIXG COSTS AT CRIPPLE CREF.K
i.<>.i
iiu'lhods of uork. IIo\vc%-cr desirable it niav be io have
cciiiiplete cost records, and I heartily endorse Mr. I'inlay's
position in the matter, it is not always practicable to do
so; and many engineers hesitate to give out incomplete
information for fear of its being misleading. This is a
real danger projjcrly to be guarded against ; but even
incomplete figures, carefully stated and analy7.ed, may
carry their lesson without promoting misconceptions.
These considerations shall be my excuse for presenting
tiie following partial figures of the cost of mining 7.087
tons of average Crij)ple Creek ore. The cost i^er ton was
$14.73,01 which $9.06 was for labor anil S5. 67 for su])plies
aii(l all other costs. In mining the ore 388,7^5 cu. ft of
stoping was done, e(|uivalent to 54.8 cu. ft. per ton of
ore sold. The deveioj)ment work consisted of i,4if) ft.
of drifting and 100 ft. of sinking. .\t the beginning and
end of the campaign the ore-reserves were approximately
equal, if not somewhat increase 1. This accordingly rep-
resents roughly the amount of development work neces-
sary to keep the mine alive. If this development work
be figured in cubic feet, then 56,208 cu. ft. of crude ore
aiul waste must be added to that taken from the stopcs ;
or, for every ton of ore sold, 54.8 cu. ft. was stoped and
7.9 cu. ft. removed in development. The work was done
with small machine drills, the average of sto])ing being
in the ratio of uo cu. ft. per machine per shift. This
ore was all screened and hand-sorted, so that the 7,087
tons sold were really concentrated from the 34.759 tons
broken and handled.
If the costs be figured on the bc^sis of this crude ore
instead of the concentrated ore, as is customary in other
districts, the cost figures become: Labor cost, $1.84; sup-
plies and general, $r.i<); total, $3. Of the total cost, ap
(JiO-ximately $2.rKj was mining cost and 40c. was for
development. This method of figuring the development
cost back to the ton> sold is unusual, but has advantages
ir.o
77//: l:C(>.\()MICS Ul- MIMXG
wUvw. as in the pi\M.-m case, it Ijccuuks i>u>-ibli.-. If
in a i^iven canipai.^n the (irc-re>ervi's were imtahly dc-
pk'tetl i)r iiicrea>eil. it would Ir- ilil'tk-uU. if not inipossihlc.
h'.vcii wluii tlk- costs arc rcchiccd to terms of crude ore
and waste broken, C'ri|)ple Creek co-ts are lii,L;h \n coni-
liarison with those clscwliere. Tins is (hie n part to
hi,s;h hihor and ni (lart to the snialhiess of the orehodit -,
whicli necessitates the liandhni; of much waste. In tlie
present case the a\eraL;e ihiily w aj^^e was $.V37 l' "" •'"
ciiihtdiour shift, less Jo minutes for lunch and ahout lO
minutes at chan,L,Mn.u' time. The ti<,nires are his;her than
Mr. linlav's averat;e. presuinalily because a laruer ]iro-
porlion of machine-men were em])loyed. C >al also aver-
aged liisher than in the case cited hy him. thoui,di timber
was ahout the same. An effort was made to decrease
costs hv increasiiiij the capacity, and it was found that
this decreased the item of lahnr. but not the supplies.
The record of two separate montlis is triven below:
Laliiir .sJurplifs aii<l
Testis Si.Kl C'list. General Kxpenscs. j,
ion $11.02 $4 12 $15 14
1,8/3 «05 4.90 >.'04
Not much reliance is to be placed on these figures.
however, in view of the .small tonnage and the consider-
able diti'erence in costs resultint: from variation in the
amount of development work carried on. The particular
months given were chosen with a view to eliminating
these factors as far as possible. Comparisons made be-
tween these figures and the costs, at a number of still
smaller mines under the s.une management, indicate that
the labor co.st ])er ton is not influenced much by the scale
of operations u]) to a monthly ontinit of i.ooo tons. Com-
parisons with costs at plants having still larger outputs
indicate roughly that the cost iier ton shipped is influ-
enced more by the character of the ore-body than the
scale of operations. jj Poster r..\iN.
Washiimton, D. C. Dec. i8, 1903.
MINING AND MILLING IN THE MOJAVE
DESERT
(January ^S. igu4.)
riic liditor:
SiK — riu' Dt sort Rtjinn. from an (.cononiic stand-
point, in n-^ard ti) mininLr. '''is a miinlxT of disadvantages
tliat iiiilitaif a.^ainst tlu- pr .titahk' (.-xiractii >n and rrduc-
tum (if low-^radc orr. as ciiin])arfd with nuirc favorc<l
liicalitics. Ilk' scarcity of water, fut.1 and tinihrr. and,
ni siinu' cisi.-. an entire .alwoice nf the same, increases
the cost f mining; and reihictimi to such an extent as to
render the mining;- and reduction of low-jj^rade ores un-
remuiierative. Tile hist-named coiichtions o!)t;iin at
Rand>hur-. Kern coum\ . Tahforma. In the accompanx'-
ini^- tal)le from tlie niontidy re])ort <if l]u' ^'ellow Aster
Mining \- Milhni; (."onijiany it will he seen that low-Lrrade
ore. Irom .^,^50 up. c.iii he mad^' to yieM ,1 i^ood profit,
under projier conditions. The ahove-mentioned mine is
equipped witii two mills. <Mie of nxi and the other of 50
stamps, reducin,!; 500 tons of ore a da\- on an averaije.
.Mthouyh witliiii a distance of two miles of the terminu.s
of the railway, freights are hi-li. as will he seen from the
])rices of suppll?s. a f ^ \v of the important ones heing ap-
pendei] herewith :
hue! oil, 4]c. per i^al. ; lumher. S32.50 per tliou.sand ;
other supplies in proportion. Water is ohtaineil from two
wells, ';nr.k to the dej-th of 450 ami yit^ ft.. resiH'CtivcIv,
at a mean distance of six mik< from mine and mill, at a
point 1.500 ft. helow point of cK'liwrw ( )n .account of
the strike declared aL^ainst the comp.-my on June 10. 1003,
the mine remained closed until Septemher I fo!lowin,i.j.
Since that date t!ie miiie has heen in operalis^n stcadilv to
its lull capacitw with non-union emi)lo\i'es.
The following,'- is the scale of wa,L,'es : Miners. () hour>.
!]
l.-.s
THE ECO\(hMICS or .UIMXC
§^
;10
n c £ s ' -
O ij z ~ ~ ^
k- l-
D*
'•J
V-
'X 5
^
'*" X
^ X;
u
E.i
o
5
r -'
0^ "3
Is
H
/
^X
(J
S
5 ^ i i 3
i^i ir. ~l - C
r-ii s
:rv°5'
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Scocooo-
ccccood' —
w '/ V
— f^ ^
w 6
K
u
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tJ
s
(/T
u
c.
^ _
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6
(J
X
^
g"^
Xt
tj ^ s „ tt-
y 2 y £ - =
O c -^ — ~
(J5 C- *! C- I"-. 5. C VT' 11?
n r^ T- ". - C c 'I 04
i-i c o c c c -T ^ ^1
oococc^c^^
B c c T- ;i t^
"- O O O O "I
c c o o c 6
"4 O
' :^ -r
; r^ C C
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£-1
o
- - -J =0
i i— res
- -, & ^J^ Z a c „ .
.:i,uJ2: — — — ^.^-jaixas
- 0^
-.?;
gSi^gg.'
— ^ «- ^ — zr -* _i- -i/ra— - — ;:: rz ■• zi -> —
re^-.- = «•-,:?, ^-- = a. _i :£: -r ai ^.
M c
ci
MIMXC IX Tllfi MOJ.irr. DllSP.RT ir.!»
$3 ; imickcrs, <) lumr,;. $2.50 : car-nu'ti, i) hours, $3 ; tim-
ber tiuMi. () hours. $3.50: aiiialf^Miiiators, u Ivmrs. $4;
Stationary (M^'iiu'crs, u hours, $4: hoisting; cn;,MiK'ers, 8
hours, $3.50: iJuinii-nH'ii, u liours, $,^.50.
KidENE H. Barton.
F?ani!shnr{^, Cal.. Dec. 15, i</)3.
COST OF MINING ZINC ORE IN THE
JOPLIN Pl^TRICT
I lie l.ditcir:
I i iliruary j5. ivm.
SiK — Vour reviews ni ilu' lead ami /iik- prudiuium aii>l
the J :,lin district :i ymir is»iics ui JauuarN 7 ..iid 14.
and tlik di .u^'Mis m iiinre recent i>siK'>. have aiiiaeicd
iii> atluiii'in. 1 he vkw> expri -.miI as t" ilii.- in.-,! of inin-
in.i; ;:iiK- (in in the Jo|)lin district recall a iir(ii)leni uincli
pre-ented it>elf h> \\k iliunt a \iar aLju.
Xa'.urallx cn..u-h. it i> p.iimlar ainmi^ the nniu npi.T-
atiTs \n relei the cost nf mininj^ {u unit> ct iht- iirnduct
sold. A statement like the fulluwin^' is very sim;,!,- and
easily iindrrst,..id ; /jiu- ,irc sells for $^^4. tlu' cn-t of niui-
inj,' and r.^valf- amounts to $_'S. ami tin.' \t\->'\'- is, iliere-
lore, $<i jht ton of zinc ore. This nuth' d nf calcnlatinn
may imt h. olijcctionalile as aiijiliul in a particular mine
prodncinL; > ' ni uiiif"rm ru'me--, hut it ; readil\ slmun
that to j^emralizi.- witli siicli istimatcs ^f cost ina\ in vt.r_\
inisleadin.^.
It costs practically ti:c sanie to mine and mill niatiria!
\irldin- 5 per cent of clean /inc ore as it di'cs if the mine-
run oir \itld^ 10 ])cr cent, i -it the operating; cost referreil
to a ton of product in tlu' former case is aliont double,
iiie royalty chari^as. on the otlar hand, are a delinitc per-
centage of the receipts from ore s.iles. and are, therefore,
proportional to iIk- srllui- ijrice a:.d amount of clean zinc
ore produced. The determination of the cost ,,1 jimduc-
lion of a ton of zinc ore may lie further complicated when
a considerahle part of tl,. ])ro<luct of the mine is lead ore.
The price of lioth k'ad ami v'mc ore are -uliject to chan^cfef.
f""" W' to week, aiid are po- 'lily char,i;ealile also with
dilterent rati - of ro\ ah\ .
I Ik tahle piven herewith was calculated to meet iust
.such ;i pmhleni under conditions where the mar-in of
profit w.is siuall. and liktly to he altooether wip,ed out hv
COST ()!■ MIM.W, /I.W oia
Hit
o
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obbobo------ --
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Qodoood----
■^, tr, 1^ C — ^, ^r. 1^^
(^ O C rx l^X "* C C — "I "I r^. -t -♦ "■ C I^ ( xX ^ CT
■N -r 5 5C 5 -1 -r 1^ J — ". "■. 1^ cy — ". " 1^ r - " "■.
.7.
o o o o o o o
_ _ 'I *i r^, -r -*■ f. w 1^ i^x :?
^1 .r, 1-. I - :'. ir. - - -- -
^ n ^4 ^ "^ ^ .^. r. I - -. .r; !>. r - " ..; i.v; - -.
X^C 300000
'%
<n i O InX X - C ; - -I -I ~-. -T -I- 1^. _ 1^ l^X ; ~
'»• X X, X "Z X ? r c r ? o o o G c 'I
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vi l> l^X xxxx ~c^~^^i■oc c cc
ty o
-1 w t^X « ~ C - - -I "■. '^. -T •>-, ■/-. c r^x -4 :■ O 5
'/f 1 , n. 1-,-^ X X X -it c- c c- r 5 o c c c i
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cooocdodoccccc ---
O 1^ In. 1^ ^ C^ O « — "I ^. r^, -t ir. ir.\C t^x X C^ Q C
, ' C -1 — i X - ". 10 1^ r- — ". ir, 1^ J - ". ". I^ O 'Nl
</>• 1^ 1^ W 1^ I^X XXXXC-C^OC.COCO--
T3>''"' gooocoooocccccc
C3 -_; u //>-
J, u • >o\a r^x z. O —
ll-
;///: l:L().\(.K\IU>> Ui .\ll.\l.\i.
.1 iliMj) ni" a ii.\\ clnllar> in llic ]>ri' i| iitluT Uad i t /iiu'
i.rc. 1 lie nuiH'-nm ^lu'Wcil a \ii. uiiilnrin \ul.l t.l _■ ,^
piT cent /itici'Ti- aiui i.i )nT iiiit Iiail 'If, laliulaiiil in mi
the results (if iiiilliiiL; i-'.-77 t.ai-. Altli. m-h \\\v mcM
varird I'racti' •nails I'l'iii ila_\ ti.(la\. llu- averam' I'lr aii>
111, , nth (hil n-i var> in. .re than n.\ \nr eeiit li. .in that
adi.pti-d in llu |ire|Kiraii(iii ..f the laliK ; the ti.i;ures reine-
sent the eakulaleil net cash Mel. I jier t.n ' f inme-rnii
afier the ])a\inent ..f the n.\all>. (Hit of these ani.niii;-.
the cnst .'t mining: ami millini,' is to he iiaid.
The use ..f the tahle may he illlustra'ed hy an example:
A-Minie tliat /itie <.re is sellinj,^ an a $j8 basis fur <>o per
eetit ere; that the ore eontains some iron, and must pay a
|Hiialty of $_• per ton, fetehin^'. therefore, $J(> per ton m
llu- hin; and that lead ore sells for $.'5 per th.iusand
]ioiin<ls in the J)iii. I'nder these conditions a reference
t.i the tahle shows the net cash receipts to he equivaient
I.I $1.0,^.^ per ton. and, if the operatin.i,' expense i- ?i per
t. 11, the niarj.;in of jir. itit is 3.3c. ])er ton of ore mined and
inilled. Should zinc ..re prices decline $2 per ton, then
receipts would fall to $().(/)_> ])er ton. and the mine would
-how a small loss. Since the cost of inininj; is .tjiven hy
our Inioks. a reference to this tahle affords, at
once, tlie data for an accurate estimate of jirospective
pains or losses under ruling current prices for lead and
zinc ores, and makes prompt action certain, if changes in
prices demand it.
The tahle is useful (Mily for the particf.lar combination
of vield and royalty a>sumed. but a similar tahle may he
prepared to repirestnt any other combination of con<'.-
tions. When a mine produces zinc ore alone, or lead ore
alone, the problem of determining costs is simpler and
lends itself very nic'lv to representation by a (lia,i,'ram.
Such a diaijram for zinc ore is presented herewith.
Th.e sellintr price per ton of ore is represented on the
vertical scale at the left of the diagram, the rates of roy-
COST Ol- .l//.\7.\(, Z/.Vc ')Rr
•a 30 15 10 „
Oprralore Nft RfCfiiiti pt-r To/i uf Zinc Ore afUr DtHJu.-tiliK Kojaltifs.
Cost Diaok.\.\i fok Joili.n Zinc Ores.
164
THli liCOXOMICS Of MIMXG
alty arc represented by one set nt <lia^'nn;il lines, and tla
rates "1 yield of elean zinc ore, expre^ed in per eeni,-' nt
nniK-rnn, are rejire'-ented by an.nher set df diagonal hues.
The hiiriznntal seale at the iHjttuni shows the c>peratiir>'
net reeeipts per ton from the sale of the zinc ore, afur
(ledncting royalty, and the vertieal scale at the right ex-
presses the operators' net receipts per ton of mine nm lor
any combination of prices, royalty and rate of yield, t Hit
of these amounts, the ..peratnr is to pay his working co>t>
and make his pmtil. The use of the diagram is e.xplainei!
l)y two exanii>les. nne wherein the net re :ii)ls per ton of
mine-run are determined for an as>uried combination of
price, royalty and yield: anil tlie other in which
the working c^ _-ls. royalty and '.ield being assumed.
the selling pric is determined at which costs and receii)t>
would just balance. If the mine yields bmli lead and
zinc, the net recei])ts per dii of mine-run may be deter-
mined for each separately, preferably for convenience, by
ditVcrent diagrams, the sum of tlie two being the t'ltal
receipts per ton. \alues lor lead I'res may be shown nii
the same diagram, if desired: but since the relative v ield
of lead ores is often small, a different scale fur the >ield
diagonals makes a more convenient and usefid diagram.
Another use of the diagram is illustrated by the follow-
ing example- .\ssume the selling i)rice of zinc ore at
$30, royalty 20 per ceiU. yield 5 l)er cent, operating costs
$1 ix-r ton of mine-run. 'i'ake $30 on the scale of selling
prices at the left, and follow the horizontal line to the _>i)
per cei.i royalty-diagonal, then follow the intersecting
vertical l.ne to the bottom of the diagram, uii wlncli we
read $J4, which represents the ii]Krators' net receiiits per
tnii i.f clean zinc ore .sold, after deducting royalties. Xmv
take Si. on the vertical scale at tl;e right of the diagr.un.
f .IImw the horizontal line to the 3 per cent \uld diagi>ii;il.
then icillnw the interse. ting vrrlical line to the bottom
line, on which we read ^Ju. Tins represents the working
f!
C'O.ST Of MIMXC /.IXC ORE
10.-)
cost on clean zinc ore, and the ])rofit must be. tlierefore,
the difference lietween $24 and $20. namely, $4 i)er tnn
of zinc ore sold. This will he seen to correspond with
the calculations in the first exami)le on the diatjrain. As-
suming that HX3 tons of mine-run are handled daily, the
]jroduct will he 3 tons of clean zinc ore. and the jjrofit hy
the first method is fiL,nired on 100 tons of mine-run at 20c.,
nameb', $20. and hy the method just explained, the profii
is on I tons of zinc ore at $4. or $20, as hefore.
The cost of mining atul milling; in the Joplin district
varies from 80c. to $' per ton of mine-run. This fi.i^ure
does not include any char<;e for redeemiuf^ the capital
spent in o])enin,t^ up the mine and e(|uipi5ing it. When
the ore-bodies are of considirable size, the mills of mod-
ern construction, and the operator has little or no pump-
ing; to do, these fifjures need seldom be exceeded, and in
some cases costs may fall somewhat below the lesser fif;^-
ure. Between these limits, costs vary accordini:; to
physical conditions, being high in li.ird sheet-ground.
where air-drills nnist be employed, and the ])owder bills
are large, and in soft ground, where the saving in the
powder bills is off.set by the cost (.. timber. Occasionally
an operator is fortunate enough to have soft ore and a
hard roof, and under such conditions the cost of mining
and milling has been (|uoted as low as 75c. per ton.
Large areas of sheet-ground are now known in the
Carterville W'ebi) City district. Most mines in this sheet-
ground vary in vield of zinc ore froni 2.5 to 3 per cent,
although, in some cases, Uiev are very tnuch richer
.\dopting $1 per ton as a frir estimate of the cost of the
mining and milling in this kind of ground, and referring
to tb.e diagram, we get the prices <if ore at which the
mines of different rate of vield will come into pri'fitable
productivtn.
In making comparisons, the effect of (|n;ditv on the sell-
ing price of zinc ore must be kept in mind, for, although
160
TIIF ECONOMICS OF MIXIXG
the l)asis price for 60 per cent zinc nrv may be $30 per
tf)n. one mine may produce ore of so hijjh ^rade that it
finds ready sale at $34, whereas another mine may pro-
duce ore containing niundic and will fetch, according to
the assay, one or more dollars less than the hasi . price.
According to -ite of royalty, from 10 t<i .'5 per cent :
Ore yielding .i , - cent will pay, when the zinc ore sells at $22.20
to $2(1-
Ore yiel(!iii>; 45 per cent will pay, when the zinc ore sells at $24.70
to $20 70
Ore yitldinK' 4 per cent will pay, when the zinc ore sells at $2780
to $.13 40
Ore yieldnii; ,^ 5 per cent will pay, when the zinc ore sells at $.31 80
to .v'^JO
Ore yielding ,? per cent will pay. when the zinc on. sells at $37 40
to $44.40.
Ore viclding 25 percent will pa/, wlu-n the zinc ore sells at $44.50
tn $53 (X)'. "
Ore yielding' 2 per eent will pay. when the zinc ore sells at $5S0O
to $<')7 Of)'.
The foregoi.Tg data serve to cni])hasizc the fallacy
whicli inav devclnp 1)\ basing costs on the tonnage of zinc
ore sold. The richer mines } ielding " to 10 per cent and
upward are exceptions among the general run of Jo])lin
mines, and those uhicli arc nnnnng on ore leaner than 5
per cent doubtless constitute tiie majority. When ore
prices advance beyond $25, the 4.5 per cent and 4 per cent
nn'ncs start up ; when prices go to $32 the 3.5 per cent
mines begin to produce, and at $^7 the 3 per cent mines
are worked.
Fach successive class offers to the market more ex-
pensive ore. and conseipienily the average cost of pro-
duction for the entire district, referred to the cleaned zinc
ore, seems to advance iiearK in proportion to the ad-
vancing ore prices. The cost of mining per ton of mine-
run rem.'iins. however, pra'-ticdlv u.nchanged, evi-ept for
the effect of changing prices of l;ibor and ^np])!ies.
W. ."-^I'l-.Xn R Ih CHINSON.
Boston, F • . • 1004.
' F.'-timated because lieyund the limits mT the ili,i:jrain.
It
MINING IN RHODESIA
CMartli 10. igu4.)
I he Editor:
SiK — hi your issue of L)cccnil)(.T lo, 1903 (Vol.
LXX\'I, ])p. 885-888), appears a very interesting and
timely article on 'Gold Minin^j in Rhodesia,' by Mr. F. C.
Roberts. It has an especial interest for m<', for many of
the data u]X)n whicli the article is based liave been fur-
nished by a mine in whicli I am a shareholder, and of
which the earlier development was carried on under my
direction. Mr. Roberts was for a short time the mine
manaLTcr, and later succeeded me as engineer.
Having rpent nearly six years in Rhodesia, and having
had exceptional opportunities of studying, a large portion
of that section of it known as Matabeleiand — and it is to
this section that Mr. Rol)erts more particularly, though
not exclusively, refers — I would like tlie opportunity of
offering a little friendly criticism on the article referred
to. In mv remarks 1 shall keejj in mind the fact that an
article which attempts in sucii small com]>ass to treat of
everv feature of the gold-mining industry in Rhodesia
must necessarily be incomplete.
The first statement upon whicli 1 would comment is :
"In but one instatice in tlie whole of Rl.odesia has it
been found advantageous to attack the orelwdies and
veins tlirough adits." If this means that only one adit
has been driven in Rhodesia it is ver\ wide of the truth.
I have seen adits on no fewer than seven different jirop-
crties, and there arc others in the country: and I iiave
every reason to believe tlint it will be found advantageous
to win tiie ore from more tlian one of tiiese.
Physical and Gcoloi^ical f-cafurcs. —\\h\k- it is a fact
that "few really hi^li mountain rriULces traverse the conn-
trv" it must be borne in mind iliat the geiier. ' elevation
ICiS
7"/;7: /:'c OXoMltS Ol- Ml' 'XC
i> liij^h, HulawuNo l)t.'iiiLr 4,4(x^ tl. alr.ivc sca-lcvcl, and tlu'
siiinnii'< of l!ic lii^'lK'sl hills rcaili an I'lcvaiimi ui marly
0,(xxj 11. \ iowcil I'roni i1r- plaui- ami vailcNs tht- liril>
certainly d" nut ap])iar liit:h.
! :iad no: (ihsiTvcd the uati ■ of "conical liill^" in the
j^ranitc holts, th ^h 1 haw trawrscd the country from
its eastern houmlary as far west as JJ'' 20' E. lonj:;., and
from its Southern i)oundary as far north as ij' 40' .^.
hit. ' he wea'herin^ of tlu granite hills 111 Rhodesia is
the s.iine ■ in other parts of the world, the ])revailini,'
ty{)es beini; eitlur domes or boulder-strewn ridj;es with
ca tellated escar])nieiits. The conical hill- (more cor-
reciiy, ])\ramidal) arc; ra'iier liaracten>tic of the schis-
tose areas.
It i> true th.'it "no j.jeolo;.;ical survey has yit been made
in 'vhodesia" (though in no other country in the world
is one more lucdidi. and tlii- .-'Seral --o-called '^eo-
lopical' niajK of it ■, hicli have been nui)lished have no
scientific \alMe wL.itever ; but the "generalized descri])-
tion" of the i.;eol())j;y j.;iven !i\ .\li. Ruberts is not ve:'\
accurate, if not actually mi^leadini;. i'jTouj::h is kno.vn
of the subject to afford a better account than has b.i'U
presented by .Mr. Kol)erts ; biit of i .urse it must be 1111-
(k'r tood that be w riti^ a> a miner rather than as a
geolo}.jist.
We are told that "\'>\ far the i;rt.'ater portion of tlu
conntrv consists of j^ramle rocks, in wide l)elts, havin^L,^ a
strike somewhat west of north and 1 i^t of souih." b'.veii
if in the term ":.;raniie rocks" we 1 vliide t\pical ij;ranile.
syenite. ^niei-.s. and all .u;r:mitoid variitii> of rocks, 1
lllink .Mr. Iv'berl^' c-timate 'if the extent of their occur-
rence is ,111 cxrissiMh hiiL;li one. i --hould say tliat very
much less ih.in onedialf the total ;irea of the conntrx i-.
f^ranitic. The >tnke of these rocks is not accurately
^ive;i, iniKti! no '.^eiier.'il sirike prevails. Some of the
iarsrer .i^iamte belts have ,1 trend almost diu e.ist-and-
MIMXi, l\ k'HODIiSI.-l
IGl)
west, some siiialler oiks trend north-aiul-south ; and some
in fact trend in alnidst every <iireetinn.
While it i.^ true tluit "the f;n!(! heh.> embrace the areas
cliaracterized. by shites and schists, " it is also trne tiiat
so.iie of the jjoUl mines are well within the granite areas.
Thi.. is the i,use of a t\pical mine descibed.' the imme-
diate coinitry-rock beinij j^^ranitoid. and it lies on the
northern side of an extensive f^rar.ite belt, trendinj;' nearly
east-and-west. and bouniled on the north and south b\
hills of metamorf)hic rocks.
We are told that "In the val!e\s, or small <:;ulehes of
*be Iiill country, the alluvium is of very limited extent.
su,:^.i.;estinjj; a lack of those extreme climatic c(Midition>
necessarv to produce rajiid ero>ion.'" Hut even if it werk-
true^whicb I take leave to doubt — that the alluvium i>
so limited, surely the fact sufj^ests somethini; else than tliat
stated. Do not the torrential smn..ier rains account for
the removal of the alluvium from the hill country? In
the broad valleys the thickness of the alluvimu is often
verv f^reat, and every one who has visited the country is
familiar with the deep rifts by which the river-fords are
usually apjiroached.
The description of the (|uartz veins miijht liave been
extended b\ a reference to a number (if lari,a' (5nes which
are not only wide, but may be traced ahnost continuously
for several miles. Reference is made to the .auriferon-
(liorite o* the Avrshire mine. bui. ;is \i)u jxiint out in a
footnote, this h;is been jireviously described in the jofi;-
NAI. at LTreater length. ! am irieath interested iii Mr,
i^oberts" accouiU of bis discovery of ;m auriferous liorn-
blende por]ih\rite ; id i wonder if it occurs in a ])art of
the cotuitry which 1 visitt'd.
.Indent ll'oikin^^s. — Some of those who liave devoted
much time to the stiuh of the (luestion of the ancient race.
"hk l",N'iii\FFHi\i; .\Ni> Minim, Ihiknm p !*^5. Dec lo. irjo,'^.
170
77//; l.LOXO.MICS OF MIXfXG
or races, wlio foniKrly fxploitiil the RlnKlcsiaii ^old-
fields, will liardly iVel tlattcrcd nn l)cini,' wM that "no
satisfactory expl.iiiation h,i> lucii advanced tuuchin<:j tlieir
(the anrients") idi.ntil\," iintw ith.staniHnL: that i-thuD-
j,'ra|)hical invesiis^ators liave written vohinies on the snh-
ject. i'.ut 1 am prejjared to ^o all the way with Mr. Roh-
iTts when he >|ieaks of the estimates that ha\e been made
of the jj^old recovered by the ancients as "iiypothetic" — I
think tliey are ridicnlons; hut I cannot believe wah him
that lo dwt. of LTold jier ton of ore was the mininunn
vaLie of that treated by the ancients— 1 think 'they nnisl
have, in manv cases, treated ore as low as, if not lower
than, 5 dwt. of L;i>ld tc the tun.
l-'inaiuial i'liusulcriilidiis. — We ha\e here a brief bnt
fair account of the tinanciiij; of Rhodesian mines, many
of which, it may be empliasized, are very !arL,'ely over-
ca])itali/ed. in referriuL,' to the Mineral ( )rdinance. .Mr.
Roberts omitted to mention that a new one has been
drawn up and is e\i)ected sewn to be promulejated, and
from which the objectionable feature of the 'law of the
apex' is to be eliminated. Mr. John Hays Hammond
has been larj.^ely blamecl — 1 know not with what truth —
for the adoi)tion of this indrtensible feature of the orij^-
inal ordinance. I'.ut as the new ordinance can liardly be
made retroactive, it is likely that the lawyers may yet
rea[) a f^olden harvest from the obnoxious law.
.•J.s\?(iv Plans. — .Mr. Roberts" de^cri])tion of these as in
use in Rhodesia is correct a> far as it L;oes ; anil it is
satisfactory to learn that while slii^ht dilTerences of
method of constructing,^ the jilans m;i\- be found in the
several mines, "tlie fuiidameiUal princi])les are a.lhered
to." This ijeneral uniformitv ot p-inciple may be larLjeiy
attributable to .Mr. J-'.. 11. i .arthw aite. the ^dvernnieut
eni,Mneer, who has made a s])ecial study of sami)linfj and
mine-valuation, and has been in a position to imjiress his
views on the comi/.inies' ens^ineiTs. 1 he ass.ay diai^ram
■ai
MIMXG l.\ RHODFSIA
171
fif^urcd by Mt. RdlnTis'' so'jtns to iiio id Ikuc
bi'i'ii unfdrtimati'ly s<.'h--cli.'il aiul iiiaccuratt.-ly ikscrihnl.
I i!i> n. ! think iIk' use nf i,'rapliic iliai^ranis has yet ho-
coiiie };i.-iRTal in RhcHk"-ia; nor is tiic oni- illustratcil a
"stojjinfj^ <Hai,Tani.' 1 r(.cni;iiizo(l it at once as a simple
assay-])lan of a prospectint^ level which was opened up
under my direction in icSijj-cjS. The sUf^Lrestion that
assay values should he t;iven in shillings tead ni troy
penns weii,dits is most nnjiortant, and it is to he hoped
that this system may he ado])ted in tiie near future.
Dczrlopmcut llDrk. — It is d'flicult to offer aiu' criti-
cism of the fij^j^ures presented by Mr. Roberts, as they are
incomplete and some minor errors ajjjiear. It would
seem that in the period under review ^.''177 ft. if devel-
0])tniii; was accom]ilished. and _^8. kx) tons cf ore were
won and milled. Xow, if the shafts, levels and winzes
avVraLTcd 4 by 6 ft. in cross-section, and allowing 14 cu.
ft. of quartz to the ton, there would only be 4,38<) tons
obtained froni tiie footage piven. I'erhaps the decimal
point in the middle column of tiL^ures is misi)laced out'
fit,nire to the left, m which case the tons milled would
iivriire out about .^Hio, and the total cost per ton milleil
would he $17.03 instead of Si. 70, which would be ab-
surd. What is i)robably the fact is the omission to men-
tion the area stoped. lUit "stopas^e' is not 'footaijfe.' If
no stopinp is inclu<!ed in the cost the jirice j^'iven ]wv foot.
.Sj^.^o (it fi,trures out $-'3. 51), is excessive, even for
l-!hodesia. On tiie other hand, if the total cost of mininix
ore is only !?l-7() i>ev ton the fij^ure scenes too low. Put-
tins' 'f'l-' (■"'■'St of ini!liii<; — which i^ not iriven — at one-half
that of mininij, whicli is fair, the total cost per ton would
only be $.m")8. a fii^ure that is too luw for Mr. Roberts
or anyone else to reacli i'l Rhoile-.ia.
Then the *wo ituus "("om]iressors and rock-drills" and
"R'Jck-driUs and sharpening;" toq;ether amount to S21,-
" Tnt; Fnoinef.rin'g and Mininc, Joirnai,. p AS6. Dec. 3, ltx)3.
ITli
I III: I:l(>.\().\iils or Mi.\i.\(;
')J'-). mil of a tnial of ^iS.^oo, or o\i.r ,^J (iir iint. Ami
lierc I iiiii^lil say tliat lln> >ct'ins to cuiitinu iii\ i'.\|irr^siil
M|)nni'ii ihal al tlu- nunc in i|iK'sliiin, i>\\iiis,' to tin- scarnts'
anil lii^^li fosl of fiul. llic iii.-tallati"ii I'f a ci inijiiussor
plant \\a> iii't .I'lvisalik- until cltiMper lurl cnuM lii- oh-
tainril. l'os>il)lv soim- |iart. nr tlu' whole, nf tlu- fust of
till' coni|ircssor plant is ini'ludcil it: tlu' itiin $iO,^i)i); if
XI. a poniim at lea-~t "1 the eosi ci' all the nihir jilant
sliotlld In- nuluilrcl a> well. It is nut worth while tn ilis-
eii>s thest' timires further until aiMitional li,L;ht i-. thrnwii
upon iheni h\ their author.
MilHir^. — We are niformed that " 1 he iiUroductinu of
heavv >tanip> with the lihjeet of securiuy a lartje stanip-
ilut\ has nciw reached its iiraclical hunts, that is, at 1.45O
Ih." 1 )(ie> n"t this weight exceed the liniit"'' I fear so,
,ind the fiar is |i,irtl\' inspired l)\ what Mr. i\(ilnrts says
further un the stihirct. When I drew up the first S]);cih-
cations f'lr the mill under review I calle<l for staiii[)S of
1.050 111. f.dlini; wei^dit. hut later, 011 consultiui^ willi
some of the leading; eii!.i;iiiecrs at johanneshurLj and I'.ula-
wa\c), I .-litired the specification to 1.J50 II). lint tlie mill
was ultimatel\ erected under Mr. Knherts' direction and,
I prt'sume, accoriliiii,^ to his specifications.
Cxtiiiiiiatioii. — Mr. ivoherts' remarks on this si;hject
are interestiiiLj and im])onant. It ma> he questioned, as
he pninis iiut. whel!;i.r it is advisal/le to instal a c_\anide
lilanl in Rhodesia so lonj;- as the ore continues free-niill-
iiii.:. There would he no(|uestion of its advisahility when-
ever the sulphide ore is reached. It is all a (juestion of
testing,' for e.ich particular mine.
I'erh.ips 1 feel ail exce])tioual interest in .Mr. Rol)erts'
ar'ii^de. dealini;' as it does with a mine of which the first
di'velii])iiieut was done under m\ diri'Ction ; hut it sliould
have ,-1 L;eiiei;il interest as wi'll, and it 's only to he re-
^'relted tluii 11 was iii.t liiui^er and iiior'' detailed.
.•1 1 • T ,- . „ . W ALL \( I'. 1 Iko \i I-
THE ECONOMIC RATIO OF rKHAriWH.M
CAPACITY TO ORE-KESERVES
\'\ III I |.in\l U.
(March J4, ly >4 J
Altlioiigh every metal miiu' i>a iiiciliKin pii-uliarto itself
t(i >ucli an extent as to up.sei iii">t f;eiieralizatiuii>, it \sill
lie nnt wholly useless to coiitein]ilale certain pmhlcnis in
tlie abstract. In varmus f<irin> they confront every engi-
neer, sooner or later, and althnugh (li>cussion involves
innch reiter.ition of eleinentarv jirinciples, yet there an
so main' mines in which eviii elenuntary matters of j;(><iil
man.igement are continually disregarded as tu warrant
such repetition. The ensuing discussion applies mosil_\
to that great maiorit\ nf uiinis, the unciTtainty of wIiom.
continuity in depth necessitates in every jiroject of general
]iiilicy a suhst.intial margni of security against the un-
known. Starling with an assinnptiou of mihrnken con-
tiiuiity to their utmost hoinidaries. our South African
trieuds need hut little outside .f compomid-mtercst tahles
upon which to found their hnance. In the great majority
of mines, howe\er. the roidt i>i developiuent ;it their
lowest levels remains speculative and gives a zest such as
an asstnued persistence can never afford.
'riial the most economical ..nd pnilitahle treatiuent-
capacity is the maxinnun capacity which can he emjiloyed,
is not difficidt to demonstrate; that the maximum must
depend, hnw'^ver. upon tlii.' speed of devel' '|)nuni, and that
devclo]inient must he jnished as fast as the limitations of
nature will iiermit. is hut to st.ate a corollar\ , \\\. curious
as it seems, the numher nf mines which h;i\e heen op-
crated ujKin the iirinciiile that the mil! is the hxed (]u;in-
tity and the mine the \;iri;ihle. exceeiK the r.umher con-
ducted upon the reverse jilan. 'The oljjective of develop-
Ill
/ ///. /:co.vn.i;/t .s oi .mimxg
iiuiit m till- [lU |i' iihUratnL; miiiilKi' i- i" inil :lu- null.
'I'iiis ,i>>fnii 11 1- \iriiK<l ii_\ ilir i.ni liiai uliiii- ilu- iiKi-
jnnt\ III' iiiiiH?. iii'w 111 iiinratii'ii ari- iiiurr tliaii ti'ii years
old, mviTtlu'lcss a iiiiiinr iiuiiiii(.r lia\i.' riai.luil ,i iKptli of
osiT j.iHH) It. wIrii tlk> mif^lit. (.•Mil ill till- (.niiiparatively
sliiirt prriiiil have attaiiK'il a ikjitli of 3,CKXi ft. jia-l tlu-y
|)iir-.tu-il iliv pnljcy ni (k-vcldpnu'iit hikKt lii^'hfs! pii'ssuro
and till' iTi'ctiiiti nf iriatimiil tiiiit> siuli as would keep
the i)re-e.\traetiiiii elo>e tn such develi ipinent.
It will he j,M-anted that tlie true (ihjective nf luiiiitijj; is
tD ^am the j.;reate>t prntit in 'in a .L;iven hndy nf nre. The
luaxiiiinm mitpiit i> iint mily iieeessar_\ i"nr the cheapest
])rnihutinn, htit money Ineked up in nre luider^rniind is
idle nmney. and the prntits from mining; ean he increased
ill iin mean de_i,'ree h_\' reuderinj,^ it lii|uid. 'There are,
however, limitations ituposed iipoti the investment of lars.;^e
sums of inonev in e(|uipmeiit to secure the maximum out-
put, in view of the uncertainty of cnntimiity in depth,
wiiich need to he consiilcred, in considering:: these limi-
tations, and a method by which the economic ratio may he
arrived at, it will he necessary to demonstrate the fj;en-
eraliy accepted proposal already laid down. The problem
mav l)e reduced to the (|uestion of conductini,^ operations
uiion a ^iven output as aj^ainst a fjrealer output, because
few well niana.s.;ed mines of the character under discus-
sion are, in their initial statjes, eciuijiped to tiieir maxi-
mum possibilities — and certainly the .^^reat majority, as
shown above, are not yet so ecpiipped ; therefore, the iimh-
iem in actual jiractice presents itself either in the form of
increasiii!.:: the output, or determining;; iiri<.rinally some vol-
ume of output to be provided for, as aL^ainst some smaller
volume. We may call the initial treatment-capacity the
primary equipment, and the increased plant the secondary
ei|ui])ment. The factors in this jirobleiu are:
(i) The cost of production as aftccted by increased
output.
U'.h I I )■ .l.\n ()A'/;-/v'/;.S7:A'/7 .S
1'
(J) I lie lull lll|itli III (,|' i,;i|iU,i! MUrstid III M'ldlldarv
• •i|iii[imrnt.
{ }) l.imitatiniis illl])l'^(■(l li\ tlu' niuiTtainly nf contin-
lli!_\ ill ili|ltll.
(i) Ilk' I'lalii iraiinii -f ai'inmit^ diinn;,' tlu- jia^t lias
intrii(liu-i'(l t(' till- iiij;iiu'(r niaiiv cnm|iln-atiiiiis ot ininiii^;
linatu'c wliicli .lid not Irmihk our forcfatiuTs. W'c now
ilividi' the v.'lrillU^ ehar.L;e-- af,Minst uurkinj^ expense^; into,
("list, those chari,'es variable \\ith toniiaj^e ( siicli as devel-
opiiU'iU, haulaj^e, treatment, eti- I ; and second, those
chart^es, nsiially referred to as lixed," whieh deiiend ])ar-
tially upon the element of time as well as tomiajj;e, and
imlude, jiartiy or u holly, piimpiiij^, management, amor-
tization' of capital invested, etc. Moreover, there is a
factor of no naan importance arisiii!,' from t!ie loss
of interest tliroiif,di idle profits locked up in ore staiidiiifj^
in the mine; this also must he taken into account.
I'Vom the standpoint of such fixed charj^es" as depend
partially upon the element of time, obviously the shorter
the ])eriod involved in the extraction of tlie ore the bet-
ter. The introduction of increased ef|uipmeiit necessarily
sliortcns tile time of extraction, and the savinjjf (and
tiierefore increased profits), which can he thus effected,
amounts nearly to the whole of the fixed charf^es over the
increased toiinaj:je. There are certain inevitable co-
ordinate reductions in working; expen.ses, other than fixe;!
ciiarq-es, as tlie result of a larger volume of output.
What these amounts will a^'gre^^ate, in increased profits
on the increased tonnage, depends somewhat on the pro-
portion of the increased volume to the vohime previously
treated, but the total saving on the increased tonnape
may be taken in mininnim as equal to tlie fixed charges.
Also the profits will be increased by liie interest earnings
Ry 'amortization' is meant the recovery of capiial invested
with accinmilatcd interest thereon.
MICROCOPY RESOLUTION TEST CHART
ANSI ond ISO TEST CHART No 2
I.I
'-IM IIIIM
III 2.2
t ^ IIIIM
mil 1.8
1.25
1.4
1.6
^ APPLIED I^A>^GE
'653 Ea5t Mom Street
'Rochester, N»w York U609 USA
.■''6) 4fl2 - 030Q - Phone
!7!6) 288 - 5969 - Fa.
17.; ////•; /■.cO.\().l//c .s Ol- .U/.V/.V(''
,,; ,1k. cNira I'l-Mln takr,, nut, as iKtweu, ihc oariur tunc-
it vsnuM iKuc !-on ,.ul nu , ^.rvuv l.y the secondary
o|uiim,cnt, a.ul il,. later tni,. U unuMh. rdoasc,! hy the
,„.niarv u|Uii.i,um. If tin. he lalan at a i.xcl rat.'. >a>_
4 iRT cent o.nipnuti.l iiuvrosi, it then lu-cni.- a factn,- r,i
,lu. prnm ,HT inn ..f nrc. A innuT a.Mitinn al^- an^cs
fr,„n thr in.-iva.r.l inlcrc.st-varnin- nu the ^''^ter pr-t.t
.ccurol lA the menace .-f r-mtil ariMn- fmni the savin-
,,f .^„ ,„„:„„„ ,,n,al 1.. hxe.l ehaf.^e>. We may eonsnii-
,].„,. all these a^hhtimis to prnlU. as the result nf ex-
pan.led otitput mf onu-e nnt mehidin- the ordinary jm.ht
,,„ the ore), int.. tne ..ne phrasr ■iner.nient ..t pr.'hts.
ll(.\\ iniijortant tins •iiiereiiient oi \
.rntits' nia\ hoe<'nie
uil! he seen hv taking a leu examples. On a Inw-^ra-le
,I,.p..sn. vieUhn^^ a profit of $_> per t..n, iimler C ah-
(,,rnia eoiuUtions of t.xe.l eliar.L;es ol. sa> . .^nc. per ton,
,„, an iiKrea.sed n-nna^e ..f i5.o<xi to.ns per annntn. the m-
,.n,nenl at the riu\ of three vears uouM amount to (n-er
S.,M,o<.. With a mine vul.hn- a protu ol Sio per ton
under Western \ustrahan eonditions of a tised ehar-e of.
,,v -^e per ton. the mereinent in three yi^ars on the
.ame'iuerea>ed tonna-e would a-gre-ate over $()5.ooo.
The rapidity with wliieli tin
s iueremenl of protits aceu-
mulates i, a more deta.le.l ,iemonstrati..n oi the advauta.ge
,,f the maximum om,int, and it is also a demonstration of
the neeessitv f.ir a maximum speed of devel..pment.
The v..hnue (.f these savin-.s is ^.) lar-e as to render
the .|iiesti..ii of nistitie-atiou of iuereased capital expeu-
.limic f..r their reahzati..u a matter oi eas> appn-aeli.
(2) Reduction works, and subsi.liary plant, thereto,
represent lar-e sums ..f capital, and such plant, are either
uc.rn ..nt or h.o.me valueless throuuh exliausti..n ot the
niu-.e Ihe In p. thesis that the cLulnni;- oi dead mines is
xaluahle vsas'l.-if^- .nice exploded, allhoti-h, tlu' public
se.metime. s,,,,,. n..l t.. have heanl of the explo>i,.u. in
anv eAeiit. the capital mn.st he recvered li-m the mnie,
CAPACITY AM) ORE-RESERVES
177
with conipnuiul iiitcroi. (luring; tlic lii'c nf thf iiiinu
Tl
>t (it installatKni vanes with the locahtv, character of
(irc, etc.
"'■1(1 mi
hut \\i- niav take tl
le exai
link
n| a
Cahf
ornian
le mi the (jiie iiaiid, where e(|iuijnient to hariiile
an iiutpul "if i5,(;<)(i tons per amiiini wouhl cost, say. $|S,-
ooo, amh on the oilier haiul, a \\ est Australian K"''' mine,
if ore hanclled would involve an
with more complex treatment
lie (.'aliforniaii plant, with 4
where the same vi
exjienditure o
a. id 1 thei
f $:;o
ume
000.
causes involved
per cent compound interest, at the end of three years,
would stand in at ahout $20,000; antl the West Australian
plant at .ahnut $57,000.
es, less than three vears' accumulation of
In t
nese cas
the nicreiiient nf prohts i> ri.(|uireil U> amortize the entire
capital involved. Viiven an in>tance of a low-<:;ra(lo ore
and a iiisih construction C(!>1. the necessarv time wouh
he lonj^'er, jjut in a particular case which has come under
my oliservatioii, of very lii^h profits i)er ton of ore and
mod
18 months was sufficient to amortize the expenditure.
(3) .\t the time of jiroposed c(|uipnient the life of a
erate installation costs, the increment of ])rofits over
mine o
f tl
lis class I'- .111 1111
kiK
fa'-tor. Despite this,
however, as shown above, the increment of profit so over-
takes amortization as to make it nec(>ssar\- ti> have hut
short lif
e 111 s
ij;"ht to justify the capital expenditure.
A certain jjart of the life of the mine is tan,i;il)lv visi
hie
in Its ore-reserves.
I'lik
<ler
was made 111 ini
lial
installation ( nr in the remote case of .a mine fully devel-
oped hefiire eiiui])iiu iit I . llun with \iL:;oriius (le\el"|iiiu'iit
and coiitiiuiity in depth the (ire-reser\-es of a mine will
pain on
tile t
reatment capacitv
Th
.■lin will eventualK
re.'icli ,1 p"int where the visihle life iiecimies e(|ual tn the
period at which increiueiit of ]irohts overtakes amortiza-
tion. Sn lor.L,' as the rcsirvts co.ntimie to 1,^111 upon the
treatiiK'!it-i)!,-int. aililitii)ii;d unit^ shduld he erected until
tl
le must vi"oriuK
.■1,.,
iiiunt 1^ no loTiLrer ahle to more
ITS
Till-. FCOXOMICS OF M!\IXo
than keep pace wiili ilif ..illicit. N' r will such a policy
(.■mail an unn>ual accuniulatidn ni orc-roscrvi-s ; in must
cases it will he imt iimrc than a three vi'ars' supi)ly. Thus
it hecimus (xissihle tn ileteriniite ah^'lutely the vdiuiie "f
troainient-capacitv without any sj)eculatiiin as U> cnntin-
uity in (k'lith. That it is an ohlii^atinn of ^"'"1 i.iaiiaiji.'-
meiit, lo set up a<lclilinnal ireatinent-iuiits whenever in-
creiuent of i)rofit due to theiu will overtake amortization,
Is ()l)\ioUS.
It seems clear, then, tliat the maximum profit from any
mine can onlv he ohtained In- the most rapid exhaustion
nf the mine, and that most rapid exliaustion is to he se-
cured onlv by tlie most riijorous prosecution of devel-
opment and the m;i\iiuum eciuipinent which can he em-
ployed. ^■et in the majorii} of mines the caution of
sound Imsiness m;uia,s;ement, owiii!.,' to the unknown fac-
tor of contimiity in depth, imiioses limitations upon the
extent to which capital should he invested in e(|uipmcnt,
and a trenera! rule for the determination of the size of
equipment iiii,s,dit he framed as outlined herewith:
If hv vii;< irons development the visible life of the mine,
as shown bv the ore-reserves, is lenijthened soas to exceed
the time re(|niri'd for a unit of trea'ment-caiiacity to
earn an amount throticjh the increment of profits, equal
to amortization of the capital invented in that unit, then
the installation of another unit becomes not only justi-
fiable, but an ol)li,Li;ation of ^ood management.
The liconoiiiic Limit to .li-ciiii!i(liitiou of Orc-Rrsci-: t's.
— This subject niay ajipear as merely a pha-e of the jire-
cedinir, and a natural corollary to it. We have a limit
bevond which the increase in ore-rtserves justifies an in-
crease Ml i)Iant-units; in other words, there is a maximum
reserve which it is .-HK-.-intaircous to have in a mine
It has been su^'S^ested that. <:riven a dep<)sit of fairly rep;-
ular continuity in depth, an accumulation of ore reserves
to this excessive extent means a certaiti amount of locked-
Cir.lCITV .IXn Okr.-RESERFES
170
up iillo profits, and that this profit tni;,'ht be sccureil with-
out ovcT-ii|iiii)nicnt if the luaiiageiiK-nt took the risk d
inereasiui,'- the output before they w ■- ' wholly justified
bv the increase in reserves, the resr.lt beinp that the
same niaxiiiiuiu oulinit eouM be maintained withoui the
loss, .\side from the ri>k, thert' is one matter of L;ener,al
polie\ in the coi^duet of a mine which affects the case; it
m;i\- be expressed thus :
Kvery deposit of the character U'^der discussion is sure
to tjet ])oorer eventually and fail at some point in depth.
On a paviuij;' mine, failure at ;my |.^iven level docs not mean
the abandonment of the mine at that point. To what
<lepth the .search for ore should be pursued throu^'h blank
countrv is a matter of local judijment based on the char-
acter oi the deposit and the conditions which determine
its discontinuance. That this work should be pursued
while the reduction works are in operation is a sine qua
non of pood inanap^ement. Not only does it cost less
while other ojierations are in propjress. but the mine is
])rovitlin,<j the expenditure recptired to do it, which the
owners -AW not likely to do afterwards. Mines are diffi-
cult to kill in proportion to their greatness; the more
profitable their ])ast career the deeper will their im-
protitable e.x])loration be carried. A mine with an ore-
reserve e(|ual to the period set out above possesses the
sinews t ir pursuit in depth for an equal period: and that
peri :m1 will probably prove sufficient to exhaust reasonable
hopes and to prevent the premature abandonment of pos-
siblv valuable property. As a matter of policy, then, I be-
lieve that the maximum provided as above should form
al.so the minimum.
The economic and advisable ore-reserve, therefore, will
be e(|ual in volimie to the animal outpiU multiplied by a
number of ve;irs just under tb.at needed bv the increment
of profits to e(|ualize the amortization retpiired to con-
struct increased treatment-units.
EQUIPMENT AND ORE-RESERVES.— 1.
(K'litonal, March J4, lyi^.)
We take particular [)lcasurf in inil)lishin,Lr an article by
Mr. 11. C Hoover on so important a matter as the eco-
nomic ratio between the capacity of the reduction works
of a mine and the toniiaj;c of its ore-reserves. As a basis
for argument Mr. Hoover has assumed the existence of a
plant, and procee<ls therefrom to discuss the additions
to it which are warrantetl by an increase in the amount
of ore available for treatment. There are thus two prob-
Kms: first, what size of mill to start with, and then, what
additions to make as the mine j^rows.
In most cases the plant is started with an economic
unit, which in California is usually a 40-stamp mill, while
at Johannesburg it is a 200-stamp mill. We do not know
that this is reasoned ou^ further than that the capacity is
based roughly upon the amount of ore which can be
opened up in the course of ordinary development ; that
is, the mill is expected to exhaust the existing stoping
area about as fast as new ore-reserves are opened up, so
that the original tonnage available, equivalent to a two
or three vears' supply, is maintained until such time as
development is unsuccessful, and the mine begins to show
exhaustion", then the reserves in hand are used up dur-
ing a further period of exjjloratory work. A mill is not
erected of such a size as to consume all the ore in one
year, for exami^le, because the initial supply generally
represents the result of several years' development, and
to stai. out at such a gait would shortly end in the neces-
sity of shutting down part of the ])lant. In the \\ est it is
not uncommon to base the mill cajiacity upon the amount
of ore to be extracted from one "lifi,' that is, the tonnage
sto])ed between two successive le\els mie humlred feet
apart; it being the experience that to open U]) one lower
level per annum, while consuming the reserves of one
EQUIPMI-.\r ./AT) OKP.-RF.SF.RIT.S isj
upper Icvi'I, represents a seale nf w. irkiiii; 'vhich is coni-
f(.)rtat)Ie. llowi'ver. in nrtliiiary vein niiniiii,'' all such
methods indicate an unspukeii reCDj^mitioii of the fact
tliat each (lee])er le\el l)rin<.^s tl;e mine nearer to the hori-
zon of eventual impo\erishmeiit, while on the Rand the
Hmit sot to exploitation hy the area i>f the claims, affords
a more definitive termination to the winning; of ore.
Ilavin<j a certain e(|uipiuent at the start of ojierations,
what addition to it is warranted when increased ore-re-
serves arc created in the course of successful development?
That is Mr. Hoover's (|Uistion. which he himself an-
swers. It can be stated also thus: .\n increase in tlic
mill is justitied when the --edeminion of the capital in-
volved, plus interest upon it. can he more than balanced
by the savinjj in cost, or hy the 'increment of profit," uixin
tlie additional tonnas:;;e taken from new^ ore-reserves.
The subject can he treated liy differential calculus, ami,
from a mathematical point of view, it mipjht well serve
as a thesis for advanced students at our schools of mines.
From the standpoint of financial experience and practical
mining, it affords room for a discussion which is well
worthy of the best consulting: engineers in the profession.
We commend it to their earnest consideration.
EQUIPMENT AND ORE-RESERVES— 11.
I l-.'!ii.rri,il. Ainl Ji, i'r't>
As Vft there lias lui'ii i)iit little iliscussicni of tlie iitter-
estiii.LT artiele by Mr. II. ('. Hoover on tlie subject of the
jJHiper ratio of mine ei|iiipiiieiit to ore-reserves. Mr. ]' .
(',. S;iilsbiirv, in our issue of Marcli 31. and Mr. 1'.. P>.
Lawrence, in this issue, a!.;ree in their opinion that Amer-
ican iiiinins,' rarelv atTonls conditions warrantiiiLj sucli a
nice adjustment between the abihty of the mine to pro-
(hice ore and the capacity of tlie mill to consume it. ()\v-
iniT to the uncertainties of the one and the positiveness
of the other, it seems, from their point of view, best to
err on the safe side and erect treatment plants which are
well under the probable production. A manager, of
course, likes to liave somethinj^ ap his sleeve; it is bet-
ter from his standpoint to have an accumulating ore-re-
serve underground than to hang up ten or twenty stamps:
he would ratiier have ore lying broken in the stopes than
shut down a part of the cyanide plant for lack of an
ade(|uate supply, i'.ut. as a matter of fact, the capacity
of the initial plant is usually ahead of the rate of tlevelop-
nient ; and as soon as there is evidence that the two ap-
proach each other, the owners call for an increase in the
reduction works, because they want to rush the output.
The American idea is to secure certain and immediate
profits at the expense of ultimate ]iossible economy. While
the engineers mav appreciate the benefit of plans which
pur])ose the amortization of capital, and though they may
be fullv awake to the economy of a jirtiper balance be-
tween the capacities of the mine and mill, they are brought
abru])tlv against conditions which completely uj)set any
logical solution of the problem. The owners refuse to
take a far-sighted view, and ])refer a jilan of operation
which results in immediate profits: therefore the man-
ager has to adjust his point of view to theirs: he is con-
Il(jUIPMi:\T .l.\n ()Rli-RliSI:Hll-.S is;!
fnnitcd l)v a condition, nnt a tlu-nry. and ailoi)ts a i)i>!ic\
which is practical, tliouj^h short-si^lited, wliich liuj;s the
brutalities of fact wliile it disrejj^ards the attractions of
svstcni; it is the inevitable consequence of a short-lived
ownersiiip of mines.
I'or, l)ehin(i all the arguments for and against an en-
lari^ed mill-capacity or au increase in mine develi>i)ment.
there stands, frank and unashamed, the essentially Amer-
ican idea, that it is a p«K)r business to work for posterity.
•'What has [xisterity done for us?" the cynic asks. "Let us
take short view.s of life— and of mining; why inaugurate
a policy the benefit of which it requires years to work out
while the expense of it burdens the present?" In this
connection 'posterity' means successors in any form,
whether they be shareholders, who five years hence may
have acquired the holdings of the present j)roi)rietary. or
wliether it be the engineering staff— general manager,
mine superintendent and shift bosses — who, likely enough,
will in the course of time, or with change of control, suc-
ceed the existing management. Mines get bigger or
smaller; people make as much money by selling out of
them as by buying into them ; there is a healthy growth
or a steady decadence ; in an intensely active and jnishing
comnnuiity. such as an American metal-mining district,
nothing stands still. In the coal regions it is differr-n ;
fixity of ownership is more prevalent and a consistent
policy has an opportunity to justify itself. But in the
West, it is a fact that the control of mines passes, as a
rule, in less than five years, and the manager is changed
on an average about every two years, either because a
i)etter jHisition is ofTered to him, or because a better man
is found for the position, or for any one of the several
reasons which bring about new af)pointments to such
posts of responsibility.
Tangible profit is the aim of the .Xmerican system, or
the excuse for the want of any system ; sometimes that
I>l
////: lAOxOMiiS 01 mix/m;
nic;m.s a mill uilli ;i caiJ.icitx per .inmnn ciinal !■> tlic ti'tal
ore-rcstTVCs : smmtinirs ii nicaii-, im mi'l at all. hiii tlir
disposal lit the .uitpiit t.. nisiMui mills aii.l sm.liirs ;
sdmctiiiiis It iiicaiis IK. mill and no jirc idiictinii. Imi nn ial\'
a laapaiatiMii ,.f tin- imiir t'nr a sale: m i.uli caM- the
nlijcc-t I'l vi(\\ Is llu- making; k\ tlu' lllnst n|,,iu\ I, lit of
tlir piiipirt\ 111 the sliciTtist time. Tlu' iiu'tliDd has tlu-
faults (,i its \ inn, ..
\\ hill' tlir tnr.odiiij.,' is hcliovcd In ri'iircsciit ctirrcnt
practici- in this hranch of mininur vc-i .iicmiics. wc realize
fully that there is a lari^^e numl)er n\' ua'll-urs^'ani/ed min-
ing' i)ropriet<iries which njierate mines with no view X< <
exh.aiistiil.i,' them •■■v l.i sellini^ lliem . r the sh.ires in the
companies controllin-- them, and which therefore ailnpt a
system in which aniorti/.ation of c;i[)ital and otlur nice
adjustments are ri'coL,nii/ed factors. Takint,'- a hroad
view of minini;- activity, the description f,'iveti ahove will
nevertheless he reco,L;-nized. we I)elieve, by those who are
hest intormed. to he a fair statement of the case, the dis-
cussion of which i)resents many points of view.
This subject is <if threat ])ractic,il importance to tlie
business of ininiiit,^, and we trust that some of our ex-
perienced enijitieers will use our columns as they take us
into their confidence.
EQUIPMENT AiND ORE-RESERVES.-III.
(KililHri.il, M.iv 5. ,,,,,4 I
T Ih' c.'innlmthJti (.11 ilii-, -ulijrrt li> .Mr. \\ . R. In^alls
uill lif rr.ul uith irtvriM. f. t it i,. an alilc arKiuiuiit in
la\..r ,,| tlic l.ij^ical iicatniint nf tik prMi.Kiii, l.a>t wxxk
ur .nii.lia->i/(.'<l thai ,,,[uvt ni n an. in- Huiii tlk- :,li(irl
"uimsliip ,,1 niiiK-. in .mr \\ ott-rn innmi.L; it.uicjh^: it i.s
a view of till' sulijcit uhicli uill iin'\italil\ hicninc niodi-
fu'd as iiiiniii',- is |nit cm a >niinil. • lia>i>. hm tliat i» is tlie
>■llaracton.^tic .\nuruan -tan(l|ini,a uo arc cumpi'llcd to
e-onfuss. 'llu' Inni.Ntnck inTiM.l (aillion,L;li aci-diiii.anu-d
l)y manifcstaiiciis nf ^rcat t.tRT-y, iiiccliaiiical rcsuiirce-
fnlness and tlir nunuinn nf in,L;vninn> tnacliiiKTy tn meet
nvw (.■(>iiditinii> ) ua- nmrc partuularly remarkable for
the rapid exhaustion of hij; bonanzas; and tlie uastcful-
ne>s (if tliat jrreat exploitation afifected injiiriouslv the
methods of an entire t;(.nerati(jn nf minini^ men west of
the Rocky Monntains. it represented an Ainericaii type,
just as the conservative, unprn^rnssive ways of h>eiber^\
for example, ts pitied luiropean ideas of workinjj out a
mine. Hoth extremes are wasteful and illn,-,rical ; as any
serious consideration of amortization of capital and pos-
sible increment of [)rof^t will abundantly prove. In Xew
"^ork. no less than in Ltjiidon, new ideas are dcvelopintr ;
the introduction nf business acumen into the erstwhile
.yfamblinp of minini,^ tends happilv tn elucidate the neces-
sity for treatinj:^ mininjT undcrtakin.cfs as financial enter-
prises surrounded by conditions invnlvinsj some of the
same logical reasoning as manufacturing.
The time was, not long ago, when English investors in
mines bought shares in properties the value of which was
based chiefly on their past production, and if bv chance
they got an annual sixpenny dividend, accompanied by
S(K. thing exiilanations of future betterment, they went
home content with their venture; and the shares would
I Si;
nil: LLUSOMlLS Ul- Ml.MSC
.Slav i-lnsc to till ir par vahu' nf £i until cvciimally. hut iu-
i.'vital)lv. tlu' I. ■iiipaii) uiiit nil.i lii|uiilatinu, afuT the
>liar( hiildti- liail ii..t ..iil\ !■ i-i tliiir lapual. Inu liad also
rriiivi'd a >iiialki raic "i mtiri.>t tliaii tluy mii;lit have
ohtaiiifd ilsi'wlkTi'. I )ri-ir«iTvt.'s, i'(|iiivaUiit In a year's
pf xhu'tic '11. ut'i'i >i)rt'ai| (i\ir tiwnr six yiars DptTaliniis,
tilt iiiaiiaj^iT and staff j^m tluir salaries, tlie direct' >rs <.;(it
tluir fees, and in tl:e end tlie sharehnldiTs 'held tlio
lialiv,' wlun tliiise uliii were res|»iTisil)le |nr it had cleared
out witlinut apiilnos. '\\i that era sncceeded the tl ilatioti
nf rich mines with lar^^e av.iilahle reserves, their rapid
ilei>letiiin accnmiianied hy a Imhiiu in the shares, the accu-
ninlatiiiii nt fnrtnnes hv clever insiders, the speedy ruin
nf tlinse who Ixiui^ht at top prices, a enllapse, a nmral, and
fiiiallv a resuscitatinn nf the inininj,^ cniiqiany under new
niana,t,'enient. It is nhvinus that it the ]iiihlic are wiriinj,^
tn he edu' led, indirectly thrnu.i,di tlu' professinnal men
whnui tliev einplny, tn realize the fundamental nrinciples
(if finance, tlie\- will nhject ;is nnudi tn the IniiLj life nf a
mine which means the swallnwini; nf (jml'its in general
expenses and salaries, as tins will jjmtest against a reck-
less pouring nut nf its wealth in a hrief spi'll of inflated
returns which is accnmj)anie<l hy 'in and nut' selling of
shares anmng its nwn eiiiplnyees and such tntal lack of
ecnnnmv in the management as is iinvit.-iMe wlun mere
rajiidity of nutput is the aim nf all o]h rations, witlmut any
reg.ard for the future nf the enterprise.
i'oth methods are seen tn he destructive of mining as a
respectahle form ni" investment: the right appreciation of
them will hring Imnie the fact that the magnitude nf the
etjuipment. with its comlhrv, the rate nf ]irn(luctinn, must
hear some logical ratio to the size of the ore-reserves and
its accompan_\itig factor, the vigor of development.
MINE EQUIPMENT AND ORE-REShKVES
Thr r.dltor: *""''' "■ ""'"
SiK— I have read uitli mucli iiilinst Mr. Hoover's
I)ap(T on 'Tlu' lAonoiiiic Ratio of Treatiiui.t (apacity
to ( •rc-Re.servf.s.' Every iiunil'ir of llic proiV^^ion who
has hc":; I'-ult in [)ractice knows that lliis is one of the
11' r.t IrouhleM.iik- i|iie-tion-, lliat lie i^ lalKd upon to
solve, and which, ieavini; out tiie small ininoritv of ex-
cei)tionally favored nnnes. is seldom solved satisfactorily.
Theoretieally, Mr. Hoover's deductions m.iv be per-
fectly correct, hut in actual jiractice it wnuM he verv
flifficult to attemjit t.» apply them to the ^-cKTal run of
minis, as ojitrated m this cf)Uiitry.
Ill the I'irst iilace, from my own experience I can safelv
say that the ore-treatment i)laiit, whether millinfj. con-
ceiitratiiii.,'-, smelting-, or other reijuctioii means, of over
7^ \wr cent of all the iiiiius 1 have known, is, from the
initial erection, well in excess of the output of the mine,
under all onlinary conditions of develoiMue.it. I'nder
such conihtioiis, however, a property is perhajis return-
in;.,' a fair ])rofit in addition to an amorti/'atiou fund .jf
say 5 jier cent. .\t this rate <.i extraction, ami with rea-
sonable development, we will assume that a two vears'
ore-reserve of the average value can be maintained.
Now, supposing it were decided to follow Mr. Hoover's
suggestions as to the best method of obtaining the great-
est i)rofit from this mine, it would be iiecessarv to in-
crease the devel(i])ment expenses many tinus what they
were before, (n addition to this, unless the development
work were ;dl in ore. the hoisting plant would jjrohahly
be over-ta.xed, in .getting rid of the waste material. All
this would result in diminishing the immediate distribu-
tion of jjrofits. if. indeed, it did not extinguish them al-
together.
Now. having by these means developed a further two
ISS
77//: rx'oxoMics or .i//.\/.V(;
(ir lliri'i.- \i';ii>' n.'M.r\c' ni hit. anil i)n ilialily iiu'tn"n,'il ihc
(lis>ali.--i'actii in uf all the -li 'cklii iliUi>, il luci imc'^ ik'ccs-
sar\- to Imilil ^ucli an adililion tn the trtatnu'iH plant as
will ])v rc(|i!i>ilc tn lakr farr i>\ tlii'- iiKTi.a-i.il priJiluc-
linn. I'fiitit> ha\inL; Ikiii latcn np li\ tlii- prrvinn- extra
ikAH'liipnu'nt. the patient sti ickln iIiKt is I'itluT reiinirnl
tn >iil)scril)t' aililitinnal capital fnr llu- increase nt tlie
plant, nr >ee the \alne ni hi-- linMinL;- reihieeil hy the
issue ni' nmre stuck. In nlT,-et this, he is tnlil tliat the
iiicri'ase n|' ca])acitv will ii'>nlt in Inwerin;.;- the cn>t ni"
]irn(hictinn. This is. of cnurr>e. a fact : hnt will nnt that
saviiiL; in i.;eneral exjuiises hi.' n\er-halaiuH-i! I)\ the heavy
charJ.;^'^ which nnist. in justice, he ni.a<le I'nr the anmrti/a-
tinn nf the cnst i)f tile inci-c;i~eil pl.int. which shuiiM hi
cninciilent with tlie exh.anstinn ni' the twn nr three \ears'
1 >re- •■eser\e>, whicli al'Mie h.ax'e instilieil its i.i\-ctinn.'
1 think it is selt-e\iilent that the sti ickhnlder nf such a
prnpert\ wnnkl. at tile eiiil nl" the \ears, when the ;is-
siimeil riser\es nf ore hail hecn exhausteil. hi' in a much
better tinancial cnmliiinn with the nriL,Hn.al reiluctinn
wnrks nnl\ tli.ui he wmikl hi.' at the etui nf three year.s
with the e.\])an(le(l capacity anil forceil iinnluctinii.
In nearly forty years' experience I ha\e knnwii iiianv
mine failures due In a tnn threat development of treat-
ment ca])acity. hut ne\er one due to jirepnuder.ance of
mine caiiacitx n\er th.'U nf the reiluctinn works.
W i- are ,ill too prone to discount the ])ossihiIities of a
mine's resources, and i)rep;ire our surface works to meet
the ni|uirements of tlu"-e po>.vihi!itics ; and while, theo-
reticalU. the expansion of the treatment plant >-h, mid
keep p.aci.' with tlu- mine development, it is m'nerallv in
]ir;ielice tuore protuahle to the invistor wiien the opposite
"'^"'t^'"*- E. GvDUux Si']Lsi;t.-KV.
MINE EQUIPMENT ANL. ORE-RESERVES
(AlTil ;i, ii)i>4,i
The liditur:
Sir — Mr. 1 Idovc-r's papiT (.11 "'I'he I'A-nnomic Ratio of
'lix'atiiK'iit L'viijacity ic.i ( )rc-Kis(.'rvcs' upcii which you
]i:i\c iiuitc'd rruici^m, ha> ri'ct.i\ rd ni\ carcl'ul cniisidcra-
tinn. 1 iiavc also road with inlcrest ynur cditurial ui)oii
ihi' suhji.ci ni ■ [■".iniipiiR'nt and ( )rc-i';csi'rv^.'
In ni\ c-xpcriiiuT in prc-cious metal iniiiinL;" in tlic
I'nitcd Stales it i> llu' exccptinn In tind a mine which
>h('\\> anything; hke the 1 ire-reserve> nece^>ar\ Id earrv
lint any sucli plan as sii,i;'.L,n'sled li\ Mr. Ilotiver. [ inii:;ht
venture to say tliat tiiere are verv few mines, unless thev
are for sale (or fixed up for a sale) which ha\e au\' suh-
stantial nre-r(.'ser\is ahead to luaMe nne to think of
'amortization' or 'nurement of p.ofits.' These term>,
it seems to me, are all rii:;-ht in the manufacturiuL; husi-
uess, hut I doiil)t very much tlie wisdom nf usiny^ them
in regard to jirecinus metal niiniui.,''. I land-to-nn lUth
methods are the rule, and we must uufortunaleK adapt
ourselves, our plans, etc., tn cnnditious as thev exist.
I noiic' th.at ynu are cihli^'d in a footnote ti/ ex])lain
to ynur readers the meaniuL; nf ';imc:niz;uii)u.' This in
my case — I hltish to c mfess it— was nmst nece>sar\ , as I
ha\e ne\er had nc .ision to use this term in the everv-dav
l)usiness uf mining;. .Mr llnover sa\s that "the incre-
ment iif jirotit^ f(ir iS miiuths was sufficient to amortize
till- exiienditun." \\ hv nut -.-iv 'nff-et' the expenditure'
< 'f cmirsi' [ sli,ill hriuLT <liiwn on m\ head a st'vere criti-
cism ,-is to the \iews which I h,i\e exjiressed in re.i^anl
to Mr. llo(i\er's ;irlicle: hut it (iocs not seem to me clear,
nor Odes it ;ippe,-d to my common -ensi', as apjilied to
prt'cious metal miniiiL; in this coun!r\',
Ih.Xi, V<. Lawki:.\ce.
.\ew ^'llrk, .\pril S. 1(104,
ANOTHER ASPECT OF MINING FINANCE
Tin- liditor:
Sin — N'our inti.Trslin)j: articks rocoiitly on 'Snnu' As-
jn'clMii MiniiiL: liiKuu-t.',' in ni\ iuil,L;iiK'nt, fail tn illu>tratt.'
tin- lati."^t l'.n_uli>h ilfvi'ldimu'iit nf the suhjci't. < )ut nf
till- chaiis 111' mine prnnidters. titiance ami explnratinii
c(ini]ianiis there has recently a])i)eare<l entirel\- andilkr
fcirni I if mining- tnianee ami management. There are
certain firms, comiioseil of jiartners — not companies —
who. for reasons which will become apparent later, liavc
steadilv come forward in the past ten years, ami are fast
controlliiif,' the <,reat Inilk of ininintj enterprise. These
tirms have risen in various wavs : some at first ori,c:inall\
merchants, ami some miniiiL;' engineers. They are com-
jioseil of various partners: financial men. minini;" en-
f^Miu'ers, mine iiianaLi^ers : in an\' e\eiit, all are experieiUH'd
iiiiniui,'^ men. devotiiii^ their entire time to the work. 1 he
business is jjfenerally organized on manai^erial lines. .\
central exploration conijiany is U'-ually created amons.^
their friends, when aii\' particular field is to be covered, a
portion of whose capital tlu'V may or may not own. The
'firm' manages this comp;m\. in return for a portion of
the })rofits. 'i'his exploration company searches for luines
under iruidance of the tirm. .md timlinij^ them. ]iroceeils
to develui:. erpiip. and create them into subsidiary com-
panies, which are in turn inanaLred or controlled by the
firm; sometimes for a iiortion of their pirofits, sometimes
for direct fees. Whatever the details of internal arrani;e-
ment m;iv be, from the standpoint of tlie investor and
outside en!.;ineer, the result is the same, and there are
three or four features of this development that are worthy
of note.
I. The position of a hoard of directors sinks into the
MiMXc; i-i.\\i.\cn
I'.tl
t)ackt,'-r(nin(I, for the clients I'f t'lo tlnn hnd tlic cajiital
for its ciitiTpriscs, and tlicsf cliunts look on tlu' tirin as
resi)onsil)lc ; cii^a the firm usually tills the bua'-d with its
own partners, or men of its 'grouix' whn \\;1I L;uard
their responsiliilities ])ro])erly from a directorial stand
point. Scandals from mismanai,fement h\- directors have
been of rarest occurrence in these ,L;roups. IkiiIi liecau-/
of the domination of the firm, and from the pcrsouucl
forminrj tlio boards.
2. The administrations of the mines are of very supe-
rior order. These firms usually confine their operations
to specific retjions. and the administrations of several
mines arc usually t,'roupe(l to.yether mider a staff of s])e-
cialists, such as no sin^'le mine couid afford to emplo\-.
Sujjplies are l)oUL,dit in very larii^e bulk. i!irect from manu
facturers. and London expenses, by combined offices, .ire
k pt at a very low fiu;iire. The (|uality of men emploved
as mana.irers and en;;ineers in these L^roups is usually of
a su^ierior ordiT, because, with a ^reat staff, invalu-
able o])i)ortmiit\- for comjtarative results arises, and the
best man is rajiidly broui^ht forward, 'Workint; costs
well balanced by extraction ar.d workinij results" is the
watclnvord of administration.
3. The position of eii}.^ineers and tuanaLTcrs in such
groups is much better than that of those emplo\ed in
sin.t,de companies, which are usually domin.ited bv boards
of titled nonentities, or worse.
As the manai;er or cnLjineer with these firms is ni't
dependent upon the success of an\' one luine for his fu-
turi — for "i^rood mines do nut make L^ood manaijers" —
under this form of administration, the opportunities of
promotion are much wider, and constant <niplovment
more certain, for the fiekl is not limitid, as saiii. to one
mine. < >tlier lars;er mines, st.iff positions ;uid ultiniatelv
partnership, are steps directly > ipen to a capal)le man.
4. Firms I'i thi'^ characiir lia\e a name to maintain.
!!):;
77//: I:C().\()M1CS ()!■ Mf.M.W:
f'lr nil tlu-ir u 1 naiiir din-s ilu'ir al)ilit\ i1i'[h'i1(1 to si'ciirc
'he vast Miius of iii«iiK-y which thoy (.■iiiplny, ami thcv arc
iK'Vor jj;uihv nf undrrtakiiiL; 'wn nu' \rn!iiri.>. At tiiiir^
I'vcn, whi'ii till' failnrr of iiiino in ikptli precipitates a
loss, thev ha\e supplie(| a new mine at their nwii cost —
not for charit\. hut to keep alive the necessary contiiletice
in their aliility and intei;rit_\.
The irrespoiisihle promoter, who puts up a dunini\
hoard of pompous dii;nitaries until iiis sliares are dis-
]josed of, is having' .^reat dilticulty to j^i't the inihlic ear,
and must disajipear. 'I'hese same jionipoi's di.u^nitaries
.are a sore trial to the honest inan;iu;er. who slaves at the
mine o\er working; costs, ami periodicallv meets their
in(|uiries wliv he does not increase iirofits by raisinij
the ;niiount of ijold jier ton. instead of tr\ in:.; to reduce
costs.
.\ feature of this form of orL;;iiii/:ation whicli is niakiiiL;
itself felt is the continuit} of the tirm. its senior partners
retire and \ounL;er nun are hrouL^ht from administrative
posiiioiis in the ticid. and the Ihni .t;ocs on. Transitory
traiisaciii Ills for min;cdiati' pri lit. at the ri~k of L;(iod
name, are not iiidtilL;ed in. for the name must he sus-
tained. 'Idle investini; ]uililic is fast recoL;iiizini; this, ami
the universal preliminary amoiii;' investors is a statement
re^ardini; .a mine, that is, that it is a 1\. (i. \' P.. niiiu'.
and not ih.at Admiral Sir IXimfunny is chairinan.
There is a marked tendency .amoiii;" thcsC tirnis to ter-
ritorialize, that is, to conline tlieniseK>.'s to specilic re-
L,Moiis. In m;in\ instances the\ are interesled in concerns
which they do not control, ddiere are in l.ondiMi seven
or ei-lit siich llriiis cif proiiiinenct'. Souih Africa fur-
nishing: the tleld for most, ddie leadinj; tirnis in the four
])riiicipal mining; regions in which h".nL;lishmen are mostly
concerned .in- iiuiiiioucd heiow, with ;ni .ipproxiniation
of the iioininal capital and market \-,ilue of tlu- enter-
prises tliex control or manaLje. The memhers oi these
MIX/XG J-IX,1XCE
VY.\
firms are often, as said, iiitorosted in other concerns ; onh
tliMse identified with the firms are included:
Rtgion of N,.inin,il Markit
rriiici|.al Activity. Ca|iu;il. \';ilm-
UltiiIrt, B.'it & Co South Afric;i. $85,500x00 $,UJ,oixi,ooo
Bewick, M(.ri'ni>; & Co. . . .-Xiistrali.!. 4.',ioo,oon ;o. 5:0, 000
John l.-iylor iS.- Son, huli.i. cto 30.500,000 ()5.50o,ooo
rarbut, Sof. & JaiiM'ii..,, Wost Africa
iiui Kiio(lc>ia. 55.500.000 ^5. 100.000
rile market price for these enterjirises, as compared
with their nominal capital, gives food for thought.
There are in London, as set out in your articles, sev-
eral exploration and nuance coiupanies which are not
controlled by such firms. .\t one time they predominated
in the mining finance of London. Some have been man-
aged with consideration for the public, and many not so.
in all cases, practically, they are tlotatit)n comi)anies [Hire
and simple. When a mine is fioated. so long as thev
maintain in it a considerable interest, thev continue to
look after the mine and guide its management, but as
soon as the mine is in the liaiids of the public, they
promptly forget it for other matters, and the administra-
tion goes to the dogs. Hence the investor has begun to
consider somewhat, not only the character of investments
otYereil him, but also whether he will need to 'carry the
baby' all alone or not.
;Ti general, in the finance-company arrangement, set
out so mucli in detail in your columns, the ultimate ten-
dency is even worse than with the individual jiromoter. for
the latter has at least some mora! responsibilitv. and a
corporation has none, '{"be general result is that the
'firm' is rapidly becoming the main source of mine
finance — and so much the better for the industr\ . There
is no finance comi^auv in London the ventures of which
in the aggre.gate stand on the market at an amount ef|ua!
to their nominal capital — itself a usetul indication of pre-
\iiiiis career. „
Observer.
London. ,\pri! 13, 1004.
THE ECONOMIC RATiO OF TREATMENT
CAPACITY TO ORE-RESERVES
The Editor: (^'•^>- 5. "'.m.)
SiK — Mr. Hoover is apiiaroiitly tlie firs': to express in
the form of a scientific );eneralizalion a princijile tliat
has heen well recoj^niized 1)\ engineers as soinid in theory ;
also as true and praiseworthy in practice, subject to limi-
tations, which it seems to me Mr. Hoover clearly referred
to, and thus (Hsarmed the criticisms of Mr. .Spilsbury and
Mr. Lawrence. The princii>le is briefly: The more
quickly the values of a mine can he realized, tlie lartjer
will be the net profit. .V practical limitation of this prin-
ciple is the uncertainty as to the ultimate resources of
the mine, involving hazard in the provi.sion of ore-treat-
ment capacity. Mr. Hoover's purpose is simply to for-
mulate general rules indicating when there is no hazard,
buL, on the contrary, the probability ot increased profit
in the investment in additional plant. Tliere is, however,
another limitation in many cases, which Mr. Hoover has
not considered, because I c >nceive he has gold mines
especially in mind : that is, the limitation of the markets.
In opposition to Messrs. Spilsbury and Lawrence, I
fail to see, Mr. Lditor, wherein .American conditions
differ from those of other countries in so far as the ore
dei)osits are concerned. All have ore deposits of various
kinds; some small, pockety and uncertain; others large,
regular and persistent. Uur .American conditions differ
perhaps from tho.se of some other countries in affording
better public markets for the ores, relieving the miner
from providing any treatiiunt capacity, permitting him
to sell as much ore as he can extract, and enabling the
intense operation of his property, doing in fact the very
thing that Mr. Hoover advises; hence the short life uf
manv of our mines. There are, however, many mines in
America which require individual plants of one kind or
C.U'.IC/TV .l\D UA'/:-A7:.S7:A'/7:-.V
liC)
aiKitlier. That soiiio of tlicsc, nay ^•\■i^u many, liavc hwu
provided with an nnprofitahle excess of treatment capac-
ity (of whicli we all Jsnow a multitnde of instances,
and doniitlcss 'here are pniportiiinatelv as many in
Australia anrl elsewhere) does not disjjpove the correct-
ness of the principle that Mr. Ih.over formulates. How
can it be said that this is a i)rinciple that is true eiiout,di
m theory, I)ut of little practical application in a country
which pos.sesses copjier mines showin.t; the ore-reserves
of Lake .^u()erior, Ihitte. I!inj,diam. and the various <lis-
tncts of .Arizona: lead mines showinj.,'- the ore-r.>erves
of tlie Geur d'.Meiie, lioime Terre, Flat River and I'ark
City: zinc mints like tho.se at Stirlinjj: Hill and I'ranklin
Furnace; and j.;()ld mines 'ike the Hoiuestake and the
proup on Dou.q-Ias Island, .Alaska? I have seen mines
which have had an excess of treatment capacity; I liave
also seen tliose which have had a deficiency.
Take for example a very wet mine, i)roducin,s^ 150,000
tons of ore per annum, the cost of pumpinj,^ water heinjr
$.:io.ooo per annum. The estimated life of the mine is in
excess of 10 years. Tiie extra cost of plant to permit
the production of 300,000 tons per annum wt)uld he $100,-
000. The savin.q: in cost of liftini,' water per ton of ore
would alone re-imhurse the cost of addition at jjjant in
ahout four years, at compound interest, not to speak of
other savin,<Ts that would ensue. This case is entirely
analo,<Tous to those which Mr. Hoover cites. .Another
method of illustratint,'- the idea is afforded in the experi-
ence in numerous districts in the L'nited States where
larj^a- bodies of low-jjrade ore are mined ; a mine worked
on the basis of 1,000 tons per day may be profitable; on
the basis of kxo tons per da\- not so. Is not tliis prin-
cij)le entirelv in accordance with tiie .American idea that
it is poor business to mine for pcjsteritv?
I do no.t consider that this discussion is sui)i)osed to
cover the policy of the iiolder of a short lease, whose
VM THE r.COXO. MIL'S Of MIMXG
interest iiKiv he distinctly to i^M a mine; or that of a for-
tunate adveiiiurer who may find it most profitable to pick
the eyes ..nt of his mine; hut rather to the policy of the
operator, wln> has probably purchased the mine on ton-
nage, assays and prosiKCti, and ha> paid for the low
as well as 'the higli-grade ore. When money is invested
in the purchase of a mine it has P't ''^ «-'^rn a .livi.lend
commensurate with the risk, and it also must he re-
funded, else there is no prey.. The more (piickly the
principal can be refunded, the greater will be the proht,
because $10,000,000 in value that can be realized in 10
years is worth more as a purchase than $io,cxx),ooo that
can onlv be realized in 40 years. .Amortization of the
principal is therefore a very important consideration.
Amortization, which is a term more used by I'.ritish and
French engineers than .\nierican, is a very good word;
there is no other single word which precisely conveys
tlie same meaning.
Let us take the case of a mine sol<l for $500,000, which
was supposed to contain at lea • j^.(Xxx(X)0 tons of ore.
The mining and milling plant rciuired to produce I,0(X)
tons of ore per day 1300,000 tons per annum) would
have cost $^or„ooo. The profit per annum would have
been $213,750 i 71. -'5^^ \>^^ ^on of ore), which would have
been nearly 27 per cent on the investment. Instead of
this, the mine was eiiuiiiped to mill only one-third as
much ore, though it was already developed to twice as
much capacitv, the total cost of development and eciuip-
ment being about $100,000. The profit per annum was
about $5(>._'50 (56.25c. per ton), which was only lo per
cent on" the investment, or only sufficient to rc-imburse
the latter in 10 \ears. without interest. I'y selecting a
better grade of ore than the average, which ihc mine
was opened sufticiently 'o permit, there was a gross im.fit
of about $100,000 per annum, or a little less than 18 per
111 1,1*-, _„.,;,] .1 V- ii-i ii..t !( Ill
CAPACITY AXn ORR-RI'.SEh'rES
197
ol the iiiiiH', leaving sicat bodies of ore too low in parade
to be mined, with tlie prospect of doin.i: no more than
rcturninp the money invested, without interest. Opera-
tion of tlie mine on the basis of l.( -o tons per day prom-
ised in lo years a profit of $j,i37,500, whicli would have
refunded the original investment al the rate of lO per
cent, with interest at 6 per cent, and would have left a
surplus of $1,07.^500, or an average of nearly 13.5 per
cent per aniunn as profit on tlie investment. Can there
be anv doubt that this mine, if originally opened in a
small showing of rich ore, and provided with small equip-
ment, should, when development indicated the true con-
dition, have promptly been provided with increased fa-
cilities?
Another case in the same line occurs In the handling
of deposits of rich ore in connection with large deposits
of poor ore. .\ certain mine was producing 100 tons
per day of smelting ore at a cost of $_> per ton. of which
^00. per ton was for pumping water and general ex-
pt_.,)sc— administration, supervision, assaying, surveying,
taxes, insurance, etc. ; and 100 tons per day of low-grade
ore, which was concentrated in a mill— cost about $25,-
000— to 10 tons of product netting about 37.5c. per ton
of crude ore, the latter being charged only with its di-
rect expenses. The high-grade and low-grade ores were
known to exist in the ratio of 1:3. but were being ex-
tracted in the ratio of only I :i. Obviously, the result of
this policy was to leave 50 per cent of the ore, all low
grade, in the mine in a form wherein it could not be ex-
tracted at any profit at all. a contingency that was pointed
out by tlie engineers.
These examples are from practice, hut as they refer to
the private business of close corporations, the details
have not been entered into and the figures have been
generalized, the object being simpl> to illustrate the prin-
ciple which Mr, Hoover argues; that when the incre-
HIS
■////■. liCOXOMK S Of MIMX(-
iiK'iil ni" proiit ■xcfi'il'- till' cost of aiMitiniial plant, I'X-
tciisKui 111 tlic laltiT -li'iiild ho mailc.
1 havt' jiruviously rvmarkcd ihv liiiiitaticin that may 1)-.
\]\c<\ hv market cniiditidns. l'''ir i'xami>l'.', if tlu- entire
iiiarkfl for a cniunn "lit> W ^upiihnl hv a sini^lo urc (K--
l)(»it. no matter how extensive the deposit mav he known
to he, its exploitation is limited l)y the capacity of the
market This is not at all a supiMisitilious example. I
fancv this consideration enters into the calculation of tlie
manaj,,'ers of some of our ^rcat mines, and it is vveii,dify,
else win- the agreements to limit prodnction tliat m one
wav or another, ;it one time or another, have been made
in almost all of the .!;reat met.al indnstries, pold and silver
exrei)te<!:- The Calnmet & Ilecia mines are snpposed to
have ;. further life of J5 vears .at their present rate ot
production ; the other i,'reat copper mines also have jjrcat
ore-reserves; hut su]ipnse the dozen lar.L;e producers,
who make approximately 50 per cent of the world's out-
put, should, at one and the same time, enter upon the
policy of intense production, the effect upon the price of
copper would immediately he manifest— and the diminu-
tion in value would proliahly wipe out forthwith the
entire increment of profit. It appears, therefore, that
while the theory of intense iiroduction is correct, and the
results of practice may correspond, subject to limitat-nns.
it is rather fortunate that the practice is not p;cnerally
followed. a,tjain excludiii','- i;old mininj;-.
I'.efore concluding tlii- rather lentjthy contribution,
reference may well be niaile to a new condifon m ore
treatment, which is developiiiL,'- in the United States.
Many vears as^'o it was a common ])ractice to put reduc-
tion works at the mines. Later. pul)lic works were estab-
lished at central points to buy ami treat the ores from
many mines. Xow it is af,'ain becoiniivj: common for the
preat mines to have tl-.eir <iwn reilnction works, but they
are bein,^' pm at central points, and are intended to buy
C.W.ICITY AXI> OFr.-Rr.Sr.RJTS
100
aii'l tnat tlic ores from ntlur iiime-;. The olTcct of tins
i^ to accomplish all that Mr. Hoover ari^iies for, ami
uith(>iit so miu-h risk to the individual mine. In fact,
the ore-rednciion hii-iness may i,'o on, and the wnrks
still have value as a m.-nnifactiirint: plant, after the mine
for which they were primarily erected has hecn entirely
exhausted. \V. R. I.n-(;.\lls.
I'.oston, Mass., .April J5. i')04.
H ♦
MINING IN RHODESIA
OIji>1] -'4. 1904.)
VVu' i-.ditor:
SiK— In M'Vir i>MR' dl Manli 10 lliiri' ;i|)|Hars a Kutr
liiiipi ■nni;,' In lii' a 'irn'iiilly rntii.i>iii" li\ Mr. Wallace
llruad upciii an arlick' i.iiiilrilnili.(l liy nif Liititlcd 'GuUl
Mniiii!; ni RhiMK--ia/ It i~ uiiinrtuiiatc that tlii' i;c'ni.ral
toiu' III Mr. r,rciair> i' intnliutinii i> nut (aif uliuli inn-
(lucts tipwani Irii'iulh (li.~cu.>>ii lu.
Ill till' main, tlu- i.iitK'i>iii> arc sn va^iulv \nn as
scari'iU til warrant ^nnmunt I lure arc. In lUiA ir. snnu'
viiu.s ratlu r liircii)ly f.\i)ri'.-.M.'(l liv Mr. Ilruacl, wl'.uli
aiiiKur til int- tn he iiarrnw iiiiiii;^h tn invite hrii f rijily
Mr. I'.rnad Minis tn he eiinl'n-~e(l uiiii rej^anl tn the
ajiplieatiiin nt nian\ nf the reiii.irk.s ecinlained in my arti-
cle, in that he asMniates tliein whnlly with a [iroperty tipnn
wliiih he did si iiiie prns]iectiii^ wcrk. .As a matter "f
t;ict. I utilized the inipreN^i, m^ ;ind I'ls^ures nhtained frmn
fmir (litYereiit iiiiniiij,^ com])anies with wliich I have been
prcifcs>iiinall\- eniinected for sciiiie years, 'lakiiii,^ hi-- par-
aj^r.iph^ seriatim :
I. The I'lnhaldiif^ha mine, situated in Mashnnaland.
is til"' diiK' mine in sfuithern Rhodesia which it has heeti
fiiund advaniai.;e(iiis' tn npeii witli adits or cmss-cuts.
rnfnrtimatelv . tn date, this class of wdrk has imt heen
whnlly cnnhncd tn this prnperty. There are many miius
in Rhndesia, the earl\ develn]imcnt of wlilch was at-
tciii|ited thrnuij;li adits; indeed, at hnth the lionsnr and
Teliekwe mines, a pnnd ileal of this class of wnrk was
started, liut it was fnund later that vertical nr inclined
shafts would he necessary (hy reason of the limitnl
amount of ore ohtainahle ahove the lowest adit level);
so that under adverse conditions and at great expense, in
which temporary and [lartial suspension of milling played
en impirtatU p t. these properties were permanently
cipcned through shafts.
MIXIXC l\ RHODESIA
•Jtil
I lure ari' m.iiu ivlliMik-i:in jirnspcets uliu'i (niit.iin
ailit-. Inn 1 kimw ni no iii^taiux' wIuTt.' ilii^ v nrk lias
lucii "I iniifc than itni]inrary inipurtanri' Iiidi-c!. I
Vw'W '<{ "lu piMpiTtv ill |iailiinlar wluTc iin K -■- ilian
2.~i^'> ft- lit wiirk \va> carrii'il "'it > n "W \\\\\A\ I'litrrdpiud
less lliaii ()(> It. aliiivc llic Icvrl cf ilir adit
2. 'I'lu' ilcvatiiiii (if the |ilati'au iipmi wliiili I'.ulawavo
is siliiati'd, is as stated, naiiuly. aljoiil 4.450 ft. ali. ivc M.a
level, hilt the individual liilK and kopics randy reach an
elevation of nion ili.ni ,V><i ft. ahove the uiidulatin.U lilaiiis
in their iniinediate proximity.
( ine of the si^dits of soutliern Khode^a. wliiih has evi-
denth escaped Mr. ilmad. is the World's \ ie\\ . a s])ot
in tile center of one of tiie lar^' 'i^raiu'.e helts.' and naiiud
l)V tiiat eiiijure hnilder, I ecil John Rhodes, in the very
midst of tiiis e.\tensi\e area, which has lieen descrihed as
"an tindnlatin:,^ plain, enihraciiii,' a jjcrfect si'a of conical-
shaped kopjes.'" lies all that remains of this ^reat man.
Similar natural monuments in a modified lorm are louml
in all the ,L;ranitic heits of RhodeMa. In the^e hells numer-
ous (piartz deposits occur, cliielly .-.e.i^re^'ations. but. with
the possible exception of one or two lodes, no ecuuomic
value can be attached to these occurrences.
7. .\s compared to the numerous alluvial districts in
which the writer has mined on the I'acitic slope of the
L'nitcd States, the ileposits of southern Rhodesia are ex-
tremely limited, not alone in vertical depth, but in super-
ficial area. llaviiiL; examined a lari;e mimbi.r ■ f these
iKCurrences in Rhodesia, I have rarely found a depth,
includinjj 'tip dirt.' to exceed Jo ft. .Mthon^di >( ,nie of
the deposits contain fair i^old-values. ver\- little attention
has been s'ven to this branch of mininjj, for the reasons
already stated.
One would hardly expect tlie same dcizrce of erosion
to obtain in a tropical climate as in a climate where ex-
treme cold obtains.
202
Tim licoxoMics or mimxg
I). I was not aware that any (Icfiiiile statcnR'nt lia<l been
made Ijy any of tlic archx^ologists who have investigated
the ancient ruins of Rhodesia, touchnig the peoples wlio
actually were responsible for the numerous old workmgs
existing in the country. I'roni the wurks I have read, I
gathered that considerable (U)ubt existed upon this sub-
ject. Mr. R. X. Hall, who has made an exhaustive study
of the subject and who has carried out sotue very im-
portant work lately, at the Zimbabwe ruins, in discussing
the material -.vhich is to be embo(lied in his new work
shortly to be published, informed me, only last Novem-
ber, that he had been able (luite recently to upset many of
the older theories, and, in fact, is making many alterations
in hi.s own original work.
11. If, in assuming a payable limit to the grade of any
given ore, and graphically segregating tlio payable from
the non-payable ore, as well as applying the .same idea to
the otlur factor, 'width of vein." one is not comprehen-
sivelv defining the lateral extent of individual sh(K)ts
which it is intended to stope, perhaps Mr. P.road will
favor us with the more im]ioriant considerations. As a
matter of fact, to the professional man, the graphic ex-
pression of values and widths has not nnich significance.
It has its importance, howevtr. in that it provides a ready
means of enlightening those who are unable to comiire-
hend the points at issue by reason of the maze of figures
and methods necessarily eni]iloyed in such work.
12. Mr. Broad has gone entirely astray on the subject
of development work. In the hr.-,t place, it is not cus-
t-)inary to charge the cost of shafts to ■devrlopment work.'
This disbursement is charged direct to 'cajiital' account.
All shafts are treated as assets, and the mom \ > expended
thereon are redeemed through deiireciation account, as it
is presumed that the shafts will be of use just as bnig as
anv of the surface eciuiimient.
It is necessarv to establish a basis in dealing with the de-
!
MIMXG IX RlfODf.SIA
20:!
vclopmcnt rodciiiption account, tliat is, in rcdceminj;^ tht-
nioiifvs expended in developing' the ore which it is expected
to mill, and as all other distrihutions are made on the basis
of the tnnnaL;e milled, it is lisnal to treat development
account in the same manner; the cross-section of the driv-
ing or \vinzin<; has absolutely nothinsj; to do with the mat-
ter, nor is the small aniuunt of clean payal)le ore, taken
from this work, of signiticance ; much less the total
cubical contents in waste rock and ore, which Mr. P.road
has, xdthout ha:iug li.ul any zciit zcidths. taken so much
trouble to compute at 4.500 tons. As a matter of fact, in
the case cited it was found advantageous to extend the
development work into the foot-wall of the vein. The
calcni.-uion was ([uite correctly given by me, and was ar-
rived at by dividing the total cost of development for a
certain period by the number of tons milled during the
same period. The cost per foot, for the wdrk, was. as
explained, above the average, because a comparatively
small fi-iotage was obtained during that particular j.eriod ;
but, as stated, individual months could have been chosen
which would have shown a great improvement. The
object, however, was to show the distribution of the
moneys expended tipon the work rather than to p-isent
a lot of flattering figures. Development work, liiat is,
drifts, when extended with machine drills, in hard rock
and on a comprehensive scale, seldom costs less than $20
l)er foot in Rhodesia. This of course includes all ex-
penses not onlv at the mine, but in London and at the
local offices and engineers' charges. It is quite clear that
an excessively small fixitage, where a full staff is being
emploved and other constants are evident, reflects un-
favorably in the cost per foot. Perhaps Mr. P.road had in
mind the bare contract price, wdiich in Rhodesia ranges
from Sf) per foot in oxidized gmtmd to Si 5 per foot in
hard rock. The facilities offered in individual cases is
also an important factor. .
204
/'//£ ECOXOMItS or MIMXG
13. The idea o.\i)rcssL'(i by Mr. llri'ad that it vould he
advisable to exclude the air-compressor I'runi the eciiiip-
m-jnt of a mine, and in ctmsefiuence ( h\ reason of tlie ir-
regular supply of native labor) operate the mill irre.mi-
larlv. as has been the experience of more than one mine,
cannot be taken seriously. Tliere is not one mine in the
whole of Rhodesia which has been able to run contin-
uouslv on ore furnished by hand iaboi . It is not usual to
charfr anv part of the machinery and plant to develop-
ment aLCount.
14 u referring to the weight of stamps I had no par-
ticuL. plant m view. I have myself erected three milbs
in Rhodesia, using ditlferent weights, namely, 1.050 lb.,
1.150 lb., 1.258 lb, : while as far back as 1898 I erected a
mill in the Transvaal of 1,385 lb. stainps. I subjoin the
weights of the individual parts of the heaviest stamps yet
made; Stem. 604 lb.; head. 437 lb., shoe, 289 lb.; tappet.
135 lb. : total. 1.405 lb. The die weighed 165 lb.
The evolution of the mining industry, while probably not
so marked in Rhodesia during the ]iast three or four
vears as in other countries, has brought about great
changes in ideas, imiiressions and methods.
I hope that Mr. Hroad, who, as indicated by his re-
marks, is a geologist of liigh standing, will favor the
readers of the Joiun.m. with his impressions of the
geologv of those parts of Rhodesia in which he has spent
so nianv vears. and I am ^ure that such an article from
him would prove of great interest to professional men.
I'ersonallv. I can onlv concede a dit'fe.ence oi opinion
upon those subjects which in my original paper were too
gcnerallv stated, or in Mr, Hroad's criticism too vaguely,
to afford ground tor either criticism or reply.
F. C. RoiiKKPS.
SECRET RESERVES
(Kditorial. May 12, 1904.)
'I'lic article on this subject, apinariiiij in litis issue, by a
writer so well known in Australia as Mr. F. H. I'athurst
is sure to be read with ii 'erest. Apart from its local in-
terest, the (luestion discussed involves many of the nice
points of com])any inanas^ement and the responsibility
which is inseparable from such nianaj^ement. When
secrecy of any sort becomes a lever oijeninii; the way for
successful share speculations on the part of those in a
position of trust it is bad — unqualifiedly bad — because it
means not only that investors are left in is^jnorance of
essential facts, but it involves a positive dan.irer to the
morale of the statT in control of operations at the mine.
A directorate which practices deception toward its share-
holders must expect like treatment from its manaijer, and
he in turn must not be surprised if members of his staff
pursue similar tactics. "T^on't monkey with a buzz-saw."
To plav witii a code of honorable conduct is to under-
mme the very basis of business, and more particularly is
it essential that above-board procedure should be the
constant aim of those who wish to establish confidences
in the speculative industry of mining.
SECRET RESERVES
IJV !•". I 1. I'.Al UL Ksr.
Tlu' fiucstinn nf tlu" linur in \'ictoria, Australia, is the
ri.L;lit (if a miiu' nnnaijfr to kit']) a secret reserve nf l^oM
for the purpii.-j of a\eraj;iii,<; the yield. .Vlteiition has heeii
directed to the sul)jcct through the discovery by one of
the directors of a dee[)-lead aihivial mine, th;it the ni.in-
ager kept a reserve whicli he used for averasin.tj pur-
poses. The auditors, on seeing tlie fact announced in
the .Melhounie .Ir^^iis that such a reser\e existed, called
on the mine manager to ]iroduce his 'gold-lwoks." The
manager thereupon forwarded tn them two hooks: X". i
showed the gold sent hy him to the h.ank. which corre-
spo:ided with the yields as reporte<! to the directors and
tlie shareholders week by week : Xo. 2 varied frotii Xo. I,
inasnuich as this book piirjiorted to sliow the whole of
the gold taken from the sluicedioxes da\ by (la_\ . and
therefore it accounted for the reserve also. This reserve
the manager had made up by taking gold from the daily
yields when high, and ^luring it in liis safe. It went
there without the knowledge of the board, wiio also were
not made acquainted witli any withdrawals fr' m it. The
only check was, as is the case with all \'ici riaii dec])-
leail mines, the sluice-man. This is the man who cleans
up the slui':o. and he, with the m;mager, weighs the gold
and initials the entr\ nf the amount in the manager's
gold-book, but he does not rejiort to the directors. The
sluice-man i.s appointed by the directors, and therefore
he is supposed to be independent of the manager. It
may be ad'led that the occasion of tlie auditors calling
u[)on the mine manager for his gold-liook was that the
gold in reserve was not shown in the half-yearly accounts,
just as it had never been >hown in the week!;, yields.
p.. »!,„ \;pt,..;^„ (• ;.,„• \.
Sr.CRIlT RBSERl T.S
2ir,
])iil>lisli a full 'itatcnu'iit of assets and liabilities each lialf-
\ear, and in additiDH the sharelmlders and the creditors
liave tiic right tu demand (and must he supplied with, on
payment of a small fee) three months' acemnits nf a min-
iii.t^ conipan}-. It is easy to see that the first f)f these
oblicfations — that of i)resentin<; a true statement of assets
and liabilities — cannot be fulfilled if a vital portion of
the assets is kejit secret at the mine. In the satue way
it is evident that if a sharehokler, in the exercise of his
statutory rij;ht. demanded a com[)lete statement of ac-
coimts, he woidd not get it if the directors and legal man-
ager did lint include tlii'-
reser\e. The object of
the legislature in allowing this privilege to creditors and;
shareholders was to prevent secrecy, so that the mining
investor might be on the same footing as the director or
any other officials of the company. Parliament held to
tlie o])inion that it was necessary for the well-being of
the industry tliat its affairs sliould be open and above
board as far as was possible, and very few directors have
had the temerity to offer opposition to its determination
in that respect.
Now it is the practice of certain directors, after they
have appointed the manager, to make no inquiry whether
he has a gold reserve. "We have confidence in our mine
manager and we trust him to work the mine to the best
advantage," they say. "if he thinks it is desirable to keep
a gold reserve to equalize yiehls. let him do so. We do
not want to know, and if we do not know we do not tell
a lis when we say to shareholders that we are not aware
if a reserve is kept." It is clear that this view involves a
shirking of responsibilit}-. In .\ustralia. whatever he may
be elsewhere, the director is a trustee. The whole spirit
of legislation is that he nuist fulfil! his trust or be re-
sponsible for his dereliction of dut\-. Indeed, in one
case it was decided that a director was compelled to make
ui) the loss in value of shares, where he had t(Jd a share-
208
Tim liCOXOMICS OF MJMXG
holder wlio had asked his advice oti the subject to liold
on to his scrip. Tiiereforo. as (hrectors arc entrusted
■ ith the control of a mine, they have no rijjht to let their
mine niana^'er re,i;nlate the yield un'css they are fully
coi^nizant of the fact. In this connection it must be ex-
plained that the practice in X'ictoria is to publish yields
weekly, and the market eljbs and tlows as the returns
vary. Hence an additional reason is afforded certain
directors for not inciuirinLT about the f^old reserve, be-
cause they do not wish to be ojien to the charge of having
secret information that would advantage them in stock
and share dealing as against the ordinary shareholder.
It will be seen that in this (juestion of the gold reserve
two factors operate with mining directors ; first, that of
trust reposed in the mine manager, and, second, that of
keeping the market steady by [)resenting average yields.
When a short time ago Mr. Herbert J. Daly, writing in
London on the subject of the gutting of the Iwnanza ore
in the Lake \"iew Consols, justified the action of the
management in that matter, he came in for criticism in
Australia. The argument used in antagcjuism to his was
that the rushing out of rich ore should not be done, un-
K ss the mine is well developed aheatl, and the company
is financially so strong that it can see its way to mine in
that fashion so as to give shareholders a return in the
(|uickest possible time. Concurrently also, it is claimed
that notification ought to be made to the shareholders
that they must not e.xpect their \ield to keep up at a
bonanza rate. Now, if the opposite policy of keeping a
bank in the mine is pursued, then there will be just the
same scope for manipulating yields by averaging them
that there is when a manager keeps a secret reserve at the
surface. Yet, in that case, the directors can be kept in
ignorance miless constant sampling is done and assay-
f)lans are regul.'irly fmnished to them to show how the
slopes ,'ire advancing and how the rich ore is being en-
SECRlir KRSIiRlllS
2()'.t
croachcd upon or left alone. But the law would not, as
it stands, reach a mine nianaj^er who did this, and it
could not touch directors who niij;ht not know anythinj^
of the true position of affairs. Of course, in Victo'-'an
quartz mines, where it would he almost fatal to a com-
pany from a share-market point of view to refuse- to
allow a weekly or fortni.ululy insjjection of the property
t(. shareholders or their experts, it would not l>c possible
loni^ to conceal any de])letion of the rich reserves, or
for the matter of that, any hoardiui^ up of them. In West
Australia, however, there are mines which are not open
to inspection, and where the directors put themselves
absolutely in the hands of the mine managers. In such
cases it is evident that, if the franlcness commanded by
the law in X'ictoria in respect to reports and accounts is
not practiced, }:;freat fraud is ])ossihle. Yields can, if a
manager is dishonest, be manij/alated so that if shares
are wanted to he bought, n.lurns can l)e made low, and
kept low until scrip is boutrht in small lots, when the re-
turn can he gradually increased ; i!:e result being a sharp
advance in market values. Then, if a bank is in exist-
ence, but the average ore is losing its richness, shares
can be sold short and yields maintamed until the crash is
wanted. Thus it is a case of "Heads I win, tails you
lose."
The same position exists exactly with alluvial mines,
where a secret reserve is kejit. Th.e company is in the
hands of the men who know of it. \n opening for fraud
exists, and it is undoubted that more than one mine man-
ager has succumbed to the temptation put in his way to
co-operate on the Stock l'"\change with hrt^-ers who knew
how to turn to account the secret information furnished
them. Thus it will be seen that wherever reserves of any
kind exist at mines tlie ])ersonai e(|uatioK must rule, lu^t
with the mine manager; and, if he is lutnest. next with the
directors to whom he reports the true position of affairs.
dfe'
!10
77//; i.coxoMics or Mfx/xc;
'I'lu' tVi'liiiL,'- III \ ntnria ti.ilay i> that tlurc (Hi-Iit to he
no inTscMial i.(|iiatiiMi. What invi'.stors want is tliat they
sliall know thr worst (ir tlif ht-st (if miiiiii}^ an<l at oiut.
1 1 llic i^riiund i> rirh, it i>U!.'!u to 1)0 fairlv miiu'd and tlir
fact R'lioitiil that tin- \K-h\ is hi^h because of the excep
tioiial (Hiaiit\ of the ore or the };ravel. ( )r if the <,T')U!id
becomes poor, tliey do not want the tnana.LTer to have his
eye on the ^hare Hsl to try to keep (|iiotations at a tic-
titiou> price h\ averai^int,' yields at a fii,nire whicli the
con(htion of tlie mine does not jiistif\. 'I'hey want thi'
(hrcclors to isiahhsh cash reserves (which will ap])ear in
till' balance sheet I uht'n times are L^ood. and to equalize
dividends from that reserve, or to use it to keep the mine
piinj,'. And above all. they ask that the truth shall be
tol<l at all times in respect to the position of the mine
and as to the actual returns obtained. There can be no
doubt as to the trend of public sentiment in this matter,
for it has been i^ravely pni])osed bv the C'h.imher of
Alines of X'ictoria that mine manaq'crs shall be com-
pelled to accompany all their rejiorts with a declaration
that the ci -tents are true. Indeed it is likely that the
outcome of the recent discussion on secret reserve.-, will
be that, in the .\mendinp Companies I'.ill. an attempt will
lie made to place a proMsion to that effect on the statute
book. Then, if manatjers do not tell thi' truth, they will
be liable to a criminal prosecution for perjury, and di-
rectors who bold hack facts which mic:bt influence the
course of the share market will run the risk of becomins::^
subject to action for breach of trust.
THE VALUATION OF GOLD MINES
I'.V 1 I. ( . I IddVI.U.
(May iq. i(»"4)
As l>i'fi)ri', tliis (liscussinn is limitt'il to tliat class (jf
L;nl(l niiiu's tlie continuity of wliicli in depth is uncertain.
If a broad survey be made of tbe method of valuation
(jf mines in ditTerent countries, by dirterent peoples or by
different individuals, there will be seen to be tlie widest
diver^^iice in the jioint of view. The pendulum of valua-
tion swings between a mniinnmi (as represented in tlie
demands of the American engineer for a jmrchasc price
to exceed but little, if any. the actual exposed profit in
sight) and an extreme maximum allowed by some tv\>-
reseiitatives of the ICnglish mining investor, who find the
value by capitalizing the possible dividends at a some-
what higher rate of interest than Government bonds.
The whole of this wide variation in theory and practice
results from a difterent attitude toward that portion of
tbe value of a mine which nnist be assessed to extension
in de])th. The one extreme allows but a few feet, whik'
the other practically ignores tbe essential characteristic of
mining investments — the necessity of recovering capital
coincidently with an interest which compensates for the
risks taken.
Were we to stick .strictly to the mi;ii:num figure, but
little business would take place, and but few funds would
be available for expansion of the industry. There is an
inherent speculation in mining, and it is this speculation
which attracts : without speculation for large returns but
little gold mining would be done. I think it is certainly
true that mine-, on the average, yield a much greater profit
than the minimum stated. On the other hand, it is ob-
vious that the maxinuitn value, which one finds only too
I
Jl-'
rill: i.C()\(>MlLS Ol- M!.\L\(;
often as,->i>.st.-(l ' 1 ^tock markets hy a jjroccs.s of multi-
plication of ilividiiuls, is siinplv ^anililiii^.
\ arinii^ ]iri>p(i.sals have Ihcii luailc to meet this ili-
verj;ence of \u\\ : u^uall\ lhe\ are attetnids Xu Ljive a
rule to llie >])eenlator or investor i)y wliicli lie ma; on
tile aserai^e mea-nre iii> mme. i-".\'ery mine i> so niueli a
()roi)lem in itself that all ^generalization is (iifticiill. hut
any sound methoil whieh calls the attention of the in-
vestor to the real !)a>ic facts of \alualion an<l tends to
keep hiiu on the ri.^ht track, is useiul.
The favorite method of hlendiuLT the extremes ha'^ hecn
to ad<l a proportion to the protit in sii;ht. In a recent
issue of this Joi k.n \i. it is aiKdcated that in j.;;cneral a
mine is worth 30 jier cent more than the net protit in
si^^lit. or. in other uonl-., the exteii'^ion in depth is, on
the averai^e. worth this amount.
My friend Mr. J. 11. L'urle, working on somewhat the
same hasis. in outlininjj a theory of sound investment in
niinin;^'' shares, says in effect :'
1st. The development in the bottom must be s^ood ;
2nd. The mine must pay 10 per cent per annum ;
3rd. There must he (kj jier cent of the price of the
shares in sifj^ht.
In other words, with favorable j^'colot^ic conditions.
Mr. L'urle estimates in i^eneral that extension in <lepth
is worth 40 per cent of the whole value, or (j6 per cent of
the protit in si.yht.
I take it that these schemes of valuation refer onlv to
the safety of the ori,i;iiial cajntal, and do not include
interest thereon, it beini;- considered that the protit of
the transaction shall arise from the possibilities bevond
recovery of capital. 1 am not disputin.i,' the possibilitv
of thus covering the necessary prolU. but there seems
something wanting where there is no expressed basis for
' 7/i,' I'r.iiuiuiiif ('Tnnll(-l^^ C;,'r,t r ir
r.ii.r.niox oi- cold mis lis
\\:\
calculating; tin- tiiiic, i.to.. to ^mw a certain iiUiTfSt as
will as recovery of cai)ita!.
Tlicoreticallv. ai least. ai:y >elunie of valuation of ex-
tension in (kptli, liaxd u]ion ratio nf ore-rescrvcs or i)rntit
in sif;lit. is ulmllv wmn^. 'ihr (Hiaiitity of ore in re-
serve is a !tntt<-r nf nianai^fnieiit iupt necessarily de-
|ienili'iit on the -i/e of the mine. A mine ma\ have a
reserve so larire as to impK' an extensimi in ilepth be-
yond all reason, or. on the ntlur h.inii. a mine m,i\ he
extreinelv valiiahle. with no protit m ^it^ht :it all. No
mine starts out \\itli an ore-reserve, and ni)on this h.isis (jf
mine vahi.ation the whole of prospectini,' ventures would
he eliminated from le.!,''itimate mining;. This hasis of
\alu.-Uion aI>o fails to t.ake into .accoimt the .Lrreat v.iri-
ahilit)' in j;eolo,i,Mc;il character between ditterent mines
and different districts in relation to i)rob.abilities of ex-
tension in deiith. Morecner. if 1 am rij,dit in the 'eco-
nomic limit' .if ore-reserves, as stated in a previous
article, to be in the most cases from two to three years'
output, then, owing to the limit reserves thus permissible,
if we estimate the value at. say. 50 jier cent more than
such reserve, the m.ijority of mines would yield, on above
footinp^s, from 20 i)er cent to 40 per cent per annum.
Ina.imuch as the value of the mine is dependent (out-
siile of the reserve profit) upon the distance that the
deposit will extend in depth (or. in rare cases, laterally)
bevond the region of vision, the most logical basis for
estimation would be a computation of how far such ex-
tension is necessary to justif\ a given value, or to what
deinh the particular deposit may be risked to so extend ;
in other words, the depth of extension should be con-
sidered instead of a iiroi)ortion of the profit in sight. By
such a method not only would broad generalizations be
avoided. biU a sort of geological basis would be found.
The general character and experience of the district for
continuitv ; the special conditions of each particular de-
Jll
////• /iCoxoM/cs or MiM.w;
p)sit as to M/i- Ml i.iiImiiIics ; tlu kiiouii lacliirs, mhIi
as Ijorc-liolf, ; till- ik'Vi.'lii|)im'iit on adjomini; iinius, and
tin- l)()^sll)llltn•s outsiilf of iiniiicdiak' oicbudic-,, etc..
uoiiM all loiiic iii[., |,lav in the ptoljahilitios assessed.
1 Ik-si- factors arc ^ln.-,Md over on an\ -\'-ttiii of propor-
tional vahiis.
An examiik- of the working,' of these niethids of esti-
mation nia\ he t.iken. it,: instance, In f^'rimpmu: the lead-
iii.L,' mines in West Australia. .\ j^'ronp of i :; niine> in
tiiat >tate is at this date valued on the London market at
i 14,500.000. riie\ have profit m si^dit of £ 1 0,500,0CX).
l'|)on a basis of addin;,' (>i> per cent to the jirotit in sirrht,
these mines are about cornctly valued. To recover the
c;i|)ital sum represented ahov. . the\ will have to extend
something' like J30 ft. helou the present bottoms, and to
repay cajiital. and. say. per cent iiiter.'st duriiii; the
whole pi-riod, lhe\ imist extend about 4X0 ft. below their
present lM)ttoms. Tin. depth is not an unreasonable risk,
takin;,' all matters inti> consideration. ( )n a7'i-ni:u- over
tile whole Kri'i'l'. ''"-■ two bases of valu.Uion a-ree fairlv
well, but, taking W mine, for iiist.iiice. with ,111 ore-
pipe ,V) ^>y '"5 't.. ai; v'xtensioii e.i 4S0 ft. i., vrv jirob-
lematical iii<ieed, and even more .so m ihe case of the
'15 mine, composed of leiiticules of nw bv no means
certain, even laterallv : >et in 'C mine, with two jiaralkl
ore-shoots, each ].imm ft. lon^'- ami i_' ft. wide, with the
adjoiiiinir mine jiroved already Ckjo ft. deei)er, even a
longer life could be gr.inted.
Taking a leading mine in the Kolar district in India,
valued by the market .at i;v''0(),'K)(), in which ])rotit in
sight is roughly £■)_>( ),(xjo, the jmjportioiial value would
assess it to be worth aboiit £i,45o,fxx). This sum of
i:i.45o,(j<JO would not < nly be rec.jvered, but al.s.i with
interest, by an extensi,,n of ^oo ft. further in depth.
\\ ith a continuous run of ore ,V3(X) ft. long, and the gen-
eral geological condition^ favorable, there would seem
VALVATIOX Oi COf.n MIXES
•s
to Ih' warrant for conti.K'iici.' to coii^iilcral)lv (greater
(K'l>tl' than siuli a valuation would ^;raiit.
in 'Ik- ilftailc'l juilj^iiifut as to tlu' prohahility of ox-
tin-ioii in iliptli. as stated above, other con(liii(,us iKini'
ei|ual. the si/e of the ore-Ixiily becomes the },'reatest fac-
tor. .\-i ored)ody i.ooo ft. loni,' is iniieti more likely to
extend tlian one lo ft. loni;. That such ixtei.si.iii is
absolute! v ji-oportii iial. 1 -h-aild, of course, not contend.
An old I Ornish sa>in.t; uas that an orebody would ex-
tend in depth a distance i'(|ual to its leiitrth. This, al-
tlioui,d: i'. shows an ai)prec.iation of the iii.ittcr from ex-
perience, does not meet the case in ore-shoots, whose
j,'eneral character implies greater dei)th than length, nor
does it meet the case for p.irtiallv exhausted mines.
In depth. dei)osits seldom terminate .abruiitly. The
lenlieularilv of ore-shoot- i- i;ener.all> recos^Miized. ami
that ore-shoots usually, in their terminals, display len-
ticular ehar.ieter is, I think, i^enerally accei)ted.
It this were established as ai avera.i,'e — ;i worthy prob-
lem for miniiii: i^eoloijists — it would be possible to state
roui^hlv that the minimum extension of an orebody or
ore-shoot in dejjlh would be a factor of a radius not less
than one-half its len.mh. I'.v lent^th is not necessarily
meant horizontal lenu^th but a section i)eri>endicular to
the downward axis, lly stud.y of jj mines with whose
orebodies I havi- been able to familiarize m\-elf. I find
this rule of minimum to apply in all cases but two, by
takint,' a number of points from top to bottom of the
workinj^'-s. Sul.>ject to wider ex])ression of experience, I
believe that an amount of ore thus rej resented can be
about as safely assumed as cm the continuity of value
throuf^di ore-reserves blocked out. I do not propose this
as a method of determination, either of maximum or
minimum value, but as a yard-stick iiossibly useful in
formiiif^ a judL,Mnent. b'or instance in the 'C mine,
cited above, having an orebody i.cjo ft. long, by such a
I
21 r.
TIIR liCOXCMICS Of MIXIXG
calciilatiini. if wc a.v^min,- mat {hv (iribocK is about to
die out, and that tlic Ijnttoni \\cjrkiiit;s represent a cross-
section of the lens, the mininuiin depth would he 500 ft.,
or ;iii avera,L,'-e of the whole ,Nteti(Hi of the oreljods ahout
2/^ ft. This distance (when conijiared with the necessity
of orehiiily to extend only 200 ft. to return the present
market price, and ciily 4i<(> ft. to relurn the price and in-
terest) would indicate that the present ()rice is fairly
sound.
In .i^^'iieral, the j)roposal is that this class of mine .should
be valued at, (a ) ;lie i)r<irit in sii^ht ; (b) a further amount
ba.sed upon the e\ten>i )n in depth of the orcbody (in
volume and value as disclosed at its lowest section)
for .-i di-taiice based uj-on the probabilities in each par-
tictdar mine, instead of the rous,,di anfl ready method of a
proportion of profit in sight.
TREATMENT CAPACITY AND ORE-
RESERVES
(May Jt). 19U4 )
The Editor:
Siu — I ctuifess to a pnod ,loal of disappointment at the
mcaj^er discussion that Mr. H. C. Hofu'cr's article on this
subject has ehcited. To ni\- mind, u i;-, from its form of
treatnuiit. the most im])ortant on the peiierrdities of min-
inpf ensincerinf; that \vc iiave seen for some tinx' ])ast.
It caiiiiot be douJJted that the clear understanding of
any problem in the abstract assists materially in the mas-
tery of each example in the concrete ; and. though such
abstract understanding may not be tlu- sine qua uon of
grasping the concnte, those with the clearest understand-
ing of the abstract usually err the least in the concrete.
Notwithstanding the examples cited, Mr. Hoover's pa-
per is one of generalities, and his broad generalizations,
which crystallize into words, and perhaps in a somewhat
novel form, the practice of more than one engineer, can
be handled with safety only under expert advice, being
in this resjiect decidedly dang'. rous in lay hands.
As an instance, the temptation is almost irresistible for
the superintendent, when his costs are cut down by the
addition of a secondar\ plant, to lower the grade of his
ore as well, by the inclusion of rock that would have
been, but for the secondary plant. ' 'ow treatment grade.
This, however, upsets all the c ie;-' ^ns upon which the
secondary plant was authorize!;, i ,)e sure, the condi-
tion of the mine may actuall\ justify it. but imless that
were recognized as among the factors of the problem, and
allowed for when additions were made, ihc propertw
with the increased outpiU .uid with the increased capital
outlay, due to the secondary plant, to pay interest upon,
will actually be giving a less, return per centum.
-•18 Tllli 1 OXOMICS or MIMXC
Wliili- till.' t'xact form of ^tateiTK-nt ni;uk- In Mr. Hoo-
ver of till' fundainciuals of tlu' i)rol)lcrn is most strikin<j,
I am fa-- from sure that the simple comi)arative motliod
of stateiiHiit of the ease of tiie primary plant for a mim-
her of years, as a,i^ainst the primary ])his tlie secondary
for the same number of tons and years, is not sim[)ler and
less liable to error in calculation; at all events, the latter
is th.e form in \vl;'ch the problem sugj^ests itself most nat-
urrlly, and on these lines the following- table of coeffi-
cients lias been prepared. It is assumed tliat current
profits arc transferred into interest-bearint^ deposits quar-
terly, and that the interest rate is i per cent, per quarter.
Tlii- would be (|uitc compatible with common business
arran^i^'-emeiits. I"or any case of primary, or iirimarv and
secondary, plant let T be the (juarteriy tonnage and P
the profit : P T, then, is the iiuarterlv profit.
At the end of the first ([uarter the profits will be P T;
at the entl of the sjcond quarter, P T plus o.oi P T or
i.oi P T; and the total profit for the tv,o ([uarters, 2.01
i' T. .\t the end of the third quarter the total profit will
be 3.0301 P T. In a word, the case is that of the amount
of an annuity of i in ;; years, and by the formula for this
(Kent, p. 15) the coefficients can be worked out. For
the assumed case and for six years they are given below:
COI'l'MCIlA' IS OF P T
Gain.
Quarterly. Total
Q Months I, J.
•5 ][ I.OI 2 01
. " 1. 0201 30.^01
1 ''"'"' I 0^0? 40(i<i4
.1 -Months 10406 s 1010
^ ]] I o:;io 6.i.i;.'o
9 " I o^it.'; 7-2Li^
' ' '""'^ 1 .0721 8 2S,6
■^ M"iiihs 1 .0X20 9. .1685
'' [[ I o<),?7 10.4622
'> . " I 1046 II !;«)S
•' ,','"" i.ii.=;7 12 6S2.<;
.1 -^''","lis 1 ,j(« i.v8og<
^ " ■ I 'jHr 14.9474
c.ip.ic:Ty .1X0 orh rilsi'.rjt.s. -jik
Gain.
Quarterly. T.-tal
6 Months I i4')5 i6 og6q
4 y't'iirs I i6io 172579
,^ Months I i7.'6 184,^05
<) " I ll^4.^ l(> 6148
9 " I iryu 20 8iog
5 )',,i/-.t l.jnXi 220100
3 Months 1.2202 23.2302
(> " I 2324 244716
'i " 1-2447 257163
6 Vrurs ',i>7^ 26.9735
The i)ractical use of this is illustrated below for two
extreme cases :
Primary I'lant
Ca.se 1 l\T;e 2.
TonnaRc per quarter 7,500 7.500
Pnilit per tnn $1.00 $!,oo
Quarterly pmlit (PI) $7,500.00 $7,50000
lixed charges .30 ' I 00
I'ruuary and S,\.>)iiiiiiy !'!iinls.
I'oniia.nc per qnarlcr io,o<io in,ooo
Prolit per ton inorea-.e<l tonnaij;o $1 30 $2.00
Profit per ton on whole tonnage i 075 i .25
Qnarterly profit (PI) 10.750 00 I2..500,00
L'sitirr the coefficients as above pivcn and substituting
th^' vakics of P T, we get the following:
Case 1 Ca-^e 2
Case I & 2, Primary & tVunary &
I'rimary. Sccutiitary. Seeomlary.
Tons 60,000 . . , , ....
Time 2 vrs. i'^, yrs. I'/j yrs.
Profit $62,000 $66,000 $77,000
PIms i-.!t(rr^t for two quar-
ters, coinpoundeil .... 67 .000 79.OOO
Cain over priniarv .... $5.chx) $i7.o<k)
Tons 90.000 ....
'I inip 3 yrs. 2'4 yrs. 2'.; vrs
Profit $95,000 $101,000 $117,000
Pins interest for three qii.ir-
ters. comi)ouii(le(l .... 104.000 ui.eno
fiain over pnntnry $g.ooo $26,000
Tons 120,000 .... ....
I i'lH' 4 yrs. 3 yrs 3 vrs.
Profit $129,000 $i.Vi,ooo $i5ij,'o(X3
Phis intcre-t for four quar-
ters compounded 143.000 16501x3
G.iin over prnnary $14,000 $36,000
iJO
77//; r.cnxoMics or mixixg
By this comparison (of what may he a iioniial uitli an
cxccfdiiii^ly almnmial case of tixcii cliarj:;cs; is clearly
shown the inipMrtai 1 jiart this ti\eil-char,<,'e item of Mr.
Hoi.ver's plays, a part so important a> to call for the
carefiil sepfrc.s^ation of all such iien:^ in mine accotintinjj,
so that the ratio of plant to reserves may he readilv and
constantly canvassed, witliont the necessitv of a sp.ccial
and lahorioiis investij,'-ali(jn. Air. lloover'> separate items
of <jain are all inchuled 'automatically' in the figures
14,000 and 35,cKK) ( ijo.ooo tons and four years, Cases i
and 2), thus, 10,000 tons per year for three years equals
30,000 tons, the increased tonnage per year, and fixed
charges for tiie two cases would be $9,000 and $30,000
respectively, and die several interest items amount to, .ip
proximately. $5,000 and $6,000; so that fixed charge
plays by far the most important part.
While going with Mr. Hoover in the foregoing to the
full extent of his argument regarding the maxinnim per-
missible ore reserves. I do not care to .accede unreserved-
ly to the priipositicju that the 'maximuni" provided as
above should also form the mininuim. There are certain
classes of deposits that, from geological structure and oc-
currence, can he reckoned on more definitely, within their
limus. than the standard quartz vein : there are also con-
ceivable cases where the additional securitv of the invest-
ment would Seem to he do clearly bought bv keeping a
three or four year>' reserve blocked out. Such would he
the case of a i^ine with many small veins and heavy
ground, where llie additional charge fnr repairs an-i for
interest on development would seriouslv ini])air the prof-
its. V\'ith such particular cases in mind, the minimmn
proposition quoted does not api)ear so inevitable as the
maximum, though it can be granted tli.it in the majoru\
of in-lances it aitords a safe rule fnr practice.
San Francisco, Mav 12. 1904.
R. (jn..M AN Hkow.v,
AMORTIZATION
(.June .', i'j'ji
The Editor:
Sii4 — Tlio Mihjtct of "Mine Equipment and Ore Re-
serves' has been so well treated by experts in the JoiR-
.N Ai, that I hardlv leel competent to join in the discussion
from the scientific side. I wcmld like, however, to say a
few words on the (|i-.estinn of amortizatiim. which iuirdly
seems to be understood by some of your currespondents.
1 feel further dibi)osed to do so as some of my friends
have asked for a little instruction on this point. The
word amortization is French, but it is a ^ood one to take
over into English speech, as we have nn single word
which exjircsses the idea. .Sii;king fund does not covei
it. for that is applied only U> some sp>cial provision for
tile pavnient of boi'ded debt or debentures. As nearly
as 1 can express it, amortizatici is the provision from
earnings of a fund, in(le])endent of dividends, which will,
in a given period, repay the original investment. To
provide such a fund is not usual in this country, though
it is frequently done in Ivarope ; and in France, at least,
it is required by the law governing the operations of in-
corporated companies.
.\ mining investment, in tlie great majority of cases,
is a terminable investment, not a permanent one. That
is. it will end and b'jcome unproductive after a time,
shorter or longer, according; to the nature of the mijie.
It is not a permanent uivestment. like a railri^ad, which
may be expected to last and to return profits for an in-
definite period. .A mining investment, t'v.'refore, 'o be
good, should return not only ordinary interest on the
capital, but a further sum, sufiticient tf~ repav the orig-
inal capital during the life of the mine. .\ railroad, for
instance, with proi)er allowance for repairs and renewals,
will probably be earning profits and be worth, at least as
2-' Tim r.coxoMics of mixlxg
nuu-li as now, fwcmy t)r lurty years lu'iicc; and its cuiurs
will still liavf tiK' security. But twenty or fortv vears
from n.)vv the nwners of a mine now profitable ma v have
nothiny but some extensive e.\cavnti(Mis and a lot of ma-
chinery, which is likely, at the best, to be worth r.nlv its
sellm- value as scrap. So with all minint,^ investments;
they run with the life of the mine, and the return .should
be lar-e en,m-h to c(iua] the capital, phis interest, durin,^-
that life, whatever it mav bo.
In IVance the nsual custom, I believe, is to divide the
amortization fund among the stockholders when the com-
pany has to -o out of business. In Germanv verv little
amorti;^ation is done, for the German custom' is to nurse
a mine and carry it along forever l,v taking as little out
ol It as possible each year. The exception is found in a
few of the big coal comi)anies, and thev have amortiza-
tion funds, which are usuallv apj^lied to the purchase of
more coal lan.ls. In lu.gland they do not say amortiza-
tion, f,.r y,,nr l-.nglishman has a strong propensitv to
call things i«y names that mean sometl'iing else. 'l!ut
they have depreciation funds, surphis funds and what-
not, which amount to the same thing. There are various
ways ni using these fu, ds. Thai most approved seems
to be the purchase of new i.roperty. so that the companv
may be hept alive. ( )ccasionally the funds, whatever thev
may be calle.l, are returned to stockholders; i'-.s is often
<lone by buying in. ,,r paying off. part of the stock from
time to time, so that the capital stock is reduced gra.l-
ually. as the mine decreases in value. The continuance
of the company, with a new pr.,i)ertv. seems the favonte
method, however. The Englishman is cosmopolitan in
his investments, and there are sometimes curious changes.
1 bus, some > ears ago. a companv which had been mining
m Idaho gave up its exhausted jmipertv and bought a
nune in Western .\ustralia, still retaining its old name,
."^uch instances might be multiplied.
■IMORri/.ATlUX
L'i':{
Except in FraiKH', tlurr sc'tiii> tn !)(.■ no nniforni rnlc
as to the manner in uliicli pasnicnls are made to aniorli-
zation fnnds. The fairest and most unitorni method
seems to he a tixeil ehar^e on ore miiiecl. hased eitlier on
(jiiantity or on vahie, aeconhiif^ to the nature of tile mine.
In this conntr\- amortization funds are not usuah Tiie
,ij;eneral practice is to jtay out snrphis in di\iilends. leav-
ing:; cacli stoc' holder to maice liis own amortization, if
he is disposed d > s(j — usuaUy he is not. This is hased
on the continua. .ifting of stock ownership. W ith few
exceptions the .American investor does not huy mining
stocks to keep, lie sells them when he has a chance to
make somethint^. it has been said tliat the ownersliip in
an American niininj.;^ company chanijes. on an avera^'e.
every five years: and. <|uite prohahiy, this is nf)l far from
the truth. L'nder these circmnstances. it is quite natural
tiiat a stockholiier should prefer to j^a't all that lie can
out of his sliares while he holds them, without looking
to the future.
An exception is foimd in some coal ruid iron comjia-
nies. Thus the Delaware & Hudson Company includes
in its expenses a fixed sum per ton of coal mined, which
goes into a fund which has been, up to date, used to pa\
off the company's mortgage bonds. These are now
nearly all retired. The Reading Comi)any has done the
same thing since its last reorganization. The Pittshnrg
Coal Comjiany has a similar ch:irge on earnings, the sU'ii
thus set aside being used chielly to buy !iew coal lamls.
In the last-named case the amoinit has been calculated
on such a basis that tiie fmid will rei)lace the co;d l.inds
mined out each year, and so keep the coni|)any going as
long as there are new lands to he bought.
Among iron compa:iies. severa' of the larger Snutlu-rn
companies .ilso make a charge to earnings hased on the
iron ore an<l coal mined each \ear. The .Sloss-.'^heffield
("ompany, in addition, makes a charge of 25c. for
21' t
77//: I:C(\\OMICS ()/• MIMXd
each ton (jf pis^ iron mmlf, tlu' fund \k\u^ used to renew
•'s plant. 'I'lu- ( )li>i'r Inm Cmnpanv. wliicli is the iron
niinint,-- liranch nl the I'mtcd States Siirl Corporation.
Iia> a s\><tt,'m ni charges based on on.' niimcl.
In nunc nf thi'se cases, however, exeejit tlie Hehiwart
ilv I ludson. are these funds apphed to reduction of capital,
and tliey are not, tlierilore, properly amortization funds.
The iron ininint,'' companies referred to also own manu-
facturini,' plants, and it is essential to their operation that
the ;>upiily of ore, or r.aw materi.il. should he kept up.
idle retirement, or reiiaynie'U, of capital i> not consid-
ered in the matter.
t >n the whole. [ do not think that .\merican hu\irs of
mining- !,tock will take kindl\- to amortization funds, iiti-
der present conditions. Thex- prefer to trust to them-
selves, and to the eh.ance of selliui^ their stock, to allow-
ins,' the company to look after the rep.i\inent of their
capital at setme indetiii'te future (Lite. .\s Ions; as thi-
fc'linqf lasts the practice of amortization can hardly ex-
tend.
Some day we may take time to think a little about it.
and then I believe the justice and reason of the plan will
be realized. .\nd it ma\- do somethint^ also to jiromote
permanence and stability in mine ownershi]) — which is a
thiiiij nuich to be desire
F. Ilnn.vRT.
.\ew York, Mav lo, 1904.
VALUATION OF GOLD MINES
The Editor:
SiK — 1 af,'rcc with Mr. Hnnvtr in liis interesting ar-
ticle of May 19, that every mine is a prolilein in itself;
there are no fixed |)rinci[)les l)y which the appraiser
may he fjiiided to a definite and correct value by the rules
of mathematics. I'.ecause if he deals with averaf,'es, or
laws of probability, as to the life and profit of such gold
mines in general, or even of the mines in a special dis-
trict, he will as a rule arrive at very erroneous results.
It is one of those cases in engineering ])ractice where
experience, >kill and judgment are of the utmost im-
(xirtaiice to get even an api^roximate solution.
The metl od which I have found most satisfactory is
about as follows: Having correctly valued tiie ore in
sight, the size, shape and relative positions of the ore-
bodies should be mapped to scale, and compared with those
of the exhausted orebodies for at least three years pre-
vious. Then, by comparison, try to find the law of contin-
uity and value. Xext, by that law, t(igether with a study
of the history of the most developed mines in the dis-
trict, decide on a definite figure for the undeveloped por-
tion of the mine. Having thus arrived at a definite value
for the whole mine, the next question to consider is the
econon.ic ratio of development to milling capacity. Then
the gross profits in the mine and the tiiue necessary to
exhaust the same. Lastly, an estimate should be made of
the extra capital tiecessary fully to e(|uip and develop, to
reach the economic ratio. Having found all these, the
extra capital should be subtracted from the gross profit,
and the balance cafMtalized, so as to yield 10 per cent
[)er anmim during the time necessary for exhaustion, and
at the same time redeem the iirincipal.
\\\ I tcf ration lof 11c tiL-o tli^
W'ocfroi;
////: ECO.\UMJlS Ul' MIXIXG
wliiili Mr. llnoviT '-av > haw a .l,M•<>•^- jirnl'it in sii^'ht of
a!)'iiii i i(i.(HHi.i)iHi ; ami su])])o.sc tlie appraiser aiMs an-
i>tlur tiu.txjo.iM-X) inr prutil in un(lcvi-l>'i)i'il grdinid. Now,
if lir considers £_'.()oo,ock) nfccssary to jint those mines
on an iconoinii.- ratio, so tlial tlu\ wnild he cxhaustc(l in
^\o \i-ars. then his vahiatioii would W- £4.5(x).ono. instead
of £i4.5(Xj.tx>), as Mr. Hoover makes it. I'.ecause £jo,-
OOO.OOO — £j,CXX),000 = i 1 8,000,000. .\nd ilS,(X)(),000
c;ipit;di/ed at 10 per cent i)er :inmnii for 30 years, with
the principal redeemed durin}^ that time, is re])resented
' \ £430,000 X 30 + £4,300,000 = £18,000,000. the total
,,11 ouiit of profit in the proi)ertics mentioned.
.Mr. ih)over thinks that '1 per cent is snfficient interest
to ]);iy oii mininL,"" iiivestiiunts, hut i ihiid\ most enjj^inecrs
will ;n.;ree with Mr. (nrle that 10 pi r cent is a fair fi;.;ure,
(jver and aho\e the redi-mption of the principal.
There is ;mother cniestion in the \ahiation of mines of
eviTy kind whiili is of sut'licient ini[)ortance to he men-
tioned here. And when the time '-onies that I'rof.
Church says otiyht to come if investors wish to be pro-
tected, when the president of every miniiiL': company is a
(lualitied minintj eiiLjineer, then every mine will be valued
aniutally by an indejiendent enpineer, just as the books
are audited b\- an indepeiiiknt accountant. 1 trust
the Institute of Minintr I'-usj^ineers will take this matter
up. and havi' a law passed compellincf mininpf companies
to have tluii- inventories and valuations tried hv ;m in-
dependent eni^ineer before the auditor will accept them.
RoHEKT Stevenson.
New York. May 23. 11)04.
MINE EQUIPMENT AND ORE-RESERVES
(June JJ, ly('4.)
I he I Alitor. •
Sir — 'I'lu' artii-lf on <>rr-rcserves and i.iinc niuipnicnt
by Mr. II. ('. llcinviT covits tlu particular IrM dis-
cussed liy liiiii with such skill that it scciiis m mv tlurc is
lint iiiucli iiKiri' tn say. I 'iilnrtuuatcly most of us do not
haw the opportunity (.1 nnravclini; the problems \k-t-
tainini,' to the exploitation of .such niaL,Miificent mines as
those wliicli Mr. l|o(i\er direct-, nor do we operate with
tlie reserve capital of such stronj.^ ccjmpanies as those
with which he is connected. The mininj::: future of this
coiiniry ilepends to an ever-iiicreasintj extent on the jirotit-
ahle expluitation of relatively small, erratic and |()w-;L^rade
depfisits; in other words, in inakini,^ Iianl |)ropnsitions
pay. The West has iieen iirrtty wdl run over, and it is
jirohalile that most of the Iul; tiiinf;s are already under
process of development; and while, of course, some of
us will he workin;,' lionan;^as for seviTal generations, the
vast majority of mining; etii^ineers will he continuallv up
aijainsl a hard ijaine. It is the problems jicrtainint^ to the
successful o]HTation of such deposits which more vitally
concern the majority. To m\ mind there is more credit
due to those who take up the hard propositions and make
them pay than to those who exploit bonanzas alon,cr finely
scientific lines; the first usually re(|uire energy, satjacity.
perseverance and. very often, iltiring; while the other
need chiefly cool calculation. Tlie acquirinpf and early
development of the Ivinanza is a flitTerent matter; in this
achievement much the same c|ualities are called fir as in
the operation of a hard proposition. But onlv a few of
Us, as already stated, will ever have the opportunity to
acf|uire a bonanza for ourselves or clients, so we may just
'_'L'S
////■. /:cu.\o.V/i .s (;/• Ml.\/\(,
as well liKik llir tact-- m tlk- liu c anil cnnsi.kT tlii.- i)Pih-
k-tus inciiknt u- tliu ciHralinn (.f tliai larjje class of de-
posits uitli uliii.li most of Us arc more or less directly
associati'il. In stioli cases tlk aiiiortization nf the eriiiip-
iiu'iii iiecnmes an even more serious pioliKiii than mi the
nistanees discusseil by Mr. Hoover, for it Ih'couks doubt-
fnl ulietlier the expenditure will ever be amortized at all,
rather than a qiu -non of how niaiiv months will be re-
ipiired to j^et even. And yet onditions of operation, as
they e.xist, often force an expenditure for eiiuipment be-
fore one can lii^Mire the ore reser\e to iustif\ it. It niav
be neces.sary to e(Hiip .and be^'in production, or cpm alto-
^'ether. In such cases 1 think .i man is jnstifi<(l in usin:,'
the most temporary expedients, r.ither than m jirovidm;.,'
such an e(|uiprnent as would be ealled for if a loiij,^ eam-
l)aiL:;n were ;utti.illy assured.
It has been my observation that more mines are killed
by too much e(iuipnient, and ill-advised ecjuipment, than
fmm errors in the opposite direction. Tiie tendency to
make lar<j;e expenditures to assure ;i low working- cost
per ton has been at the iKittom of man\ a ininiiiL; f.iihire,
because the hard facts of the limited number of tons
available and the utter v.orthlessncss of abandoned mine
ecp.iipment were both entirely overlooKed. The sure loss
of operatin.ij with inefficient eiiuiiinient and the possible
loss of expemlino; to,-, much on equipment, present tlie
Scylla and ( har\lidis of this feature of mine nianaj,^'-
mcnt; the admirable siiiling chart compiled by Mr.
Hoover will yuide the bio; steamers with scientific accu-
racy: but the [iilot of the little s;ii]ini.,r vessel. (lri\en by
tickle -.vinds and diverted by unseen currents, cannot fol-
low the directions, and under such conditions success is
the more .adniirablc and failure the nir,re pardonable
It seems to me that the qnestion incident to providing
the ordinary mine with equipment does not permit nf any
very extemled discussion, along general lines, because
I
ORE-RESERll-.S
229
nearly cvorv mine has itscwii iii(li\ idiial pn Jilcni, and those
that haven't, fall without (jiK-stion nndi r Mr Hoover's
rule; hut there is an infinite variety to tlir prohienis con-
f'-ontinp the averaj,'t. inun niana^'er, and the successful
solution of hard prohlcius of nianapenuiit make the basis
of what is to many of us the most interestin;.,' forn. of
mininp literature. The consideration of the difficulties
that have beset our t\li..\\s and of the niean> tlicv adopted
to overcome them is sure to be of practical service sooner
or later: and in the hope that I may Ik- able to start the
liall .a-rolhntr in thi- direction. I will mention tiirce in-
stances out of my personal experience.
The estate of W. .S. .Stratton. deceased, included some
;i3 acres of territory in the Cripple Creek district of Col-
orado. There is litile of this territory from which there
has been no shipment of ore. and some parts of it have
made a larpc production. The pay ore is found in iso-
lated bodies scattered throuoh a perfect network of veins,
contacts, and mineralized dikes. The prade of the ore at
( rifiple Creek is comparatively high, so that a relativelv
-mall oreliody may he of considerable economic impfir-
tance. As a ionsc<inence of ilu'si- conditions, the problem
of findinfj the ore very much overshadows anv other
problem in the ixiiloitation of these deposits. The suc-
cessful 'ore-tinder" is 'he man who makes an exhaustive
study of a tjiven ku ity and then watches every little
indication as n-ork proj^resscs. The failure to follow off
into the wall the smallest strinper that assays mav mean
the loss of a j,'ood orcbody. The most successful "ore-
tinders' in the camp are the small 'leasers,' whose self-
interest calls forth a degree of astuteness and careful
attention to detail which is not obtainable in a paid force.
Therefore. I recommended that the territorv which was
not developed by deep shafts should be leased in surface
blocks, and that a large part of the territory that was de-
veloped by deep shafts should be let on the tribute sys-
!i
ll
'2:u)
THE ECONOMICS OE MIMNG
Icm. Tliis plan has been slowly put into effect, and, thus
far, the results are highly satisfactory.
At the Golden Cloud mine in Montana the vein is
small, remarkably continuous and of exceptionally uni-
form value. The average grade is $25 per ton m gold
and the property is equipped with a good mill. The
quartz is soft and frozen to the walls, and the problem
to be solved Vvas how to mine tnis ore cleanly at a cost
sufficiently low to leave a margin of profit. When work-
ing on diy's pay the miners found the quartz very nice
drilling ground and shot it all to pieces, so I put them or
a contract system whereby each pair of men had a certain
block of ground and were paid so much per ton of clean
quartz delivered at the mouth of the tunnel. The svstem
has proved satisfactory thus far.
At the Cornucopia mine in eastern Oregon in 1896 the
principal problem to be solved was the successful milling
of a rebellious ore. Mr. T. A. Rickard, as consulting
engineer, was in control of operations. My position was
a subordinate one. The ore carried part of its values as
free gold, part as silver, gold, copper ind lead in pyrite
and part as telluride of gold. When Mr. Rickard took
charge there was a 20-stamp mill on the ground equipped
with si.x vannc-s, the pmduct of which was chlorinated,
with a heavy loss, mainly in the roasting stage of the
process. This loss had been undetected by reason of
stupidity in calculations, which failed to allow for the
decrease in weight by elimination of moisture in roast-
ing. .The shipment of tlie concentrate to the smelter at
Tacoma gave larger profits, hut even then the extraction
was poor, by reason of the values escaping in that part of
the tailing whicli would pass a loo-mcsh screen.
Mr. Rickard and Mr. Harnhart. the superintendent, then
decided to introduce hyciraulic separators, two more van-
iicrs and a canvas slime plant, so that the extraction was
increased from 65 per cent to 85 per cent, and the mine
ORE-RESERVES
2.T1
became a profitable enterprise. The essence of this suc-
cess was not only in the improved extraction which was
attained at every step of the milling process, but in a
general reduction of working costs carried out by the
superintendent.
Seattle, Wash., June lo, 19C4.
Geo. J. Bancroft.
THE ECONOMIC RATIO OF TREATMENT
CAPACITY TO ORE-RESERVES
The Editor:
SiR-L-„,lcT the al)ovo hoadinij appears an article bv
^ir. 11. L. H(xn-er in your issueof March 24. As this sub-
ject forms ,,„e ol the most important of tlie financial
problems u.tii which the engineer has to deal, it would be
advantageous to have it fully discussed and ventilated by
men m different parts of the world, and I put that view
forward as my excuse for the remark- that follow.
1 he general impression maJe upon mv mind after care-
fully reading through Mr. Hoover's article is that while
keeping the main issues well in view, he is somewhat ob-
scure as to the basis of his reasoning, and as to the manv
contingencies for which provision must be made before
the well-known maxims which he expounds can be prac-
tically employed. It may therefore be well to further dis-
cuss some of the questions he has raised, with a view to
greater elucidation and further suggestion.
Mr. Hoover states as a preliminary: "Starting with an
assumption of unbroken continuity to their utmost boun-
daries, our South African friends need but little outside
of compound interest tables upon which to found their
hnarice. In the great majority of mines, however the
result of <levelopment at their lowest levels remains spccu-
lat.ve and gives a zest such as an assumed persistence
can never atford " It seems to me that Mr. Hoover has
inibibed the popular idea that the art of mining on the
Kand IS conducted upon such simple lines, owing to nat-
ural conditions, that, as he says, "our South African
friends need but little outside of compound interest tables
upon which to found their finance." It should be under-
stood by engineers, at least, and I affirm it now, that the
()Rr.-Ri-:si-:h'ii:s
233
mines of the Rand are subject to as extreme fluctuations
in value as deposits of any other kind, and tliat it is
e(|ually necessary on tliese fields to develop skilfully and
far in advance of the mill as upon any other goldfield, if
any knowledge of the conditions jjovcrninj; the problems
discussed by Mr. Hoover is to be acquired.
The essentia! difference between the f^and 'banket' beds
and metalliferous deposits of dififerinp orij;in is. that in
the former we are not called upon to contemplate the
complete disappearance of our values within the limits
so far worked — a contingency which always has to be
reckoned with in other forms of deposit. It is just as
necessary, however, that reserves should be well ahead
of mill requirements for the consideration of the question
of the ratio of treatment to ore reserves; . therwise for
one period the mines would be earning large profits, and
for another they would be working at a loss. On the
Rand, equally with other fields, we must consider the
possible rate of development, which is governed by the
facilities for attack, the ore exposed per foot driven, and
the percentage of payable ore to the total developed.
In some sections of the Rand, the reef averages less
than 6 in. wide ; and. if in such cases the proportion of
payable ore is as low as 30 per cent, and if the develop-
ment scheme is rendered bad. as is the case in some in-
stances, by faults or dikes, then it is clear that the plain
sailing which Mr. Hoover believes is an essential condi-
tion (if mining work here, is an erroneous conviction.
In the second paragraph of his article Mr. Hoover
states "that the most economical and profitable treatment
capacity is the maximum capacity which can be employed,
is not difficult to demonstrate: that the maximum must
depend, however, upon the speed of development. :\':d that
the speed of development must be pushed as fast as the
limitations of nature will permit, is but to state a corol-
lary. Yet. curious as it seems, the ntunber i.f mines
234
Tl!F. nCO\'OMICS OF MIMXG
wliich have ben Dpcratcd iipnn the principle that the
mill is the fixed (|uaiuity and the mine the variable, ex-
ceeds the number conducted upon the reverse plan." This
sentence aptly illustrates my view as to the obscurity of
Mr. Hoover's basis of reasonin.ij. The statements are en-
tirely true, but there is a variety of principles involved
which cannot be tluis settled by a stroke of the pen.
I'irstly, we must consider the financial status of the com-
pany operating;:, as to whether it is in a position to make
the monetary arrantjenicnts necessarily involved in a
scheme for expansion. Let us take a case as an example.
.\ssume a company owning a property which re(|uires
£5oo,cx)0 L^ oring it to the producing stage on a basis of
loo stamps. To find such a sum of money might not only
exhaust all the cash resources of the company, but cause
it to overdraw to the extreme limit of its credit. Let it
be assumed that the company has conmienced milling
and is earning profits. It is now suggested that it should
accept Mr. ilix)ver's dictum "that development must be
[jushed as fast as the limitations of nature will permit."
To carry out tlie suggestion cMie of the following alterna-
tives might be adopted: either a loan to cover excess de-
\elopment, or profits miglit be utilized for the purj^ose of
extra development. As the company is assumed to have
no further credit, it cannot adopt the first alternative, and
for the same reason in this instance it would not be likely
to adopt the second. The further view, that current profits
should be utilized for the benefit of the later sharehold-
ers, would also be contested by the present shareholders,
who naturally would want a cash distribution as soon as
such was available.
In this instance, therefiTe, although Mr. Hoover's dic-
tum is in every sense correct, it would be impossible to
accept his policy. The basis of reasoning must therefore
include :
1. Financial cretlit.
ORB-RI'-SliRlT.S
2'^^.
2. An aprccd basis i)f arrangement as to the manner in
which the capital will be raised, namely:
(a) Whether as a direct loan.
(b) By the issue of reserve shares.
(c) By the utilization of current profits.
(d) By increasinj? the company's capital.
As he leaves the reader to guess these alternatives it
has seemed to me pertinent to mention them.
Mr. Hoover well remarks, in the concluding sentence
of the ([notation I have maile, that the mill is in genera!
regarded as the fixed (piantity and the mine as tiie varia-
ble. In my 'Deep Level Mines of the Rand,' it was shown
that if a company running a 200-stamp mill on a nine
with a 20-ycars' life earned an annual profit of £330.000.
the present value of the total profit ai £6.720.000. allow-
ing 6 per cent for dividends, and 3 per cent for amortiza-
tion of capital, would be £3.456.76^- !'■ however, the
total amount of £6,720.000 is discounted as a yearly divi-
dend of £672,000 for ten years on the same basis as be-
fore, the present value of the amount becomes £4.564.224.
or £1.107,456 greater than the same amount earned m a
20-year peiiod. In other words, if the milling equip-
ment is increased at intervals, and the mine worked out in
ten vcars instead of twenty years, the net gain, even after
allowing for extra expenditure for increased equipment,
in the instance taken, is materially increased.
It is difficult to get the financial controllers of mines
always to follow the engineer in this respect. They ob-
ject that there is a cot.„tant shifting of the financial basis,
while there is new equipment to be erected, and excess de-
velopment to be accomplished, and, strangely, they have
a sentimental liking for a longer life, which has the one
element of possible participation in improved working
conditions to recommend it. If the engineer can see be-
forehand that the property to be worked is one likely to
lend itself to a scheme of this kind, he can suggest to the
-'.'!0 THE F.COXUMICS OF MIXIXG
financial iicads the pruvisiuii ,<i reserve shares, wliicli can
be issued imm time to time tc meet the capital require-
ments, and thus the current earnings of the mine are not
diverted.
Mr. Hoover says: "We now divide the various charges
against working expenses into: First, those charges vari-
able with tonnage, such as development, haulage, treat-
ment, etc. ; and .second, those charges, usually referred to as
•fixed,' which dei)end partially upon the element of time
as well as tonnage, and include, partially or wholly, pump-
mg, management, amortization of capital invested, etc."
-Mthough not entirely relevant to the subject under int-
mediate discussion, some remarks upon this and kindred
iieads may not be out of place. The development charge
on a mine is one susceptible of very diverse treatment.
There are, however, two methods' which are legitimate,
and properly suit special conditions. The variation in the
conditions arises out of a (juestion of policy, which again
may be dictated by the financial resources at command.
( )ne engineer may recommend that the mine be developed
I'T a mill of fixed capacity and to such an extent before
milling beg: .s, that there will be no subsequent necessity
to develop at a more rapid rate than the mill require-
ments, that is to say. the total ore reserves are practically
unchanged. In .such a case the cost of development is
rightly charged to working account as a lump sum. I'\)r
the same property as above assumed, another engineer
may recommend development of the mine on a com])ara-
tively low basis, and two years ahead of the mill. He
may (|Uestion the soundness of a policy of sinking large
capital sums in development work many years ahead of
re(|uirement, because the interest on the sum should
rightly— although in practice it is not— he charged against
the developed ore.
.After the mill ^^tart?. the policy laid down provides for
rapid excess developnu'iit and periodical increases to the
ORfi-RIiSF.Rrr.S
equipment, for wliich policy tlio necessary financial pro-
vision lias been made. As the rate of development
inij^ht easilv absorb the total workinij; profits, the latter
arc not diverted, but the de\eloi)ment work is paitl for
out of the capital each month. At the • nd of the year the
accounts arc made up and it is found that. say. 20o.cxX)
tons of ore have been developed, costin;,' £5o,(X>o. The
working charge per ton milled would, therefore, be
debited with an amount of 5 shillings per ton— the cost
to develop- -in order to gradually redeem the development
at cost.
The question of amortization of capital in a mining
undertaking is a very difficult one, and I cannot follow
Mr. Hoover in his view that it should be made a fixed
charge against working costs. Amortization can only be
fixed on a definite knowledge ot the profitable term of an
undertaking. If a mine be figured to have a life of ten
vears, and it ultimately proves to have twenty, or vice
versa, the charge for amortization will in the first in-
stance have been too heavy, and in the latter too light. The
best principle is that the company should not, as a com-
panv, attempt to amortize. The value of its shares on a
given earning, on the basis of amortization of capital or
otherwise, can be readily computed by the investor. If
the companv puts aside an annual amount as amortization,
it naturally reduces the distributable profits, and these
might possibly, if distributed in full to the shareholder,
be reinvested by him with immediate benefit. Moreover, if
investors, who bought interests in the earlier stages of the
mine, sold out at a later date, the profits which they should
have received would accumulate to tb.e advantage of the
investor who bought during the later stages of the com-
pany's caicr, and thus tlie former would be at a disad-
vantage, unless the market appreciation of the company's
policy of amortization were fullv reflected in the share
value throughout. It should be the business of the share-
i.»;!s
I lir. liCOXOMICS ()!■ MIX IXC
Imlik-r in lli^ iii(livi<liial i'a[);icity tci aiiinrtizc liis iiivt'st-
iiu'iit, liut nut tliat of tlic i.-niii])aiiy in it,-, cnrjioralc
capacity.
Mr. Hoover says: 'in tlic-T cases less tlian liircc vcars'
accumulation of the increment of prolus is reijiiireil to
amortize the entire capital involvxl." lie does not ix-
jilain how lie will deal with the amorti/ation. If it is
written off profits, the future shareholder henefits to the
prejudice of iju' preseiU. and there is a reduction of divi-
dend for that p.eriod which ni;iy ;itTect the price of the
slock. If the secondary e(|uipment he paid for out f)f cap-
ital the earniuijs on the j,;reater capital sum entailed must
he Considered.
I cannot follow Mr. IIoo\er in his treatment of amor-
tization of outlay on plant. I take it that a good plant
on any mine has a life of not less than seven years,
and with proper care and .sound maiiilenance much
lon,!,,rer. Let it he taken, however, at seven years. Xow,
if the cost of i)laiit, as su^.Ljested hy Mr. Hoover, is writ-
ten off in three years, there WDuld ap])ear to he a loss on
the transaction, unless the added profits will ample com-
pensate for the potential loss in plant. The t'isjures as he
f^ives them show only ahout a similar net result, in the
cases of the jirimary and secondary ec|uipments, after
deiluetin-; the capital outlay on the latter. The sole ad-
vantage would then he the difference in the present value
of the ultimate [irofit earned, and if we take it that this is
£ioo.o<xi, the advantage of earning it in three vears in-
stead of ,six represents, on a hasis of h per cent for divi-
dends and 3 per cent for amortization. £().2io. Mr.
Ilmver takes it that on the primary hasis a three vears'
reserve should he figu'-ed uj)on. If the development in-
creased ,so rapidly that a six years' reserve is huilt up
(although he does not suggest how he arranges his finances
in the meantime), then, if f read him aright, he would add
secondare e(iuinment to such an extent ns to make the
Ok'll-RP.SF.RrrS 'J:'.!>
resiTVf a-ain three year.. I'.ut supi^nMiii; that n., nmre
pavahle ore were (Hsenvered. then it seetn^ on hi^ own
sliuwinj,' that, saving the aspect nf tlie increased pre-uit
vahie of the profits, there is no special advaiita-e in the
scheme.
Suppose, for instance, we have a loo-stanip nnU which
crushes i6S.r)00 tons iier annnm. A reserve of six years
for sticli a mill ^vnul(l he i.ooS.ooo tons. Now. if we
hnild another too stamps an<l utilize the increment of
profit to amortize the outla> we get a result somewhat as
fcjllows :
Cost of lOO stamps, 'secondary equipment,' and
all accessories, including power, etc £100,000
.Additional water supply, pumps, etc 10,000
Additional buildings, quarters, etc j 'Q'"""
Total ■^•'°'°^
Assume profit on the 100-stamp basis to be 10 shillings
per ton.
Assume profit on the joo-stamp basis to be 12| shillings
per ton. the increment of profit due to adding 100
stamps is ;
Total profit earned on 100-stamp basis in six
years, 1 ,oof<.ooo tons at 10s. per ton £504,000
Total profit earned on 200-stamp basis in three
years, 1,008,000 tons at i2^s . 630,000
Total increment of profit £126,000
Total cost of secondary equipment 120^000
■n 1 „,^Cf • . £6,000
Balance, profit
Tf interest be added to the capital outlay incurred for
tlK. sccondarv eriuipment, the balance shown will dis-
appear.
In mines of uncertain continuity in <lepth it would
therefore appear necessary to make a more conservative
•2li)
THE IiCOXOMICS 01' Mi.\:.\\;
ratio iif t>(iui|iiiu'nt to ori'-ri'MTVc than that nu'iitiniicd
liy Mr. Ihovtr. It, a-. 1 haw siiL;j^(.'>t<.'(l, the pavaljlu ore
were Miildeiily to ^ive out when Mitticteiit reserves to
provide an increment of i)rotit that would just amortize
the capital outlay iti additional jilant had heen secured,
then the inme uould p<i^>il)ly he prejudiced in the lollow-
xujr way. All mines are found in jjractice to contain the
ore in shoots, streaks, pockets or patches. As the wurk-
i'l.i^s pro<,'ress it becomes clear that a jirocess of selection
lias hicn in practice, hy which ore falling below a certain
standard in j.;raile is allowed to remain in the mine. The
lon.i^^er the mine is workul the f^reater becomes the a).jf;re-
.t,'ate tonnaj,'e of more or less developed ore of a fjrade fall-
iiii,' helonj^- the arbitrary limit of payabilitv. It is a truism,
however, that in every mining field the costs of production
vary directly with the ape of the tiold : in other words,
there is a practically continuous reduction in costs year
hy year. In the instance I have previously assumed of
a nunc havinp; a final reserve of six \ears' payable ore on
a 'primary' basis, it is probable that large (luantities of ore
left in the mine which are unpayable during the tirst of
the final six years would, through decreasing costs of
liroduction, imiirovcd methods, whether mining or metal-
lurgical, fall within the limits of profitable working before
the tirst \i'ar's work, and therefore the mine would, under
these conditions, secure a new lease of life, on ore of a
grade which, if worked out in a three vcars" period would
still be tmpayable, despite the lower operating costs of an
increased installation. There should, therefore, be a big
margin of increment of [irotit allowed over and above thv-
amortization of plant amount, and even then I doubt if
the scheme is a satisfactory one, notwithstanding that the
objects aimed at arc undoubtedly desirable,
It appears to me obvious that in mines of uncertain
continuity in depth there can be a definite and satisfactory
basis of ratio of enuiiMnenr to ore-reserves est.Thli«li..d
i
ORl:RliSEl<ll-.S
241
hut nil .-i plan (litTcru-.t m thai pmiKj.scd by "^'r. Hoover,
riu- coiulitions of .siuli iniius call for very advanced
developnu'iit, not only to enalile tlieir luture possibilities
to l)e ^;anj;e(l, but to put the operators in a position to
averaj^'c iij), over the uidest i)os>iMe area, the grade of
the ore developed, in order that steady outputs may be
niaintanied I'urther, by such a scheiii' it is possible to
include a larjj;e tonnage of ore near— but just below — the
arbitrarv limit of payability, which w'iuld inevitably be
mitouched if the ninies were worked on narrow margins
of development.
After all, the whole matter under discussion rests upon
the courage and resources of those who control the
finances of the company, {"very engineer has experienced
a difiliculty at some time or other in ])ersuading the finan-
cial heads of a mining business to carry devehipment even
one year ahead of the mill, owing generally to shortness
of funds. If they can be persuaded to follow the advice
of the engineer 1 In icve the right policy to be the fol-
lowing, which 1 submit with all deference:
It is assumed that preliminary prospecting has been
' finished and a scheme for permanent work is to be pro-
vided.
First Step. — The mine to be opened out for examina-
tion, to such an extent that data for a sound development
policy can be forimilated.
Second Step. — .\ development policy framed, including
estimates of cost; time to carry it out: and probable ton-
nage and value of ore that will be opened up.
Third Step. — bVoni the information to be gained as
the development nroceeds, a justifiable limit for ore-re-
serves to be fixed, taking into account all the variables of
width of reef, percentage of jiayable ore per ICX3 ft. driven,
and facilities for attack.
Fourth Step. — A mill of a capacity fixed by the limit
of ore reserves to be erected, which reserves should not
Ill:
L'Jl'
J III: i:c().\(KMics oi- .\//.\7.vc;
bi' K'-'> than ilu' tiital ulucli tin.- null wculil i.ru>li if wurkdl
C(iiitiiitii iu^ly fur two u-ar>.
1- If lit Sti-p. — Di-vcldiiiiii'iit t>i hi' i-niitiinii'il, at K'ait at
tlk- iiiilliiii,' rate, (in payahk' (jrc
l'(ir till' tiiiic hi'iiij^ thi'^i' ail' all tin- ^tl•|)- whii-li in a
sdund ])iilic\ can hi' I'l irimilatnl. 1 hi' iiiim- now \\(iri%>
sti'adilv alicail for a couiilc of yiars (niori- or k's.s, a^ the
ciri'urn^tanci'S (k'ciilc ) provo ii> ahility to make a j)ri)fit
on ilii> ha-i>. ami ilii' (|iii>tinn of lurtlu'r additions is
Mi^'Kotc'd hy the cnj^incir. ilcforc tlii-M' additions can he
a,i;Tei'd upon hy the tinancial heads they nnist settle the
details of the M-heiiie hy which they iirojiose tt/ finance,
which will lie one of the following,':
A. Diversion of current profits.
!!. Temijorarv kian to he paid liut of profits, over an
extended period.
I'. Increase of capital of the conii>any.
I). Issue of already existinjx reserve shares.
< )f these, the last named is in my f)pinion undonhtedly
the soundest and most e(iuiiahle to all shareholders, for
reasons which I have explained luany times in other
writinujs.
Sixth .V/i'/-. — The cnpneer, havinpj gained by experi-
ence a full knowledge of the mine and it- capabilities,
suggests that develo[imeiit sbouk' be advanced at such a
rate that the excess tonnage of payable ore (over and
abo\c tiiat re(|uired to maintain a .stipulated reserve for
the ])riniai >• e(iuipmein ) should at the end of a given period
allow for a hheral margin — say six years — on an addi-
tional unit of reduction and treatment plant. Assume that
the primary unit i> 50 st;mip> with a three years' reserve
of 252.000 tons of ori', aiul assume the first addition to be
10 stamps, re(|uirir,g a reserve on a six years' basis of
100.000 tons, then when the Go stamps begin working
the reserve would .-tand at .^32.000 tons, eipiivalent to .V5
\-,-ire. n.'ii'intinii'iir u'oidd ac.iin lie nnslied — lirovidcd
Oh'l:-l<ISI h'lTS
2».!
al\\ass that tlu' omditinii. |Rriiiilt((l -t" ^\.k\\ an extent
tliat ll'e .f^rr\e of _^._s ..ears w.iiild In maintained fiir Go
stamj)* and cxiess tonnage gained t" ^^ive si\ years' rc-
serv fnr an additional to stamps, when tlie ' itter unit
ennid lie a<lded, lirii'^ir.j, tlie mill capaeit) .ip to yn stamps
and the ore-reserve to ,v^ years' work for the whole mill.
The same process 'vould ajjain he follnued thron^h. and
the net result would be a f,'radua' f^ain in milling pov.cr,
and with each ur.it of adtiition of plant, an advance in the
ratio of reserves. When five years' reserve has been huiit
up on the lines above indicated, by which time the mill
will contain 150 stamps, the question of increasinjj the
units of addition from 10, the standard up to this point.
to 15 or 20 stamps can be safely considered, and thus
throup;hout the mine will maintain a legitimate and per-
fecuy sound ratio between ore-reserves and equipment,
and will fulfdl the essential requirement of winning the
ultimate profit from the mine in the shortest time con
sistent with sound ^nd prud. t management.
It will doubtless be said that the scheme I have out-
lined — indeed this whole question — is too elaborate for
consideration in connection with the ordinary minint^
■prospect,' because mines are frequently opened a ■ 1
worked by people with limited means at thc'r command,
to whom it is vital that the producing stage should be
re-.^Iied at the earliest possible moment, without regard
to the qnesti>'ii of ore-reserves. ( )ne lias to admit that
the industry of mining can be conducted o;i widely vary-
ing principles, and expediency will often ride rough-shod
over svstems : bm mining business which is conduct 'd
upon the method of expedients, although perhaps it is a
necessary stage of such a business, cannot be regarded
as either safe or substatuial. and if tb.e principles which
th''s article is intended to elucidate do not apply in any
given case, then T think so much the worse for that case
Tn1,atinpsl-.,,r,-T Tune fs Tnni ^- A. DeNNY
U
IH
'1
-ii
EQUIPMENT AND ORE-RESERVES.— IV.
(Eduorial, Ju)y Ji, i9"4)
The discussion upon this important subject has been
r>.vived by the vahiable contribution from Mr. G. A.
Denny, which we pubhshed last week. (Jur readers will
join with us in appreciation of so earnest and thorough a
presentation of his views. Such discussion fulfills one
of the highest purposes of technical journalism.
Many aspects of the inquiry were touched upon in the
letter referred to. One of them calls for present notice.
Mr. Denny demurs to Mr. Hoover's suggestion that the
bank* 'f the Hand is so uniform in [jcrsisten and in
the gi ^.; of ore that mining finance in South .ifrica is
shorn of ail the br: 'Hng dangers ar-sing from the vaga-
ries of ore deposit!. II elsewhere. Both of these experi-
enced engineers are right, relatively ; for it is altogether a
matter of comparison. The reefs of the Rand, in their
uniform tcncir and continuity, do somewhat resemble coal
seams — more than they do 'gash-veins,' for example,
lenses in schist, or "pockets' in liinestonc. As compared
with these tyjies of uncertainty in ore occurrence, they arc
strikingly regular and calculable; and yet when judged
by such a standard of uniformity as a coal seam, the gold-
bearing lodes of the Rand vary within margins wide
enough sometimes to try the nerves of cautious financiers.
Recent events have emphasized this. The sliares of the
Bonanza company fell from £6] to £2, because ih ,rade of
the ore (opened up declined so much that the '-s. lated life
of the mine was reduced from over four years lO about 20
months. This is one of the shares which have been
authoritatively considered as certainties, outside the limits
of ordinary speculation. On the other hand, the life of
Crown Reef has been extcmled iti estimates from seven
years' supply of ore for 120 stamp-, to 14 years'
supply for 240 stamjis, simply because previous calcula-
EQCIPMBXT AXU ORB-RESERVES
1245
tioiis had onlv included the maicrial U> he ublf'-icd from
the South Reef and the Main Reef Leader, while later
developments have demonstrated that the wider Main
Reef itself can he reckoned upon for an exceedingly big
tonnage of payable ore. 1-acts such as these indicate that
plans for c(iuipnient are likely to be disturbed by the un-
foreseen even at Johannesburg. Indeed, we doubt very
much if gold mining would have half the zest to the m-
vestor if the element of speculation were entirely elimi-
nated, and it is well at all times to emphasize the essential
distinction between even the best mining venture and the
securities, such as t^rst-class Ijonds, the safety of which is,
humanly speaking, guaranteed. L5onds give absolute
safety and a very low rate of interest ; mines yield a high
return with an inevitable risk ; in some cases the risk is
small and the return is large ; in others, otherwise. Both
arc equally legitimate as investments. As mining be-
comes freed from foolishness and develops on a sound
basis, mining shares tend increasingly to attract shrewd
men because the proportion of risk to return becomes
lessened, while in the case of bonds, that relation becomes
less attractive because the safety remains no greater, and
no less, while the plethora of trust funds slowly brings
about a fall in the rate of interest receivable.
EQUIPMENT AND ORE-RESERVES.— V.
(E(liti>rial, August 4, 1904.)
Ill a recent (liscussii^ni of this subject, reference was
made to the (liniiiuuion in "orkinj; costs as a mining
region grows older. Aii_\cne inaugurating a mining enter-
prise may well afford to consider this factor, before plan-
ning for a lessening of expenses on the basis of a large
and costly equipment. It is not always realized how great
is the drop in costs which follows upon the improved
conditions conse([uent upon the growth of a goldfield.
In 1894 the average cost of realizing upon the gold per
ton of ore shipped from Crifijile Creek must have been
fully $40. At that time the smelters charged Si 5 per ton
for treatment, the railway took $5 per ton, and these de-
ductions, with the higher cost of supplies and machinery.
made a fearful inroad into profits. Only high-grade ore
could be handled, .sorting was necessary, anfl this multi-
plied the original expense of mining. Within five years
the smelter rate went down to $6.50 and the railwa}'
charge to ?3 ; and in later years the erection of large, cen-
trri'ly situated chlorination and cyanide mills, competing
in the ore market with the smelters, brought the total
charge for both transjxjrt and treatment to a mininnmi,
on low-grade ores, of $5 jut ton.
In \\'estern Australia, in 1897, the costs in the outlying
goldfic'ds averaged mere than the value of an ounce of
gok'. The scarcity of water, the dearth of timber and its
transport from elsewhere by camels, the distance from
<listributing centers and the want of experience in the
metallurgical treatment of the ores — all these factors
united in rendering expenses so high as to kill the mining
of medium-grade ort >;. Within ;i eoii])le of vc.-irs the ex-
tension of the r.iilways, arrangements for securing water
from idle iiiiiKs and the skill put into the milling metli-
EQUIPMBXT .IXD ORE-RESERVES -'47
ods, reduced c()>ts by 30 to 50 per cent. Tliis was done
without ar.v increase of equipment.
The minimum figures of recent years are, of course,
the result, ir large part, of better equipment and a larger
scale of operations: but, quite Pside from this factor, tlie
general conditions existing during the earlier years of
mining in Western Australia anc' in the Cripple Creek
region changed for the better so : uch, that, on the same
tonnage and the same equipment at the same mine, the
expenses went down within five years to the extent of
fullv 50 per cent. That is, to put it plainly, at Cripple
Creek costs averaged $40 in 1894 and $23 in 1899: in the
outlving districts of Western Australia they averaged
$22 in 1897 and $10 in 1902. Tt is obvious that the incre-
ment of profit to be gained from a larger output would
have been exceeded during this period by the economies
due to the rapid improvement in local conditions, and
that a management which deferred the enlargement of its
equipment would have won a larger final profit than one
which wasted its ore-reserves in meeting the heavy ex-
penses inci-dental to the youth of a mining district.
The subject is one to which we will return. It is well
to udd that the high costs at Cripple Creek were due to
the fact that of the ore mined not more than one-third
underwent shipment; even in rich mii;es one.-half was
.sorted out, in others as much as three-quarters or even
more. Thus the cost was high per ton of ore rcali/ed
This was due to the nature of the ore occurrence.
Costs are now about $14 pcr ton as compared to %2}, in
1899, not so much because general conditions have gone
on improving, but by reason of tlie larger capacity of the
custom mills and the bigger proportion of those low-grade
ores on which treatment charge; are relatively low. In
Western .Xustralia. similarly, since M)nj the beneficent
rcstilts of the CcKilgarlie water scheiTie. the extension of
the railways, the improvements in ore reduction and the
IP!
I
248
77//: /:(-(),V0.1//C".V or MIXIXG
sinsc of stability ilue to tlu' (ipciiiiii; up of lar,L;o n.>LTVL's
of ore have warranted estimates of an increment of profit
due to larger eiiuipmenl, and t(ulay even an outlvinj^
mine like the L'ljsmiipuliian exhibits workin;^ co>ts as
low as $544 per ton, inclusive of development and taxes.
Considerations such as these prove that the solution of
the problem — the ratio of e(|iiipment to ore-reserves —
must be determined by the local conditions of each case,
and not upon general theory, however w- 11 founded. But
a workinc: theory is quite necessary, in order to start with
intelligent ideas upon the subject.
ORE-RESERVES IN GOLD MINES
Tlic Editor:
Sir— 1 liavc ju>t ticcn ru-rcadmLC Mr. Hoover's articles
of March 24 aiul May Kj, and, if nut luo late in the ticld,
I will make a lew remarks on some ]>(uiits raised liy him.
Mr. Hoover says that "the maximum profit from any
(gold) mine can only be obtained by the most rapid ex-
haustion of the mine, and that most rapid exhaustion is
to be secured only by the most vigorous prosecution of
development and 'he maximum equipment that can be
employed." He then goes on to show — as a result of
carrying out this system — that an economic limit to a
mine's ore reserves intrudes itself as a factor, and that
this economic limit works out at abiuit three years. From
the technical point of view I feel sure that Air. Hoover's
arguments are correct. They are unanswerable, and can-
not but be endorsed by technical men.
Now let us look at ore reserves from the point of view
of those who buy the shares. What do they say? It is
a true saying that "those who pay the piper call the tune,'
and as the investors in gold mines furnish the capital
wherewith the industry is kept going, it is only right that
their side of the argument should carry weight. I will
.issume that these people know as much about sound
finance as Mr. Hoover does about economic mining — in-
deed, you will find H. C. Hoover, Esq., the capitalist,
among their number.
The argument of one 01 this investors' class would be
as follows: "I have money to invest and intend to put it
in gold mines. I have a sound knowledge of finance,
and believe that, besides the value of any capital in the
mining industry, my personality will have a sound and
steadying influence on a class of securities hitherto held by
many people in disrepute. But if I come in, and find
money, I brin^' in with me my knowledge of sound
^1
1 1
TIIR liCOXOMICS OF MIXIXG
finance, and I insist that the investments placed before
nie shall conform tu a certain degree of safety, which de-
force I, not you, .shall decide. 1 see that from the technical
point of view Mr. Hoover's claim for an ore-reserve of
only three \ears is sound; but I, who am asked as a con-
se(|uence to risk the sjjreater ])art of my capital on the
chance of tindin<,^ ore that is not yet exposed, and know-
ing the risks of mining, decline to go in on such terms.
.\s a sound financier I wish to insure my capital, and I
can do so to a great extent by insisting that there shall
he ore-reserves for considerably more than three years
ahead. I know that this is not the most economical way
of handling the mine, and that there is a loss of interest
1)11 the mt)ney locked up in these extra reserves; but I
look on this loss as the price I pay for insuring my capi-
tal, and am satisfied to incur it. If my terms don't suit
you, I will withdraw from gold mining, and the gamblers
and charlatans who have in the past made this industry
their hunting groiu.d can return."
Under itieal conditions of investment a three years'
ore-reserve, as recjuired by Mr. Hoover, would really be
enough, for the shares would be capitalized only at such
a price as to } ield 30 per cent to the investor, who would
tiien, on his three _\ears" reserves, have the respectable
proportion of yo per cent of the mine's market capitaliza-
tions in sight as net profit. I>ut in a mine that is located
in a gond district, with big orebodies, and looking well
in the Iwttorn, such a yield as 30 ])er cent is now impossi-
ble to secure. If such a min'e can be bought into, to yield
15 per cent, it is as much as the investor can look for;
but more often the yield of interest on the price of stand-
ard gold mines is found to be no more than 12, 10 or
even as l<nv as 8 per cent. Personally, I have come to the
conclusion that the best gold mine should return 15 per
cent to an investor, of which he nnist set aside at least
half for the redemption of his cajiilal ; if the mine is not
ORE-RliSnRIT.S I\ i'.OI.n MIXES
2.-1
li^'kinp well in depth tlu' ate of interest reeeived ought
to he consideraljly more.
Mr. IlooverV second article discusses <Te-reserves in
tiieir relation to mine valuation, lie sa\s, with truth,
that it is rarely possihle in the initial stai^e lo tin 1 a mine
with a net jirotit in sii,du equal to the ])rice asked for it.
I had said that it is rarely possible to l.uy .shares on this
basis in a producing mine, and we had both tried to an-
swer the question, W hat marf^in of risk is i' permissible
to take? Mr. Hoover arjjjues that this margin of risk
ought to be determined differently for individual mines,
and gives most ingenious theories for arriving at this
unknown factor — theories based on locality; geologic
structures; the nature of ore-shoots; width, length and
value of the orebodies — all of which must be assessed
at theii just value and adtled to the net profit then in
sight. I had previously (in estimating the cliances of the
average sound gold mine, over and above its present net
profit in sight ) lumped all these iK)ssibiIitie.-- together as
job lot. My formula is that a share is worth buying if
the net profit in the mine — assuming developments in the
bottom are normal as to width and '-alue — is cfjual to two-
thirds of the market price of the mine. That means that
I expect enough additional ore will be exposed in depth to
at least return the one-third of the capital which is un-
guarded, and also pay a good interest on the whole of the
capital at stake. This generalization of mines strikes Mr.
H(K)ver as somewhat crude. But let me point out that it
was written for laymen. The average investor, so far as
I can sec, has no standard to guide him. and is liable to
flounder most hopelessly when he buys mining shares.
The mere putting into operation of this bit of advice, and
therebv rc<lucing mine capitalizations to on>third more
than the net value of the current ore-rcser\-cs, would alter
the status of mining investments out of all recognition. In
other words, to produce a paradox on one of Mr.
252
Tlir. ECOXOMICS 01- MIMXG
Hoovvr's favDriie cxprcssicjiis — amortizati' .ii would set in,
and tin- invcstini,' body, instead of dying, would be on the
higli road to recovery
London, July 20, i<X)4.
J. H. CURLE.
THE PERSONAL EQUATION
(tdlturial, August 18, 1904.)
The repeated insisieiiee in tliese columns of the impor-
tance to the mining imUustry of the sense of professional
responsibility amonp the chiefs who direct the ojx^rations
of mines, mills nnd smelters, will have failed utterly if it
has not brought out the grt t underlying fact that per-
sonal character is the pilot \ ho steers an undeviating
course amid the shoals of pliant circumstance. Character
means that a man will do the same thing even under dif-
fering conditions ; he is wanting in individuality who m<id-
ifies his action according lo temix-r and environtr.ent. It
is the one element which gives each man an identity
among his fellow s. Kach is a law unto himself if he pos-
sesses character; but a concrete mob, if he does not.
Given the same data, the conclusions formed oy diller-
tnt engineers will vary, by reason of the introduction of
that decisive element which represents the personality of
the man who weighs them, balances them, and decides
their relative bearing upon the work in hand. The per-
sonal equation is the application of character to practice.
While the ecjuation includes an unknown term, that term
is supposed to have a fixed value ; otherwise it makes a
sum too difficult for the business of life, which has no time
for complexities. The expression of the personal equa-
tion is judgment, that indefinable quality of mind which
enables a man to focus the experience of a lifetime upon
the work in hand and gives advice which, in all human
probability, represents the best solution of the problem
set before him. In this efTorv, training is a factor, in se-
lecting the experience which throws the best light on each
separate case, and in establishing the logical bearing of
various kinds of knowledge upon the special circum-
stances to be studied.
When two or more individuals co-operate, various per-
254
Tin: licuKOMics or mixi.w.
^onal i([uations of unlike icriii^ ar^ cnml i. il and tlie
result can no lont^ir he txi n -^m ij l.hiiitily Character
is <>l)l:tt'raf' <1 : a cr. -tai.nu- ,ni!i\ idiial brcniiU' an anior-
pliuus aggregate. \ou cannot sji.dicate character.
ORE-RESERVES
^AuKUil I
;04.)
Tin- lid it or:
SiK — 1 may be pardomd lor rtturning to the char^u ,
as tlic iiiaiur has privcd uf soiiii.' ii.tcrtst.
In the JuUKNAL oi April 21, Mr. Lawrence seems t '
object to the use of the word amortization,' and before
his onslauf,dit 1 hasten to enireiicli myself behind prece
dent. My assistant, at my rceiiiest, has scanned the pages
of two well-known standard works on mining, and finds
that the word amorti/ation' appears in those pages im
less than 162 times. As to the exact Mieaniiig of the word,
•Investor,' in your issue of June 2'. has truly exi)lainiil
the origin ■ f the word and its most proper Use. I do not
wish, iKHvever, to be taken as claiming amortization as a
common feature "i mining finance. Amortization, a.^
used here, is a factor necessarv to consider in tinancia!
calculations, yet it is a thing not often actually set out i>f
dividends. In other words, the recovery of capital from
a wasting enterprise within a given period is a necessary
factor in the calculation of \hc pros and cons of that en-
terprise. Having served for tiie purpo-t. of calculation,
it is quite inimater' il whether the $j received from this
enterprise should be separated and each stamped indi-
vidnallv — one as amortization and the other as dividend
— (^r not.
In the JofRN.\L of March 31, Mr. Spilsbury says: "In
the first place, from my own experience, I can safely say
that the ore-treatment plant, whether milling, concentrat-
ing, smelting, or other reduction means, of over 75 per
cent of the mines I have know.i. is from initial erection
well in excess of the output of the mine under all ordinary
conditions- of development." I sympathize most deeply
with Mr. Spilsbury that in 75 per cent of his experience
Sice article 'Aniorti^ntion.' by F. Ilohart. p J_'I.
::.,()
Till-. liCOXOMICS OV MIXIXC
I
ai\(l practice his l^t lias bi-i'ii ca-t aiiK'tii: niiMiiai.aKfd
mines. I carefully excluded tliis class in fcnuidinK' my ar-
munent, an.l 1 cannot accept llie aliove -tatcnuiit a., any
iifutation of my ^i-ncralizatidii. Mr. Siidsliury j^ivcs an
example "f a mine whicli. I d-erve, has the fnllouinK'
characteristics :
1. I'nder ordinary conditions of devel i)ment, it re-
turns a fair profit and an ■■amortization fund oi 5 jier
cent."
2. With mine development of a viyor which I propose,
I ohserve that the hauling' engine will not handle the
waste dirt, and that the profit- will all be eaten up hy
doint:; this increased development.
3. I ohserve that. t;iven thi.- development done, the
mine is not likely, with its jirimary plant, to earn enonj^h
protii to build the secondary plant.
4. Supposing tl'.at tiie seccjiidary plant be built, the
profit derived from the combined plants will possibly be
less than it would from the primary plain.
The case seems to me al)snlutely hopeless. I must again
extend my sympathy to Mr. Spilsbury in having a mine
of sucli truly w. etched character, in that the margin of
profit is too narrow to stand such a campaign, and that
dispersion of the orebodies seems so great, and tiie waste
dirt is of such enormous proportions, that neither the
excavations for ore give room enoiigh to stow it away,
nor is the hauling engine good enougli to cojx' with it.
It is a most trying case, and I feel like admitting at once
that this instance is like those emanations of the human
brain called nightmares, entirely out of the reach of sound
kigic. My heart especially gix-s out to Mr. Spilsbury
when I notice that in this particular instance an amortiza-
tion fund of 5 per cent is considered sufficient, and there-
fore that the life of tins wretched mine is bound to be at
least 16 years. If Mr. Spilsbury, however, will give us
the figures as to the size of the orebodies, the distance
ORi:-Riis!:h'ri:s
257
between them, the ijnifit jht tmi. the totn.l workinp cnsts
and the fixed l•har^,'e^, I will .'ii^ree to try to mn'-e my plan
fit or show that hopes of nniortiz-.-ion before death should
he abandoned.
for Mr. Itipalls' letter in the Joirn-.m. of May 5, and
Mr. I'.rown's letter of May 26, I have to than': l)Oth Mr.
int,'alls and Mr. ilniwii for the kindly trouMv they have
taken to nnderstand tli'' poinis whiih I desired to make
clear and the support they havi i,'ivt'n I how to Mr.
Infjalls' suggestion that in Muh nutal mines as have
a product of variable price tlu' iiu^'stion may, ui certain
conditions, be very much modi'iid. Mr. liruwn has pre-
pared a useful tal>!e. which I trust Mr. Spilsbury will
avail himself of. -s it very much simplifies the application
of the mati^r and might assist him in his troublous
practice.
As to Mr. Brown's .iiiggestion cf the temptation of
superintendents to treat rock rendered profitable by the
lowermg of costs, due to increased equipment, and thus
lowering the avcidge profit of the mine, so as to even
lower the total profit and to upset the calculations on
which the extend'^ 1 plant was authorized, I believe Mr.
Brown should carry his argument somewhat further —
althoup;h, aside fror,. the immediate question, 1 might
observe that superintendents should no^ yield to the
temptation to do wrong. If there exists in a mine such an
amount of ore of a lower grade which can be profitably
worked by a reduction of costs, to be secured by larger
equipment, as will affect the total output, then this ore
forms a problem by itself, entirely aside from the ore
which was within the scope of the pr-mary plant. Either
this secondary ore warrants an increase in equipment to
work it, upon its merits alone, or it does not. If it does
so warrant, and the primary ore also warrants an exien-
sion of plant for reasons set out in my programme, then
there should be two extci.sions of the plant and not one.
258
TUB ECOXOMICS OF MIXING
In your issue nf April 21, yuu, in effect, say tliat tlic
unashamed and essential American idea is that it is pcKir
business to mine for jxisterity, and I assume from the
context that \ou otYer this as a criticism on my plan. 'Ihe
proposal 1 have laid down will, if followed, exhaust a
mine far more ([uickly than is common in American prac-
tice. It is my helief that it is possible to extend the de-
velopment in the average mine by the depth to which the
shaft can be sunk, say 350 to 450 ft. per annum, and if
my plan were followed, mines would be exhausted with
this rapidity. Instead of most of the American mines
being more than 10 years old and few of them excavated
to a depth of 1.500 ft., they would, had my plan
been followed, been excavated J a depth of over 3,000
ft.; in fact, amon<; the most serious objections which I
see to the proposal which I have made, is r'-t that it works
the mines too slowly, but that it works them too fast. It
has been suggested to me that from the broad standpoint
of public good it will exhaust the mines too rapidly. As
Mr. Ingalls points out in — say, copper mines — this pro-
gramme would Hood the market with metal.
In your issue of April ji you raise the question of the
occasional desire on the part of a mine-owner to devote
himself to development work with a view to increasing
his ore-reserves and profit in sight to a figure desirable
from the standpoint of .sale of the mine. This, of course,
is a matter of policy entirely outside the discussion of a
method to get the great. ^ ultimate profit on the ore itself
—this involves the gre:.t science of getting the most
money out of some other human being.
In your issue of June 23, Mr. Bancroft raises an im-
porta. t subject in a discussion of the care and nurture of
infant mines. I wholly agree that tlie problems which
surround the installation of the primary plant may often
be far different from those of the secondary plant. Mr.
Bancroft's article I must jwint out to one critic as my
ORE-RF.SILRl'RS
L'no
justification for statint^ the case in the manner in which
I did — that the real proMem of ratio hcs for its solution
in expansion, not in original installation.
If I were poinp to generalize on the subject of nrhnary
plants 1 should probably fall back upon the principle of a
friend whose occupation i the operation of mines through
their nursery stapes; tha. is, "In common business pru-
dence do not erect a treatment plant at all until there is
enough profit in sight to repay the cost of it."
H. C. Hoover.
Johannesburg, July 15, 1904,
NO-LIABILITY COMPANIES
(^eptcInl)e^ 8, 1904-)
The Editor:
5iK__ln your <liscussion .n mining finance it may n(jt
be out of place to consic'- :.c question of the "no-liability'
company as practiced m Australia. This system is not
well known in the United Slates, and as it is resorted to
so largely in a country whose gold output was last year
the largest in the world, it is certainly worthy of
consiilcration. The reason that the •no-hability' company
has such a popularity in Australia is that, exclusive of
Western Australia, the mines are opened and supported
almost entirely by local capital, the shares being held
mostly in small blocks. X-arly all miners, and a large
prnpo'rtion of the outside public, speculate in minmg
si .res. Local capitalists, not being strong enough to
underwrite or finance large undertakings, and with a
desire to retam the cotitrol of the mines in the country,
the 'no-liabilitv' company has sprung into existence, untd
to-day it is an inseparable feature of Australian nimmg
practice.
i'revious to the introduction of this class of organiza-
tion the limited-liability company was the method oi flota-
tion adopted; bin including, as it did, among its share-
holders a great number of miners and others with limited
means, whcT) a large 'call' was made at one time, the
poorer' shareholders would olten be unable to meet it, and
cases have occurred where individuals have been thrown
into bankruptcy on account of their share liability. In
contrast to this, in a liability company, a person buying
shares tm wl.ich only a frac-: .n of the nominal value has
beer called up, assuiner ' ^ability to meet any future
calls. He can drop ou- lin'c he sees ht, and in the
rase of non-payment, usually after the lapse of one month.
the shares are sold at auction on the Stock b.xchani;e,
after notice of the sale has been duly advertised in the
XO-Ll.tlill.lTV COMI'.IMI'S
liOl
local papers. I'hc no-liahility company has been the
means of iiroducinp; a lar^e ani' mi: of i,'ol(l, hut it has
many weak points, amontx the cliief of whicli is the fact
that it increases the speculative element in mining invest-
ment, and it is the earnest desire of every cnf,nncer to re-
duce the speculative element in mining as much as
possible.
One writer would have So per cent of the share value
of a mine in siLdit as profit before considering it a good
investment, and though that is a consummation devoutly
to be wished, vet from the engineer s viewpc-iint it is luam-
•estlv asking too much. This method would re(iuire only
a sampler and an assayer to determine the value of a
mine, but every day the examining engineer is called upon
to pass judgment on propositions that could not comply
with the 80 per cent condition.
Every proposition we investigate is not a big one, and
to condemn wholesale all prospects we come across would
require verv little of what we may call mining intuition.
r,y prospects as here used, I include properties from
which a considerable amount of ore may have been taken,
))ut which have liltie or no ore in sight. This, then,
brings i" the legitimate element of speculation, which
aspect tlie engineer can never separate from mining, and
with which he must always reckon. In many cases this
is (piite large enough, without endangering the success
of the enterprise by foriuing a noTiability company, often
with an entirely inadeciuate capital ; the amounts .secured
by each separate call being so small that economical
methods cannot be adopted, as the funds do not allow of
any scope in planning the work. I do n(,t for a moment
mean to imply that all no-liability companies are crippled
through this sort of policy, because such is not the case;
but a great deal of this hand-to-mouth policy does ex-st.
The philosophy, then, of the call system is based on the
verv thing the engineer seeks to eliminate, namelv. the
7 '//;" J:l().\OMICS op MIXfXG
flcnuiii f ^ptTii' ttii ill. \ c<inipaii\ ^ fcinK'd to wurk a
I)r(i{)ert\. Let us fi'Uow l!u' tm '.IkkI pursued by a siiiall
une (if, say, iio.ooc tniiia apital and i\ sliar- s. ( )nc
or tun sli:!liii,i;> ma\ be re((uired 'Aitli the >ub-Lriptii)ii.
and then 3d. pir month per sliari .s ealleil ; this l)rings
in £125 per n nth. All wnrk will be earried out in the
most sliji lod niannei to inak the money iri' as lar as
possible at the partieu, ^r m lent, with the hi;pe tiiat the
mi'ie wilt soon be able to pay its way. It is true, many
pc( iile have p; t money into mines nn this sort of a basis
who won' not on anv other, miners inakinL'' £2 per week
owninp and paving' ealls on small blm-ks of shares. These
small hM!dinij;s, no d'>ulil. atj^reL^ate eonsiderable --nms
and constitute an i.nportant pereent;n,'e of the total capi-
tal nivested in mitu- in this part of the world, and, too,
tliey materially supi)ort the industry ; \ et \\ ith a proper
workini:; capital in the beL^inninu,^ at t!u disposal of a con".-
petcnt man, a .threat deal more could be done with the
same cash, and therefore with the greater chance of
success.
Another great objection to the ncKliability companv is
the ease with which it lends itself to the ends 01 the dis-
honest company pr;. ii>ter. In the limitid-liability com-
pany the larger sums ri quired are a])t to cause a closer
invest 'Ration into the merits nf a property , whereas in the
nodiability conipany, as the payments arc intermittent,
smaller ami not a> much felt by the investor, he is willing
to take a bigger risk, because, lu- argues, he can drop out at
any time, and he often goe^ mto a company much as he
would put u|) money on a hor.^e race. ( )nce in, glowing
rejxirts frfim the mine keep him [laxing calls, until often
he has a consiilerable sum invested, and then continues,
because he has alreadv so nuuii at stake. Taking advan-
tage f>f this weaknes.- of iuiman nature, the dishonest
promoter gets one or more exceeding!) favorable rejx^'rts
from a certain class of mining quack and, w ith these as a
NO-LI. iBILITV COM P. IMES
203
l.;isi>;, be snlicits sul)srri])tinns. Tlu' owner is to he paid,
pi rliaps, a certain amount of cash, in cast' of flotation ;
tile promoter reserves for himself a sufficient numher of
siiares, issued as fully paid, and .he rest are offered to
the puhlic. Xaturally, attenii)ts are made to create an
artificial value in the shares, by issuing ojlowing reports
from the mine, and hy whatever other means are at hand.
< )nce a demand for shares is created, out j.;oes the pro-
tin iter, although, as his shares are fully paid up. he may
find it to his advanias:je to hold on for a considerable
lcnf:fth of time as the mrre moiiey paid in calls, other
thinj^s beini^ equal, the more valuable his own holdings
become.
Despite all its handicaps, the noliabilily company con-
tinues, and will continue, to exist in Australia, as it af-
fords the working miner and small capitalist an oppor-
tunity of niaki'ig a stake, and in many other wnys suits
the conditions of the country. It must be borne in mind
that, to a very large extent, the ores are free milling, and
can be treated in comparat:^'ely inexpensive plants, so
that, as soon as the pay-shoot is encountered, the property
can begin to pay its way without the necessity of having
to plan a special metallurgical plant.
C. S. Herzig.
Melbourne, July 25, 1904.
i '
ENGINEERS* ESTIMATES OF COSTS
By \V. R. l.NGALLS.
(September ^-;, 1^04.)
Mr. Wliinery, in an able paper in a recent issue of
Tlic E>igiiiccniig Nczcs, discusses the prevalent distrust
of ens^incerinj; estimates ; he admits this distrust to be nut
without excuse, unless tlie estimates are reliable. lie
therefore analyses the causes that seem to discredit tin-
more carefully prepared e>tiniates. Into every complete
estimate <it the jjrohaljle cost
a projected ent;i-
neerint( work the fnUowinjj elements enter: i, Quan-
tity and character of work to be done; 2, physical cnndi-
tioiis muler which it nui>t be performed; 3, best metlind
of execution ; 4, unit cost of the various items ; 5, general
expense; 6, market fluctuations; 7, ability and skill of
execution; 8, integrity and honesty in execution; o, for-
tuitous incidents; 10, assumption that plan and scope of
work will not be altered. Mr. W hinery considers that
only items i to 5 are properly within the scope of the
engineer, ai, 1 argues that he is no better able to forescf
the contingencies that may ari>e under items O to 10
than the man of business, and therefore should disclaim
responsibility for prophecy co'icerning them. All of this
should be distinctly understood, however, and a state-
ment to accompany an estimate, something like the fol-
lowing, is therefore proposed :
"The survevs and examinations for the proposed im-
provement have been made with unusual care and thor-
oughness, and plans and outline specifications have been
worked out and considered, with great care; the quanti-
ties and the character of the work involved have been
asccrtaine<l as fully as is practicable before the w k is
actually under construction, and we have made iiberal
allowance, where any uncertainty exists in this respect.
In estimating the probable cost of the work we have
/:.V(;/.\7;7;a'.v i-sriM.iri-.s or costs lv,:,
! Tsi'd (lur fij^uri's up"!! i'lc picMMit m.u'kit value nf ma-
urials and lalmr iii tin.' rcijioii uIkti' tin. unrk is t" he
(lone. Tile unit prices applied t^ the several kinds of
work are based upon our personal knowled^'C and experi-
ence, supplemented liv all the information we have been
able to obtain about the cost of similar wi)rk, the special
phvsica! conditions that are likely to be encountered in
this particular w > rk bavin- been i;iven full consideration.
L'nder the In ad of Ljeneral expenses we have added such
sums for e!i,£,dneeriiiir superintendence, clerical work, and
interest and depreciation upoi. plant as in our opinion
should fullv cover these items of cost. The estimate
assumes that the \Nork will be conducted witli the average
skill and efficiency. It makes no allowance for possible
changes in the plan or scope of the improvement we have
outlined, nor for changes in the market value of material
and labor. No allowance is ma ie in the estimate for pos-
sible inii)roi)er f)r dishonest administration; nor for cas-
ualties and conlinccencie:, which can'iot now be foreseen,
but which, judfjini,' from our expi'rience on work of simi-
lar character, -luuild not exceed per cent upon the
total we have rep Tted."
I do not a<,'ree with Mr. Whinery that the ent^incer
is no Iietter able to forecast the imcert:iin contin}:;encies
than the lawyer, financier or man of business. He should
know better iliaii they as to the ranges in the prices of
the labor and materi.il that he has to do with, better a?- to
the limits, ability and skill in the execution of this kind
of work, better as to the t::cneral nature (>f tlie fortuitous
accidents that may liajiijcn and the ways of puardiiiL;'
a^^'iinst them, and Iietter ns to the prob.ahie losses lhrou).;;h
dishonesty, liecau -e al! of tiiit is |)art of the experience
that he has fjained in '!.e execution of similar work. If
he has not done similar work he canno; be expected tn
make a trustworthy estimate; but if b.- has. he is naturally
belter able to forecast the chances than the lawyer, finan-
I'OG
7/7/; ECOXOMICS Of MISISG
i-RT nr mail of Iuimirss who has had im Mich cxpcrii'iici;
at all. Ill <ithcr wurd.s, the niudcrn tn^inccr in order to
i)e successful must necessarily he a man of husuiess him-
self; and the only ground f' ir iilaciiiK c nhdince in the
estimate <>i a husiness man in eni^ineenii!; matters is
when lie is something' of an engineer himself, which in
fact many modern husiness men are. 1 think that no
hlamc will he attached either to the engineer or husiness
man for a cost in excess of estimate which is due to a de-
fakatioti of funds, or a change in the plan and scope of
the work after the estimate was made, although the en-
gineer may even foresee the possible advisability, or
nccessitv, for making certain changes from the original
plans and can also estimate in advance their probable
cost.
I think that Mr. \\ hinery rather hedged from his
original position when he presented his proposed e.><-
planatorv note to acconij)any an estimate, which is in my
opinion fairly well expresses!, except it does not go (luite
far enough, because the engineers can say :
"We have based our figures u,)'>n the p.-cseiit market
value of materials and labor in the region where the work
is to be done. These values are — per cent alwve (or
below) the average of the previous 5 (or lo") years. The
general trend of the market has recently been upward
(or downward). The jjroportion of lal)or in the total
estimate of cost is — per cent; of materials, — per
c it, etc."
Une of the questions that is frequently asked the en-
gineer is, What would lie the effect of a reduction in the
prices for labor and material? Plans and estimates for a
certain work have been prepared. The work has been
deferred. A year later, the engineer is asked what \\ill
be the cost of the work then. A large work, to run
through a series of years, is to be undertaken. The
prices for labor and material are bound to change during
/r.Vr7/.V/r/:A\V r.STlM.ITliS Ol- costs L'f.7
that piriud. At the Ijc^iniiinj,' tluy may Ik at tlu- li.uot
uii rii'oril, cli)>e Id licd-mck. witli cvcrv jii'isiJi-ct (jf an
upward trend in the markets. The cnj,nniiT sIkhiM know
this; it is his Inisincss to know it; and if he l)asc> an
estimate on the minimmn prices he is as niiicii to blame
as if lie were at error in iiis qnantities.
Mr. W'hinery's su.t,'L:estion to di>tinH:iiish clearlv be-
tween the mure and tlie less certain jiarts of an estimate is
praisesvurtiiy. It is anaI<>j,'ons to the discriminalinn of
'iKisitive ore,' 'prolialile ore' and possible ore" b\- the en-
gineer vakiitii,' a mine. I-'.ither in estimating the co,t
of a works or the vahu' of a mine, it is the engmeer's bnsi-
iiess to e.\[)re>> an expert ojiinion: and in renderinjj onl\-
a partial opinion, leavin;; someone else to draw the final
conckision in order to shield himself fnnn responsibilitv,
he is derelict in his diUy. A deliberate overstiniatc is as
reprehensible as an underestimate. The commercial pur-
pose of an engineer's estimate is not merely to indicate
how much money is i:;oinc: to be required, but also to
serve as a basis for calculation of the probable return
on the money.
There are plenty of enpincers in practice who are altle
to estimate closely what work will actually cost, as proved
by experience. They command la -pc fees, and properlv,
for their work involves technical and l)usiness knowledge
of the highest order. The financier slionid see that he gets
this kind of engineer, and when he is sure that he has. he
should be careful not to obtrude liis own less expert knowl-
edge. Fair industrial projects are not infrequently re-
jected as not good enough, because a .soimd engineering
estimate of cost is increased 25 per cnt, _^3 1-3 per cent,
or more "on general principles" by the business man
whose previous experience has been gained at the ex-
pense of defective engineering advice."
GOLD DREDGING IN CALIFORNIA
By Chas. G. Yalk
(September 15, I'.KH )
The following; data relative to costs of a drcd.LCc operat-
ing at ( )rovilK . I al., are tlie averat;es coverini,' three
years' work, and are taken from the books of a company:
Size of In-ckets, 5 cu. ft.; average speed of bucket., 12
per minute; avera^a- bank measure per month, 4'>,(M'^
cu. vd. ; avera',a' hours running per montli, 535 : average
kw. lionrs per month, 23,995; average cost of power per
montli, ^35').93; average cost of oil, grease and sundries,
$13. ji); average co-t of repairs, $1,212.0); average ofilice
anil general expenses, $177.40: average labor cost,
•>4</'-33 : average depth of ground. Ji) ft. : age of dredge, 3
vears; average total cost of o])erating, 4.H8C. per cu. y<l.
Takin-^ the average of the ( )roville ground at iCk. per
cu. yd. ;ind writing ofT 10 per cent for dtterioration of
the dredge, will leave a net of 14.4c. jter cu. yd. Deduct-
ing cost of oi)eration of 4.88c. leaves a net profit of 0.520.
per cu. yd. on all the property cited, and a net profit of
$3_>,5S7 i)er annum, or over 30 per cent interest on the
ca[)ital invested.
I'nilahly the best showing that can be made as to low
costs i> in another instance at < )roville, where a monthly
statement shows that 50.760 cu. yd. were dredged, or an
average of 1.^)92 en. yd. for each working day, at a total
cost, with all expenses, of i.(>(>c. per cu. yd. The average
yield of the ground per cu. yd. was 18.9c., and the net
profit for the month was $7,744- This was done with a
5-ft. continuous bucket dredge.
M
GOLD DREDGING
(October ti, I'.KH )
The Editor:
SiK — In your issue of Septet. ibtr 15 we note an erii-
torial j^'ivin^; costs of f,oItl dred^iii)^ ,it ( )rovillo. Having
recently had occasion to invcst:jj;atc this matter, we take
tiie hberty of (luesiioning tlie accuracy of the fgures
given.
'I lie cost per yard, 4..SHC., is below the general experi-
ence of this ('i trict. Seven cents per yard would he
nnich nearer he actual operatinij expense of the 5-ft.
dredj;cs now in use. The last company to invatle this
field, guided by the previous results obtained, has al-
lowed 8c. per yard to cover operating expense and depre-
ciation, the latter item being estimated at about ic. per
yard.
The statement of 23.0<j5 kw. hours per month is less
than lialf of any figures that have heretofore come to
light. Labor at $4iX> per month is also much below the
best results so far obtained. There are several instances
where dredges have been operated for a month or more
at a cost of less than 4c. per yard, but estimates of costs,
yardage, etc., from periods of one month arc entirely mis-
leading. Repair exi)enses range from one-ouarter to
one-half the total cost of operations, and for many months
they may be comparatively small. This, of course, will
give a large yardage and low monthly expense. Conse-
quently the cost per yard will be much below the normal.
On the other hand, a month when much- repairing and
renewal of dredge parts took place will give a low yard-
age and a high monthly operating expense, giving costs
per yard much above the average.
One dredge at Oroville ran continuously for eight
months, making a sjilcndid lecord, and then shut down
39 (lavs for repairs. The fact, tiicrefore, is obvious that
MICROCOPY RESOIUTION TEST CHART
ANSI a.id ISO TEST CHART No 2
1.0
I.I
Jii in III 2.5
150 ""^"^ 11111 =
■32
36
I- am
140
2.2
1:11=
2.0
1.8
1.25
1.4
^ APP LIED IM/^GE Jnc
=^ : I Mom Stfe#t
\^ ■■■'. New To'h U609 uSA
= ,ai - 03OO - Phiin*
:7o
Tin-- r.COXOMICS Of MI.MXC
costs per van! are reliable only when periods of a year or
more are cnisidereil.
The present tendeney is to increase the size of the
buckets and the stren};tli of the wearin.; |)arts. This in-
creases tile yardat;e. with ])ractically the same labor
charge, and a less than proportional increase in the ex-
pense for jiower and repairs. It is expected that the im-
proved dredj;es ca])able of handlintj $80,000 cu. yd. ant!
upward per month will reduce the costs to 5c., and
lower, ])er yard, but this cannot be done with dredges
having; a capacity of only 46,000 yards per month.
Yours respectfully,
Stebbins & Smith.
San Francisco, September 22, 1(^4.
[Tliis criticism is made fairly and with some reason.
Wc can quote average costs and yield for a well-known
dredging company at Oroville, which has been in opera-
tion for 5 years The average cost for each year has
ranged between 4.92c. and 7.47c., averaging 6c. for the
whole period ; the yield has averaged 13c. per yard. —
Editor.]
MINING IN MISSOURI
(November 3, ia04 )
The Editor:
Sir— In Missouri there are two important mining dis-
tricts. The Joplin district, in the soutiuvest, is the iarpest
producer of zinc in the United States. The mines of St.
Francois county, in the southeast, rank that district as the
second lar<,a'st producer of lead. The JopHn district is
also a considerable producer of lead froin ore concen-
trated, as a by-product, in the milling of the zinc or^-
Such comparisons as are to be made in this letter are not
for the purpose of pointing out the relative merits of the
two districts as fields for mining operations, but merelv
to show in a striking way the baneful results of the labor
union policy as applied to mining. Everyone knows what
the results have been in Colorado, but— fortunately, lack-
ing the gloomy record of outrage and bloodshed— Mis-
souri presents the more instructive industrial picture of
"before and after," which it can show contemporaneously.
The ore mined at Joplin yields on the average about
4.5 per cent of blende, worth, say, $35 per ton, under the
normal conditions of the present time, and 0.5 per cent
galena, worth, say, $50, or an aggregate of 5 per cent of
mineral worth about $36.50. The ore mined at Bonne
Terrc and Flat River yields about 5 per cent of galena,
worth about $37.25 per ton f.o.b. mines, when lead is
at 4c. St. Louis. At Joplin there is great and general
prosperity. In St. Francois county the mining companies
are struggling along at little or no profit, hoping vainly
for an amelioration in the conditions. It is strange that
ore of the same grade and value can be worked profitably
at one place and cannot be worked profitably at
another place m the same State, especially when the
physical conditions are all apparently in favor of the
unprofitable mines.
At Joplin there are comparatively small lenses of ore
27:: Till-. liCUXOMICS 01- ML\'L\'G
an.l .-licet deposits, avcrat;ing uiily about <S ft. in thick-
ness, the mineralized yroinul beinj;- the hardest kind of
chert. The mines arc worked in a crude kind of way;
oiieiied by tmall shaits, hoisting? ore ni small tubs by
means of unecunoniical engines, and dressing the ore ii>
ramshackle mills of comparatively small capacity, the
entire cost of opening a mine and equipping it with plant
to treat lo tons per hour being only about $i5,cxjo. At
I'.onne Terre and llat River there are immense shoots of
nre, affording stopes of 20 ft. to 80 ft. in height, and
width almost to suit; the ore an easily mined dolomite,
-round of character reiiuiring no timbering, depth of
mines only slightly greater than at Joplin, and no greater
inllu.\ of water, except in two or three instances; the
mines opened by line large shafts, cMiuipped with nearly
the most modern facilities; the ore dressed in complete
and costly mills of 500 to 1,500 tons daily capacity.
Surely St. Francois county has all the advantages of
physical condition, and theorelically ought to .surpass
foi>lin in operating costs. The explanation of why it
does not, involves some technical factors, but the chief
cause is to be found in the character of the miners and
their work.
The mines of St. Francois county used to make money.
The mininuim price of lead in the history of that metal
did not Slop them, and they have shown go(,d jjrofits
when lead was considerably less than 4c. per lb. This,
however, was before the labor union was organized m
the district.
I'he mines of St. Francois county are operated by large
companies. The cost of opening and equipping a mine
there is so large that a company with abundant capital is
rcciuired. I'or that reason there is no leasing nor any in-
dividual operations. The condition of the miners was
good: they were paid high wages, as compared with the
scale for other trades in that part of the country; the
il//.\7.\(; /.\- MISSOURI
27.]
(lay's work of lo hours was no lonj^cr tlian was required
of other artisans; the mines were sanitary and in no
way especially dangerous; the men were well cared for
i'v the • iipanies. The entire niininj; district is pleas-
antly situated, far more pleasantly than the averajje.
The climate is pood; all the conditions of livinp are
pood. The men were well satisfied, and - peneral air of
prosperity pervaded the entire district. This was before
the diseases of iniionism and socialism were contracted.
In 'he struggle which ensued, the unions were vic-
torious. The companies made no fight in line, shoulder
to shoulder. Some of them made no fight at all, and sur-
rendered without a shot. The others fought alone, one
by one, and were overwhelmed one after the other. The
unions won an increase in wages, a reduction in working
time to 8 hours per day, and the victor's right to despise
the conquered, which in successful labor wars takes the
form of cheating the employer in the work that he pays
for. The amount of work done per hour at Flat River
is materially less than before the advent of the union.
This is the chief reason why the mines of southeastern
Missouri are not making money.
Joplin has never been tainted with unionism. It has
always been the great camp of the small miner. The capi-
tal required to oi)en and operate a mine there is not large,
and the operators themselves to a large extent take hoM
and work with their men. Every hired man wears on his
!uad the hat of a future operator. He saves his money,
an<! sooner or later docs some prospecting on his own ac-
cotnit. If he is lucky, good for him. If he is unlucky,
he goes back to work until he can save enough to try 'it
again. Everybody works hard— works hard everv minute
ot the day— and when the day's work is done he seeks
enjoyment in such way as most appeals to him. The gen-
eral aspect <,f things at Tr>plin ,ind Flat River show'^ at
lirst sight tliat the Jojili,, man has the more fun. The
274
THE I-.COSUMICS Ol' MIXING
man who lias dune a good .s(|uarc da_v"s wurk is better
calcidated to enjoy himself, anyway, than the man who
has listlessly loafed ihrongh his task. And the Juplin
men certainly work. A pair of men break more to the
drill in their iiard, lliniy .i^nmnd. with no very high breasts
to stope on, than the b'lat River man breaks in hi.s niag-
niheeut chambers in limestone; and when it comes to
slioveling and tramming, there is no comparison at all.
Xor has the former any kind company to provide him
with lavatories and lockers, look out for his safety, and
pay him damages for unavoidable accidents. The Joplin
man simply takes his chances — often they are big chances
— ])uts in an honest day's work, and gets on in the world
if ther; is anything in him at all. Hut Joplin has no
union. Joplin has tb.e liest American spirit, and, conse-
quentlv, Jnplin is iirospcriius, and can mine 5 per cent ore
with little tubs and ramshackle mills, and make money ;
while the far greater deposits of an equally valuable ore
in St. I'rancois county cannot be made to pay a reasonable
return on the capital rccpiired to work them.
\V. R. IXG.XLI.S.
New York, October 18, 1904.
SECRET RESERVES
(Eilitorial, November 24. 1904.)
London and Kalgoorlit- arc perturbed at the present
time over the riglu and wrong of a practice which in dif-
ferrnt forms is familiar to mine managers elsewhere ; we
refer to the mamtenance of a reserve intended to e.iualizc
a variable output. This question was discussed in our
issue of May 12, 1904, by Mr. F. H. Bathurst, of the
Melbourne Ar;:us; but that well-known authority on min-
ing matters dealt with the problem in its more local as-
pects, as exemplified by companies operating in Victoria
However, the principle involved is the same. The im-
portance of it from a financial standpoint has been em-
phasized by the Boulder Perseverance fiasco, an inquiry
into which has elicited the fact that a reserve of 20000
oz. of gold-say, $40o,ooo-was held at the mine; from
this store of unreported bullion, it was the custom to take
three or four thousand ounces at a time in order to in-
crease the monthly returns when these fell off. In loon
the actual output of the mine was 209,206 oz., but the
output declared was 219.923 oz. In January, 1904. the
actual output was 12.426 oz. ; hut ,7,471 oz. was sVated to
be the production of the mine for that month. In the first
three months the secret reserve of bullion was depleted
to the extent of 10,000 oz. During the first six months
of the current year it became.manifest that the mine coul.l
not maintain a rate of output based upon a certain esti-
mate of ore reserves: but the gradual falling off was ob-
sctired by doctoring the returns in the manner described
iintil finally, the secret reserve being exhausted, the facts
had to come out, and there was a collapse, as injurious to
the professional men connected with the management as
It was distressing to shareholders who had bought stock
at a price based upon a fictitious production. In the
course of an official inquiry, the statement was made that
'_'7t; nil'- lA'OXO.MICS ()!■ M!\'I\'(-
Ihc Drnva-r.rowiihill, a i;nai irnl.l mine, tli.irmighly well
mana«,n-(l. gave out niomhlv returns sc uniform in thetr
amount that the services of a secret reserve were mani-
fest. It was also stated that this practice was usual m
Western Australia.
Before proceeding further, let it be emphasized tliat
Western .\ustralia is not the one corrupt spot in the mul-
ing world ; it has had several unsavory scandals, and U
ha'^s been the victim of a number of unscrupulous cam-
paigns, waged both on the i)ear and the bull side of the
market. This is '-le not to anv inherent Westralian de-
pravitv, but, as is obvious to men of experience, to the
unusual richness of the orebodies, a richness which .n
nature is concomitant with irregularity of tjccnrrcnce.
As against these troubles, so hurtful to the advance of
mining as a legitimate business, must be place.l a big
credit for honest management, technical skill and unre-
mitting energy, on the part of a handful of technical men.
both English and American, without whom the Westra-
lian mining conii)anies would have been in a bad way
indeed. In brief, human nature being the same the world
over, mines characterized by rich and erratic orebod.es
afford the ma.ximum of temptatir:-. to wrong-doing.
A iUictuating output and a secret reserve represent a
state of e(iuilibriuin comparable to a powder magazine
enclosing a small boy armed with fireworks. We are
aware that the gold is not necessarily luhl in a vault : it
is the custom to realize upon it and to carry a balance at
the bank, transfers from which effect the purpose of reg-
ulating the returns as reported ; but even though burglary
of bullion is noi involved, a theft no less vital is always
on the cards— the loss oi one man's reputation or an-
other's propertv as expressed in share values. Take the
case in point; the absentee manager of the Boulder Ter-
severance has had to suffer from statements of output
which— explain it as you will— were false. To go fur-
s/:ch'i:r i<i si.Rn-.s
tlur, llic iiian;i<,'tnK'iit of ilu- ( )r('\a-i;ri'\\ iihill is, we be-
lieve, opcratiiif,'' that iiiitir witii ;i \ir\v in si-rvinp existinif
sharcliolders ; and if a re.^crvi' is ktpt, it is for tlie pur-
pose of avoidiiif^ such Ihictuatious ;is rcudir sliarehoMrrs
anxious. It is more than likJ\, however, tliat iti thi-;
case the ()ossession of certain slopes of extraordinary
ricliness renders it tmtiecessary to store Iju'.Iion in the
safe or to carry a corres[ion(hiv^r balance at tlie banker's.
Iti any case, a remedy for vaiiation in the yield can be
secured by nuthfuls less darij^erous. In tliese company
matters, publicitv is tlie best preventative of wron^- ; secrecy
is its incubator. State your output, whatever it may be;
if you have a block of ground unusually rich, say so; if
you carry a reserve of bullion, state that fact ; publish the
amount of special ore wiiich may have been stoped dur-
ing the month or the quantity of bullion transferred from
the reserve in order to sweeten the returns. In short,
have your reserve, init get rid of secrecy ; maintain a
steady output, but state how it is done. If not, cease
monthly reports, which disturb timid shareholders bv rea-
son of their fluctuation, and issue half-yearly reports
with interim records of progress. Surely silence is bet-
ter than falsehood. A policy of straightforward frank-
ness, accompanied b_> the fullest publicity, is the onlv
cure for the present condition of affairs at Kalgoorlie ; it
is as necessary as fresh air to an invalid.
EQUIPMENT AND ORE-RESERVES— V.
1 lie discussion on the prnpcr ratio t)t.iuci.'n nunc
cquipnuiu ami orc-n. servos is taken up ay;ain in this issro
hy an L'nj:,Mnccr whose experience f;ives special value to
liis o!)servations. Previous contriijutions on this suhjcct
have !)rouj;ht out two poiius of view, which, natu/ally
enou^'h, are held to re[iresent tlie opposite standpoints of
fuiancia! surety and practical niinin^^; the quo a>ks lor the
niaxiimnn security consistent with a reasonable rate of
interc-t ; the other demands the larpest pain in the least
time. .Mr. Curie's now famous requirement of a r«-per-
cent reserve represents the investment view; while Mr.
Hoover's insistence on the increment of profit due to
rapidity of extraction expresses the intention to get the
largest amount of money out of a given body of ore.
As a matter of fact, any discussion of these di (Terences
of opinion will continue to be at cross purposes until it is
realized that only one form of ownership is coiUemplatcd,
namely, that of a limited liability company, organized and
conducted under certain recognized conditions. If the
mine i;-, owned by an individual who has no intention of
selling it, tite problem is simplitled; tliere is no share
quotation to maintain, no diversity of interests to please,
no directors to educate, and no financial press to consider.
It becomes simply a question of logical method, striving
to make the most money out of the ore deposit ; the aim
will be to avoi<l the wastefulness of an extraction so slew
as to allow ore-reserves to remain underground unreal-
ized, while fixed charges consume small profits, or the
extravagance of an exploitation under which the incre-
ment of profit due to rapidity of extraction becomes over-
wlielnied by the interest to be paid on an eciuipment the
services of which are soon ended by the exhaustion of
the mine. The fact is, we do not (juile appreciate how
Ilnril'MliST .1X1) C'A7,-A7;S7;A';7;.V
_'.:i
greatly mir imtliuils iirc ilMmmatnl by tin- flnctii.-ititi!,'-
ownership of mines; sIiarelnlikTs furni a dissolvinf,' liody
of i)roprietnrs tin- interests of wliom are cliverL,'ent ac-
cording as they liave bought as investors, to liold indefi-
nitely, or as speculators, to sell on the next rise.
fo tile iiivestnr, ore-reserves are an insurance; and,
even thiiugli tlie opening up of an excessive area of
ore-hearing ground represents the expenditure of caiiital
n. .t innnediately rennnnTative. he feels that the added
expense is worth the additional security. The siteculator
buys to hold lor a time, until he lias a reasonahle protit ;
hut in any event he does not contem])!ate retaining his
holding until the hitler end — when the mine is worked
(iUt. To him completeness of e(|uipment with capacitv
to extract rajjidly, at least as rajjidly as the opening up of
new ground, affords the results most to his liking — a
rising ([notation, an increased dividend, and a proximate
disposal of his holding at an enhanced price.
We can illustrate this view of the matter by quQfmg
the case of a company which carries a year's outi)ut in the
shape of broken ore; apart from reserves in the f( '•m of
blocks of ground not \et mined, there is this big toimage
of ore already mined lying in the slopes. l''rom the in-
vestor's slandi)oinl— Mr. Curie's — this is insurance of the
best Kind; for ohviinisly ore actually stoiied, sampled, and
assayed can be appraised with an accuracy not possible
when it is in place in the lode. As the speculating
shareholder .sees it— as Mr. Hoover would regard it—
this is just .so much money lying idle underground, on
which not only is there no interest forthcoming, but it
requires a constant, though small, expenditure in the way
of maintenance — that is, limbering, ladderways, tracks,
etc. It is here that we disagree with Mr. Curie — sound
as his views are on most matters of mining finance. We
consider that mining cannot be safeouarded to the extent
■.( „i;.
280
77//:' liCO.\OMlCS Ui Ml.MSC,
l)v tliiiiaiiiliiiL,' a itrtain rritii) of ori'-ri'SiTvis ami a speci-
fied rate "f (lui'knd. yoii can make a iiiinini; investnutii
as safe a~ a railrnad li.-ibl I'.y vigorous iKmIi ipiiKiii. li_\
acciimulaiiii^; ht'kui ore. ami by eiilar,i;m^ ilie l)in>, you
decrease tlie uncertaiiity : hut the ri>.k remains — it is the
essence of minint;. 'I herefore, the increased eiimpmeiu
and the taster extraction — with the concurrent advance of
ileveiopment. a lari,^^T (Hvidend and a smaller ore-re-erve
— represent tile MiumUst kuid of ininini,'. Under coni-
panv nianayement. that rate of extraction in which, as
Mr. Hoover claims, the increment of profit due to en-
lar_i;ed e(iuipment halances the amortization of the addi-
tional capital invested in the e(|tiipnient. .L;ives the lluctu-
atiiif,' ownership the hest return. It thi> is accompanied
hv accurate peril xlical estimates of res.rves, hy a frank and
freipient record of pro<.;re>>. and li>' a manat,'ement which
does not huv or sell the shares of the mine under it-; di-
rection, there is achieved the most prolitable form of busi-
ness known to the modern world.
SECRET RESERVES
( l)ttcii;(icr I, tyo4.)
Ill rij^ard to thiij rnatttr, wliich was discussed in our
editorial columns last week, it us interesting; tu not- tli-
views of four kadint; mine managers at Ka'g inrlie,
as elicited by a Royal Cumnimisaion which is [)rubmg the
Boulder i'erseverance scandal.
In cours. ■>! his evidence, Mr. Richard Hamilton, man-
ager of the Great lioulder Proprietary, depused on ojth :
"It is the custom of most of the mines here to have a bul-
lion reserve. I think it is very a'lvisai)le to have one to
kee[) the returns even; it prevents lluctuations in the mar-
ket, and enables you to work tlie mine cheaper. If you
had to keep the returns even by taking the ore out of the
mine, you would not be able to do straightforward stop-
ing. The amount of the bullion reserve should depend
upon the character of the mine, but half a month's return
would be a fair thing. Our reserve is kept locally. If
you did not keep a reseive you might have a 25 per cent
or 30 per cent variation ; such a fluctuation would affect
the market pro!)al)ly to the detriment of the shareholders.
I am in favor of limiting the reserve to half the month's
output. The bullion reserve does not show in the yearly
balance-sheet in every case ; the control of the bullion
reserve is generally left to the manager. I have not had
any definite instructions to keep up a normal output. The
directors do not always know of the bullion reserve. The
Chamber of Mines has rcconur.ended that bullion re-
serves be kept, but with no limitations as to the amount.
I am in favor of giving every opportunity to shareholders
of acquiring information about the mines: I would not
let them know what the bullion reserve was. I think de-
velopments should be announced here simultaneousiv with
London : I wouUl also give publicity to the assay plans.
nr^A 11 '/M il/1 iin'tl->VinI*-4 r> r\*- Vt « r
K,tf ti,^ K,,n:^
282
JUL liCOXOMJCS Ul- MIMXo
nut see that it is iKCissary to have local directors; tlioic
who suliscribc the capital naturally want control of the
mine. There lines not seem to be a \ery lart;e body of
investors in Western Australia; W estralia would derive
greater benefit by having:; the mine offices where the capi-
tal is available. 1 do not think }ou recjuire any more legis-
lation than you liave at present to prevent mining scan-
dals ; Royal connnissions, such as the present, would act
as a greater deterrent than in enacting fresh legislation."
Mr. Hamilton gave a description of his sampling meth-
ods, saying he generally took samples not more than to
ft. apart.
Mr. Robert D. Nicholson, the manager of the Ivanhoe,
in the course of iiis statement, said; "1 am in favor of a
bullion reserve. In a nune like the Jvanhoe it is (juite possi-
ble! to have a variation of 25 per cent in the ouii)ut, and
that would be detrimental to investing shareholders. In
a mine like the Ivanhoe, where we get slides, the fluctua-
tions are considerable. I thiik 75 per cent of the month's
output is a fair thing for a bullion reserve. The directors
know exactly what the output is ; it is not desirable to let
the shareholders know the actual figures. The bullion
reserve is merely to regulate the monthly output. Two
of the officials on the mine beside myself know what the
reserve is. The holding of the reserve makes the costs of
mining chea]xr ; for instance, you would leave a lot of
low-grade stuti' behind you if you had no bullion reserve
to work on." Mr. Xicholson, in tlescribing the sampling
practice on his nunc, said he took assays every 3 ft., cut-
ting everything above 5 oz. down to that figure m calcu-
lating averages. He continued: 'T tlnnk the public gen-
erally shiiuld ha\e access to the mine. Tliev luue access to
the Ivanhoe; we will show them the assay plans up to the
dale the) are receiveii in London; we publish all iniorma-
lion here simultaneou-ly with London. 1 do not think it
wouli! be wise t<j legislate that ore-reverses should onh'
siiCKirr h'/:s/:h'ri:s -jh:'.
'V Ihnsc opened up 01! tliroc sides; it should be left to the
<hscrction of the manager. What is rcallv wanted is tlie
puhhshuig here of th,.- forMiigluIy rei..rts. giving widths
and vahies; we do it on the Ivaniioe."
AJr. Frank A. Moss, general manager of the Kalgurli
and Hamault, .ieposed : "The Kalgurli differs from most
mnies on the field. W'e have verv big lodes, but no
definite hn^ of lode, and unless we had a bullion reserve
we would have a bad time." (Witness produced a plan
showmg a stope n^o ft. long and 132 ft. wide, and ex-
plamcd to the Commission that in working sueh a big ore-
body It was impossii)le to maintain an even return ) "In
January our output was 5,800 o?. ; probably six months
later it would be 2,800 oz. Still, our shares never fluc-
tuate, and that is due to the use of a bullion reserve ■ a
mouth's bullion reserve is quite sufficient for i;s Vo main-
tain an even output. We do not expose ore on three sides
in our mine : we go by what we have taken out. Supposing
we take 20,000 tons out from 20 ft. in height, and it goes
17 'Iwt.. we reckon the next 20 ft. sliould be something
the same. No hard-and-fast rule r , regards estimating
ore-reserves would apply to the Kalgurlie. We have a
stope 65 ft. wide at 640 ft., and at 700 ft, it is 5 ft wide •
80 ft. south of that it is 80 ft. wide at the 700 ft. My es-
timates, so far. have worked out correctlv. If any per-
sons wanted to sample the Kalgnrli it would take them
12 months; they wouM have to shoot the stopes out to
do It. In the Kalgurli I would not take samples even in
5-tt. .sections; for instance, in one face we may be on
lo-dwt. ore. and the next cut might give us 5 oz My
instructions are that the mine plans, assavs, etc.. are to be
open to the public."
Mr. fieorge M. Roberts, manager of the Associated
Xorthern illocks. deposed: "I think it is essential to have
a bullion reserve ecpial to half tlie month's output ■ values
in these mines arc very erratic; in the event of legislation
■2^1
JUL l:tU.\UMlLS 01- MIMXG
1 would- say a ninmir.s reserve. There are about 2tx) ft.
of country in our mine, orc-ljeariii,^, carrying lenses of
ore ; face samples are very mi>lea(ling in our case, and it
is a difficult mine t' reckon up the ore reserves. 1 would
U'A make evn a iireliminary report on samples taken 50
ft. ai'art; it would he useless. 1 would like to sample
at least every 10 ft., and then compare my results with
the mine assays: if I were buying a mine 1 would sample
every 3 ft. I am in favor of a mine being worked cnienly ;
our mine has been open to the public ever since I tex)k
charge. 1 consider the keeping of a bullion reserve as-
sists us in cheap mining."
MINE EQUIPMENT AND ORE-RESERVES
(December i. 1904.)
'I'lie Editor:
Sir — If a tew vvurds, rather late in the day, can be
granted mc, 1 would like to submit a consideration of the
dit^'erence between the policy advocated by Mr. Hoover
and that urged by Mr. Curie. This difference is partly
fundamental, and, in part, one of premises. Mr. Hoover
says: "It will be granted that the true objective of min-
ing is to gain the greatest profit from a given body of
ore." Mr. Curie, using mining as a generic term, em-
bracing finance as well as practical management, answers
"that the greatest technical economy is one thing and
financial security another, that high-pressure development
and the economic limit of reserves, while satisfying the
one, arc in contravention of basal principles of the other,"
and further, that capital being the first essential of opera-
tions, "those who pay the piper must call the tune."
This assumption of the opposition of practical mining
and finance is so much of a facer for those engineers
who are trying to reach the most economical basis of
operations that it is worth our while to examine the mat-
ter with some closeness.
There is no dispute in this case about the economy to
be effected by Mr. Hoover's policy of forced development
and unit-plant additions. The financial argimient against
it is thpt. while increasing profits, it decreases ore-re-
serves, and tends to keep them at about a three years'
limit. The investor looks upon ore-reserves as the secur-
ity for his investment, and feels that he has little enough
of that if he allows tw.o-fifths of his capital (Mr. Curie's
ratio) to stand witliout that security. In other words,
under normal conditions of bottom development he asks
that for every $ioo of stock valuation there should be
$60 of actual profit in reserve ; then, if the mine be paying
i'>r,
I llli 1:CU.\(>MUS Ol- MIMXC
lo per CL-iit on that valiiatinii, there wnuKl be six year>'
dividends assured in the reserves.
The addition of further treatment units may, through
tile increment of protits. increase the n.t value of the re-
serves by 20 per cent and the annua' dividends I)\- kk)
per cent. The increased dividend rate, moreover, has
the effect of raising the stock valuation as well, hv per-
hajis lao per cent, while the ori'-reserves, in point of
time, are diminished by half. I think this states the ar-
gument fairly.
For the original investors, those who bought on the
$iO(5 basis, nti which the property was paying its 10 per
cent dividend, there seems to be no question that the sec-
ondary ecpiipment has been a financial gain, rcgardleriS
of the increased stock valuation, and it is iiard to see
what in the condition of the mine should tempt them to
sell evei^. at the enhanced price : by so doing they would
be sacrificing ;i high-return iiivesimeni. and one that
actually exceetled the three-fifths profit in ore-reserves,
and could scarcely hope to reinvest their increased capital
on as good terms as that. This in itself would tend to
strengthen the investment view of mines, and weaken
the sjieculative.
It may be granted, liowe\er, that some Vv'ould sell, ami
the new holders would have a 10 per cent investment, as
tile original holders had, but through th- sliort life of the
mine they might, by failure of subsequent development,
lose part of their capital. The question is whether this
ought to be considered in deciding on the secondary
plant. Should the present stockholders l)e sacrificed in
pocket because of some possible people who may buy the
shares later?
Stated in this way, the (picstion implies its answer, and
I can see no reason why citlicr tlie management or the
directory, who ;ire expressly chosen bv the present stock-
holders to look after their interests, should have any
EQ[-fr.}fl:XT .IXD ORI:-Ri;Si:Rr!:S 287
(loiihts in tlio mattiT. We may all Ik- snrry f(ir excitable
and short-si>,rhti-il investors, and Innk forward to the time
when a clearer view of what constitutes vahie in a mine
will ohtain— may even exert ourselves, a. Mr. I'urle so
successfully has done, to brinp the tii le nearer ; hut this
is entirely irrespective of present pohc, . In short, it
seems to me ah.surd to hesitate about li^ditiiif:: a fire in
A's stove because 11 may burn his fingers at it ; rather the
clear-seeing economist should argue that some time P.
nuist learn all about fires, and the sooner he is scotched
the sooner will he become enlightened.
Perhaps Mr. Curie would argue the hopelessness of
expecting people to sell a share yielding an annual $jo for
$ioo, even though, on Mr. Curie's basis, it lacks security.
This may he true, but ilocs not this simply indicate that
the la\inan does not accept that formula of chances.^
In the absence of the geological and historical data
that would give the be.-t evidence obtainable of the future
of the mine. or. perlnps. because of inability to under-
stand them, he believes he can have no safer guide than
his experience in other investments, and, according to
what that b;is been, he capitalizes the particular profit.
This is not saying that, as an expression of averages. Mr.
Curie's formula is not sound; we are considering it as
applicable to particular cases, and for such, statements
of averages are of d.nibtfi.l value— <ine cannot predicate
a man's height from the mean of the human race.
In conclusion, may I be allowed to point out that the
term 'insurance' is not safel\ aijjilied to what security may
be obtained from large ore-reserves, as distinct from
'econonnc' ones. Insurance is a definite securitv for
which a definite premium is paid ; in this case, the secur-
ity is indeterminate ami the i)remiuin depends upon the
increment of profit, which is the sum actually sacrificed
for the security by insisting upon the two-thirds rule.
This varies from dollars to tlmnsands: but. whatever it
288
Till-: liCOXO.UICS OF MIMXa
may be, it is an unknown quantity unk^s the investor is
awake to the function of 'fixed charges" and understands
the ■increment of profits.' When this de.i^ree of knowl-
c(l"-e has been reached, it is not a far siej) to a technical
view of the real prospects of a nnnc as disunct troni the
average view, and knowledge on this point removes the
need for the use of the two-thirds rule.
What 1 liave wished \. licularly to make clear is that
the two-thirds rule with its conse(iuences does not tend
to a ratii'ual treatment of mining investments: that it does
not of necessity make for the less specu'ative view of the
industry; that it does not even invite the best class of
investors, those who will try to understand the needs of
the business. R Gii.MAN Brown.
Bodie. Cal., November q. lOO-i.
GOLD DREDGING AT OROVILLE
i!v Howard D. Smiih and Elwyn W. Stebbins.
( nect'nil)cr y. i gM4. )
TIic growth of the j;olcl-drc'djj;injx industry of Califor-
nia has j,dvL'n it a Icadinj^ place among the mining activi-
ties of the State, and there is every indication of a further
increase in its importance. The most extensive operations
have been carried on at Oroville, where, of the 28 bucket-
line dredges so far constructed, 27 are now in successful
operation, and the ground upt)n which one dredge failed
to pay profits is at present worked with good results by
another company. Several dreilges are in process of
construction, and active prospecting is increasing the
area of proved and profitabl<' dredging ground.
The character of the ground at Oroville is peculiarly
favorable to dredge operations. The false bed-rock is
comparatively flat and quite soft, being merely a bed of
volcanic tuff overlying unprofitable gravel. Few boulders
weighing over 500 lb. are encountered. The gravel being
rarely compacted, there is no need for blasting; in the
present river channel and adjacent thereto the gravel is
loose and easily dredged. On some high ground, where
the deposit antedates that found nearer the river, it has
been found advisable to blast the hank. At the expense
of a decreased yardage, the hard gravel can still be dug
without blasting; but the high bank, at times 20 ft. above
the highest obtainable pond-water-level, makes it advis-
able to blast, otherwise the undercut bank will cave in
large portions, so as to endanger the bucket-line and the
dredge itself. For blasting, 30 to 40 holes per acre are
drilled, usually only to water-level, each being charged
with 100 to 125 lb. of No. 2 dvnamite. This increases
the yardage handled daily, as well as obviates danger
from the caving of the bank. The extra expense of 2.5
'2W I III: liCo:u>MlCS Oi MIMSG
to ,^c. [iir Ml. [iri'\i.> Id lie i;uu(J prui-'ticc uii'lcr the cir-
cunistaiKcs.
Tlic j;ravL'l is of a dv-inli siiilctl to (lrcil};iii^, licing from
20 to 6u ft., with a LI iii|)aiati\cly even Miriacc. I'or a
gravel deposit, the ^mM is evenly (lislriliuud, ran!;ing,
in large tracts, Inun 10 to 33e. per yd. The wlmle Oro-
villc tlistrict probably averages about idc. per _\ 1. The
gold is all tine, screens with 3/iS-iii. luile-' being u.-^ed.
Winters are mild, and im difficulties from freezing are eii-
cnuntereil. Water is conveyed by an excellent ditch
system to all jiarts nf the district, the expense averaging
about $IJ5 per ininith per <lredge. L'nlimiteil electric
power is obtainable at 1.5c. per kw. hour.
An excellent class of labor can be had a. the following
wages :
CKi;w lok oNi-. i)i<i;i)GK.
I Foreman at $5.00 i)er day ?5-00
3 Winchnun " 3.00 " ().oo
3 Oilers " J. 50 " 7. 50
1 Biack-niith '■ 3.50 " .V.^o
; Helper " 2.},o " J. 50
2 Chinamen " 1 .75 " i-^o
Total $3 1 • 00
1:' addition there is a superintendent, whose time is
generally distributed anniig several dredges. The winch-
men and oilers work S-linur shifts, wiiile the blacksmith
and heljier woik 10 hours. The Chinamen clear the
ground of brush anil trees, 'bury dead men" and do gen-
era! chores.
Low costs are attainable largely by reason of conveni-
ent communicaticin with San b'rancisco, and the presence
of well-equipped machine-shops on the spot.
'Not in tlic mortuary -cii-c ; in c!re<l,^in(j:. 'dcail nirn'arc
.nncliors of wood or nutal to winch mooring caMcs are at-
tached.
<;()!. n iu<i.in;iS{; .it oKoni.i.r.
ll)!
riif Kriiund is pr- ispiTtf.! hv shafts (ir (Irill-linK-, sunk
to bed-rock, tlic gravel tlun ftum iiciiiL; nuknl nr iiaiincd.
''oside ijivins a sample of tlic ^'ravi'I, pnxpn-t holes
should yield important data, as to tlie distriliutimi nf the
fjnld, tlu' eharaeter (.)f the <lei)iisit and thr nature of the
lied-rock.
'I'he gravel fmm succev>ivc leiij^nhs of a hole i> treated
seiiarately, and the res])eetive aini.unts of ,>;ol(l estimated.
Such estimates are cheeked uitii the \\eii;ht of the f.;iiid
recovered from the entire liorin.LT. With iiraetiee this
otimation l)eeomes fairly accurate. Shafts are preferred
where it is possible to sink them, as they ^ive more com-
plete and accur.ite information ; hut if water is i)resent in
any (|nantity, they become tix) exijensive, and drillini,^
must be resorted to. Owinj; to the avadabilily of Chiiie-e
labor, shafts arc cheaper to sink in dry jj^round than drill-
holes.
About one hole per 5 or 10 acres will serve to sample
a larj,'-c tract; but jirospect holes are put down much more
frequently in the immediate vicinity of the dr-d,Lre. both
before construction and duritij.^ operation. If care is not
exercised in prospecting; with drillings; machines, the
sample may easily prove misleadiiij,'-. Errors frecjuently
occur fn.im the s(|Ueezinj;- of material into the bottom of
the casinij, thus sivinp;- a iarL;er sample than is called for
by the size of the lu)le. Sliminp and consequent loss of
f,'old will sometimes result when too lon|j^ a period of
chnrninq- transpires before pumpint; the hole. The casint;
should be kejit driven bekjw the point of drillinsj when-
ever possible. The practice is to drill and pump the hole
in i-ft. sections, the material from each foot bein.s,' panned
separately. Where preat care is required, sections of only
6 in. are driile'. and pumped at a time. Frcciuently the
whole f(K)t can be pumped with but little drillinj,'-. The
drill crew consists of one man in charge, one sand-pump
man, one drill-man, one fireman anil one or two laborers.
i':»j
nil: Li.U.\OMlCS Oi Ml.MSG
'IIk' iiuiii in cluirj^c .-lumld Ikivc a kiiowlcil^c of the i)nn-
riljk> nf .^aiiipliii);, U<x u[m.ii In.-, jucl^imtil (UpLiuls ihc
valiK' nt tin.' rc.Mili.s i)l)taiiicil. lie u.-.uall> il"<.'.> llit.' paniiini;
limiMlt. Where cil i^ used mr fuel, <iiie man attends lo
licth tlie sand-puiuiiiiij; and lirinj;. 'Ihe ei »l i>i samiihng
with ehurn-drills. under favorable circu!ii>taiiLes, is $J to
iiij.30, with $3.50 [)er foot as a iiiaxiinuin.
(iold dredges are sinnlar in general tvpe and operati )n ;
Init details of design are of great iinporlance. In fact, suc-
cessful dredge-building depends upon working out the
details, and a dredge properly built for one locality, with
given conditions, may i)e totally unlit for another. If a
dredge is not suitably constructed for its particular work,
the cost of re[)airs is certain to be kirge. Ihe importance
of this consideration is shown when it is understood that
this item of expense ranges fri.m i)ne-((uarter to one-hall
tile total cost of operation. Several types have been tried,
l)Ut the li! ket-liiK dredge has now superseded all others.
LUickets with a capacity of 3 cu. it. were hrst used; later,
dredges were built with 5-ft. buckets, while near Folsoni
a 7. 5-ft. bucket has been used with a fair mea-nre of
success, and a new dredge, of the same capacity, irect-
ing the faults of the first, is now in process of construc-
tion. Dredges of 11 and i2-ft. bucket capacity are used
in other districts, bu: it is impossible to compare results
without data covering a'l tl'e local conditions. Two 5-ft.
bucket dredges, built to handle grave! to a depth of 60 tt.
below the water level, are now undergoing the severe test
of actual operation on the Yuba river.
The advantages of a large bucket are increased yard-
age with practically the same labor, the pcjssibility of
handling i)igger boulders, a less than proportional in-
crease of power and general expense, and probably a less
than proportional increase in the cost of repairs. 'Ihe
clisadvantaues are — a greater first cost, the necessity for
special facilities for handling the heavy dredge-parts
(,('/./' /'A7 /'(,7,V(, .//' oh'orn.i.r.
•j'.i;:
'A 111 II ni.ik;iiL niiaiis i T ixiKual^, ami llic iin n\i>i >l ilitVl-
i-iilty ''1 wa-lmi- llu' lar-i' and lu-lil) irn^ular aiUMun'.
(if iiialirial dcIiviTi-d l>\ llu- Imcktls Id tlu' scncti. ll
>.i'iiiis prcLalik- that tin.- 7.3-lt.. and i»)>sil)ly larger, luickc;
will ])ruw i1k iih-t (lt'>iralik' uiukr ocnditidns existing at
( ii-nvilk'.
(i,.ld is lost in siviTal ways. A ciTla-n amnuiit ^''^'^
i.tT in till" tailiiiL; t'nmi tlio shiicis ; and. il the .L;r;ivt.l is
net ilinn.nL;lil\ ^s.i^luiK tlu- ..•iiar>i.' niali'rial will carry
sonu" np till' >lackir. Sonic is left <in the lud-nx-k. ihouj.;!!
this amonnt shcnld be small. .\ slii^ht kiss dcciirs fnmi
tlu- inatmal which drains from the l.uckds into the well
(hiring; their journey from the hank to the iipjicr tuin
hlers. i-'.xhanslive tests of the tahle-tailin-,' have hi en
niaile. sliowuii: a \er\ small kis>, in no ca-e as much as
20. per \d. With .uoo(l management it is proh.ahle that
an extraction of ahont (p per cent i> ohtained. Both
cocoa-niattiii},' .nul anj^le-iron rittles have jirovcil excellent
devices, most of the ^(M heinj^ caught directly under the
screens.
While it is not advisable here to f^o into the subject of
dredge-building, it is well to mention one or two points.
The bucketdine and tumblers are subject to enormous
strain and we.ar; their maintenance constitutes the larj;er
part of the repairs. .\iiy improvements which increase
•he strenj^tli and life of the various wearini,' parts, witii-
out excessive increa.-^e in co.st. are sure to be welcomed.
The operators have been constantly iir,c;in,i,'- manufactur-
ers to make stronger machines, so that the expense in lost
time and in repairs will be diminished. The tendency
toward increased strength, power and capacity is still in
evidence. The 7.5-tt. machine, in prtx-ess of building at
F-'olsom, has bucket-pins of 6-in. diani., and other parts
in proportion. .\ capacity of 110,000 yd. per month is
expected. There is a valuable device for increasing the
pitch of the tumbler faces to correspond with increased
•2\n
THE I^CU.\UMICS Ol- MIMXG
pitili ut llii- liiKkcl-iliaiii links, uli'cli results linm the
ui-armg (jf the \n\\>. I he rcvulvnig .screen is <k>irahlc
ft»r clayey, stiiks f;ra\el. a> it luljis disintej;rati>iii more
than the tlat sireeii ; where j;n.iiiul is not stieky, however,
the Hat >ereen i> ]ire!\'ral)le, .siiue it co>ts less, is easier to
rej)air and reiuw, ami ii>e> U» power. Ii i~ iinportaiu
that the power whie'.i drives the hiicket-hiie and that
which raises the ladder should ctnne irom ditVereiit mo-
tors. There is thus reserve i)ower in ca>e tlu hank caves,
so as to cover the ladiler and buckets. \\ lun dreil.i;ini;
an overliurdeii ol' harreii >.>il, si'ine convkiiunt method of
disposing' <>i it, without pa»in^' it o\er the tables and
fouling' the litiles, is desirahle. I'or tlii^, and other pur-
po.ses, the iiopper should he made to diM-h.-irj^e into the
well, or to one side I'i the dredj;e, when doired.
r.oth intermittent and c'lose-coniiected hucket-lines are
in use, hut the close-connected type, as a rule, linds more
favor amonj; ojK'rators. It is claimed — and it is undouht-
edlv true — that the intiTiiiittciil line can lie run faster
and tliat the huckets till better; but, as there are only half
as mativ buckets tor the same number of links, the (lred,t;-
ing capacity is less. An iiiteriiutlcnl biickci-line will han-
dle larger boulders than a close-connected one, and it is
to be preferred in some cases for this rcaMHi.
'l\) hold the boat against the liank and move ahead,
either .spuds or a head-line are u>ed. I'.ach method has
advantages and advocates. .\ little tinu- is lo.-,i in walking
ahead with spuds, but the labor of l)ur_\ing 'tlead men'
for the head-line ;ind moving the latter by hand along a
high bank is obviated ; w ider cuts can be dug, hut they
are ordinarily of no particular advantage. Spuds hold
the dredge steadily against the bank .-iiid obviate the roll-
ing and pitching, which are a disadv.antage when the
head-line is u.-^ed. It costs more to equip a dredge with
.s]iuds, but they ;ire generally preferred in ( )rovillc when
dredLMUir in imnds. When working in swiftlv running
uuin DKi.ncisc at oix'^rii.i.r.
•J'.C)
u.itrr, a ilml.^i- nihiiJiml uilli l"illi ln-.nMiia- and ^jiiuts
wunM he <li'>ir,ililc.
< If mining; costs in ^HtKTal, ami of (lrf(!f,'iiii,' costs in
particular, it may he said that har.' ti^,n?ri's, withmit de-
tails (if the items considered and "f tiie I'lcai ennditions,
convey no detiiiite infornialion and are iiractieally value-
less. By a little iiookkeepiiit,' dred;,Miii: costs may he made
as desired, if the fij^nires iiuluded all expenses iiieurreil
during the vear, and an anmniit for the dejjreeiation of
the dredj^e. a inueii niore satisfaetory hasis for coinpari-
>. ill u-i'Uld he availahle. Amortisation oi the price of the
t^'mund ni.inife>tly varies with each case considered, and
comparisons are useless. Owiii^' to tiie slack metluMls of
measurement fre(|nently employed, the yardapc quoted
may easily vary 20 ])er cent.
The following; talile of co>ts applies to a 3-5-ft- close-
connected, hncket-line dredij;c workini; in the hip;li-\vater
eh;innel "i tlie heatiii 1 river, or adjacent thereto;
-C.i^t I'tT CnTiic \at'l —
Percent' ij
I^inlc -ik'e nf ■« c
Measure- time in , Kep.iii ^ «;
ment. .1.. .ipera- a"'' ^"I" '.i'.i<-r.nl (- :?
1903. yd. dug. ti.m. Lah'-r. Pumt. plies. Kxpense. u;
Dec... 3S.0O0 68 ;8 $.<mS2 $.0221 $.oi,^o $.0.^08 $.ti.v
J.in.... 37.000 67.61 .o.?o(: .017.3 -0276 0023 077K
.. 37.000
Feb... .37.H00 86.16 .0276
Mar..40.i(X) 65.88 .0250
.Xpr'. . 24.'()8o 42.68 .0.302
Mav.. X'i-S72 74.33 0.^2
June.. 44.878 «7.76 ■02.U
July.. .3,^..S20 72+4 -031.^
AuR.. 49.340 84.80 .023,q
Sept.. 34.226 88.70 .0,^05
Oct.'. . 36.000 88.fvS .0207
Kov.. 38.000 88.41 .0270
Dec... 38.:;oo W).73 -O-'^.^i
.oiog
.0181
.0170
.02.^8
0173
.0106
0131
.OKK)
. 0220
.0100
0175
oi8<)
.0114
.0038
.0414
■ 0370
.0230
. 0280
.033.S
.0285
.0207
. 0433
.oaS7
.0241
.0062
.0028
• 003.=;
.0010
.0022
.0018
.0010
.00.?2
.03 to
.0026
.0017
.0075
06.; I
.0.107
. looi
. 00 1''
.0<Vi8
.oSo'T
07 1 1
.0812
. 10^2
.0928
.0.^64
.O70<i
' llnod
Grave! 30 to 45 ft. deep is considered easy di.STRin.Lr
l)v Oroville operators. I'ndcr the head of iahor' are in-
■2'm;
I IIL hxU.\OMlCS Ui MIMXC,
(.'liuli.'d ihc MuxriiUiniiviU's salary ami such work on re-
pairs as could i)c made \\idK)iii the aid of the local cusitun
iiiachiuc-sliop. I'tir Ucccnibcr, the tirst nionlh nt opeia-
1'.' u. the custs are increased under ilie head dt 'labor.' i)y
sujji.rinteiidein's salars prior tn start of actual dij;|;iiii; ;
and luider head of 'j^encral expense,' by all the ort,''ainza-
tiiiii (.xpen.-cs of the company, the taxes on lantl and the
nistirance for one _\ear. In April hiL;li water lorceil an
entire slmt-dow n, thus accnuntin.i^ for the small yardat;e.
"I'ower' is nicreaseil b_\ reason of the pumping oi water
from the river tw the dredge-pond ; it ha> since been found
advisable to obtain water from a ditch at about $75 per
month. ( 'ne new stacker-liclt was boui;lu diu-iiij; the \e.ir
and a 4odi. p. innt.;r f.ir the pump>. to repla e one of
,^5 h. p. which pn.ned !nade([uate. While the bucket-
line ke[)t in ^ood conditinn. there was no j;eneral replace-
ment of parts, the bucket-backs beini^ still in use in
< )ctober, 1904- Stacker-bell >.o. 3 u;is purchased in
January, i()04. and is now about worn out with 8
months' use, altliou.L;b .guaranteed for one \car. This,
with the expense of an entire new bucket-line stacker-belt
recently purcba^ed. and other jiarts. has kejjt the costs for
I«j04 soniewhat above fij;ures for 11/J3, altliouj^di an in-
creased yardat^e averatjint,^ over 40.00(1 cu. \(1. jier month
has lieen ilui;'. I he table inchides .ill expen>e incurred
ti'r whate\er reason, but does not include interest nor a
Sinn lur amortization of the capital invested in land and
dredi^e.
Above is a summary of tiie opertitim; expense of :i 5-ft.
intermittent bucket-dredfjje for the calendar )ear 1903.
This dredi^e C(..-.t ^43,000, which is much lower than that
of the better class of dred.ms ikjw lieiii^ iiislallid. .Most
of the ground was fairly easy dii;^in},^ but little ti,i;ht
gravel beint,' encoimlert-d. I'ropdrtion of time in opera-
tion. f)<).4: b;mk me.isurement. 474.O10 cu. yd. The aver-
age cost was :is folldws: ( )]x'r;itive 1,'ibor. 1.S5C,. jiower.
(/n/./) /'A7:7'(;/.\(/ .//• Oh'Oi'lLLi:
JUT
1.15c.; rcjiairs ami .NUi)i)lics. ,5.40c.; j^icncral expenses,
1.J5C.; total, 7.71c. per c.i. yd.
'Operative labor' includes superintendent's salary per
cubic yard; 'rejiairs and supplies' includes the labor of
repairs, as well as the materials; 'general expense' covers
i;eiural exjiense at Oroville and at San Francisco, taxes,
insurance, and bullion charges, beside tlie expenses of
prospect ini,'. To the above should be added interest on
the inonev invested, includint;- the dredging; plant and
land, which ni.ay be as.^umed as ai)proxiniateIy 0.75c. per
yd., and anout $4,500 for yearly depreciation of the
dredge, sav ic. per yd. This brings the total expense
close to ().5c. per yd. Out of the jjrofits there .still has to
be written off another amount to cover loss in the value of
the land dredged.
The following figures for the month of September.
1904, were made by a new 5-ft., close-connected, bucket-
line dredge, digging on a spuil in soft ground 40 ft. dee]),
tnider ver\ favorable ( iroville conditions: 'l\ital excava-
tion, 96.1 I-' cu. yd. 'idle cost of l.ibnr was 0.957c.;
power, o.()()i)c.; supplies, o.<;35c. : sundry. 0.4300c.; taxes
and insurance proportion for ttu- month, 0.1075c.; total.
.V4JiS5c. jier cu. vd. There was no charge for mainte-
nance ancl repairs during the month.
All repairing necessary wa> done by the regular crew,
no shut-down for that purpose of any moment taking
jd.ice, thus accounting for the large yardage and the in-
sigiiitlcant expense for repairs. ( ^n the other hand, costs
for one company have run for several months togetlier
over 20c. per cu. yd., which shows the amount of varia-
tion encountered, and the erroneous imiiression given by
costs which cover but a short jierind of time.
Figures recently (|Uoted.' with no details as to iteni'^
included, give yearly averages of from 4.92 to 7.47c. per
cu. yd., the gener.d average fr.r a luimbcr of years bcitig
'Tlii.'- TouKN.M.. OitolKT (>. 1004, p. 541.
L".I8
illE JiCU.XUMiCS Ul- AJlMXi,
6c. These figures may contain ;>M legitimate charges
against operating costs, notwithstanunig the fact that the
intermittent bucket-hne type of dredge is u>ed, as this
particular coni])any works under very favorable condi-
tiims, namely, dredging alni(i>t exclusively in the present
liver chaiiiK-1, thereby saving the ciist of water and en-
countering only loo>e and easily dug gravel, and having a
well-equipi)ed machine-simp devoted to tlredge-repairs
and operating hve dredges in the same vicinity.
The manager nf this company, in common with others
equally well infnrnied, h.ilds that the average of operating
costs fur ihe ( )ni\iile district is certainly not less than "c
per cu. yd. at this time.
It is evident ihat with more than one dredge, items such
as superintentlence. repairs, (jffice expense, etc., may be
mati -ially reduced. What the future may Imld forth to
operators iif large and improved dredges is hazardous to
say, but predictions are freely made of a cost of from 4
to 5c. per yd. under f.avorable circtnnstances.
I'onditions favorable to dredging at a low cost must
apprr.ximate those found comnmuly at Oroville, namely,
a soft and nut uneven bedrock, few boulders over 500 lb.
in weight, gravel banks from 20 to 60 ft. deep and not
sufticieiuly indurated to re(|uire blasting, a plentiful supply
of water, cheap power, machine-^hdp facilities, nearness
to supplies and means of transportation, mild winters and
mtelligent labor at reasonalde wages.
Gold cnnrcntrnted on a h;ird. rdugh bedrock cannot be
dredged. \"ery large boulders have to be left with con-
siderable gravel surroun<ling them, and, if many are en-
cinmtered, dredging becomes itnpossible. In departing
from the f.'vor;d>le conditions stated above, the expense
and difficulty of operation increases, lucessitating a higher
grade of ground for pn'iit.
The conditions bearing on the cust "i operation are such
that eac'n tract nf gmund Ijecomo a prdblem in itself, and
aOI.u I>RliD(iI.\G AT OROniJ.T
L"J1>
any attempt to use the costs obtained under one set of
conditions, to predict those which would hold under
otliers. without a thorough knowledge of the various
elements which enter the problem, will lead to large dis-
crepancies between the results predicted and those ac-
tually obtained, with a possible consequent failure of the
enterprise. Much remains to be learned abnut gold
dredging; but, in the future, as well as in the past,
progress will no doubt result fmni the helpful professional
spirit prevalent in the Oroville district, tiood dredging
conditions are not generally found with gravel deposits;
but no form of minnig gives r re certain results, pro-
vided the average content of the deposit and the ojjeraiing
facilities have been found favorable by competent investi-
gators, and a suitable dredge be installed.
THE BASIS OF VALUE
(Editorial, Ueccmbtr 15, iyu4.)
The recent break in the share (luotations of the Amal-
gamated Copper Cumpany ami the Greene Consolidated
L'opper Company tloiihiless illustrates several of the va
garies of human nature and some of the eeeentrieities of
speculation ; but unlike as these two undertakinj^s un-
doubtedly are in many respects, they bear one resemblance
in the lack of proper information given to sharehold-
ers. It is manifest that when either the financial condi-
tions or the metal markets aii'ect adversely the ([uoted
value of mining shares, those will sulVer most winch are
rendered vulnerable by alisence of reliable information.
The ilaily press may very ,.riiperl\ sneer at Mr. '1. \\ .
La'vsi>n and attempt to ileu\ him his harti-bmight
notoriety bv refirring to him as a ISoston operator"; but
the fact is that luither he nor any other adventurer could
depress a security such as Amalgamated if it published
proper reports and balance sheets. As it is, the hel[)less
speculator knows nothing of the assets or of the intrinsic
value of the property represmted by his share certiticates ;
it may be a South Sea bubble of iridescent air, and he
might as \vi '1 throw his money on the roulette table. W'e
venture to s.iy, however, that if a proper accounting of
the business were given, accompanied by reports on the
pin sical condition of the mines by the techn.ical chiefs,
such men as Mr. Benjamin B. Thayer or Mr L'harles W.
Goodale, the value of Amalg;miated shares would rest on
a solid basis of fact. Similarly, in regard to Greene Con-
solidated, splendid, mine as it is, nothing definite or sat-
isfactory is given in the reports issued to shareholders.
Vague and flamboyant statements are issued by the presi-
dent and a handsome production is undoubtedly being
mad>., but none of the usual ;ind proprr estimates
of ore-reserves are given to the shareholders — .md
THE BASIS OP r.U.UF.
•.w\
uitliont those, tlie rate ')t dividend, cost ot cop-
per, and so forth, are illusive. Here af::;ain. we vcn-
Uire to sav that it smh menilicrs of the manasenHut
as Mr. .\rthnr S. Dwi-ht or Mr. W. P,. Dcvcrenx were
to make a rejjort on the ore-reserves and future prospects,
there would be tjiven a stability to the investment in this
copper mine such as it can never possess under existing
circumstances. Whether people buy as pamblcrs or as
investors, sooner or later they nuist face the facts, and
the fundamental fact in a mining enterprise is the known
quantity of ore in the mine.
EQUIPMENT AND ORE-RESERVES
The Lditor:
SiK — 1 have \:w\\ greatly interested in foll(nving the
(hscnssion on '(Jre-Reservo,' tci.:,H'llKr with vuur impar-
tial treatment of the snbjeel. It is an excellent illustra-
tion of the tiimiy fruitlulness of devt-lnping a suhject in
this way. Indeed, 1 know of no greater service that the
leading mining journal of the world can perform than
to thrc-h out such pu/zling (juestions by public discussion.
Here is something [iraclical. The faulting of the strata
of the -lock market may confuse many a wise and honest
director or sui)crintendcnt, who wishes to follow l!;e
pay-streak of honesty, and the vein of business.
I'irstly, I would cordially agree with you in the wis-
dom of dealing frankly with the public. If ore-reserves
arc to be hoarded, let tlv knowledge of the fact of re-
serves be as open as is the e.xistencc of the mine itself.
Indeed, tin-re is no more sign.al mark of ethical progress.
in civilization at large, and in the cor'rol cjf business in
particular, than the growing demand by the people for a
free, open statement of the respective facts. The people
may not alwa_\ s get this, but they have learned tt) ask for
it ; and in this I presume that lox popnli is lox Dei.
But secondly, assuming, to be sjjecitic, that the con-
trasted views of Mr. Hoover and Mr. Curie re[)resent the
opposite opinions of the speculator and of the investor
respectively, is it fair to formulate the questions at issue
from the stand[)oint of either, or. for that matter, from
a standpoint intermediate between both ? That is, may
there not be other and more powerful considerations of
ijusiness, to the demands of which the private interests
of both investor and speculator must conform? It may
be trie, for the present — as the speculator is furnishing
most of tlic money necessary to develop mines — that his
P.nUIPMI-.XT ASD ORI-.-KRSPRVP.S HO:?
iim-rc'-ts must I'c lon-ultid ; tlu> may hv a present lui-i-
nc'ss necessity. lUit is it ptissihlc to educate tlie specu-
lator to the more rational views of the investor? And is
it possible, in turn, u) (piicken the investor with the spec-
ulator's practical keenness for results?' And to do lidth
so that business jiractice niav attain that nu'tliod of mine
nianaijement which is best for all Cducerni'd in the Vavz
run ?
Then, thirdly, what will best serve the real purpose of
capital invested? If the applicatidU of actuary mathe-
matics to such prMJiKnis were hi-hlv developed, it would
he necessary onlv m refer ti> a manual of dividend accu-
mulation, anidrtization nf investment, sinkin.y; fur 1 reduc-
tion, etc.. to know .at once what arc the financi;il forces
that are competint,' fi .' control as this complex of interests
seeks its natural e(|uilibrium.
Now a mine, even a lar.t^e one, with large, well-defined
veins carrvini; a -generous supply of ore, even this is not
like a farm wlii^li may sci "" indefinitely producing from
tlie same 'ground year afur year. .An exhausted mine
is sint])lv an empty, worthless hole in the ground; and
this may be the destiny of all mines. This view would
seem to argue distinctly for the speculator. The mine
is hound to be exhausted sooner or later; working it is
like the threshing of this year's wheat crop- let it be done
and done as ([uickly as possible, so as to r-loase the capital
for employment in other fields. The illustration is good;
but it is not an argutnent. It is at best only an analogy
which can be applied to certain mines, namely, those
which can be quickly exhausted. .As for the other class of
mines, those like the Treadwell. the Homestake, or better
still, some imaginary reef or mountain — as the gold in
the ocean, for instance — which .night be practically inex-
haustible, in such cases would not the policy of counting
on long supplies for the long investor be the better?
This, then, is the suggestion that I would make, and I
1-1
au4
JUL LlU.\UM1lS OI' MIMXG
ui.nIi _\(iU wi.ulil M) (HmUss il. Is iiol llic inUTcst of the
transient .spcciilatur, ri.]) resented by .Mr. llt><)ver. ju^ul'ied
Ly tlic cniiditicMis ot snine niii\es? And, on the other
hand, is not the interest "t tiie loii},' investor, represented
by Mr. Curie, ei[iially well jiistitied by the conditions of
other mines? Do not both views represent some truth —
but only as applied to special cases? Will it not be uell
to continue the discussion till we may see clearly brou^dit
out the particular kind of mine to which applies, re-
spectively, the interest ui the investor and of the specu-
''^""•' C. S. r.\L.MKR.
New York. December 5. 1904.
LEASING AT CRIPPLE CREEK
The Ldiior:
Sir— Mure lias Ikcii a c()n>i(kTaljlc imprnvLinciU lately
in the (nitput of the Cripple Creek district, both in (iiian-
tity and -nudity of (^re. MmukaneiiUsly there has been a
decided extension of the leaMn- system both in practice
and in jiopnlar favor. Cndcnibtedly a portit.!i of the un-
proved results are due lo the success of many leases—
especially on Stralton's Independence. It occurs to me
that a discussion of the merits and province of the lessee
as compared with those of the company's miner and nnn-
ing en-meer may intere^t a pnrtion of the minin.i: public.
Manv suppose that the reason why lessees oitcn do
marked'lv better than companies is that they k"-' """■<-'
work out of their men and do a good deal of the work
themselves. I'ndoubtedly m general this is true, but the
importance of this point is much less than many imagine,
and there is no reason why a mine superintendent cannot
make his men work just as hard as a lease superintendent
can. In fact, it is possible fnr a mine superintendent to
accomplish just as gwd results for his company as a
lessee can for himself. Many leases of importance m the
Cripple Creek district are managed by hired superinten-
dents, just as mining cnmpanies are. In mv ,.pinion the
snperioritv of the lessee comes from the fact that his train-
ing quahf.es him to find ore and mine it to the best ad-
vantage. He is 0i:en aided by the fact that he has n
professional record to make. He is not worried abr .
costs per ton. His sole object is to make money, and he
makes it by shipping clean ore.
Nobodv hears of leases in any mines except those
where (i) the ore is a concentrating one, or (2) the find-
ing of the ore is the principal part of the work. Tt i^
cunous to note how little there is in mining literature on
•It
• If
;;(m;
I /ll: ECO.\uM/lS Ul- MJ.\L\(i
tlic .siiljji.ct of nmiiii- cuiKciur.-itini,' ores. V.v concen-
trating ure I mean an ..re in which tlie metal '.sou^Iit is
ii'>t nminrmly distributed through ilir ni.i>s: in ..tliu
uurds, an ore cuiisisting in larye part ..1 unrtlikss rock
which must ni sonic uay he separated from tlie vahiahle
mineral. Mo.st .,f the uunv. in ilu- Koekv Mountain
ref^ion are of this chanirter. Tlie han.llniK' ''i Mich oa-
bodies afTords a much .t,aeater scope for intelligence and
Inisiness judgment than ,1,-e. the extraction of a hodv
of uniform ore. In the latter case, one's efficiency can he
nieasurert in cost per ton of ore mined. In the' former,
one's efficiency nm-t he measured hv the o-t ,,f metals
produced. It is not fair even to ,„;,ke a comparison of
the cost of concentrates: in the case of lead ores, for
example, r>ne ni.in niav take a 50 per cent concentrate
and another a 70 i.er cent. Obviouslv in a concentrating
proposition the main efTort is to get rid ,.f the worthless
gaiigue and .save the Nahiahle metal. Whether this
gangue can hest he reniovr.l in the process 01 mining or
in a concentrating mill, or partlv in hoth, is often a ques-
tion iiiK.n the solution of which depends the success of a
mining venture.
In Cripple Creek the ores arc almost universallv of the
nnxed type. They will ,„,t uel.l to ordinary metiiods of
water concentration. Alter the ore is hrr.ken it can onlv
be separated crudely by means of screening, snppleniented
by hand-ptckmg: but the cncentrating can be be.ain at
the moment the .irilling be.:;ins umlerground l.-v u.kin-
care to brenk nothing except what will pav TIktc i"
plenty of room for skill an.l experience in' determining
such ,iu,s,„„, ;,s the following: (.) what ground to
break and what to leave; (j) u here to put tlie hoj^s and
how much powder to use in breaking in order to leave the
rock m the best con.lition for elTectivc sortin- (:,)
whether it IS best to sort un.lerground, or on the Surface
or both; (4) whether to use hand-drills or machines; (5)
/-/:./.s7.\(, .;/ ( A7/77./-. CKI l:K ;;(i7
^^1';" ai.ph.uu-.s ,,, u.r n, th. >l,.q.r .„ ua.iaTs. .>,,rtn,.^-
l.ililis, pu-kiii',' liilts. etc.. ftc. ^
I.ich of tlu'.sc (iik'stions (if liatKlIin-,' tlir < t,- ni i\ in.!
-I;h-. vitally afT.ct tl.c lessee's i>nck.th.,.,k lie mu.t .lo
IM- nnmnt; snUIy ui,l, a view ,u nukuiLT profits, for
I'n.t.ts Ik- nntst have ..r ,|„it. A ,ni.,c n,ar.ai;er n,av .-o
thrnn^.h iIr. motions of .nitiinj,. i„ apparentlv ^'o,,.l mvIo
II'' n.a\ have nue tnadimery, jjood p„mps, elab., rate 're-
ports, aeciirate cost-sluets— and ,„, pr.^Ci. He nriv
"">u- larjre oreho.lies at s,„all cost. He >nav r.oint with
pn.le to the very ihinu^ thai on,^hl to eo„.le,nn hini .is
Ii-IHlessly ineontpetent. 1 le may he minin.t: t"o mneh an-l
nninnf: ton eheap. In savin- at the s,,i^.ot he may he
losmf:^ at the htuii,'.
The les.see rarely enmniits such blunders He thinks
solely of .Inllars a„.l cents. He tnakes no reports and
seldnn, hntluTs al.,:nt indicator cards, lu.t he watches h.s
ore like a hawk ,n,d ,„ines it ri.^dit. He i^mores the frills
and attacks the siil,stance of his business.
So far s,, .^nnd. I hit the lessee's linntations are also
co.ispK-nons. ( )rd,nar,ly his mterest m the pn-perty d(,es
not exten.l bey„„d the hope of makinjr some money out
of a lunued block of ^^round. His development work ,s
apt to be d,,ne .L^rudoin^ly and with little attention to its
sub.se.inent utility. In mmes that have been partiallv
<!evelnped by the leasin- svstem it often happen., that the
entire nnne nuist be re-npened on more comprehensive
l.ncs helore it can be w,,rked out. It usuallv happens
also that the owners fall back at last upon the ;ervices of
li.red nuana.cers who. while havinj^ .some .lualifications
Ihat the lessees lack, .-.re deficient in the verv important
practical virtues that the lessees possess.
_ It seems to me that the lessee fills a peculiar province
HI the ramm^ business that is es.sentiallv his own-that
of fun.ishin- the hanl comm,.n sense and practical en-
tcri,nse iuces<ary to exploit doubtful and poorlv man-
308
rill-. ECOSOMICS Ol- MIMXC
a>;iil ii.iius. Ill li.i-. ti' l.iki.' ili.iiu I.'', .iiui 111 t.ikiii;^ tliclll
he is n.\sar(lf(l liy a i.\riam i)iri.i.iita^;f ni .successes. IK-
takes cIk'-hcs that a tlioroii^'iily .(ii^ipctciit mining ciigi-
lU'iT iiiij^iit III it 1)1- willins^ til .iiivi.si'
I liorc is imicli that the average lessee knows whieli
shniilil he e--Miiti,il tn the >iK\ess of every milling;: operator,
hut uliieh is strai;i;el\ nej^leeted hy many. I iiere are
some mine managers who appear to forget tl'at tlieir hnsi
ness is >itiinii^, ami who neglect the problem of handling
the ore to ^pelul their lime mi retineinents wliuli ni.iv he
of iniportaiiee, Imt uIik-1i "-iglit to he K tt to oilurs i
believe it to l)e rare that any amount of leclinii-al know I
edge is of siitlhcient value to cover up a defn leiicy in tin
knowledge of plain, straight mining. Wlun the lessee
demonstrates hy hi> snccess that such deliciency has ex-
isted elsewhere, he is doing the husiness and the profes-
sion a great, luit pirli;i])s nnconsrious. service.
J. R. FrNi..\Y.
Colorado Springs, Xovembcr 14, 1904,
SECRECY IN MINING
(Kihtorial, December ^9. i904->
1 lie Wf-t Australian Ldiiimissidii, ciiiik wcrcd to bold
..II iiiijUir\ iiitn till' ti.iM."o arisinij finm tlv maTiipulaMoii
of bliarcs ill ilu' KmiUlir l)n]i LiacIs at Kalj^'norln.', has
()risi'iitL<l it> ii-port to till- Slate i,n)vrrim;_n.. It is ni.iiiiv
imndi-d :
"(I) Tliat all niiiK'S sliall liv open to inspcctmi) by
sliarflii:)klcrs at convenient hours. ( j) I'hat the Minister
of Minis sliall he empowered to authorize an i fticial to
take samples from any property, iiisiiect the working, and
(J,) i.'oiii]iel tile i'i'ni])anies to keep assay plan.s, also jilans
of till' under;;ronii(l \vorkin<;s where they will he avail-
.ihle for iiis[)eotinn hy shareholders. (4) It is further
reeoninun ud that tiiisrepresentatioi: or concealnieiit of
faets shall he punishable hy itie or imprisonment, and
(5) that managers' reports shall i>e published locally
coincidently with tin r reacliin<,' the iuad office. Tiie
C'onimission says that the enforcement of tiiese recom-
mendations will put an end to secrecy adopted by some
mines."
The intention of tlicsc recommendations, in so far as
they signify the lifting of secrecv from the operations of
mining companies, is well enough. Wrong-doing grows
in the dark; the opening of doors and the admission of
light will do much to check the rascality from which
mining investments sufifer. Admission to mines sliould
be regulated so as not to impede operations, and it should
include the experts engaged by shareholders, as well as
the shareholders themselves. ,\ limit as to the number of
inspections permitted during a given period would be a
reasonable check upon a practice which might degenerate
into a nuisance. Tf the Minister for Mines is to be em-
|)owered to send an official to inspect, then the Minister
himselt, no less tiian his deputy, must on no account be
:{lo
I HE LlOXOMICS Ol- MIMXG
thf i>.,.s,c,sor, i.i.vcT, ,„■ >dkT <.l ilK' sliarcs ..f atu mine
in the region uvcr wliicli he lu.kLs this autlu.nty \s,av-
plans and maps are iKxx,^sary to all iiniies. whether large
or small; and this rccuinniendation should meet with
unquahhed approval. W, presume that, in order to
punish misrepresentation and concealment of facts the
intention to defraud would have to be proved; this' is a
k'gal matter, the settlement of which is unimportant for
If secrecy is eliminated, misrepresentation will be unsuc-
cessful. The publication of reports locally, as well as in
London. ,s reasonable; it will work no hardship on the
siiareholders in luirope or elsewhere, and it will be a
I'n.per concession to Australian shareholders. If the
\\fstern Australian government imposes such a condi-
tion, we do not see why the I-iiLdishman should object
Ihis also will serve as an obstacle to tiie manipulation of
the local stock market, by encouraging the diffusion of
official information simultaneouslv at l«th ends the head
office in London an,l the place where the mine is situated
Kverything that tends to give shareholders full informa-
tion, works for the investment aspect of mining; changes
in tne physical condition of a mine are frequent, but these
account for only (Mie-quarter of the fluctuations in share.
A straishtforward pnlicv give, security, and without that
a mine becomes merely the sport of gamblers.
MINE VALUATION
(Editorial, January 19, 1905.)
Un another page vvc reply to a correspondent in Mex-
ico, who asks for an explanation of the use of annuity
tables in the appraisal of mine sliares, and we have taken
the opijurtunity to publish Inwood's tables, which are
used by investors in South African mines. To some of
our readers, it will seem ajjsurd to apply sucli methods
to the cheerful gamble of a mining venture ; and to these
same readers, the vagaries oi gentlemen from Arizona
and prophets from Boston are fit and proper adjuncts to
an industry the importance of which to us, on the other
hand, can be gauged not only in terms of money, but
also by the education and character of the profession
which tries to serve it faithfully, despite the careless dis-
regard of an ignorant public. To many speculators, the
talk of amortization of capital, return of investment, life
of mine, and other financial terms indicative of serious
business, is only an irritation ; and, when yon speak to
them of the necessity of a mine paying back the market
valuation, plus interest on the investment, they grow
weary. But it does not need a long lifetime to appreciate
the fact that mining is slowly emerging from the muddy
shallows of spurious finance to a dignified busmess ; and,
if our insistence on certain fundamental principles can
contrib"fe to that end, one of the purposes of this Jock-
N.A' . ' le fulfilled. It is pitiful to notice how the daily
pre. s conmient on the Montreal & Boston impos-
ture, appea.s to accept a low standard of morality as in-
herent in mining affairs, without so much as a side glance
at disgraceful messes such as that of the Shipbuilding
Company, and other industrial undertakings whose spon-
sors sit in high places.
Those who buy shares to sell them at a higher price
usually have little regard fcir niceties of valuation, and
312
TIIR ECOXDMICS Ol'- M/XIXG
consider, pn^pcrly vu.^u-h. tiiat market cmuliti.ins arc a
nir.rc iniii,.rtant factor ihan any academic ratiocinations;
luK. even for those scnticmcn who dahhle on the danger-
ous margin of the fniancial rajnds, it uill l,j f.^ind weU to
have an idea <<{ that which, is the funchiniental hasis of
their speculations. Sooner nr later, they must face the
facts: every si)eciilat.)r eventually fails to find one more
reckless than him>elf. ( )re-re~.erves. an<l profit, derived
frnni them, are the essence ■ f successful mining enter-
prise; without them, the mine is only a hole' in the
ground. Dividends indicate the surplus of a moment;
they arc no criterion of future returns, unless these are-
in>ure<l by accurately measured reserves of ore. Low
costs are a symptom of healthy economv, but thev do
not guarantee profits ; they simply prove that the minus
quantity to be deducted fmm the value of the production
is relatively small. Good management does not make a
mine; it is o„Iy an aid. We .sympathize with the unfor-
tunate Ilritisher who. after several experiences with poor
mines and j^ood managers, is said to have exclaimed that
m future he would invest in mines that could stand bad
mana,i,rement. Properly ascertaine<I resources in the form
of orelx-xlies. thorous-hly sampled and measured, are the
only assurance of the lono; life of a mining enterprise;
and. without such assurance, it is not an investment. P.ut
tliis does not belittle the worthiness of sensible specula-
tion, which has been, and ever will be, the quickest wav to
make money. We simply desire to emphasize the essen-
tials of an 'inveMnient.' which is the attractive term too
generally applied to schemes of an essentially speculative
character. Pay your money and take your choice: but,
for the sake of sound mining, let us make di.stinctions
which are essential.
MINE VALUATION
(January 19, 1905.)
Ttic Editor:
Sir— I (juote from the editorial in your issue of De-
cember 8, KJ04, entitled 'The Loi^ic of \"aluation' : "In
the first pL.ee, an investment in a well developed copper
mine should yield lo per cent; secondly, 5 per cent should
be set aside for a sinkinpf fund to redeem the principal.
By the annuity tables, it is found that, assuming; 10 vears'
life for the mine, the number of vears' jjurchasc of divi-
dend to yield 10 per cent income and redemption of prin-
cipal at 5 per cent compound interest is 6.14 years. This
6.14. multiplied by the annual dividend— $4.80— makes
$29.47, say, $30. which is the amount that should be paid
per share to pve the purchaser 10 per cent income,
and return to him. at the end of 10 years, the price which
he paid for the share."
I encounter this iiuestion of "so many years' purchase,
at so much income, and redemption of principal at a cer-
tain interest," very fre(iuently : and I am free to sav that
it is obscure to me, thoui^di I have no doubt it works out
in a very simple form. .As a matter of fact, this whole
matter of capitalization nf a debt, annuity etc. amortiza-
tion, number nf years" purchase of dividend sinkintr
fund, and annuities is only vai:;nely understood by me,
and I shoubl like to obtain some convenient manual
whereby I can post myself thoroughly. C'an you recom-
mend anythin_i,v on the list of works handled by your
JoL'KN.Ai. that will fill the hill?
There may he others amon<j your sul)scrihcrs whose
experience with financial questions of this particular
nature is as limited as mine; ami if you would elucidate
the point mentioned in your editorial you would confer a
favor on us all.
Parral, Mexico, December 19, 1904.
E. H. W.
;U4
77//: r.COXOM/CS 01- M/XfXG
[ 1 lie ain.irtizatiMn of capital invested in eciiiipiiiciit a.>
related to the deerea.-ed oust attainetl by such additional
machinery has lieen disciissetl in this Joikxal by several
writers, notably .Mr. II. C. Ibniver. in our issue of Marcli
-4- i'/J4- A discussion ensued, and to this inir corre-
sjiondent is referred. Amortization is the recovery of
cajmal uivoted. at the end of a certain term. Xtunber
of years' purchase niean> the luunbcr of annual profits
which tiii^ether represent a return of the capital; a mine
sold for $100,000 is bought at live years' purcha.se if it
yields $20,000 profit per amuun. 'I'he iim-stion of life
and return of capital on the basis of an annuilv is a more
com] Heated question. In 1X1 1 Inwood's tables were first
publ'.died ; they K'\e the pre.M'iit value of an annuity at
duferent rates per cent for any munber oi years and
replacement of principal on termination of the annuitv.
What immediate lump ^imi must one pav to receive $Jt
annuity and have the money paid for the ainuiitv replaced
at the end of 25 years? The tables in (|uestion tjive the
answer in the form -f the number of years' purchase of
the annuity. At 5 per cent, the present price to be paid
for a 25 years' annuity is 14 years' purchase oi antuiity.
These annuity tables can Ix' applied to the valuation of
mine shares, and they have been so ajiplied by the in-
vestors in_ South African mines. We applied the methoil
recently, as ipKUed above by our correspondent. Of
course, as a nile, mining enterprises do not ler.d tlu'in-
selves to such logical Ireatnient, as investors rarelv lock-
up their scrip for five or ten years, either actuallv in q
safe or mentally, by their way of re.gardi-ig their com-
mitments. lUit the mine which has ceased to l)e a ])ros-
pect— essentially a .gamble— and has developed even l)e-
.vond the early stages. v.Ikii it is a highly speculative
risk, 10 that sta.ge of assured productiveness wliich war-
rants the application of the term 'investment'— such a
mine can be valued in a logical manner or else it should
MINE VAIA'
Xumhcr of years' Purchase of Di:id,
Income and ReJem/^lion of Prin,
Interest).
I.lfe. Cent. Crnt. Cent.
■ 05 04 .03
2 1..% 1 Xt, i.8i
3 2.72 2. by 2.(t2
■♦ .3-54 .3.46 },.T,o
5 4-3.3 4--'i 4.10
6 5 or 4 r)_. ., ;6
7 .'^•"X .T J^-' :; 40
° 0.46 f) ji r ,,7
9 7-II ('.So f, i^i
'o 7".2 - .^() 702
" S.,^0 7 Sf) 7.^0
l^ «.«() S.,?,S 7.„4
'3 0.,!'? «.8s 8 ;6
'4 900 030 874
IS 10. .38 071 0.,,
'6 10 84 10. in Q _;[;
'7 11. J7 10 48 0.76
'•' "60 io,8,i 10.06
19 12 08 II 16 to ^1,
20 12.46 11.47 10 50
2' I -'82 II 76 10 Si
22 '3- "' 12 04 M.of)
23 I.V40 12.30 II J7
24 1,1 8<i ij :;:; n 47
25 14 «) 12 78 ir.(,5
26 14 .17 ivoo II 8.'
^l 14 ''4 i,V2i ii.,>S
2^ 14 00 t.V4i 12 u
29 15- 14 1,3.59 12.28
^° IS 37 13 76 12.41
^' '.=^50 1,3 03 T2 =3
^2 15.80 14.08 12.65
^i 16.00 14.2,3 12.75
•^4 If' fO 14. ,37 1285;
•^S 16. .37 IJ..50 T2 05
^^ 16.54 1462 F3.0.3
^l '^ "I M 74 1,3 12
•^« it^X? .485 13,10
■'9 1702 14. (,5 ,, j„
40 17.16 15 O) ! ) -5^
-tS 17.77 '5 46 i,i fo
5° '«-25 15.76 13,80
IT I ox
315
■mi ^> ]'irltl h to 10 Prr Cent
■ital ($ Per Cent Cmnf^ound
M 8 Per
.■\t IVr
.M 10 I
Cent,
C.-nt
C.-nt
03
.92
.91
1.78
I 76
I 74
2.. 58
^53
2 40
3 31
3.24
3 17
3. 09
3 «•!
3 79
4.62
4 10
4, 56
5 21
5 0.3
4.87
5.75
5 . 53
5 34
tl.2-^
6.00
5 76
671
6 ,2
f' 14
7 14
6 81
6 ;o
7 54
7 16
6 81
7.90
7-49
7 10
iH
7.79
7 ,39
«.56
8.06
7.61
8.8s
831
7 82
0. 12
8 54
8.02
0.37
8 76
8. 20
O.fK)
8.05
8 ,37
9.82
9 13
8 51
10. 02
9.29
8.65
10.20
9.44
8 77
10., 37
0-58
8 88
10 53
9 71
8.r)<)
10 ()7
9 82
9 08
10 Si
9 93
16
10.04
10.0.3
9 24
r I o.i
10 12
9 .31
ir.i6
TO 20
9.37
11.26
10.27
9.43
I ' 35
'0 .34
9.4S
II ;3
10.41
9.53
'•51
10 46
9 57
II 50
10 !:2
0.61
1 1 . 65
'O.57
9.64
11 7-'
10.61
9.f)8
1 1 . 78
10 65
9. 71
11.8?
10.69
9 7.3
11.88
10.73
9 76
"03
10.76
9.78
I
12 tl
12.23
10.88
10.96
9.86
9.92
.•:i(;
////: licoxoMics or mim.w;
he k't aliHK'. l-'ipr tin.' emu i. nieiici' of nur rraiKrs w c add
tlic annuity taMcs referred u<. as tliey apjiear m Tiie
Mines of the Transvaal." ])nl)lislied liy Tin- Sidlist. a
London tinruiL'ial journal wliieh lia,^ done piod work in
this deitarinieut of nnniuL; business ^I'-nrruu.]
GRAVEL-MINING COSTS IN ALASKA AND
NORTHWEST CANADA*
By lhestkk W. I'l'kingkin.
(Ii'liruary q, 1905.)
Tlic (laia in tlic tahlr on pa^c 318 ha\c btcn compikit
from statistics CdlU'ctcil durinj;' a recent inspection of the
placer fields in Alaska, Yukon 'I'erritory and nortlicni
llrilish (."()hinil)ia. Of the statements ti'mished by opf ra-
ters, only those which are considered lelialile have been
used. The \vt)rk attempted had no relation to the sani-
plinj^ or valuing; of mining properties, and time did not
permit, usitally, of the measuring of the ground.
Owing to the varying contlitions governing the cost of
mining in the \orth, the territory has been divided into
three provinces. The South Coa.st province includes the
Juneau, Porcupine and Sunrise districts of Alaska. The
Interior province includes the Atlin district of British
Columbia, the Klondike district of Yukon Territory, and
the b'ortymile. Eagle, Birch Creek, b'airbanks and Ram-
part distiicts of .\laska. The Seward Peninsula province
includes the Nome, Council and Solomon districts of
Alaska. The Xizina district of the South Coast province,
and the Port Clarence, Fairhaven. and Kugrok districts
of the Seward Peninsula are separately considered.
In preparing the sheet, the working costs of 1 18 differ-
ent operations were first tabulated with reference tc the
method employed and to situation. A second table was
then prepared, in which the working cost was augmented
* The fiiiurcs that nro pivcn hore arc ■ "'ictpd frnm a re-
port nil tlu' 'Costs .111(1 Methods (.f dravcl and Placer Mitiing
ill Alaska.' and here pnhlished liy permission of the Director of
the I'nited States Genlojiical Survey. The data furnish as near
approximations as the nature of the work permits. The cr. -.t of
.nil supplies, rates of transportation, cost of Inhnr, and dfsrription
of water, timhor and fuel resources in all important parts of the
territory, as well as full descriptions of all the methods of min-
ing employed, will he civen in the final report
.•?is
/■///:■ /:C0.vr).i//c-.v or M/.\/\,
I'v an amount [kt cul.:, vanl Ium.I ,in alluuamv in,-
<!q>rcciatinn ,,t i,la„t. A j^naTal li.^urc ,,i mx vcars wa.
taken as tiu- avrra.^c Iiu- ,,i an individual prnp'^riy and
rxccpt in llu. ca.c .,1 wniirr dnltin^ -iHTaiinn., I j,, ,la^ s
as the workinjj season. 1, ,va. Hun a.M.nud that live
annnal payments are mad. ,,, a deprecatinn fund. The
fund .s equivalent .„ ,heo.>t .,f plant an,! n.aintenance
of same dnnn^ the hfe .f , he pn.penv. pht. s>x years'
;lil
Ch'.lllL-MLMXC COSTS
.•?l!l
>ini|ili intiTiNt nil tlu' ii)\c-munt at 5 ;Hr cent. Facli
annual pavnuiit u.;^ dividrd hy tin- stasnn's outptit in
ciiliic yard^;. and tlir animnit llnis ohtaincd added to tin-
daily workint,' cxikiims. to <^<.i the tntal nniput c^t pir
yard, as far as possible. Prices paid for niininj,' ])ropertv
arc taken no accr-uit of, as tlicy represent an imknown
factor. In cases where expensive plants have hcen in-
stalled the ainnrtizatinn was separately fit;nred for each
case. In cases of shoveliiiLr-in and small mechanical
Jilants, the installation and maintenance cost was taki'ti
at an avcra,i,'e amomit for a ^jronj) of operations in eacli
district. Where th'.' operatiin implies an addition.a! .stri])
pint,' of overlmrden. which is always separately charcrcd.
the cost was distrihntcd and added to the gravel extrac-
tion cost.
I'roni the second table, where the costs were r<diicid
to one tiy;iire f.)r each <listrict, a third table (as rrjvi n 1
was prejiared, ^ivint,' as nearly as possible the avcrai;e
cost for each of the 17 separate methods considered in
one or more of the three iirovinces. Where the opera-
tions from which the averares are derived exceed two in
number, the <'act is so indicated in the table.
1 he attempt has Ix'cn made to reject rifj:urcs which
were evidently not representati\e. The final figure ar-
rived at is not, however, always satisfactory, l-'or exam-
ple, under \'o. 5 (the method of workini,'- ojnii-cut by
shoveling into wheelbarrows, whcelintx to b'..ckct. hoist-
ing and convcyinp;- to sluice by self-dumpiiiL,' carrier or
cable). $2.14 is representative for the Klondike, where
seepage water is generally pumped from the pit, and
many operators pump the water for sluicing. On the
other hand, a plant in the llirch Creek district of
Alaska, mining only 22 cu. yd. per day, and handling the
water by a drain, operated at a cost of $1.50 per cubic
yard. In Xn. 13 (drifting solidly frozen groun.l, steam
or hot-water thawing, hoisting and convevimj with the
-1
m
'■■m\
n\\
320
JUL LCO.WMJl^ Ui .\n.\L\G
use of the .sclf-ininipiiif; biKkct), the cost in the Klon-
dike is $1.95; while the liii;her lij,'ure j;iven is arrived at
by comhiiiini; the e\piii>;.r American camps of I'drty-
niile and l'aiil)aiik>. wluri. the i.d>t is $4.03 and ?3.5<) re-
spectively.
The hijjli cost of liydrauliekiii); uiili use of hydraulic
lift, in tile Seward Peninsula, i> caused by the ditticnlty
of moving: the gravel to the bedrock sluice,' and the ex-
pense of the ditches and installations. liydr.-iiilukm-
by means of wati.r undtr natural head without the u.^e of
the hydraulic lift, (jr ^^ me otliei means nf elevating; the
material, was not seen in the Seward IVninsula. it is
known that a hydraulic plant is in successful operation
at Bluff. 50 miles to the east of Nome, hut no data an.
available. In the interior, only bench j^ravels are liy-
draulicked. Steeper grades for sluices can be obtained,
and the gravel is more easily moved. The lii,L;h duty of
the miners' inch in the Klondike is a large factor in
bringing down the co-t of .\d. 1 and Xo. 16. It should
he distinctly understood, if h\ draulicking costs in the
interior appear attractively l^w, that the water supply is
exceeihnglv variable, and that nn nlijible estimate can
be made beforehand of the ontput of a given season's
operations. I'urtherniore. while much of the bench
gravel was originally rich, the ])a\-streaks have been
largely drifted out. and the gold is not disseminated
through the upper portion of the gravel to the extent that
it is in California. With regard to the pumping of water
for hydraulicking, the practice cannot be too strongly
condemned. He is a bold man who attmipts it. and a
singularly fortunate one who makes a tinanci.al success
(if it.
Mr. Stephen Birch, operating in the Xizina district of
' This ilitliculty is due. not only to the exceedingly gentle
grades of the streams, but also to the shingly character of the
iiKitcri.'il haiidlf'l.
(ll^irr.I. MIXING COSTS
•.\2\
Alaska, has courteously funii>lu'.l. tor iliis npdrt, a sinn-
in.iry of tlio costs of workiiij^r jilaccr f^nnitid mi Dan creek.
'I'lusc tij,'iircs are given hcrewitli, as they imply a total
ciiari;e nf invested capital, in addition to working costs
against one season's o[uTations.
By pronnd sluicing through 20-in. Iluiiie, 6..S0.? cu. yd..
$8,781.44, or $1.14 per cuhic yard.
i'.y use of S in cotton-pressure hose and nozzle,
flirough 20-in. Hume, i ,6(X) cu. yd., $i.457.(>j. or $091
per culiic yard.
I so of pick and shovel only, through lo-in sluice-box,
2,320 cu. yd., .$5,100, or $i.,S7 per cuhic yard.
27,vft. luimel. 6 hy 6 ft., tinihered. $1,017.00, or .S,V72
lur running t'oot. ( )r 407 cu. \.l. of grav< 1 removed.
\\lii>h co^t $-'.50 i)cr cuhic yard.
-Mr. IJirch adds: •■\\hilc the cost ma> seem high, it is
hecausc of tile i.u-t that u iiKhi.Ks the to(il-> and material
now on hand, which were necessary to remove this gravel.
Now. if this work is continued for a number of years, the
<lepreciation of the fiojs. etc., could he charged propor-
tionately. 'I hese prices may n^t he a eriterion for future
operations in that country, hut were our lirst cost of oper-
ation, and an\ --trangcrs going into th.at section of coun-
trv would he apt to run \V) their costs to {\\v^c tu; res."
1 he cost of ^h.iveliiig into sluice-ho.xcs in the rcinote
parts of the Seward I\iiiii>nla reaches to ,$5 per en. yd..
and even higher. Some drifting ojierations have been
carried on in the Kugrok and l"airhaven districts, on
which figures are not at hand.
Dredging estimates furnished hy reliable interior oper-
ators place the cost at Hoc. per cu. yd., where gravel must
be thawed by points ahead of the dredge. In the Seward
ll'iiinsula it is estimated that if the [)roperty is sutficipntly
large for a lo-year life to bi. allowed, a dredge can be
oi)erated at the cost of 30c. per \(1. The field for dredges
in i>l.icer mining in .Vlaska is extremely limited. In
■Si^ a I
THE ECOXOMlL .s ui- MJMXC
the Siward IVniiisiila it is not impossible tliat some of
tlie wide, shallow creek deposits will be worked success-
lull} b_v means of the steam scraper. The cost of an
experimental oiieration uu ( ipliir creek was said to be
under 20c. per yd.
The costs of operating by two mechanical systems, in
the Seward Peninsula (involving the labor of men in
shoveling into cars and iramminj,'. in the one case to the
bottom of an incline, and in the other to a bedrock sluice
leading to hydraulic ek\atnr throat), are unfurtunatcly
not available for i)ublicati(!n. The derricking system.
X<). ", however, both in the interior and the Seward
Peninsula, apjuars tn be superior in pnint of cost to either
I 'I the above nientioncil, for the Wdrkiiig of the average
.Alaska open-cuts.
Frozen ^rmnid cannot be att.icked with success by the
steam-shovel. Kven where it dig> the gravel successfully,
if men follow it clean to bedmck bv hand, the cost of
operating is sometimes dnubkd. Tin.' i-team-shovel has.
however, a i'n\i\ in northern placer nuniiiL;,
Regarding niechanical o[)eralion^ in general, the nn-
poriaiu principle shnuld be eiiiphasi/.e(! that the main e.K-
pense is getlinj; the material into the receptacle which
conveys it to the sluice or washuig jjlani. Tramming,
even for a long distance and to a considerable elevation,
adils a very -mail [)roportioiiate anUiUni ti. thu tutal cost
of working. The establishment of a permanent washing
plant, economically situated, as regard> water supply ami
diHiip, slii'uld lie cimsidered by every .\Iaskan mnier who
proposes working tlu' shallow creek deposits which char-
acterize that country. The isolation of the washing oper-
ations, together with the adoption of the most economical
system of traniniing {)ossible, will go far towaril attaining
the ends of adei|uate grade and re in for tailing, which
are the sine qua nun accompaniments of successful gravel
mining.
•!?
it
THE COST OF MIMNG
(hUitiirlal. February lO. 1905.)
On another pa,!,H uc pi.hlish a suRnrcstivc contribution
by Mr. W. k. Inj,Mll.N on tiu' a>s\ of mmin),', a Mihjcet of
the mm,, St iinpnrtance. Wiutlirr regarded in its l.road
econnniic aspect as implyinp^ the wlioie process of winning,'
the metals, or in the narrower sense as covering only the
actual hreakin- ni an-, the question is one which must
appeal to the readers of this Joiknai. i,, a uu^-i practical
way. Just as in ordinary life it is a proverl, that niMricy
is easier to make than to keep, so in mining it is not too
much to say that the finding of ore re<iuircs less skjH th,„,
the heneficiation of it; at all events, the haphazard meth-
ods of the one must ever be in strong contrast to the log-
ical ways ni tlu. other. The subject presents tnanv as-
pects, each of which invites discussion. There is the gen-
eral (lue.stion of the attamablc mininuim of uxp,psc as
aft'ecting the wnrM's oiupiu of metals, and the relation ot
the growing rate of labor to the increr.sing application of
machinery; there is the accountant's and director's view
of the portion of cost propiTly chargeable to mining, w uli
a glance back at the days when development was charged
to capital account, and perishable machinery to assets
Ihere IS a gener.al ini|niry into the conditions which cause
costs to vary within such wide limits in diffiretit mining
regions, and the pertinent subject of the factors contribut-
ing to particularly creditable results at individual mines.
Finally, there comes the broad problem of practice under-
ground, where more money is lost or saved than is dre;mit
'if in tlu- philosophy of the average investor. These are
but suggestions ; our own views will find I'xnression at a
later date, when our friends will have given a good start
to a discussion, the obvious usefulness of which should
ehcit a widespread expression of experience and opinion.
7^
THE COST OF MIMING
1')^ W . K. I.NGAl.LS.
V I cliruary i (). t .)> 5 )
Tlicrc is perlmps no .>ul)jcct more difticult to gcneralizi'.
'I'lic cost of iiiiiiiiiij^ varies according; to coiiilitions in a
nianncr so obvious as lo rc(iuiri' no antitlit'tical citations.
TlicTL' can be no (|uest.on as to what constitutes tlie ulti-
mate cost of mining, but opinions ditYer as to wiiat enters
into the cost during a limited or arbitrary period, sucli as
the fiscal year; in other words, accounts are kept in vari-
<.ur \va_\ s. .\lan\ other diUiculties may be mentioned.
Xotwithstanding all these, it is \M'ttli while to attempt
some generalizations, making due allowance for the vari-
ables, since it is onl\- through siicii deductions that we
obtain standards for comparison.
The determination of standards would be useful in at
least three ways: ( i ) They would enal)Ie the mine super-
intendent to know if his work were being done as cheaply
as it ought to be by comparison with the cost of similar
work elsewhere; (2) they would stimulate efforts to re-
duce ex])enses, since a knowledge of the cost of each part
of the work indicates the <lirerti(>n where economy can be
effected, and ( _0 they would furnish die engineer who
has to value nunes, especially r"w mines, with improved
means of tstunatmg the probable i.<st of mining, and
therefore the mi value of the ore. The cost of kci'ping
accounts, even in tlu' fullest detail, is so slight that there
is no good reason wTiy they should not be kept in a thor-
oughh instructive manner. The value of any accounting
is greatl\ diminished if it be not so systematized as to give
all the inlninialion that ma)' be commercially or technic-
ally ie(iiiired.
THE COST Ol- MIMXG
32o
At the present time there is a great lack of recorded in-
formation such as w ill fiirni>h the desired t^uidance to the
ei'gineer. It is a fre(|iient practice to estimate that be-
cause a certain orebody is being mined in one place at a
c.Ttaui cost, a supposedly similar orebody niav be mined
at another place at approximately the same cost. Such
comparisons are useful as checks, but constitute an un-
trustworthy basis for estimates, unless the analogies are
thoroughly demonstrated, since in the outcome it often
happens that the actual cost of mining proves to be widely
different from what was forecast, bec;nise of peculiarities
m the particular orebody an.l its occurrence that had not
been taken into account.
I have recently had occasion to examine several reports
on a large deposit of low-grade ore occurring in a locality
where there \.'as not much mining precedent. The grade
of the ore was low, and the successful exploitation of it
depended upon a large tonnage being handled at a close
margin of profit. It was a case where the probable cost
of mining should have been estimated with the utmost
precision, and by the application of engineering principles
It could have been done. The mine was examined by
three well known professional men, of whom two at least
had wide experience in such work. The cost of mining
wa:. estimated by one of them by a rather far-fetched
analogy ; the other two simply expressed the .opinion that
It would |)robablv be a certain amount per ton. no reasons
being given, and no references to the conditions alTecting
the cost. The estimates of mining and treating the ore
were certainly at fault somewhere, since the mine prove«l
unsuccessful.
If, in estitnating the cost of mining, as in estimating the
cost of smelting and other engineering processes, the esti-
mate be divided imo its elements— the probable cost of
the various parts of the work that go to make up the total
—peculiarities affecting the total cost are much more like-
!!'()
THE liCOXOMICS 01- MIMXG
ly to riceivo critical attention than wlicn a Ininp estimate
is made witliont an_\- analysis.
The |)reseiUatii)n oi a detailed estimate in a report on a
ininini,' pr()])ositioii is a i,^(jod deal more convincing, espe-
cially to consulting engineers, to whom the report may be
submitted, than the statement of a single figure for the
total, which furnishes uo evidence as to its accnracy, and
ill many cases can be prcmoiinced no more than "prob-
able" or "improbable" or some other uncertain character-
ization. It may he .^ugge^te(l that (in view of the numer-
ous reports that are circulated without any information
as to the cost of mining, cost of plant, etc., wb'ich it is nec-
essary to know .-ibout, leavii,"' it to tlie investigator to de
termine those factors) we should be grateful for what
little is sometimes otTered, and so we are, but it is not that
class of mining report to which I am referring in thi.-^
article.
In venturing the suggestion that it is possible to fore-
cast the probable cost of mining in a more ratit:uial man-
ner, I feel sure of my ground, through the knowledge that
there are many engineers who are not content to express
inferential opinions, but analyze tiie various conditions
that atTect the cost of stoping, traiuming. hoisting, timber-
ing, pumping, etc., and that there are such technical pa-
per.s as that of Kiuzie on the mining ami milling methods
at Douglas Island, and that of MacHonald on the method
and cost of mine timbering :it Kossl.uid, and manv others
of the same class, which go thonnighly and lucidly into
the engineering conditions. We need more |)apers of
tiiat eliaracter wh.icli will gue inlnrmatinn as to the unit
costs under nnnieri'U'- and \ariiius conditions, aiul es[)e
cially the unit re(|uiremcnts of labor, in hours of work,
and material, in pounds, tons and other measures.
In making ;m;ily>es of costs for purposes of compari-
son, it IS essential that the basis for itemization sliall be as
nearly uniform as poi-^ible. Some recently pul'isiied
THE COST OF MINING 327
statements have permitted the following tabulation,
wliich, thougli admittedly imperfect, will certainly prove
suggestive :
Item. A< B* C
I. Miner, and helpers $o.j5 $o.4.?5 $0.4-";
-■I rammers, shovelors. etc 0.41 o.,i(i5 o.-ijo
J. Urill sliarpeiiing and repairs.. 0.15 o ijo o 'Oi
4. Compressed air „. ijo ooSi
5. Alamtenance of cars 0,01 o.(X)0 o o<,S
" '■-.^■''"-'^'•■^ 0.1,? 0..45 0.0.')..
I '.'"'^er o.j.S 0,110 o -'OS
«. limbermen o.j,, o. „;o o.o<j7
'>. Hoistnis 0.23 0100
!o. Pumping o 0,5
II. Supplies, n.c.s.' 0.04 0.040 010=
\2. Supervision 0.J3 0.JJ5 >
"Tota' $-'.07 $2,065 $-'.070
^Cripple Creek. Co!, (reported hv J. R Fiiilay).
^Centre Star Mine, f^ossland. H.'C. (otiicial report)
liuiiker Hill and Sullivan. Ginr d'.Mene (official report)
^ Including all supplies not else^^ here specilied.
'Including bosses, assaying, surveying.
Tlie above clas.sification appears to me quite useful, al-
though for thorough comparison we ought to know the
rates of wages, c-onsumi)tion of certain material (esixrcially
coal) and prices of the principal materials. Items i, ^, 4
and 6 give substantially the cost of breaking down the ore :
items 2 and 5 the cost of loading the ore and delivering
to the shaft: item <) the cost of hoi.sting and delivering
at the surface : items 7 and 8 the cost of supporting th.-
.grotind, and item 10 the cost of kee|)ing the mine drv.
Each of the.se steps in the work is likely to vary rather
widely in difTerent mines. Tiie ups and downs mav offset
each other and make the totals abotit the same, as, for ex-
ample, in the three cares given above, but they may not.
There are comparativelv few mining companies which
report their costs with the above d-tail. \umerons com-
panies, liowever, report co.sts iten.ized as follows: i, la-
bor: 2. coal: 3. timber: 4. explosives: 5. other supplies;
.!L'S
rill: LCUXUMICS UP MIXIXG
0, -suiKTv i,-i(in : 7, adiiiini.-iratKiii and i^etKral (.'Npcnsc.
Siicli a j-tatiimnt is usclul, hut it is more usffiil if tlie
ittnis arc subdivided according to the various hrancJKs df
tile work.
Ill considering the comparative cost of mining, the fol-
lowing are some of the essential conditions determining
the result which it - neC(S,-ar\- to take into account:
1. Size and character of the ore deposit.
2. Method of mining, (a) ojien cast, (b) underground.
If the latter, whether rdom-and-pillar system, caving, till-
ing, timbering, or a C(inibin;iliiin i)f two (ir more. The
projjortion of the orelxidv extracted is an important con-
sideration. The system nf breaking the gnnuul, the lay-
out of the mine, the metlmd of handling the ore, <lrainage,
etc., are determining factors.
3. Depth and longitudinal extent of the workings. In-
crease in depth increases the cost of hoisting an<l pump-
ing; increase in longitudinal and lateral direction in-
creases tile cost of traiuming.
4. Character and .amoimt of necessary development
w<irk : ;. I-., the w(irk that must be done to di.scover and
give access to tlu- ore. The amount of 'dead work' that
is required is one .jf the greatest cau.ses of variation in tlv
cost of mining.
5. Uuantity of water to be r.ti'-ed from the mine and the
depth from which it mii>t be lifted.
6. Quantity of coal, dynamite, timber, steel, ttc, con-
sumed per ton of ore.
7. Wages of labor of \-arious kinds and its (jualitv.
8. Cost ])er ton of co.al and its ([ualit_\ .
9. t o^t per potmd of (i\tiaiiiite (various grades).
10. Cost of timber [kt i .ckx) ft., board measure.
11. Totis of ore mined per annum; tons of shipping
product sorted out; tons of waste raised.
12. .Supervision and administration.
The conditions which are most closely comparable are
Till-. COS I ()!■ Ml.\l.\i;
SLM)
tliusc of larfjc orohodifs. cif which tlic uhnlc, or ncarlv tlic
whole, is extracted and sent to the mill, as, for example,
those of Diicktown, in Teiniessee ; Mat River, in Mis-
souri ; Homestake, in South Dakota, and the copper mines
of Lake Superior. In the case of narrower veins, like
those of Cripple Creek, comparison can he made only h\-
considerinpf as the ore all the material that has to be taken
out ; hut inasmuch as it is seldom profitable to take out
more than enough to atford workini:;^ room, the costs in
such mines are necessarily his^dier than in those wherein
larjje faces of ore can be worked in preat chambers. Thj
lowest cost of miniuj,' iij.;ht theoretically to be experi-
enced in larpfe deposits of ore that can be entirely extract-
ed as suitable for milling; or smcltinj^, and can be opened
by drifts of large size.
Considered commercially — and. after all, mining is sim-
ply a conunercial business — the true cost of mining is
X — Y = A, in which A is the maximum profit realizable
from the mine, X the market value of the ore, and Y the
cost of mining, including all oiulay for plant and develop-
ment woik; but it is only in rare cases that advance esti-
mates can be reduced to these elements. However, the
cost of getting to the ore and the co.st of plant tor its ex-
traction are certainly faclors in the cost of mining; this
leatls to the much-discussed (juestion as to how the ex-
pense for new construction, and great developments, like
new shafts or adits, should be charged in annual state-
ments of mining costs.
It should be recognized clearly that any useful comi)ari-
son of costs can be made only in the light of analysis of
all the (letei mining nuKlitions. The cost of mining at one
place may be S3 [ler ton and at another place only $2. yet
the better work may really l)e done at the former. In
itemizing the various elements of cost, such as breaking
ground, shoveling and tramiuing, explosives, timbering,
pumping, etc., and comparing them, we shall arrive closer
330
run RcoxoMics op mixixg
tn the actual rc>uli>, hut we .-hall fail to ^et al the truth
unless \vi' cdtisider the ])ri)p(irtiijn of the orehndy ulti-
mately won and the linal jirotit in its extraction. Mr. J.
K. I"inla\' expres-es this principle so clearl\ in discussing;
the cost of ininintx ^'t Cripple L'reek. L'ol.,' iliat it is useful
to repeat some of his remarks, lie says: ".\ low cost per
ton, either of crude rock hoisted or of sorteil ore shipped,
dois not necessarily indicate I'ither good mining or good
managi'inent, and is nearly as apt to indicate the contrar_\ .
Two mines ma\' l)e working in exactly the same kind of
ore. and one ma\' ship ore at more than twice the cost for
mining that the other does, and yet be doing belter work
and making larger profits.
"At C'ri])ple (reek the ore occurs in a multitude of
small wins, either single or in aggregates. In the small
se.ams which constitute either the vein itself or a compo-
nent \y.\ri of it, the ore is rich, but the rock on the walls, or
between the seams, is either whollv or partly waste. The
ricii seams may vary in thickness from a mere crack to a
foot or two; and for these uiilths, it may carry from one
to several hundred ounces gold jxt ton.
"There are no large orebodies in Crip]ile Creek. It is
doubtful if any single orebody. or even any single vein,
has produced 100,000 tons of sliijiping ore. The largest an<l
best Veins have l)een found in the granite, where tin- rock-
w.alls themsilves are sometimes uniformly inipregn.'ited
with value for a width of _^o or 40 ft. In such places
large amounts of clean ore h.ive been mined and shipped
without sorting, but only in the swells; when the vein
narrows down it is .always necessa.ry to break some waste
in order to in;ike roum to work.
" 1 he ori , tlurefore, i-- mined from veins of such a
character that it i- impossible to get it mit without mixing
with some • )rthless rock. The problem of h.uidling this
'The f"\<;iNTKKiNi, wn Minini; Jiuknai. Xovcinbi-r .'i, \^y^x
77//: COST or MI mm;
:v.u
ore ocoiiriniie-ally (lc])iti(ls on tlu' cnst <>i treatment. This
cost is at present — and is likely to be always — so liipli tliat
it becomes very essential to throw nut as much waste, or
low-grade nre, as possible before shipping. Could tl.e ore
be treated for a dollar or two a ton, the proposition wonld
be entirely ditTerent."
The ore shipped from Cripple Cretk is a concentrate-
produced by hand sorting. .Numerous mines in other dis-
tricts are operated tuider similar conditions. Even at
Lake Superior a considerabK' ])ropnrtion of barren and
lean rock is sorted out nf the rock h listed, in order to
iffect a ]ireliminary concenlration of the ore before send-
ing it to the stamp mills. This leads to a consideration of
the point where mining leaves off and ore-dressing be-
gins. Probably there will be no disagreement that sorting
practiced on the surface is technically a process of ore-
dressing, but .sorting is also done underground, and while
that migli'. also Ik- technically considered a process of ore-
dressing, it would be highly inijiracticable in bo<ik-kee])ing
to distinguish between it and mining.
These features indicate some of the difficulties in re-
ducing the cost of mining under various conditions to anv
sound basis of comparison. Unquestionably, however, an
analysis of the elements of cost would bring us nearer to
sucii a basis, and an examination of the costs, as officially
reported by various mining companies, will .show the de-
sirability of such an analysis. It is, for example, difficult
for anyone not familiar with the special conditions to
underst:nid why the cost of extracting a ton of ore from a
great, \\ell-e(|uippeil mine like tlu- .\nae(inda should be
$3.50 per ton, when ore is mined for $2 per ton at Cri])ple
Creek, Col. .Anyone examining the reports of the Laki
SujxTior copper companies is natur.ally led to iiKjuirc why
the cost of mining in the .\tlantic is only f>oc. per ton, and
in sotue other mines of the same district twice as much.
.\iiother intere.NlinLT (Uiestion woidd n;itur.-d!v -irise as to
:v.\'2
illli IC(>.\(>\IU'S ()!■ MISISC,
whv mniiny: i-an \w cl<'iu' willi inML;nitu'ant cipuimuMil and
>.i) iluaplv a- it lia> Int'ii in tiir jn]ilin ili-trict nf Mis-
s( luri.
It i^ Impfd iliat a discn'-sii in of tlu-c (|iution- ami
(itlnTs i,f tlir >anK- iIiaractcT will Ik- taken uj) ni turtlur
nnitrilniliuns.
THE COST OF MINING
The Editor:
SiK — As Mr. liif,Mll> lK'^nn> I)> -annc; in lii ; rect nt arti-
t-lr. till' uiattrr .it the i)rn]KT oust fur iiiiiiin}j; is i liard sul)-
jtct to ,i,niKTalizf. hut 1 am of the imi)rfssinn that, if more
I'ompaniis puhlislud their costs in i)r()pi-r detail, the ditTi-
euitv of i^eiurahz.ition ■, onhl he nuicli less, hec.'use even
in cases of wide difference of conditions, tliere would still
he found operations in which the conditions weie more
or less parallel. 1 have amused myself in comiKiriuL,' cer-
tain items of cost at the Treadwcll mine in .\laska. as
pnhlished hy Mr. Kin/ie, and those of the Portland
mine at Cripple ("reek. At first ij;lancc one nus^dit say
that in no tv o jilaces could the conditions he more dis-
similar — the 'Ireadwell, with its immense hodies of uni-
form ore, mined very rapidly with comparatively small
outlay for exploration and development, and the Port-
land, with its air,i,M-e,i;ate of more or less scattered and small
orehodies re(iuirin^' for exploitation a large amount of
development work, done to a considerahle extent at ran-
dom. Nevertheless, 1 fmd that there are certain opera-
tions at the Portland that find a parallel in the Tread-
well, and in these cases it is worth noting how well the
Cripple Creek property will compare. Mr. Kinzie gives
the tonnage hroken per machine shift in underground
st(3pes of the 'rreadwell at 34»/>- H^^' •'•^'■'■'^ ""' ^^^^^
whether this is toimage removed from the slopes or the
actual tonnage hroken, it heing understood that in the
underground part of the Treadwcll mine ahout one-half
of the ore hroken is left in the slopes until they are
worked through. In case the tonnage referred to is the
actual hreakage record of th- machines, the performance
is almost identical in cost with that in the wide slopes
Xli mii l:C().\t)\lli. S Or M I .\ I .\ G
at iIk' I'lTtlaiiil tiiiiif. I lu- talilr IhIhw !;ui.> tlic fnin-
pari-' pti
At liir I'' iitlaiul. Miiall luacliiiu -, _• [ in., ()])tTatril hv
■ itir mail ,ii $4.00, arc ti^od: at tlu' 'Iri-aiKMll. .^,'-iii.
macliiiH's, usIhl; j 15 tmus a> imuli air at tlio >anK' ])is-
ton spi'i'd as the I'orllaiul tiKU'liiiio. ami ■iprrati'l hy
two iiK'n at S7.S7 ])iT (lav.
I'lTtland. Trcatlwtll.
'I'ons per tii.icliiiK' in all ^topcs IJ.4 34-9'>
Tons in wiilc stopi-s i7-7* ^.M-Q**
Tons por machine in drifts 5.,? 9.6
Tons piT foot Ml drifts 2.5 7
Liihor cost per ton on ore broken in large Cents. Crnti.
stopes JJ 6 jj . 5
Labor cost per ton broken in drifts . 75 Sj
Labor cost per foot of drift for machine
drilliiiK I S6 5 ^5
* One man niaolnncs ' Tvv.i nu'n iii.u'Iunes.
In tile al)i>\c I'ascs tiic comiiari^i in i> not nnt'a\ urahK
to till' triiijilc (reck |irii|Krt\. ilic ilcvcli ipmcin \\nrk
l)i.'iiio; tmu-li I'lu'apcr at rri])pl(.' (.'reck than at the Trcail
well, hilt 111 this jiariiciUar the cases arc not paralKh
I'cvclopnRMit Work in the 'Ircaclwcll means k.r.i;c o|)cii-
iiios designed for the cxtra'.iion uf hi'avv tonnaL^e. At
L'ripple Cn'ck tlie ])riniar\ object ot' dcvclopnicnt work
is to discover ore, and conscqiuntU the driftinsj and
cross-ciittint^ arc desit^iu'd to I)e driven with tlic L^rcatest
speed and the K-ast ex]Hn.se, rei;ardless uf the fiiliire
iitiUtv of the W(ir!< for niiniiio pur])pi>t'S.
'i'lie result of this dilYereiice in desi,L;n of devclopiiient
Work shows in the C(ist of trainniiiii;, which is <iver joc.
per ton at the i'ortland, as a.L^aiiist a trille ovt'r _^c. at tlie
Treadwell. Twentv cents per ton is ahont the Kast that
the traniniin;.; can he done for in (ripple treek under
the prisiiit i>lan in niininLC operation-. It is not ])rac-
ticahlc t(j introdiici' haiilaoe s\stem> nndert;Tound on ac-
count of tin -mall, scaltcrid oreliodies c<Minect(.d by
crooked drifts, li i.s hard to see how anv utlier arraiiLTc-
THE COST Ol- M!.\ l\G
33fi
ij
nil lit lliati the ]i!i'-ciit w'iiiM :il'l'l\ ■ I'lunlnrc. llu- dil-
firiiici' (if cii.st (if iraiiiiiimL' Iji'twom tlir I'drtlaiiil iiiiik'
and till' Trtailw!.!! i> -titVuuntly accoiiiiiid fir l)y tlic
radical dilTiuiux' nf cniiditinns.
AtiotlK-r i'\|K'nM- at tlu' I'drtlaixl is tiiuhcriiiji, wliich
avrraj^td fnr ^ix iimntli^ alinnst ixaitly 51H-. per Imi.
At the Trcadwill tlii- i \ikiim' i~ prai-tirailv /ath. 1 Iiis
is a ]i()mt in wliu'li liir ii'-ai'tici- at llu' i'nrtlaiitl mine
!iii<;lil 1)1- (ipcn td critK-i'-ni. Im-aiisr ullur luiiu-s in (._ rip-
ple Creek succeed in ( xtiaeliiiL; tlnir nrv with alnuist as
sirall exi)eiise fur tii:ilier as the Treadwrll. Xe\' rtlie-
less. as I have atteiiii>ted t<i imint dUt in one nr t\M)
fciriuer cdiiiimniicatidns, tlu' pnibleni is imt mie ui mere
Cd.st per tdii. lint that df mimiiL; the value at the least
cost from a lUdfit-makini,' pi)int of view, ar.d in my judt:-
meiit the timheriiif; cost at the Portland is fully ju>titie(l
by the conditidiis.
Af^'ain. the Cd^t df (irc-sortinf^ at the Purtland is about
three tiiues as much as that of milliii^ aii<l conceiUratitii;
at the TreaduiU. Mere attain the ditYereiice of C(i>t is
justified hv a ditYereiice of Cdiiditidiis sn obvinus as
scarcely to merit discussion.
'{"he cost of hdistini^j at the Portland is about 22c. per
ton. as a^'ainst about iic. for the Ready lUillion and
Alaska Mexican, which handle about the .-.aiiie tonnage.
'i'his difTercnce is one which should not exist, and is ac-
counted for larj^el)- by the bad design of almost all Crip-
ple C'reek hdistiiiLT plants. Tlure is no reason why ("niiple
Creek ores should not bi' hoisted b\- skips and diiinjieil
directly into ore-bins, as is done at the Triadwell. there-
bv doini;- awav with the exjjense of toji-trammiiii.;, which
in (ripple Creek is invariably a lary;e item.
I am fi'^'"?^ ^'i*^' -'I'love comparisons larmlv because
tluv are interesting in themselves, and partly to show
that if the prd])iT ditails were fjiven, there is a lejjiti-
matf Cdniparison that can be made between mines e\en
ti
3.10
////: liCOWMICS 0/ MlMXo
I't .i;ri;ii .i|i|i;iri'iit ililVvrnn;".- m iliai.nlcr. 'I'lu.' [)iil)li
lalicMi ,ii' t.-i)>i> waiilil he (if ;iilvantaj;i' to ui.iiiy. prdliahlv
niii-t. ininiiijj coiii]iaiiK ■>, lui-aiive li', mi ilmnj^ ilu\
U'Uil'l Ijiin- ti) lii;iii nitain di lu-u ik U's in tlnir (r,\n
ni.iiiaj^i nil tit. wliuh woulil, m cuiir.M' .if linn', he |,.iiii(l(1
I'lii 1.1 iluiii. Maii\ I omiiaiiio aii' <lilu<kil into lliiiik
iiil; iliat tliiir Mijii. 1 niti-iitlcii'.> arr ^(jod iiiiiiinj,' iiiiii,
>iii:iil\ l)ri.-au-i.' llu_\ lia\f l)i.iii oil l!u propirts a loiii;
IlllR'.
lakrii III tlu- lar^r. ihc (liM.-tissinn of luiniiij; costs v 'U
iiuii^c into that ])io\oki,il liy Mr. llo(j\ir'> .irti;-!!.' .)ii
iiiiiK' i.iini|)iu(.iil and ore rcsi.TV(.-s. .\lo-i n .ini><.ti iit
niiiK' iiiaiia,L;LTs will probably ai^rt-i' uiih Mr. Hoover
that ibr luobleni i>. to i .xtraet ainl niarkrt 'In ■■ntirc
ili-poMt i-(jn.siitntin^' a minr at tl'c L;ri.-aii.'^t proti; to tlu-
stoi'klKjldir. '! luy will fnll_\ a,s;r.i' with liini on llir
(.■i.-onoin\ . not onl^ of pid\idiii;,' abnndant (.-(inipii' nt for
tJR- rallur -laidy working,' of vi,->iblc ore >upplK-s, but
alsii oi workiii;; that M|nipnu.'nt to it.s itmost capacits.
'I he con>idi.ration of mkIi subjects i.- t,ic consideration
of iiiiniii'; co.st- III ;lu' widv.^t ^ei,>e. ''he problem of
deciding,' iii)on the be>t iiiethuds, tile jiroijcr scale of op-
erations :ind (he iiuxt i/.-.vfruWt' cost to be aimed at, is
one biu; eiioni^h I'or the best business intellii.;e!ice a niiii-
iiij; engineer can mtistir. Unfortunately, tu(j maiiv
engineers lonline their attention too niucii to technical
subjects, -iiid the ow uer.s of la'i^e enter|)ri.-is ofien find
it neces-ar\ to leave them out of con>ideration in tile
decision of the broader as|)ecls of the bu.-iness.
Ability to see ihiiins in their proper [)reipoitions and
to lay strcjiij; hold of the essential features of an enter-
prise are more vital to the .-uccess of a manager than all
other iiu.ililii-s coinbiiud, and are more neces>ar\ at the
begni'Mnj; (jf an enterprise than at any other tune. !t
is, indeed, rare that a s^^ood mine i> abxilnteh .vpuiled,
but nothing is nie)re coiiimon. than to ^ee mines worked
Till-: COST 01- MIMXG
387
mil iiiicKr siu/li liaiiilir;ii)> >l 1ki 1 'iiaiKimiiu'iit tliat tlicv
fall I iioriii. iii-l\ ^licirl of piixlncinjr tluir jii^t |)ri]tlt',
1 liis had ...a^ imiit is just as ajjt to !)(.■ tlu' ri>iilt of
soi.:i.' mistake in j;i'iKral i)riiicipK s, siicli as iiutliixls of
ininiii^'. ilfsij^ii and scope nf |)1;'; ', as from failure- to
work out > ,i.r\day (ktails. Mistakis diii to failure to
eoiniiriluMid tile .structure and capahililf's of the ore-
liodies ari' extremely common, and 1 have seen mines
Ijiouyht to the verj,'e of mill hy such mistakes.
It is only when the salient features of an cntirprise
Iia\e hem uoikid out and decided on. thai one is justi-
lied in ti,i;nrin^ on the details of cost. h"or instance, one
can scarct'ly estimate how much 't will co>t to hoist a
Ion (jf rock until he knows what kind of an eiif^Miie he
is goinj; to have, as well ;is the aj)])lianccs used in load-
ing and dumijinf,', etc. If his tonnage is small and uii-
:ertain, he will ])rohal)ly prefer not to put in skips w'th
underground loadini^iiockits. hut will use li^-jit etiLjines.
small cages or buckets. Tin rehy he will save a portion
of lii.s ilant inv( *ment at the expense of a higher cost
in daily manipulation. If you are able to hoist onlv 40
Ions a (lay, yon will still be compelled to employ two
engineers at $4 a <lay, and \our hoisting will ct)st ^oc. a
ton for engineers' Labor .'done. Circumstr ■ ccs niav be
such that a hoisting cost of 4i)c a t(Mi wid be just as
good practice at one place as 4c. ;i ton at a.: >thei ])lace.
The thoroughly com]>itent (.iigineer will see the folK of
working on nnjnstiliahle economies. If ;i man really ex-
pects to hoist only io,ooo tons altogether, he will he a
better engineer to get all that rock out with a windlass
at $1 a ton than to buy a ,Sio,<xx) hoist in i-der to gtt it
tip for IOC, a ton.
The same kind of reasoning applies, in mauv wavs, to
a variety of items that make up mining costs. I'or ex-
ample, a man may he doing excellent drifting ' -..i he
may do so much of it that it may appear as a large item
338
77//: 1:1 0.\<.>. MIL'S Ul' MIXIW:
.1 his cost nl nrc. \ n\ likily Iv.' mii^lil :n ]\\\\w praise
fur his t;<)0(i ih-iftint;, iiisi. u! ul lilanic for hi- Inj^h cost
per toll.
It sums to inc. therefore, tliat the costs that affunl
nuist iiitcresiini; coniiiansoiis ami are most easy to nh
tain, are ihnse whicli apply to sncli tlniiLjs as driftini.;.
shaft-sinkint;. s!ioveliii<j. niacliiiie ilrilling. -.'tc.. etc.; in
fact, just Mieh detaiU as .Mr, Kiii/ie t^ives in his pa])e,-
on the Treadwell, When costs on these tliint;;s are cor
rectly stated, with inforniaiion re,ii;ardin.u; the condition-
■ ■1 wnrkiiiL^ (such as ventilation, water, kind of rock,
manner and method of \vi>rkini,0, they hecoine valuahU.
It woidd probably be aina/inn; to see the difference
between n!ine> in the .-ame di' ict. workinjr under iden-
tical conditidiis. These Cdst , tlierifiire. and not the
total costs, are those tl'.it nii.t;Iit l)e L,dveii publicity, witli-
oii, harm t" the mining'; companies, and iimre olten to
their t;reat advantage.
J. R. FlNL.W,
Colorado Springs, Feb. nj, 1905.
MINE RESFRVES
(March 2, 1905.)
The Editor:
Siu— When 1 wrote vdu, early last year, asking for
an expression uf 0()iiii()n as to the wisdom of the prac-
tice of keeping a reserve (jf gold or I)ullion at a mine, it
was because I had a premonition that the question
would have to be settled in Western Australia soonc- or
later. The Boulder Perseverance scandal has brought
the matter to a head in that State, just as the matter
had been fought out earlier in the smaller companies in
Victoria. When writing to \ou, the point that was put
was that the practice was bad, inherently bad, inasmuch
as it gave great opening for fraud. Nothing has oc-
curred to shake that opinion.
If the evi<lcnce of the leadmg Kalgoorlie mine man-
agers, given before the IJoulder Perseverance Commis-
sion, in favor of the retaining of a reserve at the mine,
is analyzed, it will be found that the chief reason ad-
duced in support is that the share market must be kept
level by having level yields. The members of the royal
commission were so impressed by this contention that
in their finding they adopt the views put forward by
the mine managers. Still, is it in any sense the duty
of the mine manager to consider the share mai et? If
he does, is there not always the risk that he will take a
hand in it? With men receiving the regal salaries earned
by the managers of the big Kalgoorlie mines, there
ought not to be any temptation to go astray by using
the knowledge they obtain in their official position to
speculate in their company's shares. Hut the history of
Kalgoorlie mining is such as to enforce the conviction
that, not only liave wrong estimates of the value of the
ore been given, but also that bullion reserves have been
used \o assist in market operations. With smaller com-
340
THE liCOXOMICS or MINIXG
panics, wlurf salaries arc low, how imicli greater must
be tile temi)tati()n to iiieii to try to make themselves
financially secure by manipulating .tlic bullion reserve.
But does the existence of a gold reserve protect shares
from tUicluations? \ictoriaii experience says No. The
grade of the ore falls off and the yield is kept up by the
assistance of the golit resirve. Xo one, ostensibly,
knows of the true slate of affairs, except t!ie manager
and the directors — when the latter arc kept posted as to
the reserve — or the manager alone, and perhaps one of
his trusted officials. Yet the market soon shows signs
that something is wrong, although the yields have kept
up to tiuir average. Some one invariably learns of the
clianged circumsiances of the property, and lie gets rich
at the expense of others. Is this good for the industry?
It may he said that a study of the assay plans will co'i-
vey the fact of the falling oft in the grade of ore. But
we in \ ictoria do not have assay plans, and even if wc
had, the ordiniiry shareholder, like the mine manager,
hopes that pay-dirt n.ay again Itc entered. As it is. how-
ever, the practice of keeping gold reserves has been
practically abandoned here. And it is an answer to
those who think tliat stocks would depreciate if yields
were to fluctuate, that some of the most stable shares in
the bullion market are those where no gold reserve is
maintained. Shareholders are educated to know that
thev must expect variations in yield. All they want to
l)e told is, that the mine is opened up well ahead of the
jiicks, and that the average value of the ihrt is main-
tained. Then they are not alarmed by poo*- patches.
One point touched upon in the evidence given ijefore
the royal commission deserves attention. Managers
stateil th.it thev wduhl not tell a .^harebolder the amount
nf the reserve if he made an inc)ulry on the point. The
\ietniiaii L ompanies .\ct provides that in a mif.ing
company a shareholder or a creditor can demand, and
MIXfi RliSliRn-lS
341
must be supplied witli, tlirt'c iiKintlis' accounts from tin."
hoard. Just sec the position tlie directtjrs would be in if.
while telling tiiat the debts were S(j nuich and the assets
so much, they oniitttd to state that there were so many
ounces of i^old held in reserve. Should the shareholder
sell on the statement and tlie scrip rise, he could recover
against them for furnishing a false return. If he held,
and shares declined, he would still be in tlie same strong
position. It is the dut;. oi the directors to know if a
gold reserve exi>ts, and still more is i; tlieir dntv to
know how it is used. W'itl: this information in their
haTids, they have no right to refuse to tell a partner-
that is, a fellow shareholder — how the reserve stands.
( )nly under certain cmditions can a gold reserve
at a mine owned by a company be justified, (i) T!iat it
shall be ke])t with the fidl knowledge and consent of the
shareholders. (2) That every monthlv yield shall be re-
corded truthfully — say, 10.000 tons for S,25o nz.; taken
from reserve. 1.750 oz.; total return. 10,000 oz., if the
average to be kept up is an ounce. (3) That the extent
of the reserve then started shall be disclosed; and (4)
that every month the uithdrawais from it, or the addi-
tions to it, shall be stated. Then the nrdinary shareholder
will know lunv he stands, and as he is the backbone of
the industry, it is to everyone's interest that he shall not
he deceived, and so be led to withdraw his support from
''■ F. H I5ATHUKST.
Melbourne, \'ictoria. Jan. 21. 1905.
THE COST OF MINING
(.Marcn g, iy'*5-t
riic Editor:
SiK — Mr. liipalls' tiiiuly article on the above subject
calls attention, not only to the desiral)ility of uniforni
methods of keei)iii,L,'^ mine costs, but also to the publica-
tion of itemized statements of costs. On the latter point
tluro is much ditTerence of opinion.
There should be nu difference of opinion regarding
which enters into tlie cost oi mining. Nothing short of
the total cost can be correct, and anything less is, to say
the least, misleading. No n'.atter how the costs may be
divided up or distributed, the net profit per ton deducted
from the market value equals the cost of mining, or, as
Mr. Ingalls puts it, X — Y = A.
The tabulated costs quoted by Mr. Ingalls, and ad-
mitted imperfect, are simply ex parte statements. No
charge is shown for maintenance of plant, taxes, insur-
ance and many other items of substantial expense in-
separable from ordinary mining operations.
Here is a more complete statement, taken from the
balance sheet of another Cripple Creek property (Mining
Reporter, December 8, 1904 j. and which, 1 presume, rej)-
resents English methutls ;
Ccst for Year Ending June jo, 1904.
RlockipR out ore. etc $4-1.31
Ore breakiiii; 5, 182
I inihcrinj,' 0744
riimpiiig o.y.i.i
Hoisting and tramming I-4*>9
drc scirliMj; am! loading o.'X)8
(kMieral lighting o. II2
.Surveying o.oXo
Mine saiiipliiiK O.oCK)
W'aiies of foreman, etc O.265
Watchman o. 134
$13.7-34"
Tim COST OF MIXIXG 343
R(•||,■ll^^ and iinprovcincnts Id huiIdiiiKs atid plants $o .280
Sliippiii>; and M'llin^ (irf. --anipliMK and assaying n i7i».<
Salaries of i-nnsnltniK fiiginc-cr and manaj^cr o S<^_>3
Salaries cd clerks on.^',?
Auditing fees and -xpenses " 0J44
Assay plans o o,?(>4
Travi'luiH expenses n.0050
I'.Nploitation expenses (i 0770
Insurance o. 14(14
Taxes (less adjustment) <> I'xM
Compensation, etc., cage accidents o J50J
Strike expenses 0.0S75
l.e^al expenses o.nj$j
Loss on cottages o ni 10
Miscellaneous o.07.?o
Total $J..?io
Freight and Ire.alnient on 4,1,758 ton*; $7-74.<
London otVice expenses, including $5,178.80 for a special
report on the mine O.51J
Total cost $24,290
A gddd sy.steni of co.st keeping^, not ncccs.sarily an
elaborate one, is an essential requirement of any well-
managed mine, nevertheless it is very often, throngh
faulty methods or tediously minute classifications, a mat-
ter of eonsiderahle expe-.se. When the ordinary shift
bosses arc overloaded with cost keeping or cost dis-
tribution methods the general work suffers, and the cost
of breaking rock goes up, as it were, in an eflfort to keep
it down. In other words, while the foremen or bosses
are endeavoring^ to find out how many nails, caps and
candles are consumed in breaking a ton of rock in one
slope, the men may be idling in another.
The minute elaboration of mine costs is largely acad-
emic — the result, perhaps, of autocratic mine manage-
ment with lledgelings itistead. of experienced birds in
charge of the operations. The autocrat, seated in his
nt^cc chair at some financial center, in his endeavor to
direct the operation of some score or more mines, often
, attaches undue importance to mere items of cost (which
are seldom strictly comparable for any two mines') and
344
rill- ECOXOMICS (>/•• MIMXG
pays litilc if any aitcnti. n w \hv practical minin.i,' ability
of those ill cliaij;c ul the npcratums. Should not the
ability to discover ore. or even not to lose it, when
discovered, rank fully as hi,L,h as mere cost of prodr.--
tion? 'Idle most elaborate cost system ever devised u.d
never successfully displace mining skill acfjuired by
years of close, intelligent observation and experience
in actual mining work. I have known mines where the
cost of producing and milling or marketing a ton of
ore was steadily lowered by one expedient (jr another;
but somehow, before the total cost readied a miiuis
quantity profits vanished, the stockholders kicked, or
something else happened, a strike, like as nut, and the
mine was eventually leased, with results entirely satis-
factory to the stockholders.
We have, here in Colorado, scores of cases where
lessees (practical and experienced miners) have taken u\)
unprofitable and practically abandoned mines, made
them pay handsomely, and turned them over at the
ex[)iration of their leases in condition where even the
Rodomont autocrat could for some time work them
profitably from his observation point, perhaps tliousands
of miles distant from the field of operation. Xovv,
lessees do not depend on any vlaboration of mining costs
to secure these results, but rely almost entirelv on their
ability as miners and on their practical experience, which
has taught them that mining is the an of inakiiii^ iiioiwx
from ore deposits; that the co>t per ton is only one
factor; and that bi caking the ore as free as possible
from waste, and properly sorting it. is often of more im-
portance, for the reason that, while it increases the cost
of raising a ton of ore, it also increases the net profit of
the operation, which should be the oljjective point in
mining. Therefore, I hold, the successful miner in anv
given mine is he zclio returns the lor.;est f^ereeutcii^e of
profit from the gross z'aliie of the ore, not necessarily
THE COST OF MIMXG
343
the one who can shuw ilic lnwi-st mininfj cost. To reach
this (lesira'le condiiinn, ihe cost ni minms^ or snieltin<;
must he sti.ilii'd, tn<;ciher with the cost of the actual niin-
in<x and sorting: or drcssini;- of the ore; hence these
charf:;cs, very jiroperly ijrouped separatel) in the itemized
costs, are hrouL^ht toL^ellier lo form ihe toi.d mininjj; cost
as previoush defined.
I favor a simple s\>tem of cost keepiny^. where the dis-
tnt)ution of sU]iplies, etc.. is made (hreci from the mine
store, on the orders of the superiiUeiident or shift bosses.
and they are cliar.L;ed at oiue to tiie particuhir phice or
work indie ;ted.
The f^eniTal suhihvisions of mine costs that su!;i,'est
themselves are: (I) Wiimin^ ( hlockini;: out ore). (2)
stopin,cf the ore, ( .^ ) dressintj or luilliui^f or smelting the
ore, the sum of these hein;,,' the entire cost of producin^j
and disfiosin.q' of one ton of ore, provided alu.i\s. the
amount won durinij the period under review e(iuals the
amount of ore stoped, otherwise corrections mu-t he
made for increased or ilecreased ore reserves; or, at least,
the condition of the ore reserves should he clearlv stated.
The averaj,'e stockholder is satisfied with the totals as
above, together with the value of the ore and profit per
ton, or the usual balance slieet and profit and loss state-
ment. Then why bewilder him with itemized statements
of costs? I'seful and indispensable thourrh they mav be
to the management, tliey are as invariably useless to
stockholders.
The matter of piililishing itemized mining costs is one
that mining companies do not. as a rule. apprn\c. As
the president of a large conipnn\- once said to me. "ft is
our private business, and why should we give it to the
world to satisfy the curious, or help educate \oiing min-
ing engineers who have not had jiractical experience
along those lines, or to furnish ammunition for the stock-
holders to make erroneous comparisons between two
346 TUL. LCUXOMICS 01- MISISC,
mines of piihaps vci> ditfcrciit type?" ThrDUKlinut the
Rocky Miiiiiitain rci^icm tlu' ;ivcTaj;c mining companies
have <lealiiif,'s with tlie railways and ^melters in marketin^j
tlieir ores, and, ri.t^htly or wrongly, very often heheve that
these corporations are anxious to secure as ln^h a taniT
as thev lielieve the ore will stand; antl so, in places :is
far apart as I'.ritish Columhia and the San Juan, and
once in ( )ld Mexico, I have at various times heard niine-
(.wners say soniethini; like this: "Why should we puh-
lish the itemized costs of producing a ton of marketahlc
nre? Neither the railroads nor the smelters puhlish
itemized costs for liaulius or for smelting a ton of ore.
and, furthermore, we do not iR'lieve that it costs the rail-
wav corjxirations any more to haul a ton of $50 ore than
it would to move a ton of $15 ore over the same distance,
and yet the charfje is often douhle. And so with the
smelters, the charges on some ores are based simply on
their precious metal value."
.\ full discussion of the various methods of classifyinjj
mine costs mav. and 1 hope will, result in the gradual
adoption of a uniform system, from which tentative com-
parisons can readilv he made between mines of similar
type. etc. ; but under the present economic conditions that
obtain in the West, the c;rcat majority of mining com-
panies will, as now, refrain from publishing itemized
statements of costs. Philip Arc.m.l.
Depver, December 12, 1904.
THE COST OF MINING
(Mar
J}. 11105)
The Editor:
Siu — I'lu' sriipf (if such a disi-ussiou is tuci-ssarily
wide, liut ill tlic fiillnw iiit,' I shall t. nfinc myself to clt-
laiii fuiiilaiiKiitals, ratlur than to a cniiijjarison of ex-
amples. An 'iiti-lli^eiU stiuly of mining; costs must he
prcccdcil hy a analysis of the various items .i;"'"R t"
make r.]) the total, in order to obtain a sej^rcfjation that
shall he lofjical and useful. Such items as Mr. Int;;alls
j^ives m his lirief tabulation are certainly useful, but they
do not \irl(l the whole, or even the larger part, of the
value tiiat the tifjures in themselves contain. This, I un-
derstand, Mr. lnj:;alls recoj^nizcs, and 1 have no doubt
that he will fully in<lorse tlie statement that a classifica-
tion in this form may conceal cietails of the first impor-
tance to the engineer.
In the first place, it is ])ertinent to infpn're. What are
the uses to which accountiufj; lends itself? There is the
obvious use of su])plyintj a business need ; of fjivinp to
the stockholders, present and pros])ective. a reliable idea
of what the property can do in the way of profits; and.
in general, how it is managed, though it must be admitted
that comparisons of cost in this way may be misleading.
In fact, they are chiefly valuable in raising iii'-Hiirics that
only a more logical segregation can answer. These com-
mercial accounts will naturally fall under obvious and
simple heads, presenting what would be, from tlie engi-
neer's point of view, mere summaries of the more ex-
tended subdivisions which are technically tisefid : and it is
the logical basis for these technical accomits which par-
ticularly concerns this discussion.
This basis mav be simply a cutting of expenditure into
small items, as is the case in Mr. Ingalls' table. Fre-
([uently this is all that is done, ant! the valuable intor-
348
////- i:CO.\UMUS Ol' MIMXG
iiiatMii alhmk"! i- fnii-.i(liTi(l tin- end dt tlu- !)u>mcss.
r.ui iluTc is mure to Ik -aiiui ■. an these tij,^iircs diiiclly
KHc: and. witli tlii> f.,, t in situ, it i- unrtli ci n>idcrint;
wliat t i.s iMi wliicli till' ciii^incrr really lias use. As
managfr. he ui.-hes in i-Miiipar> his acenunts. ni< nth hy
niniiih .111.1 \ear hy _\ ear, lioiii with theni.sclvcs and al.-,o
with thi >e ni dtl.^r n:nie>. as a i heek npnn operation and
for siif;^'esti( n ni iinproveiiient : >m far a> this .i^oes, tlie
items, as ^riv n lurewith, answer fairly, lint he uislus
also to know hou ,(.sts will k' altered hy ehan^'e i:: ton-
naf,'e. 1 hi> i- a matter of inipnrtanee. fur the mine nian-
a!,aT a.s well ,is t,ir the examinrit; eii.^ineer; it is imper-
fi. tly j,Mven 1>\ muI: a -ystetn, e.xeept for those divi-ions
which are direct fnncti.ms of tonii tije. Som- aceonnts
are not fiuu-tii ik of tonnaL;' at all. -ueli as superinten-
deii-e, ottiee- and tax. -: Mtlurs are ndt pro[jortional fiine-
lions, sncli a< pnmpinj,'. h.oistinj;; there is a long list of
snch ace'iunts.
1 hen lioth the niana.q:er and the examining engineer
need a di\i-ion: this -'i.iuld rec gni/<: aoeoinils: (A)
that are iiidep< lulent m1, and ( 1', ) those that are dependent
on. tonn;i-e ; that i>. ( .\ I w'lere the total- for a period
do not alter with variation in tonnage, and (LI) where
they do >o alter. I uriher, under ( .\ ) there are some
(Ai) accounts that are practically con>'ant, such a.s
superintendence and tuanageinent. and others (Aj) that,
while uideiK-ndetit of •onnage, are variahle. such as those
thai alter with chan,i;e of sea-"n_ travehn.g e.x])cnse, etc.
In close estimates it will help to have these known sep-
arately. (11) also has two natural suhdivisions : (i!i)
where tot, , ,ire vir'.n.dly direci functions of tonnage,
and (112) where totals are indirect functions of tonnage;
that is, they alter with tonnage, hut not proportionatelv.
i-'.xamples i.f (111) arc "stoping" and ■tramming'; (B2")
includes development, which varies according to condi-
tions of mill, and oreiuHlies ; also certain repairs.
w
THE COST or Ml \ ISC,
%\'.\
TJicro is am villi r l.irpe class of accuuiits. iiaiin-ly. those
aildiiions to pi.uil, f(|nipmciit ari'I ripaii- that will tiiakf.'
thcni--olvcs flit (uiT (■.xtcti'K'il piTJi-ils; in ntluT words,
'capital t'X|Hiiilii n -.' Thf-o -hniilil Ik- ri'liiiiK-d hy
• harj^i's against npiTaiiiii; expenses over varying; periods
Whatever niav he the liusituss policy of chari^iti;,,' thesi
nfT, there can he -iiuill i|iustioii that the accurate logical
treatment for the en,L;ineer i-; tn coiisiiler theni as a part
of his operatinijf expense, month hy month. Xo estimate
of cost wliich nnt^hlv assnmes that such txpcnditures
will e(inalize them-elves will i)e fair; if they are not put
into 'wnrkinp co>t' there is always the dan^'er that they
will he n\erl'^)keil entirely in makini:^ estimates. A
division of expenditure on these lines can l)e carried out
to any extent of itemization, and will ^ive a system of
technical accounts that w dl furnish all the data desired.
In ^tudyinp the prMhiem of a proper segregation, it
will he seen that none of the adv.uitapes of the more
coiiimon systems oi plain snhdivision will he lost : the
basis IS applicahle to the smallest as well as to the largest
mines; the degree of snhdivision can he extended, as
easilv as in an\ other systein, to any degree of minute-
ness demanded.
In the foregoing T have aimed to outline a familiar
principle ; it is so well estahlishcd that a large part of the
recent discussion in this Jot'RN.M, on 'Mine Equipment
and Ore Reser\-es' hinges upon it. TTowever, though the
principle is not new in practice, so far as I know, hefore
the fliscussion referred to. it had not been hrought out in
r'"'"*- R. Gii.M.vN Brown.
.'^an Francisco, March i, 1905.
TUt COST OF ivVaING
The Ldtior:
Sjk_1„ proposing; tlii> miruatr sul.ici-t. Mr lu^M^
has pavi'tl tlic wmv h<r .m ;ilni"st iinliiiiiU.l iiitiTiluinm
of i(lca> upon ar, imi"irtani, l)Ut lu-l.vtol. l.raiidi ni mm-
iIlJ,^ .\> Mr. Imlas lias s,, uill put il, '■Hie p'oblciu nf
tk'cidmt; uih.ii iIk- l.c-t nu't'uids, tlu' proper scale of opera
tions aiul the ni.-l (k-irahle working cost to he iiiiied at.
is one hiir eii.iUL;h for the he-^t business intelh^^enei that a
mininjj: en:j;;iieer can iinister.
The Mihjeet involves a phase of mining' coneirnin^
which not aloiu the newly t^radiiateil mining' eni;iiieer
lacks knowledge: it inclndes pn.hleni> and coiiditioio
whicli many enL;ineers of loiij,' experience have not had
the K"'"l fortune to incounler. To obtain reliable a: d
well sej;re«atetl ti^ures pertaining' to woikiu^' costs from
the avera,^e mine, this is oue of the most ditVicult tasks
which the en^Miuer can undertake; unlike the other fac-
tors tliat contribute to mine valuation, the necessary data
can be obtained only from written records.
I cannot miderstand why so many mininp; companies
continue to practice such wasteful brevity. It is a fact
that, in most cases where such method is practiced, not
only the officers of the company, but their servants also,
unconsciously fail in possessing and preserving an ade-
quate knowledge of their true conditions In estimating
the value of a mine it i.^ impossible to separate this fac-
tor of 'working cost'; nevertheless, we often read mining
reports in which the author may have accurately applied
every known principle in estimating the ore reserves, and
yet, for want of projier data, he may decline to hazard an
estimate of the working costs. The working cost is to
mine valuation, what width is to the assay-value of a
givin vein.
)
itii
T'li: COST Oh V/\7V(7 ",",1
It (l(.<s not appt'.ir Im I.r a .lirtuult ta-k m standardi/i-
ilif Iira<lii!i,'s t(. 1k' iiM.l in till- tnial classifuation ..f inin-
ini,' rests, sin-li as niniii.i^', tra.,i|-.iint,'. ln.i^titiL,'. surlini;.
cnisliint:. ai,.l s(. on. foll.iwin^; thr (lilTcnni prm-issi'S
n->.l in t..r trratinr.it of tlic ( re; I'nt to settle iii"'" a nni-
f,,rin tnelliod of setjre.sjiatinf; the itenis eontnhntin- to
tlusf aivonnts. and a eorrect distrilmfinn of tlie nio,ie\.
(■x(H'ii(le(l. tills is a snlijrct which sliotiid elicit iiiforma-
tidti Imtl- interestinir and instnictivc. l"or. no matter
wh.it the svstein '>i time k.'eiiinL,' mav he (wlthii, ecnnninic
limits K there are certain innnevs which must he (hs-
trilniled uithont the assistance nf detailed record. ^
Workini: costs will contimie to show variations, in the
same districts, midcr the same conditions of vein- width,
capacitv. etc . hecanse engineers, like other in-ople. differ
in their views oi application; hut. nevertheless, there are
certain rtindamental jirinc'ples to he uhserved. Ff uni-
formity : re<;arded in mine statements (which retlect the
local conditions'), a desire to efTect lei^itimate ccnnomv
will he created, and inferior methods will soon he elimi-
nated. .As a concrete example, in illustration of the
methods sometimes applied in the seprctration of accou, ts,
where millini: and cvanidation onlv are omjiloved. the
followinsj will serve; the final summarv is ijivcn first, in
order to elucidate some points more clearlv .
,S'i()iii?!(irj'
Tii-t Percent-
Total C.St. r.r T,.ii. age.
MiMitic; $I2S.787.W S,^.^8 45. 54
Tr;uisport ..f ore ^.^S7 1^ "■'" '••^^'
=;ortiii« and cnisliiiit; 8.6.',:;, .U O.J2 .^.^"^
\h\\uvr .^8.06v87 1. 02 l-'.x.
Cvaiiichtion .14..-^ U o .p
r,n!,l re.ili'.itic.n 4."i.' ^■' " '" '■^-
C'lier.il rli:,rccs 2J.0X7 <J^ ^ S7 7 , ^
OfTirc expenses 0.,'''7/'O "^4 .1 .1-
Devehninient M-ileniptinn .V'.45'ai 0.S4 tti
dX'preriMtion - 1
Total $.>8...6oi M $7.42
::o2 Tim LCOXOMICS 01- ML\'L\G
In order tu make the above suiiiniary valuable, and
comparison possible, it is necessary to know what con-
iribmes to the several accounts. This is shown, in case
nf mining,' for example, u> be as follows:
Mining. „
Coet Pcrcinl
Tuial e..^I. IVt I"I1. aK>-.
Salaries ;?4.4t>-'.f« $o.il() .?.4')
Wants (skillc(l) IJ.01.S..S4 C)..5l5 9^4
Cmlractors io.i.p.S.S ().-'«) 7 ■>*)
Want's (uii^killcd) J().-5' .^ 0.700 20. ,^
l\,o.l .<uS.-<9.8. 0...S0 8.4'-
Stores .?.7i'J " o '^J*^ 2.S.S
ICxplosucs l--.J3j,J.) . ;-'0 9.49
Charcoal H 4" "OOI 0.0.,
Fuel (timber) 47,S.75 o.oi-> O..!')
Maintenance -',5<J0.7(> o.o(^ 2.0:1
Workshops .^i;.74 o.ojr o.U.l
Tran-port -'.?5 'M "O^' " ''^
Hospital 5.W.7O 0.014 0,42
l.ahnr prtminms -'jo.l^ o.ooo 0.19
I'nnipmw 10.SO7.7O 0.-..S.S «.44
Conipoun.l expenses .y'20.'i,S o.cvjo 2..S
Compressor charnes (>.'„?"« o 0'(> o^'>
Mannfacturinn ;uui sharpening
li.uul drills «.>-^J 17 o._'JO ()o'J
Hoisting S7'>-Ml "■'4'^ 4 4-'
UiulerKronn.l traniinini; I,?,040 ()5 o..?3« 10. Os
AsaviiiK' '>^'■'-^ "■"-■'.; "'1
Snrveynm an. 1 sampling; ^2l.^i o OO^ " -3
Totals $128,787 'kS $.?..^8
.\ numb'-r of the accounts L;iven herewith, such as
m;iiiuenai'ce, iiuinpiii.i;, uiule. ofouiul tranmiiii^j, manu-
facturing and >har])eninK drills. rc(|uire aoai:' to be sub-
divided, becaus" tluy in turn contain important factors;
with all this ihe (|uestion arises: 'lo what extent does n
pay to set, 1- 'gate mining accounts: The remaining items
— sti'res, w.i^es. salaries, fuel, etc.— carry us liack to the
tit"ekeeper\s and the stnreinairs records. It appears to me
that with the details a^ -iveii herewith, when accoiripamed
by a correct ilis.tribution and a knowledge of the local
conditions, the engineer should be fortified with materi:d
sutVicie'ii to direct the work ettectively and to compile
reliable fi 'recasts.
THE COST OF MIXING
r?53
Prolialily one of llic iiinst irmilik'siiim' accounts to deal
with, especially in cases where the shares are quoted on
tlie market, is •developnieiit.' to which is charged the
nienev expv'nded in openinsj; up the ore-hcarintj; ground,
hefore and after the reduction of ore lias hcgun. The
commnn interpretation of the term makes it include all
operations (such as driving, cross-cutting, sinking — ex-
clusive of V. ain shafts— raising, hauling, sampling, assay-
ing, survcuig and handling the barren ground) which
result in the opening up of ore.
rp to the time when milling begins, we will assume
that $50,000 has been expended ui)on development work,
and it is estimated that 100,000 tons of ore have been
developed, hence an obligation of o.^c. per ton has been
created; but a part of this money has contributed toward
the partial exjiosure of other tonnage, which, however,
c;innot be accurately estimated. In order to arrive at the
cost per ton of the developed ore, the measurements taken
underground are used, while the monjv sjient is redeemetl
upon the basis of the tons milled. These two figures
seldom, if ever, agree; and, while the s --ted product will
account for a part of the discrepancy, there are always
large dilTereiices between the tonnages as measured un-
derground and the combinetl total of tons milled and
sorted.
In addition to this consideration, there are ninnthly
expenditures on account of devekipment work. 1 he
cost of develoimient per ton over any period, as one
month, depends upon the width of the vein encountered,
the relative jiosition of orebodies. labor conditions, etc.,
during that period ; thus if devi lojuncnt costs are chargeil
t() the current-month expense, wild thictuation will occur
in the working costs. Such irregv'arities create a feeling
of uncertaintv, which might he followed by forced sales
of the shares and conse(]Uent depreciation, a 'csult not
tolerated in sonic mining center.-..
jS
354
illL ECOXOMICS 01- MINING
Ucl'iirc the rc'diK-tinii of urc has hct^un, the cost of dc-
velupiiig a certain tuiiiia^e is far jjreater than at any
other ixriod, liecause administration and other constant
charges nnist he wliolly carried hy this account; lience it
seems only fair that certain adjustments sliould he mad.-
in rede •'■". ,^ this expencHture, otherwise the present
shareiu.uiers hecome unduly taxed for the benefit of
future hoUkrs. In some instances the expenditure, on ac-
count of developineiU up to the time milling begins, is
charged to 'capital account," and written off in the same
manner as machiiujry, reservoirs, or other permanent
e(iuipme-it ; in such a case only the current-month expense
is charged to vorking costs.
Another method of discharging this obligation is by
creating a 'suspense account, ' by charging the develop-
ment expenses to the reduction stage, and the excess de-
vekjpment for each month thereafter to this account.
Then a fixed charge is made monthly for development,
and the 'suspense' account is wriiten off in annual suut^,
which are measured by the work of the previous year.
This method eenis to give satisfactory results.
it is desirai)le that the methods of distribution be re-
fl'H-ted in a statement of working costs, accompanied by
the application of certain definite principles. 'Capital'
account is generally elastic and often much abused. The
items usually charged to this, such as machinery and
plant, buildings, main shafts, etc., arc suppose(' to cover
expcnd'tnres on |)ermanent work and eiiuipinent. If the
conditions are such that the life of the enterprise can be
calculated accurately, the treatment of this account is
simple, and the '-apital can tx> amortized at a cert.iin com-
puted rate of interest. If this account be not embodied in
a statenT"*- "f working costs, nor referred to therein,
effective '<' in mine equipnunt is not retlected. llem-e.
for this anu for other less weighty reasons, it would seem
important that a certain life be assumed, or other meas-
TifR COST OF MIMXG
355
iircs t;'kcii uluTi'liy the nimuNS nii^lit l)i" rcilccnud upon
a fixt'd basis, witlidiif iTcatintj .'in iniilul\ hiavv chrir^c.
A (lisi-iission thai will cnmhict.' tmvanl standardization
of mining; costs, as well as toward method in otluT dcpart-
nunts, will prove of invaluable service, botli to the entji-
neer and the investor.
i'". C. KoBIiRT.S,
Berkeley, Cal., March 7, 1905.
COST OF CHLORINATING CRIPPLE
CHEEK URES
Bv I'liu."' Aiu..\i.L.
(April -. . 1905.)
The special report on ilif 1 ipiralions of the rortland
nimij ami i.ull durin.i; the year 1904, reeeiitly issued IjV the
president < i the I'ortlaiKl (jdlu Miiiinj; Loiiipaiiy. gives
11- for he tirsl time, an (ipportuiiity oi aiial_\zm.g and e>ti-
iiiatm^ die total e-ost "f ehlnriiiating Cripple Creek (jre
in a modern niill.
During the year f.nd' r review, the I'c uland (.jokl Min-
ing C oinpanv treated 111 its Cnlnrado City mill 88,997.44
tdiis of ore, averaging $-'4,257 pet tun. 1 he mill \.as
creilited with earning a trealment charge cjf $<j_'3,J53.o3
11 handling this ore, which amounts to $7,003 per inn;
the profit on the \ ear's nperatun ;;f the null is said t(j be
$153,1X33. 73, or $1.7285 per l(,ni tieated; by deducting
the latter aniomit from the treatment charge, wc find the
cost of ni,iiiiig :\ V>M of (ire, including metal lo,s. is
$5. -'745. 'I here is a heading doss by < .\iraction,' a 1 that
must me, ill metal loss, $105.95141, which auKjUiits to
•'^i'9"5 I"-''" '"'1 treated, Iroin winch it appears that the
hook cnst "I chlorinating a tmi of ore during the past
year was $4,084, exclusive of amortization and interest
on the capital u.--ed in die i)U.siness. The method of keep-
ing the accounts is somewhat peculiar, and evidently de-
signed to compare the result of niUing the Portland ore
in the I'nrtland mill, against selling tiu ore to the cus-
Inm milU; thi-. at least. w<uild account for the peculiar
s\>tem 'if ;il!. luing the mill $7 per ton fc ." treating the
ore, and 1 .~hall ir\ to make i\\\> CMinparison.
'rurning t" the treasurer's balance sliei.t, it is possible
t'l trace nut ])rettv closeK die itein^ ^f the aliove cost, hut
I niak.' it \erv nearly loc, ]iei- ton nn.re, which would be
almost balanced by the 'treating concentrates' item, or
COST or ciii.oRix.rrixc
X
tlu'.'c mav 111' scinu' credit ik t apprircnt nn thu balance
sIkl! llial iiIImIs llii> ixli.' \o i:v\\\.>.
Total
Kxpt'iisc.
nnllinn oxi)cti>ie $7.Ckx).W)
IrcitiiiR Cdiu-fiitr.-it S..i().i.(jj
i. )pcratiiiK accuiint I J5,()75 . -'7
Clicinic:ils ()<j,45l.(M
A'Jsay supplies 5,,i()j.2i
Stdie room aecoinit 4.i.*i75 i^
Fuel (mnstiiiK and ilryinj^ (Uily) 3** f'.f? 4^
Power (electric ) jfi,,V)5 02
(jeue'al expenses u, i .so . ()5
LcKa'i expenses io,7()< 31
Office expr-isc^ (i.fx;<i 07
Office tiirnitiire ( lixtiires ) ?<<>). ,vS
Repairs 44-'. 'X>
Treating by-proilncts l(),4'),i.20
Cost
IVr r..!,.
$o.oJ<55
O.0<),?.S
I .4!-I
o 7S04
o . f/xi J
o 41/37
o 4-'S5
O , ->Q<)6
0.1,5117
o 075J
01(H5
O.OOSO
cS,S.()<)7 44 tiins^a $4. iSoj = $.37^.091 .48 or $4.1809
III audition in tlie fiircp;nin<;; amounts tlure is a charge
(if $-'",079. 51; to Kitiipnitnt' atid S3 3 560.76 to 'construc-
tion.'
As tin- mill ha- liecn in operation several years it is
difficult to understand the furtiier rliari^a- for etiuipmcnt.
in addition to a hcavv construction char<j;e : in t'le matter
of repairs, liowcver. the palm is conceded to tiw Portland
mill, unless perchance the cost of repairs is hidden in the
"storehouse' and operatins; accounts.
To cottipare intellit;ently the above costs with the rates
char.Ljed for treating; ore by tlie custom chiorination mills,
\vc must inclii.le amortization and the ca])ital involved in
the business. It is well known that the custon; mills pay
for the ore .as it is sampled, and .arry a larye stock of ore
on hand, usually a month's run. Therefore, we must
charge to the PortK-n ! .nill the interest on the capital
locked up in ore. bullion, stores, etc., and I shall assume
the followini,'^ :
Ore. ,1.000 tons $50,000
'^tore ,1o.o<K)
r.i.llion .-md iinM in vohuuiii. He 40.000
Workint; e.ipital ,^0,000
Total $150,000
i'
\\.s
I'ii
358 77//- liCO.\UMlLS Ot- MIS ISC,
'I'lis at MS will i'(|ual o. 1,550. per loii ui ..r' treated.
Suiuniaruir.^^ tlu^e tii;iires we have the fcilluwing:
Cost of cliliiruuitiiig (liDok cost) $4,084
IntiTc-^t nil capital iiivotfij 111 tlie buMiic^s o. i.lj
Ainorti/atiuil. ;.ay O.701
Metal lo^, ''90
Total $0. l(>)
It wniil.l appear that the s^nld in the (ire i- l-illed to the
I'ortland null at $ju per nz. ithe priee paid by the ctistuiii
mills), less $7 per t.m treatiiuiu chari^e, so we are now
in position to make a lair cMiiiparisoii between the Port-
land mill and the ■.ustoin milN in the matter of total cost
of ehhjrinatiiii^ (.ripple I reek ore. .\> noted in tliis
jot k.N.M. tor Deeember Ji.i. l<)o4. p. lojj, the rate ehar^ed
by the eiistom mills on ore vary ins,' "■'"" '-'5 '" '-5 '-^^■■
of gold is 'S'7~S P^T '' "■ li^'^^ ^' P'-''' ^'""^ "" l"">;-tinic con-
tracts, so oil the latter liasis C^^hJl) it eaniiot lie said
that the charge of the ctistom chlorination mills is too
high: thev have a large amount of cajiital invested in
tlu'ir plants and are entitled to a good interest on the in-
vestment, considering the eiihemeral nature of tli: busi-
ness they are engaged in.
i am plea-ed to see continued improvements in the
chlorination process. ;is shown in the following extract
from the report <if the superintendent <if the Portland
mill: ■■\\t have inaugurated a -vstem of saving the values
in wash-water from the barrels, which has heretofore
run down the creek, and now saves the comi)any thou-
sands of dollars each vear."
COST OF MINING AND MILLING
UV R. J. < iWAN r.
The detailed expenditure t<i he discussed refers to oper-
ations at the t"osinii]X)Htan mine, situated at Kuukynie,
in Western Aiistraha. I'he figures are those for Sepiein-
h(T. iix>4- I' sliouhl l>e added tliat the CosntopoHtan is
ahi lit 5UO miles from tiie coast, and uo miles northeast
from Kalf^ooriie. on the ,i;overnment railway.
It is one of the many companies in Western Australia
under the management of Messrs. Bewick, Morcing &
C(>nii)any ft was taken over by tlieni in the latter pai^
of ii;(U, with II. .\. Shi])nian as mine manager. .At that
time th.> costs were about -S'l/S Jier ton for mining and
milling. When Mr. Sliipman left, in May, np4, the
costs had been redu.ed to $2.95. The writer succeeded
^ir. Shipman. (.leorge (iill is un<lerground superinten-
dent, ;uitl .Alfred I'.huimfield is mill superintendent.
1 be C(^nditions are not all that might be desired for low
costs; the latxir (luestion is a serious one. and wages are
high for the class of wurkmen employd. The average
wai:e Tier ei^iit-iiour shift is .ibout $,^20: tins includes
all classes, ir-im $2.8=; per shift paid to truckers and shov-
elers, which is the lowest rate, to $4 per shift for machine
men working ni wet gfonnd. being the highest rate. l'>oth
machine men get the ."•;.me late : in c.tlur words, no helper
is recognized
'Supplies are all high., explosives costing 50'' more than
in .Xnurira. and other goods m proportion. Wood is used
for fuel, ;uid costs about $3.t'K> per cord, two cords being
e'|ual to one ton of average coal. .Mine water, which is
salt and conains i7' solid matter, is used for steam-
360
Till-. /-.COXOMUS ()!■ MIXfXG
iiiL: 'inil is a (.•niist.nit ixpciisi' Tlie coU of clcanint,'
li'ilcrs aloiu' is ovir i>,VX' V-'^ nioiilli.
I 1k' ore, or ■stom-,' as ii is called, is a jjlassy wliitc
(|iiartz, carryiiijj; a small amnuiit of iron pyritc. aiitl, at
prisi'iit, aixuit 7 (Km. -did per ton. TIk' 'reef lies at an
aii,L;li.' of 41 hftwi'cn li:u<l j^ranitc walls, and aviraf^cs
S It. in width, occasionallv rarr\iii^,' from 1 to 4 ft. of
waste in the eentir. .\11 ore in the sto])es lias to lie sliov-
eled, owini,^ to the flatness of the foot-wall. I'or the
month under report, the ore eame from the 700. Soo and
<jo()-ft. levels— hut ehietly fnni the (joo-ft. level. The
ore is trncked from the stojtes to liins at the shaft, and
lioiste<l from there in skips, holding: ahout _'.', tons eaeh,
to the surface, where it is duniptd into hins. It is run hy
{gravity over j^rizzjies into I'.lake crushers set to 1.1 in.
It is then hoisted 50 ft. and trucked to the mill hin^. The
mill contains 50 stamps, each \vei.i;hin.E^, when newlv shod.
l.0()0 11). The dro]) is S in., and the speed averages loO
drops per minute. The screens used are 20-mesh wire-
cloth, and the lieit^ht of dischart^e is from \ to j.l in. The
pulp ROCS from the stamps over copper ]>lates, u ft. loni.:,
then over 10 \\ilt1ey tahles to a tailin<,'- wheel, where it is
idevated 50 ft. and run into leachin<; vats, which are fitted
with distrihntors : here the sand settles, and is treated
with cyanide. Tlie sand residue is carried, hv trucking:
and hoistimj. to a dump (>o ft. hij;h. The slime runs hack
to spiizkasten, where it is settled; then it passes into ajji-
tation vats and is treated with a 0.077; cyanide
solution, and f^.lter-prcssed ; the overflow water is run
hack to the hattery and used atrain. The residue is
trucked to a mixer, where water is added, and afterward
pimiped to a dam.
The niininp and milling costs irchide everything; ex-
cept the London oflice expenditure, and cover taxes, in-
surance, .general mana;;er's salary, etc. All development
work m the mine is done on contract at the following
Mi.xi.w; .1X1) Mii.i.i.w, icsis :$<u
.•i\t r;i)4c luui's: l)rii't<. Si<>; en ps><-iiiIn. :>i2.50; rai.scs.
ijiK.jn ]nr It I lie (.1 •nlr.iiii .r p^llVl(|<■^ ;ill txplosivis ami
I'aiiillis, ,iii.l ililuiTs ilic I ir iiiiii the liiiis at tlii' main
■-lialt, llu- >niii|)aii\ t'liriu- hint; iiri!l<, ti"'K ami ix)\\cr.
rri'cipitatiim take-- plan- in "nliiiarv zmc Imxis; llu'
ck'aii-ii]) is ttKcti-il ii\ tin- ai'id UKtliiiil. '['hv ruastiiiL;
anil smi'ltin^ arr iji-m- in ilic usiial maniK-r
Tin- !^'i)l'1 i'- ixifartid :is fullnws:
Aiiialnatnatinii (hoxus ami plates) 61.55'^
(ciiu-cntralr In i-> ani-latiuM •''So"
S.iiul by rvani.l.itii'ii 14 50 "
Sliiiio liy oyaindatioi! and liltcr-pn ^■^IMK (1.00 "
Total extraction QO 55 "
Average value nf 'lieaiN' fi>r ninnlh 6 dwt. iS f,'r
Aver.ige value of residue^' fur niuiilh o ' 15 '
1 lu' cost (if tmninL; was as fdlows :
Per Ton Mine'l.
Labor and -alaries $o.4S
Explosives n.iosn
Caudles o nijs
Steel 0.0705
Sundry snpplie- o o<iio
Power for niaeliine drills o. i.vx)
Assaying and ^ainplnig o 01^5
Repairs and niaiiuenance o 04.10
(iencral expenses 0.0575
Proportion pumpin.s; o. I JJ5
Trucking and hoisting ore o. J,^5n
Timbering and lillmg slopes o. i.ioo
9,ig.^ tons $1 3555
The cost of iirillino; js t^ivcn in the tahle lielnw :
I'cr T..11 Mill.-. I
Rock-breaking $0 . o.^Sj
Ore transport, fmni crushers to mill-bins o.odiS
Rattery and |)Iates 0.4O<)_'
Concentrating 0.0340
Cyaniding concentrate o oj.^t)
Cyanidiug sand by pen . ilation o JJ54
Cyaniding slune by agitation o.oSSf,
Filler-pressing slime , o 077!)
Precipitation and smelting o o6<)S
Disposal of residue o 177S
9,ig3 tons $1 .20.50
362 TUB F.COSOMICS 01- MIMW:
1 he workini; cnst ptr .ut-i.il ton treated was a> t'lllnws
IVr l.in Millcil.
I.,ih(ir aiul salaries $o.«/)6
Power o 1750
Repairs ami lu.iiiileiMiice 00544
Assaying and ^anll)llll^{ 0.007^
(loiieral exiicnscs o.oioK
ymcksiher o 0070
Slioes ami dies 0.0358
Sundry supplies o oaS4
Total cost $0406^
C"iiCt'ittiati)ij; (157 tons Siived).
Labor and salaries ; $' ■^'94
I'ower 04^66
Repairs atul maintenance o. 1318
Ciencral expenses o 1466
Sundry supplies o. 0654
Total cost $1.9898
CwntiiUni; Coiicrnfyatc fl^j /^itit treated).
Labor and salaries $o.4-'86
Tower 00366
Assaying ° "-'f^
(1. niril exiieii^es 00406
Potassium cyanide " ~'^-
Total $1 3364
CviJiii./iii;' .V""(' h /''•'■'■ 'I"!'-'" C'T^'' tous)
I'tr T.iii Trcatcil.
Labor and salaries $0 04<j8
Tourr o,07J4
Repairs and maintenance 0.04J8
Assaying 00064
(lencral exinn^es o 0060
Potassium cyanide o.og.?6
Sundry supplies 0.00J4
Total cost $0.2734
CyaniJiiig SHiiic by .V^ilalioii (1.456 tons).
I'lT Tiiii Treated.
Labor and salaries $0.0906
Power 00308
Repairs and maintenance 0,0530
AssayiiiR 0.0J18
General expenses o 0106
Pot.i'-sinin cyanide o 3294
Sundry supplies o o_'2j
Total cost $0.5584
MIMXii .IXI> MII.I.I.W; COSTS :?";:5
I tllrr [rrssnii; Shut,- { 1,45') l''».0
IV> T.H, Tr. .it,,|
I.abiir ,inil s.il:iru"^ $0 ,V(W
I.iucr n ojii^i
Ropair-i ,ini| miiiitrnance o otd.'
Ciciier.il txpiMse* o (141H
Filter rldth O n?.?6
Siiivlrv -!i|iplics ooogj
Tntal .^.1 $0 4f/1J
l'r,\tritiili:>n iind Siiu-ltiiii; (y.IOJ 'c>i/.''>
Per Ton Trrati-d
l.ahor anil vilarit"; $0 ojn4
F^cpairs and maintriiance o nojj
A<;':ayinu n oo;i)
ieneral expenses o no.>4
Furl o 0(14(1
7inr <;havine<.. o ni iS
S'lliihiiric :>ci'i , n oijCi
Simdrv >npp!r< o ni)88
Total cost $o.o6<j«
i
MICROCOPY RESOLUTION TEST CHART
ANSI and ISO TEST CHART No 2
1.0
I.I
m jiiii 1 2.5
"'3 2
36
"III 2.2
1.8
'•25 III 1.4 i 1.6
^ A PPLIED \M/\(3E Inc
=1 -53 EosI Mom Slfisel
r-= -chesitr. New rofh .4609 USA
-= '6) *8i - 0300 - PHone
== '6) 288 - 5989 - Fa.
HOIST BY HIS OWN PETARD
(l-.iiil..nal, April J,-. i^-S •
A spaMii of exactitude has swept across the inininj^
world; 'ore-reserves' lias become a term of dreaded im-
port ; the younj; men have armed themselves with a bt)om-
eraiig and the old hands have been astonished into silence.
The canipais;n ior method in sampling;, for conscience in
estimating, and for science in final appraisal of mines has
succeeded beyond our expectation. Transmission of
ideas has been helped by the technical literature of the
profession, and now, like the undertow that meets the
oncoming surf, we are receiving the backward wave of
a discussion that has spent its force for g(jod. W'e are
threatened with virtues that have been exaggerated to
vices, and with methods that have been debased to a
fetich. The whole question of ore-reserves lias become
a state of mind; there is a palsy on judgment, an eclipse
of experience.
The milling engineer, who once used his brains with
cheerful ct)nfidence to formulate clear opinions regarding
the condition of a mine, now stands panic-stricken on the
edge of a difficulty from which he cannot retreat. From
enii)liasizing the care re(|uired in determining the com-
mercial value of ore, from the demand that the old happy-
go-lucky style of inspection shall no longer be tolerated,
from these and other efforts to ally science with experi-
ence, we have passed to that stage where engineers state
tonnages with fearsome minuteness and (piibble over as-
says of academic difference, until the last stroke of all
is the suggestion, in South .Africa, to 'audit ore reserves"
and app. lint a government-certilicated-ore-reserve-audi-
tor! In truth, it is time to pull up. West Australian
mining lias been suffering from this intoxication of
theory until it is recognized that each estiinate of the ore
blocked out in a mine must be more consirvative than the
HOIST BY ins oirx petard
oi).".
last. A variatidii wliich is no real difference becomes
a discrepancy; a capable engineer's work is stultified by
that of another cciually capaljle. simply because the two of
them do not sing a perfect duet of appraisal, and share-
lK)l(lers tremble every time a cablegram comes from the
mine manager. It has gone so far that the general condi-
tion of a mine, the metallurgical treatment of the ore, the
excellence of management, are of no avail when weighed
against the estimate of the ore in reserve: indeed, one
could maintain the shares of a mining company at a big
premium without producing an ounce of gold or paying
a pennv of dividend, if only at stated intervals some engi-
neer wiiuld ccrtifv that the ore-reserves had increased. In
South. .Africa the sampler looms almost bigger than the
consulting engineer, and in .America the Iinglish-owned
mines which are suffering from the same miasma are de-
.-cribed bv their engineers in terms which are so cautious
that, whether twice as much or half the amoimt of ore
stated should be eXLr;ii-teil. no censure would be possible.
In the old days they guessed twice and divided by two for
accuracy's sake : no\\ad;iys the engineer, more solicitous
for his own reputation than his client's welfare, hedge,
with providence anfl divides by two, so as to be safe. Min-
ing is being made ridiculous ; there is an idea that risk can
be eliminated, that shareholders can insist on supernatural
closeness of calculation, that engineers must save their
skins and that everyone nuist "get out from under" when
an orebody hafipens to misbehave.
And in all this, have we not lost the main point of
mining — what the old Cornish captains would call the
'sport' of it — the exercise of experienced judgment in
sizing up the present character and future prospects of
a mine? It appears so. We no longer buy a mine for
the chance of favorable development, the making of a
mine out of a prospect, or a bonanza out of a stniggling
hole-in-the-ground : we take no risks: we buv ore. — as if
i
1
i.
:!(;()
Tim r.coxoMics op mixing
by all the measuring and assaying and arithmetic \vc can
eliminate the essential risk of estimating what we do not
see, save at its edges. Sample and survey and calculate
all ycu please, and then, even if you face the facts like a
man and do not play tricks to avoid responsibility, you
still have only one-half — sometimes not even one-half —
of the essential problem. The future prospects of a mine
remain beyond the vision of a timid doctrinaire; to gauge
them fairly needs the ability to observe beyond the point
of the fii.K. and the honesty to weigh facts, to an extent
far be\ond the shifting compromise of a conservative
ore-reserver. It is time to get back to bedrock.
DREDGING AT OROVILLE*
By L. J. Hoiiu
(May 1 I. 1905 )
The averacje running; time of the boats varies a great
deal in dilicrent months and under ditiferent circum-
stances. A new boat will be able to make better running
time, as no serious breaks are likely to occur if it has been
made strong enough in the first place. A breakdown of
any magnitude, such as upper tumbler shaft, lower tum-
bler shaft or bucket line, will cut down the average run-
ning time. Where the boats are influenced by the stage
of the water in the river, high water may seriously ham-
per them at certain seasons, and last winter was an ex-
ceptionally severe one in this respect, high water occur-
ring as early as November, 1903, and being with us all
through February and March of 1904. To show an
extreme case I have taken a selected year in the run of a
boat exposed to the high water, so that the year contains
all the high water of last season.
Beside high water troubles, the bucket line was in bad
shape and broke frequently, the upper tumbler shaft broke
twice during the period under consideration, the lower
tumbler and its shaft had to be renewed, also the con-
veyor-belt, and, to cap the climax, the power was abnor-
mally unsteady and unreliable during most r f that year.
The nmning time of the boat, figuring on the basis of
365 days in the year and 24 hours to the day, was 16
hours out of 24. It may seem odd to call particular at-
tention to the fact that in this calculation the year is taken
as having 365 days and each day to have 24 hours, but
when you look over the records of some of the boats you
will find that some of the stoppages (such as high water,
holidays, etc.) are not counted on, the owner or manager
* Abstract from paper rcnH hefore the Thirteenth Annual Con-
vention of the Caliiomia Miners' Association, December, IQ04.
368 THE ECOXOMICS Of MINING
nrt^niin.c:^ that the dredpc should not be charged with any
dilay.s not orij;inatin,2: '" the dredge or its appurtenances.
The simple trutli that the dredge is not earning anytliing
when it is stopped, wlietiier sucli stoppage originates
within or without tlie dredge, and wliich fact finds ex-
pression on tlie balance sheet of the company at the end
of the year, is sufficient to show the fallacy of the
assuminion. Returning Xn the case under consideration, I
append a tabulated statement :
Causes of Stoi^pascs, in Per Cents.
Relting 1.3
Bucket line 2^.\
Linos breaking ami ciianging 4.8
Cleaning up 1.7
Conveyor 51
Flovating mac'.iinery 1,5
I'riclions and winches 2.5
Cioneral repairs 1.7
iligh water 15.5
Holi<lays j 8
Ladder and ladder hoist 1.3
Lower tumbler ^4.3
Oilmg 38
Power off 4.5
Shaking screen 45
Stniies, roots and stumps 0.7
Upper tumbler j(,2
Water pump 14
Total 100. o
Another set of figures follows, covering the operations
of dredges over a period of three years, and it is but fair
to state that the high percentage shown under the head
of power troubles is not attributable to the present com-
pany operating in ihe field, but to an ol ,er electric-power
plant :
Causes of Stoppages, in Per Cents.
Moving ahead 57
Poiver troubles iy(,
Repairs and holidays 754
Sand pump ^,^
Total 1000
DREDGING AT OROVILLE 3G9
The averap;e runninc^ time for the period p^iven was i6
hours, 56 minutes. From other records extending over
loncf periods of time it is probable that the best averaj^e
runninc^ time of the boats will hardly exceed 18 hours
out of 24, taking all causes of stoppages into consideration
and figuring on 365 days per year. It is true that in a
few lases better running time has been obtained, but
where this has been the fact, it was due to conditions sur-
rounding that case, which it is not safe to figure on in
every instance.
While the figures so far presented were for Bucyrus
boats, I have condensed from Mr. Monroe's paper in
the Mining (Uid ScicutHic Press of February 6, 1904, cor-
responding data for a 5-cu. ft. Risdon iwat, whichk I give
below :
Causi'S of Stof'f'af^rs, in Per Cents.
Riickct line and ladder 30.7
Clean ups 7.7
(iencral repairs 17. g
Lines g.q
Power troubles 7.9
Pumps 5.4
Screens 4.5
Stacker 9.4
Total 100.
The data above extended over a period of one year, but
not a picked one, it being a regular calendar year. The
bucket line on the boat was renewed during the year,
which raises the percentage of time lost on account
of the bucket line and ladder. Comparing the percentage
of time lost on account of shaking screens and stacker
with the percentage given for the picked year of the
Bucyrus boat, we find, curiously enough, that the loss
due to the shaking device in either case was exactly* the
same, while the Risdon stacker shows 9.4/^ as against
-,.^'": for the belt-conveyor. The running time of
the Risdon dredge for the year amounts to 16 hours, 31)
minutes out of 24 hours. The cost of repairs to the con-
370 run licoxoMics oi- mixing
vcyor <liirin<; the year I'l t tlic KImIoii Ijnat animinted to
$1,241.28, an aiiiount whiili about (.iiuals the cost of tlif
bclt-convcyor in thir particular instance, if tlic difYcrcncc
in lost time is taken into consideration.
As to the capacity of tlie ditterent iy])es and styles of
boats, no fixed rule can be hid down, for the reason tliat
tile same dredi^e in diiiferent j;roiind m;iy not be able to
make as much of a yardage, owing to local conditions.
To mention one of these conditions, 1 wi^uld say that the
washing of very sardy soil is more dithcult than that <it
pure gravel, and it may be necessary to cut down the
digging, for the reason that with full buckets the riffles
become crowded.
A fair average yardage would be about as follows :
liuckct Capacity. Yd. I'er Montli.
Risdon (Iredj^'c ,^ cu ft 25.000 to 35,000
Risdon dredge 5 cu. ft 35,000 to 45,000
Biicyrus dredRc 3 cu. ft. .?5.0(xi to 45,000
Bucyrus dredge 5 cu. ft. 50,000 to 65,000
The above figures would represent the work of a
dredge, as now in use in the Oroville district, extending
over a long period of time. The maximum obtainable
will far exceed the figures quoted, and may be kept up
for a short period with any one of the boats.
The cost of production depends to a great extent on
the magnitude of the enterprise, which reduces the gen-
eral expenses by dividing them up among a number of
different boats, and by the chance of diminishing the
cost of repair by the erection of shops near bv. It has to
be kept in mind that the operating expenses are intlucnced
by local conditions, such as nature of the ground, general
efficiency of digging and washing appliances, adjustment
of motors and resistances to their work, cxtraordinarv
repairs occurring in short periods of time and a number
of other details.
The following statement will give a fair representation
of the extremes of the cost per cubic yard of material:
DRF.nciXG AT OROriLLE 371
Operating I'.xtmscs P,r Cubu Vcirii of Material.
Power I fVi I JO 11^ 161 I 77
l^ep-i'" -' «<' ^o^ ,v.,6 ..,,7 ,.,s<)
Labor 1 ,4 i Sj 1 .S5 j .,,, ...05
(jeiKTal (.xpiiiscs. 0(14 o ()7 1 j.j i.jS 075
•otals JO 6.72 7.6g 8.ig 8.35
The (lata fur tlic above statement were obtained from
different operators in the district ; the period over which
they extend is in each case not less than one year. In
some of the figures f^iven the taxes are included under the
heading of general expenses, in others they are not. The
cost of superintendence in some instances is included
under the item of dredge labor, in others it is charged to
general expense, but in all cases the totals give all the ex-
penses incident to the working of the dredge and keeping
it in gootl running order.
The life of a boat has not been determined as yet, but
with a well and strongly constnicted hull, which is taken
good care of, it should be not less than 12 to 15 years in
this climate. It is self-evident that during that period a
great portion of the machinery and appli.ances will have
to be renewed over and over again, siTch as tumblers, lad-
der rollers, buckets, shaking screens, pulleys and shafts,
spuds, conveyors, etc. : but the item of dredge repairs, as
shown in the above statements of cost of operating, will
cover these items, and there is no doubt that the experi-
ence gained so far, and which will be gained in the future
will have a tendency to gradually diminish such expenses,
and, what is even more important, forestall the occurrence
of larger mishaps.
t v
s
;
THE COST OF MINING
(May II. iv'^5)
I lie Ldilor:
Sir — Mr. [iif:;alls' viry inrtiiu'iit aitiflc, 'Cost of Min-
ing in AnKrica," brings np a .subject inditing tile broadest
discussion. There are feu of us wlio liave managed nun-
ing properties ulin eannnt add sonieiliing to tlie general
fund of knowledge in tliis deparlinent. My own custom
has l)cen always to keep a monthly record, and at the end
of the year tn make a full general report in the form uf a
statement of cost and production, i happen to have re-
tained a copy of one of the.se re[)orts made several years
ago, and no harm can be done now by making it public.
The results may not be 'standard,' but when it is taken
into account that we were Oo miles from even a wagon
road, and that the lode was only from 2^ to 3 1-3 ft. wide,
and the orebodies small and scattered over three-fourth.-
of a mile on the strike, it will be seen that worse might
have been done. (Jf course, in a report of this nature,
only the general headings are re<iuireil, and these sift
down to :
Cost per ton :
I'rospectitig and dead work.
Ore extraction.
Ore reduction.
General e.\])cnses and sundries.
To determine these a more or less detailed series nt
accounts mu>t be kept. In my own u(jrk, 1 have con-
sidered only a few general subdivisions as necessary
although strict account is kept of everything in detail.
For instance- In my 'statement of costs," etc., ore extrac-
tion is what is usually classed as 'mining,' and this I
THE COST or MIXIXG
in.-?
consider as made up, fnr the i)iiri)'isf of tliis rcpurt. al)oiit
as follows:
Mining :
Assay department :
Lahor.
Materials.
Sundries.
Ore hreakinjj:
Labor )
Materials j
Includinf^f same for tinibcrinj^, etc.
Sundries.
Administration :
Salaries.
Ciemral expenses.
( )ftici.- e.xpenscs.
Under tiie head of 'materials' is bunched everything
used in that line durin<; each month. 'Sundries' embraces
minor expenses not coniinjj under any one of the general
headings adopted — item ii of Mr. Ingalls' list. 'Ck-neral
expenses' embraces the fixed expendituies in carrying on
the work, such as items 4, 5, 9 and 10 of Mr. Ingalls' list.
In this way one gets a full and accurate idea of the
work carried on during a year, without the need of tabu-
lating all expenses in minute detail : for subdivision can
be carried out to the point of stultifying the object in
view. Although some improvements can undoubtedly
be suggested, still I believe that such a compilation as I
here present about covers the ground, and gives a much
more full information than could fifty pages of written
report.
All repairing, of whatever nature, in the mine, all drift-
ing, sinking, raising and timbering of such works, run-
ning out waste, etc., I always class as "prospecting and
dead work.' and only consider the ore as mined when it
is delivered to the bins or on the dump. All sorting and
374
Tin iiCOxOMics Oh .u/.v/at;
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TIIL COST or MI.\/\G
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376
THE nCOXOMICS 01- MINING
preliminary work necessary to secure workable ore should
be charj,a'il to 'ore ertraction." In the case we now have
under consideration, it will he noted that about 33 per
cent of tin cost per ton was due to prospectinjr and dead
work. Tiiis was due to the ury;ent need, at all times, for
ore ; there heinsjf practically no reserves, and no regular,
cnntinunus or .body. Under the head of 'general ex-
penses." I always include improvements of all kinds, and
have always charsj^ed the.se to the working expenses of the
month in which they were made.
I venture to say that there are few cases where ttif!
costs in one m'ning district can be taken for granted as
fitting some other camp ; and where grave mistakes are
sometimes made is in assuming this, when, as a tact, ma-
terials of all kinds may cost from two to three times as
much in a new region as in some favored region which
the engineer making the 'finding' may have in mind. In
fi.guring on probable costs the greatest care should always
be u.sed, and the fact borne in n.ind that mining and mill-
ing costs that can be closely approximated do not consti-
tute the sole expense of exploiting a new orebody ; but
prospecting, dead work and general expenses have to be
taken int' account, for they often amount to as much as
do mining and milling. Especially is this the case with
small, irregular lodes and orebodies of irregular shape.
I hope tiiat this letter may. at least, cause some one to
take issue with me. thus enlarging the discussion on such
a vital subject ; or if not worthy of such attention, that it
will bring out the latent knowledge of some well informed
co-workers who, because it all seems so simple to them,
refrain from giving valuable experience to the profession
^' ^'''^'- E. A. H. T..VVS.
Fuertc, Sinaloa, Mexico, February '.6, 1905.
THE COST OF MIXING 377
SCM MAin.*
Total prdduction for year $2Sn.jqy.27
Total expenses for year 186,24^.14
Difference $94,554.23
What conctntrate wtaild proiiuce net by shipping 7»t-95
$95,266.18
Less gold purchased (iuring year..... 1,172.19
Net profit for year, assay rroduction $94,091.10
Net profit for year, actual returns from bank $93.757'65
* See table, pp. 374-5.
SOME PUMPING DATA
Bv K. GiLMAN Bkowx.
(May 18, 1505.)
The following figures have been collected from records
kept at the Brunswick mine, Grass \"allcy, Cal., during
the fall and winter of 1903-4. In the previous year
an extraordinary How of water was cut on the 1,250-ft.
level (1,017 ft- vertical depth), which quickly drowned
the Cornish pumps by which the mine had been pre-
viously drained. The water raised to the 700-ft. level
(505 ft., vertically, below the collar of the shaft and 376
ft. below the drainage adit), and was there held by the
[::-in. plunger of the Cornish system.
The problem of unwaterirg presented some complica-
tions, chief among which was the small size of the shaft
compartments, which, in the upper and older part, were
32 by 39 in. clear. This precluded the use of large sink-
ing-pumps and finally led to the selection of the air-lift
for the actual unwatering, lack of efficiency being of but
small moment when compared with the advantages of-
fered in compactness, simplicity and small first cost. The
use of the air-lift for the work was first suggested by E.
A. Rix, of San Francisco.
The general scheme for freeing the mine of water and
installing a permanent system was worked out as follows:
Starting from the rate at which the flooding water had
risen in the shaft, it was determined that the permanent
system should i;ave a maxinitun capacity of 500 gal. per
min. ; a pump of that capacity was to be installed at the
700-f«. !'/vel anrl the water lowered from that hori7r)n
with an air-lift to the qno-t't. level. There an auxiliary
pump was tn he placed, and the water again Iowck 1 hv
the air-lift to the 1,000-ft. level. Here a second perma-
nent piniip was to be placed, discharging to the 700-ft.
PUMPIXG DATA
379
icvel. P.clow the i,ooo-ft. level the unwaterin.t,^ was to he
contimiefl as far as pos>ihle, a pump station to he cut out
and the auxiliary pump to he removed to it. the remaui-
iufr distance to he freed hy the air-lift again, assisted hy
a small sinking-pump and hy hailing.
The event showed that the capahility of the air-lift had
heen underestimated, for the water was lowered with it
from the 700 to the i,ooo-ft. level, and there held for
five weeks while the second nump was heing installed.
During this period of installation the lift was handling
25.6 cu. ft. per min. to a vertical height of 288 ft., with a
suhmersion l)elow the surface of the water of 152.
Air Lift.~Thv air was supplied hy a pair of duplex
single-stage cnmpressors. driven hy electricity, and giving
a united disi)lacement of 9.()i cu. ft. free air per revolu-
tion. The speed was constant at i !0 rev. per. min.
These compressors were jilaced 50 ft. from the collar
of the shaft, and delivered the air through a receiver and
a 4-in. air-column to tlie mine. The column for the air-
lift was of 7-in. tuhing, with flange unions, and it was
lowered down the shaft on skids sliding on the track of
the skipway. The interior air-pipe was 2 inches.
The following tahle gives the record for a part of the
unwatering period, arranged in a decreasing .series, ac-
cording to the ratio of suhmersion to lift. By ■suhmer-
sion' is meant the vertical depth of the hottom of the
air-pipe helow the surface of the water, and hv 'lift' the
vertical height of the discharge ahove the .'surface of the
water. 'I'ree air' is assumed to equal the displacement
of the compressor cxlinders.
The datn giv -n in the tahle on page 380 seem conflicting
hut thev nidicate clearly the change in efficiencv of air-
lift work due to increasing submersion. The power con-
sumed was determined hv meter readings over extended
periods, and includes all the mechanical losses in the
compressors and pipes
380
77//: ncOXOMICS OF MIX/XG
Subscijucntly ;i 4-iii. culiinin and i-iii. air-pipe were
used below llie 1,000-ft. level, with the results j^iven at
the foot of the table. This was more in the nature of an
experiment than anything else, and showed clearly the
unsatisfactory operation under such an extreiue condition.
As the final result of the experience gained in this
ti
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t Below 1,000 ft. levfl.
work, it can be conceded that constaiu volume of com-
pressor delivery (that is. constant speed of motors), and
fre(|ueiit changing submersion and lift are not conducive
to economical wrk; exact adjustment of air vol-
ume and pressure to submersion and lift are essen-
tials fcir good efiiciency, and under the conditions usual
in work of this kind arc not obtainable. For regular air-
lift work, as from dqep wtlls, 32 to 357^ is spoken of as
fi
PUMPIXG DATA
381
(juite within the range of possibilities. Notwithstand-
ing the low efficiency, however, the method proved itself
highly useful, and cost less in power and plant combined
than any other that could have been applied.
Electric Piiiup. — The electric pumps adopted for this
installation were if the Aldrich type manufactured by
the Allentown Rolling Mills. The tw. ..ain pumps were
5-plun,L;er, single-acting, 6-in. diam. by i2-in. stroke, with
a rated displacement of 66.7 cu. ft. per min. One of these
was placed at the 700-ft. level, before the unwatering
was commenced. Ft was driven by two 40-h. p., 440-volt,
induction motors, through a single set of reduction gears.
The other pump was a duplicate, except that it was
driven by one 50-h. p. motor. The respective heads for
these pumps are 376 and 290 ft. The au.xiliary pump was
of 3-plungcr upright type, driven by a 40-h. p. motor.
The current was brought into the mine by lead-covered,
armored, three-conductor cables. As originally installed,
the cable, as far as the 700-ft. level, was of a carrying
capacity of No. 1 wire B. & S., and below that level of No.
3 B. & S. It was found, however, that the lack of radia-
tion caused a dangerous rise in the temperature of the
upper cable, and it was accordingly reinforced l)y the ad-
dition of another one of No. 2.0 arrying capacity.
Under t'ull load these pumps have given a power effi-
ciency of 72.2,"^. ha-ied on a ioo7c displacement of
the plungers. The actual displacement of the plungers
has been shown by tests to be ()4.5'/' of the theoretical,
so that the actual horsepower in water handled is 69%
of the power dclivercil to the conductors at the
collar of the shaft. This includes, besides the conductor
loss, two series of lamps in the pump stations.
Cornish Pinups. — The Cornish-pump system presents
the following: Stroke, 6 ft.; ma.ximum strokes per min.,
85 : T plunger. 14-iii. dinm . iukKt 12S ft. head. 400- ft.
level; i plunger, 12-in. diam., under 250 ft. head, 700-ft.
382
Till-. r.COXOMICS Of MJMXa
Icvd; I i-Iunj^ir, ij-iii. (li.iin., under aS; ft. liuad. 1,000-
ft. k'vti; 1 pIuuyiT, 12-iii. diain., under j^u ft. lic:nl.
1, 250- ft. level.
The iiiuii[> is driven hy water, inuler j88 ft. kiiietic
head, the tir.st .-peed reductidii hein« I>y belt and the sec-
ond hy gear. The rod is of Oregon tir, 12 hi. sq., and is
supported hy njllers in the customary fashion. There is
an angle-lx)b ;it the 400ft. level, whc're tlie siiaft changes
dip. and an ordinary counterbalanced operating boh on
the surface, hesi<les a balance boh at the (joo-ft. level.
'l"he data following are for the month of February.
1904: Horsepower in motive water. t8i ; iiorsepower in
water thrown (on basis of full displacement). 65; ap-
parent efficiency, on same basis, 53.7'; . The actual' water
thrown amounted to but 75'; of the .lisplacement.
because of the necessity of drawing back water from the
columns into the pumps for considerable periods, in order
to keep the jjumps 'solid.' This is automaticallv done bv
'siphons,' and no special measurements were
floats am
made to determine the actual displacement efficiency.
This, however, with such slow-moving parts, should cer-
tainly be above 95''r. with valves and packing in good con-
dition, giving 51';; total efficiency for the pump. There
is. however, a further loss due to the stretch of the rods
and to lost motion. In this case, at the 1,250-ft. level,
this has been determined to be 3I in., or 4i per cent.
A mcist serious drawback to the use of the Cornish sys-
tems of pumps lies in the point touched upon in the last
paragraph : The fact that all the plungers must operate
at the same speed, and with practically the same length of
stroke, makes imperative the drawing back of some water
to make up deficiencies at some of the [jumps. The
plunger. h(nvever, so long as it is raising to the next lift,
IS doing its work against the full pressure the whole time,'
even though nine-tenths of its water is being drawn back.'
This is inherent in the system, and can no more be
ri'MPIXC P. IT. I
383
avoided — thoupli it may he minimized— tlian tlic cliani^e
in the rate at whicli water 'makes' in ilie various levels
can he prevented.
It wnnld he intcrcstinc: were data at hand for similar
work by other styles and systems of pumps, but it seems
highly imprnbahlc that efficiencies as hiph as 69'^^ can
he -btained hy other than those electrically driven, with
the possible exception of pumps using re-heated air.
t
THE COST OF MINING
(.\Iay .'S. 1905.)
The Editor:
Siu — 1 am a reader (if your \alual)le Journal, and
derive i)leaMire ami |irntit ilureliw Among tlie many
thiiif^s uf itUerest it eontait'.^, to me there are none more
so than tlic reiKirt> of the cost of muiiiij;; hut in those
reports we are never told what the cost is of those articles
that make \\\) the per ton cost; hence, as comparative fig-
ures, they are not very relialile. There is a great dilTor-
ence in the price of mining su])plies if hought in large or
small (|uanlities. So al.so do the hours and wages paid differ
in dill'erent localities, as do all other conditions atTecting
the character of operations. In giving those reports to
the puhlic, the character and h.ardness of the rock shoukl
he given, as well as cost of mater'al ; in fact, all things
that add to the final expenditure. The mine owner reads
the re])ort perhaps as keenly as does the mine superinten-
dent, and if it happens that he has hail similar work done
on his propertv at a ji^reater cost, he will wonder why his
man could not do it as cheaply as the other fellow, and
thus many a gcx^d man uiay get 'knocked.'
'ihis report i^ not intended as an example of how
cheap this kind of work can he done (it cost $13.50 less
per foot than the previous Joo ft.), hut is more in the
n.ature of a memnrandimi for the yoimg mine supcrin-
ten<leiit who may not have had the experience in shaft-
sinking.
(.)ur supplies were shipped from Rutte, 30 miles by
rail, thence S miles I)\- wagon over a rough mountain road,
grade 200 ft, to the mile. When we started work
on the '-halt, it was already down 650 ft. The work in-
volvetl in getting ready to sink, such as placing the sta-
tion pump in ;i proper place, jjiuting in a hulkhcad. and
cleaning out the mud — (S ft. • f it — from the bottom of
run COST Ul' MIX ISC ?.K^
tlif sliaft, cost over $J(xj, which was I'luirjii^cd tip to the
(.•( >^t ptT foot nf siiikinL;'. 1'hc sizo of the shaft whtTf wt*
.started is (> ft. I)y 4 ft. 6 in., the new work is 9 ft. hy 4 ft.
Supclu-s f.'T SmKiii^ SI aft J14 Feet.
4 kens inrl nnils u, $ t * .1 ' i S'vSS
Ji r.-uiiil it.iiiit siiu\il> " U.84 "7-t»4
-ij6 H hy 8 in. Uk sirrws " 5.50 i^.gS
20 lb. ^-in. cut washers " .... 1.50
4 plum bobs *• .... ^.00
2(to fcft plumb line *' .... o.aj
6 mine tnrclies " 0.75 4-5o
Wilkin^ fur turches *' .... o.i 5
.ino II) I in. rnumi soft strcl fi)r hanginK Holts " 3-40 10.20
4K 1 in. Sf'iiare iiut>, 44 lb " o.oyYi 3.30
48 1 in. cast washers, jj lb " 0.05 1.60
g axe harnHts " 0.35 3.15
2 axes '* 0.8s 1.70
2 <I(>z. pick liaii'ilt's " 0.27 6.48
1 (i(i7. ,V>-iu. sk-tJKr handles '* 0.21 1.52
loo lb. axle iirrase^ — fi»r cartri(!i;es '* 0.116 6.00
415 Ih. of 2 Ih. r raiis — for Surface track.. " 2.75 11.42
50 lb. track spik<-^ " 0.04 j.oo
2.345 11»- blacksmith's cual " *').so "9-.5S $ijo.j9
1SV2 boxes candles — 2040 SnnwHake '* j.on $55-5') $55-5o
2.600 lb. powder — Kepauuo gelatine " 14-25 37'>-5"
10.700 ft. triple tape fuse " 0.46 40.42
2.40Q caps — F.ion Iiran<i " 0.75 iH.oo 437 qJ
5n,rino ft. timber and plank " 17.50 $875.00
Tlie r.itio of plank and square timber
u^cd was, M(uare timber 55-36^; j-in.
plank. 44.64%.
Labor.
Blacksmith. 57 days (it, $4.00 $22S.no
Blacksmith helper. 24 ! 4 days " 3.00 7-75 300.75
Carpenter, 77 days " 4.5<i $346.50
Superiiitetuient 556.92
Contractors 3.424.00
I*uni[ iu^ and hoisting account i.i>i6.o5
Plant maintenance and ad Jitions account 5,M "9
$8.567.7»
Hardware supi'lics $0.561016 per foot
Cardies "■-^5'JJ45 '" "
Aninnmition ^"46355
Timber — c xce'-t ijiiidcs 4. 1)887 " "
I'umpinK and Iioislnig account 8.95^5 '* "
!*Iant maintenance and additional account. ... 2 igS6 "
Blacksmith wcrk ' 4 5374 " "
Carpenter work 1.6,91'* " "
Superiiiten<!ent 2,60 " "
Contract price 16.00 '* "
$40. O.J " "
10 in., all timher lo hv lo-ln tlr. I-'nr linj^tint:;" tlic rock
we used a bucket with the Ijail pivoted Iielow the center,
and for lack of heii;ht under the sheave it was hun^i^ just
2 ft. under the cage; to tkur.p it we hinged a door on
;!n;
nil: i:C().\().\ncs or mim.w;
tlic opposite sido of tlic shaft fnitu tli.ii on ulii.li wc caged
tlie t-ars; on this dMor we placed ilie car and dumped the
rock into it irom the limkct. W i- n-ed the ea-r t" liucr
and h'MM mm. aNo t,, li.ijst nick I'nan the 400 it. level,
ulnre we hail iwd -liifts, of two men each, ruiminf,' a
dnit \\ iiilr the innu- made cnnsiderahie water, tlie shaft
\\a> i|mtc Ircr Iri m it; what there was rame fn in near
the Min.aee and amotmted lo 50 i;;d. jjer hour, which we
i)"iMid to the (100 ft, -'atiMii and dnmpeil it into a launder,
whi.h carried it tn ilie mine vtittip. We sl.irted to sink
X'>venilier _•!), and fniidieil I'ehrtt.ary H) 'rii,- shaft hein-
\^>'I "I the li:o| \uill lln' uranile wa^ ver\ h.ird for Kio
ft : the niiiainder, while it was '^>^ut\ Miff i^roimd. hroke
Will. Ihe contract jirice was .Si() per font, the (■■inipanv
fiinii.shini,' all material; there were four contr;ictor-.. who
employed ei^lit oilu rs, tlin- making; fmir men ju r >hiit.
We used two \)-;t,2 In-ersoll-Sert^ermt nck-drilK. When
scndin;,' np r. ek, ..tie (if the vkaft nun acted as top car-
man, for which 1 .allowed the contr.actdrs S.V5') per -liifl ;
tin's man .aNo handU.l tlu' rock from the drift, --,, th.it
when there was no n-ek comiiiLr out of the sh:ift we had
no top m;m in p., v. We found this iilaii adv;mt;ii;enns
h' th to the company ami contractor^, fnr the man that
\\nrki'd nil toj) e.f,t $4, the same as the men on the hottom.
lieiice he ernt a 'ninve on him." The rlistance sunk — 214
ft.rJ'Sir)— cost S3.424: to whici :u]i\ $t,-^j fnr top c;irman ;
(lividiti!,>- hv 8O4. the numher nf shifts. ,c:ives ^4.^7 jht
shift per man. The top work was charLred to piimpiiiL,'
and hoistintr account. t it
J.\.Mli.S 1 1 I'M lis.
i'.asin, Moil., May 15. 1905.
THE COST OF MINING
(l.'lu.irul. June .■!. V )
1 lir ci.Tiiriljtiiinn., to tlii> i!i>cii>>i.iii have nut been
iiuiiunni-, liiit ilu\ lia\c Cdiiic li. im hk-ii i-iititltil to .s|K-:ik
Willi aiulinrity, ( )ii tin. tiiaiii \»,u\\^ tlurc has him jirar-
tical iiiiatiiiiiily ; Pr in>tami-. the imd (,i a .siinpk' hut
coiiiprihfusivc .■.y>t(.in of ai.-C(Jiim.s and ilu- stihoriliiialioii
of the cost <if iniiiiii.L; to ihc vital (|iK'siioii of profit pix
ton of ore. Aiiinui,' ihr laiiors wiiidi fxplain the iiiarkcil
clillerences of (.-o.-t niadt.' apiianiit hy the rep. irt.-, of min-
inj,' comijauies, two are speeiall\' iiutahle ; we rel'er to the
effect of sortiii'; and the eflicieiicy of lahor. In districts
where niiiiiiii,^ .prraiioiis f, -Hmu small and irrr-iilar seams
of ncli ore scattered thmii-h a lari;e tiia-s of tnalerial of
low },Tadi', it is a finidaiiK tita! prohleni whether to work
the rich ore sei)arately, ohtainin,!,- a clean hiirh--;rade prod-
uct, or to hreak dow n tin- entire mass of minerali/ed loile,
with siihse(|Uent snrtini,^ at surface. It i^ a (|iiestion
whether the maxiniutii [jmht can he secured he hreakiii.t,^
the r\ch streak hy itself (tli: s. to 'resue') (jr to min-
imize the cost of hreakiii!;- hy takinj,^ the itill widlli in one
blastini^ operation. In the one case the e.\[)ense incurred
underground is ,i;reater : in the other, sortint; su[)ervenes
at surface. The clmice of methods will dejiend larj^eh,-
upon the contents and chriracter of the c.\tra width of rock
broken down with the main ore-streak. Here is where
the 'cost of mim"n.L;' tremhles in the halance. I':acli case
must be worked out individually, accordinj,^ to particular
conditions; and. in the weipliinj,:: <~'^ the factors atTectini:
thc final profit, there comes the test of jrnod management.
The (|uality of the labor employed i> another basic fac-
tor. It is hardly realized, by shareholders and directors,
how great a difFerence in the cost of mining is created by
ineflRcient labor. In this respect the mines which are
able to use the contrnct ';v^tf"7i um] ihr-.^i-- -.i-t-.:.-i-. --.-. r,
I
:tss
////; lA (J.\()M1LS t)l- MIMXd
frniii till- mnniiHi^i. lit iMaiiii\ "I ;lu niiiur>' iinimis have
a K''*''' aihaiitaj^i- (i\ir tlinsi' that .iri' (|"iiunattil li\ walk-
iiiK '''■'I'K'''*^'"' •""' •"''•^■""'I'*'"'^''' '" I'li'l''".'' <iii>l<ill>iil wnrk-
iiit'ii at (lays pa\ ' I 1ms tlii' Jujiliii ami tliu I'lat Kivir
(listriits ill Missdiiri allurd a >iriiii^' iniitrast Aiiihhl;
(itliiT aspi'i'ts of till' laliiir ]in.l)k'iii, it is, ui- tlii:ik. a safe
j,'cmralizatiiiii, that iiiiiic u])ti',iti]r> timl it I'cniiniiiKal to
niaki- the i)est nf \\hatcver native lal">r nia\ he availahle.
In Kurea, in Mexim, m riiinna. in iiin^t enuntrie> wlure
the natives ean he trained tn dn the wnrk in iniius, it is
eheaper to ediieate liicin tn the Aiiieruan or luimpcan
iiiethnds than it is to intnidiKe thi' hi^h-])rice(l \v<irknien
of more advaneid oomnnmitie^, huaiise the extra skill
seeiirt-d therehv is rarely eompensation lor tin.' eliniatic
ctteets on foreigners and the di^pi'iidenee upon men who
eannot he replaeed save with f^reat loss of time and the
ineiirrinj^ of a one-sided ohli^^ation. In all eomparisons
initiated hetween workiiijj: eost> obtained under labor con-
ditions so diverse as those of thr L'nited States, South
Africa, Mexico, and Western Australia, it is necessary to
have rej^ard to this factor.
In a recent i>sue Mr. I'hilip Argall made some perti-
nent remarks concerning the ability to discover ore in a
mine as being at least as precious as that of keepin;,' down
the costs of operation after the ore has been found, lie
([noted an instance the identitv of which it was nut ditti-
cult to recognize. L'ndoubtedly, skill in seeking ore-
bodies is one of the most ditticiilt to appraise, because it
must be. to a large extent, dei)en<lent upon accident;
nevertheless, it is well 'or those in control of mines —
especially such as maintain an expensive organization —
to realize that no ([ualits is so directly contributory to
lirofitabie mining as the instinct or experieiiee that enables
a superintendent to follow the ore or, when it nils, to pick
up a new trail of ore deposition. That is why 'tributers'
, .- 1.... ,,,.,1. , ..V.N...,.;..., .,,;.,., ...Ti-wr. >,,„>, 1 i,„A- cUiif
/■///: { ns7' ()/•■ Ml \ IXC
:\m
wIu'Ti llu'v i.ikt ci\t r a iiiiiu vuppi^ci) tn lic ixliaii'-ti il ami
f(]rtlu\iih iiiKn\tr valuahlf ciri'-s!ii»it^ ( iicasiniially. tln'
iiii'rra>i' in i'Ht|iut. i-niiicidcnt witli tlii trilmttr's rr;,'itiu'.
is traccalilc tn |ia!ilus nf ni.li c n liidiKii liy miiuTs pn-
viou-lv nil ilax's pay"; hut. as a rule, it is simply the ri'-
sult nf tlu initiative di -played hv men who are no Imii^er
working fur a ecmpan). htit fnr ihemselves. Any mrtlmd
of maii;i;;enii tit which utilizes this characteristic of hu-
manity is likely to induce economy in the cost of op-
eration.
!
!
!
DEEP MINING
U'-tiiiMria!, June i. iyu5.)
The fiiidiiitj of !,'()Id at 4 lOi Ret in a iJondigo mine is
afTorcling- suhject Inr Cdmnmit, in .\u>tralia particularly.
Murchison's dictum reyanling the nun-[)er>istence of gold-
quartz veins is re^iUTected, and that worthy j^eoloj^ist.
hut unfnrtunate geiieralizci on minni;4 mattei's, is hekl up
to ridicule. When .Murchison wrote. 50 \ears ago, gold
mining afforded no data for large statements regarding
persistence; and e\en today the discussion of the subject
is academic unless it is tieil to the ecnnomic aspect; in
other words, veins may or may not pcrsiyt to deiuhs be-
yond man's reach; the t-ii: is, that man will make no
efifort to f(jllow them if they do not pay. It is the prob-
lem of the persistence, nut ol gold-quartz, but of pay ore.
Thus, i)ur esteemed contemporary, the .■instrolian Mining
Standard, sa\s that "the ([Uestion (of depth in mining)
is, of course, largely guverned by the cost of working."
It is i\.'hoUy governed by it ; mining is nut a scientific pur-
suit, but a money-making busniess. based, of coursi'. on
the application if scientihc knowledge. That is why emi-
nent geologists occasionally go astrav.
It i.s inlerestiiig to knnw that (juart/. carr_\ing native
goki, pnibably in cciarse particles visible to the eye, has
iieen intersected by man's burrowing at a depth of three-
(}uarters nf a mile: but this dt)cs n(.it inijily profitable min-
ing at that depth. The or^ in the .W w Cluun Railway
mine, at I'.endigo. was cut liy a winze su'ik 305 ft. below
a ci,)sscut at .^,^!56 ft.; the discovery is the result of ex-
pensive exploration. Tlie last prolitable mining was at
3,350 ft. We (question whether the orelx)dy will prove
remmierative, simply because we are aware that mining
at I'.endigo, or! the whole, has n,,t been profitable liclow
2, .SCO ft. or e\en at a shallower horizon, (lesj)ile oc-
casional patchy discoveries and a few orebodies of such
DEEP MIMXG
;{!ti
(Iliiieiisions as tn pay spasmodic dividends wliitdi, while
tliey liave lasted, ubjiterated the iiieiiKiry of a nnich
li)iij,'er series nl ealls. I'^ven in Si>utli Africa the romance
of an indetinitel) (Ivvy) search fnr the 'liaiiJvet.' through
shafts planned to t;ii from one to two miles deep, has paled
of late. It is recot;ni7.e(l that the protitahle character of
the 'reefs' decreases in deptii. As u e >ai(l two years ai;(j,
e\en .Metlni-elah died. It i> as well tn j^et alnn^side of fact :
the more mone_\' is wasted on academic theories, the less is
available fur smind miniiij.^. Meanwhile, observant men
no loiiLTcr repeat the fallacv of enrichment i i depth, or
even nf indet'mitc persistence of pay ore; hut, recogniz-
ing,' comlitions as disclosed in world-wide mininjj, they
are cxtendini^ the horizon of profitable operations by re-
diicinii costs. In 1850 a lode woukl have been consid-
ered "plaNed nut' if the yield decreased from 5 nz. of Ljold
at surface to j oz. at 200 ft., because it would then have
ceased to be profitable. Twenty years ago people were
glad to begin with a yield '>f an oimce : and. if the ore
reached to i.tx)0 ft. before it fel' to half an ounce, they
were well satisfied. Nowaday; we can go dee]x-r : and,
though the diiuiniuion cnntiinies. we can snatcli profits
from material yielding less than a cpiarter of an ounce,
thereby extending the ecnnomic horizon another i .OOQ ft.
This is merely an illustration, but something of the ^irt
really does occur in practical work : and it suffices to
emi)h;isize the conclusinn. that if \ on waiU to know .anout
the structural peculiarities and distribution of ore in a
loilr, yrui do well to ask tlie ge(ilogist ; if \'OU want to
know whether a mine will pay. and how long, you had
better ask the man wIkj has managed mines.
NOTES ON MINE REPORTS
IJV CULolLK 1". LhE.
(June 8, 1905.)
General Principles. — A rv\)on should ho clear, ikfmito
and complete. Want of clearness in statement is a fatal
defect, .\lndd_v statements, confusion of ideas and run-
niuj.; one suhject into another are worse faults in this
class (if uritiiit,' than any other. Clea! expression results
from clear thought, l^veryth.int; si juld he fi,<,'ured nnt
and thou.uht out heforehand. all .! I)ts settled, and then
a statement made in as few and simple words as mav he.
All that is to ho said on any one head should he said at
ono place: jjart of a suhject in one place and part in
another leads to confusion. Detinitoness is equally os.sen-
tial. Hazy and amhiguoiis statements as tfi essential
points are inadmissihie. They are si,i;ns of incom()elenco
or a desire to mislead. .\ man who knows his husincss
and is honest will make statements in a form that cannot
bo misunderstood.
Many reports otherwise good are fatally defective for
want of some detail essential to the complete understand-
ing of the proposition. Judgment is hero necessary to
distinguish hotwoon the trivial and unessential and that
which is vita! and apposite. Xothing can he omitted
which is a link in the chain of facts that loads to the con-
clusions stated, or is essential to their clear comprehen-
sion : hut nothing should he included that is not essential
to this end. I'liat mining is the business of making
money out of ore should never he lost sight of '1 lie oh-
ject of a report is primarily coii,mercial : it is a matter of
business. Such technical matter as is neccssarv to clear-
ness ami completeness has place, hut noth.ing further.
The temper in which the matter should be approached is
judicial. Xo personal bias or feeling should enter. .\1!
should be cold, hard facts, and the conclusions such as
xorns ox mim: khports -.vxi
can ho just' drawn from the facts stated. Kvcrytliin^'
slioukl he ascertained witli exactness, notliiii^ j;iiessed
at or left to chance, and no stone left imturned to check
concinsinns in all possihle ways. Tains taken in this
last particular will save many a cnstlv hlunder.
Difisioiis. — Recjiiireini.'nts will varv <;reatly, hut the fol-
lowiiifj heads (or their e(|uivalents) will cover most cases,
and often many of them can he dispensed with. The or-
der of treatment is not insisted on:
1. Conclufions
2. Sittiaiiiiii (Geography)
3. Claims (Surface extent)
4. Title
5. History
6. Orehearing Zone
7. Cliaracttr of Deposit
8. Geology
9. Mineralogy
10. DcVv'lopnients (W'orking.s)
11. Production
12. Ore Uivelopcd
13. Ore \'alnos
14. Trcatnnnt ( Prorc^- .iiid Handling)
I=i. Costs and Proceeds
16. Plai.t
17. Working Mftlmd.s
18. Assays and Sampling
ig. Maps
20. Miscellaneous
21. .Xppeiidi.x
22. Inde.x
Coiuiusious. — It is tiic conviction of tlie writer that the
conclusions should hi' the first thint; in a repo.t. The
husy man wants to know tiothiuL,' more, and all readers
get at the meat of the matter sooner from knowinp; the
net results at the outset. .\n eni^ineer of prominence
requires all reports sulimitted to him to have the con-
chtsions reduced to the followint;; terms:
Ore zone ft, long by ft. wide I)y ft. deep.
Ore-sluK,!.-- Ill the above (innnicrating each) ft. long by
ft. wide by ft, deep. Ore can be mined for $
per ton. Ore can be treated for $ per ton. By
process. Per cent of extraction Reiiuircs ass.iy value to
j)ay of .Assay value found
n
:!!I4
Tllli l-COXOMICS OU MIXIXG
Tt is not pfissil)lc m fit all cases to so ri,t,M(l a furni, l)Ut
it illuslratfs tin- rciiiiircnu'nts of those who want thin.s^s
boiled down to the last (lr^L;reo. 'i'hey re(iuire reports to
he clear, ciisp, net. C i inclii.-.i( ms shmild he ]uit in as few
and clear words as possihle; tun much panis cannot he
taken in niakiiiL"' them at once a .--un'niary and epitome of
the will lie. The ci 'ncliisions. thnii^^h sta-idinL;- tirst. are
of course written la^t.
Sitimlioii. — I'nder this captinn cnme such ni.'itters as
j^'cot^raphical Incati'in, accessihihty. tran.-i«)natiiin facili-
ties, topcij^raphy and climate.
i'hiiins. — flainis <ir surface extent of jirnperty should,
he ftdly set lurth complete map prepared. shnwiiiL;'
evc^y pns-ihle del ■ iirface houndaries and divisidiis.
sitr\'ey lines. ciiutMurs, surface impr. '\ement<. huildin,L;s.
etc. A s;i!i:(l set nf jiln :to!.,'raphs is an aid to I'iearness.
Tillc. — Title to the property mider examinatinn is proj)-
erly matter for a lawyer's opinion, hut if it i.s mereh pos-
sessory. IT rests on patents or its e(pii\alent. so slate.
History. — I he .salient pi mts in the historx of the ])rop-
erty slmuld he m \t ^iven. I'nints of f;iilure are often
more inten stiiii; than tiiose nf snecess. To know what to
a\oid is lialf-way to know wh.at to do. I'rojierties of any
a.i,'e are sure to liave i^one through several staijes and
many vicissitudes, .if interest to i!ie pro.,peclive inirchaser.
(he Z,iiic. — r,y 'i'red)e;irin!.^ zone' is meant the extent
of -round in which ou may reasouahlv he looked for. .\
succinct statement of the i)roportion of the propertv likelv
to yield a profit is desirahle. Evidence on this head is
looked for. not only in the ground in question, hut in
near-hy property and throu,<;hout the district, if lit ed he.
Character of Ih'posit. — Without a fair workini^ knowl-
edin^c of ore deposits in general :ind an intimate act|uai'i-
tancc wiJi the deposit under discussion in jjarticular,
iiothint:: worthy can he set down. .An outliiu' onlv can i)e
.L;iven of what ■^uit.ahle treatmeii' of this section reijuircs.
XUTI.S OX MIXB NUrnRTS
:i\c,
It wiiHiil iiu'luilc tile iiri^in ai;il furni i>f the deposit, the
physical and .i^eoKjgical eliaraeler (jf the walls <<r liniitiii!;
ehaiim' iif foniiatinn nr striietnre; the strike ami dip of
the dejiiisit : the oeenrreiiee and fre(|uenc}' of shoots, ehiin-
ne\s or oilu '• enriched areas, their origin, form, dip. pitch,
etc. In general, it ni.ay he said that every characteristic,
])eculiarit\ and salient feainre of the oreho(l\- should he
described, i iccasional sketches are an aid to idearness.
(/r.'/i':;_V. — i he essential ])i'int.-5 of the local geology
should he carefully cNainined and ~nccinctl\- stated; not a
scientific treatise, hnt a pl.ain staten;.'nt of whatever af-
fects the economic aspects of the case is the thing. Uikes,
faults, sli])s, cross-courses, change of formation and sim-
ilar plieiKJiiuna shonld he descnhed, and their inllnence
on ;lie size, continuity, mineralization, etc.. of the orehod\'
considered. Snit.alile map.s and sketches are helpful in
showing these details.
Miiirriilti^^y. — 'i his will comprise an enunieratior of the
minerals in the ore, and hi the gangue and walls; a dis-
cussii'ii of the chemical .and ])liysii..il changes these min-
erals h.'ue undergone, oxidations, alteration products, etc.
\'ahus in the v.arious minerals to he determined, and a
ditTerentiation made hetween what is protitahio and what
is not.
I)c:'clnpntctits.—.\ detail account of all the workings of
the mine, with the results that have lieen accomplished.
Here again a good set of maps is indisjieiisahle. (Gener-
ally a \ertical longitudinal section of the di posit will show-
most of the openings. Imt often fre(|neiit cross-sections
are necessary. .\ map of the whole mine in jilan is the
basis for this work.
Production. — This i> hest presentul in tahulated form:
dates, character of o:-c. parts of the mine producing it.
values in the .several metals, total gross values, deductions,
costs and the like, in as full detail as is p<issib!e. .\ concise
history of the output makes the text of this heading.
:!1m;
Tllli IXOXOM/CS or M/MXC
()i\- IK':r!,)f^i\l, — '(j.^ (K m'I' ijx'd' covers what used td
\k- (U -i-ii.-iU'il 'ere ill ,siL;lii.' II'-- i|iiniuity of ore rcadv
for extractidu and ex]ici^ed , .u four sides sliinild lie li.Med
under 'developed ore': uliat i^ e\])osed on two or three
sides is 'prohahle ore,' and everythiiij,^ el>e eomes under a
consideration of the 'future of the mine.' or some similar
phrase. .\s much of this should 1,,.. talmlated as po»ihIe.
Ore rallies. — Tlie values found in tlie orehodies from
the systeiuatic sampling- of the mine should come next, in
tallies, with such comment as is indispensahle to luciditv.
'1 real incut. — 'idle liainlliufj;- of the ore from the time it
is hrokin in the nn'nc 'and even the methoil of iireakin^f)
until the finished ])r(idttel is marketed should be j^iven in
detail. When more than one form of h.mdling or treat-
ment is jKiSsihle the_\- should he compared, and their rela-
tive etticiency, cost. savinj,\ etc., s;iven. The percentage
saved, .-md the losses and their causes in the various steps
of the jimcess, should he given in full.
Costs. — Costs arc divided into iiiiiiing, metallurgical
and i^otcral. Kach should he given in detail, with analv-
sis of all eletiients that jiroduce them, under divisions of
labor, supplies, etc. With costs, ii aurally comes a consid-
eration of jiroceeds. Metallurgical processes, with their
losses and proceeds, are set down in one column and the
values of the metals treated, wasted and saved in another.
It is here that the net value of the ore comes out. This
is the main point of the report, and appears as such in the
initial paragraph giving the conclusions.
Plant. — .\ docription of the plant and other surface
improvements comes ne.xt. with such alterations and addi-
tions thereto as may be advised. Questions as to ade-
ijuacy of plant already installed, and of relation of plant
to output and ore reserves, are here discussed.
ll'urking Mctiiods. — An outline plan of opening up the
Iirojierty if not already developed, and a discussion of
working methods underground, is indispensable.
XOTJiS OX MIX/-. klJ'Oh'TS
;{!»?
.Issay diiil Saiiil'liin^. — I'lic lalilr (if a.ssa_\' rt'sults and
the calculations of a\ craves slinuKl he rclci,'atc<l to an
appendix if ihcrc is any nunihcr of tlicni. Mctliod of
sampling should he clearly set forth in detail, so that a
iud.i,'nieiit can he formed of the thoi'ouLhness of the work
and of the justness of the conclusions reached.
Maps. — The essential maps are : Surface plan ; the
workin.i^s in i)lan ; a vertical lonL;itU(IinaI -ection of the
orehody. To these may he added a key-map of the
ref,non where the |)roperty is situated, a geological section
of till- immediate vicinity, plans of levels separately, cross-
sections of orebodics at typical points, plans of surface
improvements, plans of stopes at difTerent stages, details
of timbering, etc., assay plans, and an almost infinite
variety of other special and detailed drawings.
Misciilaiu-diis. — .Ml tlie collateral information useful
in connection with the property nut strictly belonging
elsewhere can be collected here.
.Ippciulix. — .After the bodv of the report all additional
data should be placed, as: Detailed lists of assavs and
calculations of average vnhic. tests made in coimection
with treatment investigations, smelter or mill returns in
detail, lists of surface improvements, buildings, etc., in-
ventories of machinery, outfit, supplies and the like.
Statements and matters that arc purely financial should
be in an eiUirely separate document.
Index. — .Any report of more than four pages without
an index or table of contents is faultv to that extent.
MINE REPORTS
(Kilit..rij|, JiMK 15, ,.,,,5.;
llic 'Xotcs on AliiK' kri)..it.s; uhich ajipcarcd in uur
last issue, may auakeii cxjirc^iMi, ..f divcr^i' opini.ni.s.
iMr. Chester I'. Lee has many >,u>i\,k il.in^:;> t,, >;u ; mie
of these we venture u> emplub-,-e. It ,s true that -'a man
ulio is IinneM uii! make >talemcnt> in ; i,,rm that eanimt
be mi>un<ler>tnn,I.- The .sp-nt ..f .e.enee dues demand
strai-ht thmkin- an.! the direct expression of ideas: the
apphcatinn nf >nence in iinnm- asks for the same reeii-
tude of nnnd. i;.|uivocation, amhij^niity and indireamn
of any sort in a mine report are miscientilie e\en wiien
nnintentiniial; hut when deHherate!> adn,,i,.d, liiey are
uiipi-oiVs.sinnaL We have no patience with a report'urit-
ten in such manner that, uhi>her the mnie rither does
half as weU , ,r yields twice a. nuich a> the en.Ljiuecr
vaj,niely pre.hcts, it can _\et he interpreted as a vindication
of correct jud-ment. Sucli unrk is mere hocus-pocus,
which evaiis respi msilnlity and phiys the fool with the
cliun nr cnipany payin- for the lep-rt: it i> dishonest,
in that it is a failure to -deliver the .!;o'Hl>"-in this case,
an opmion that camiot he misunderstf-ul. We have seen
the devel-.pment of this tendency :\mnv^ en-imers m<:re
careful of tlieir reputation than of their dutv. It is a bad
practice: the en.^ineer who receives $5,(XK/i,.r ins exam-
ination and report is pai<l ten times as much as the man
vviiose fee is $500. fur the simple reaso;. that he has a
well-earned reputation which he puts to risk every time
he truthfully expresses Iiis jud-ment or pives Ids ap-
praisal of a mine. The physical exerti,,n. the mental exer-
cise, the time consumed are nuich the same in both cases;
in fact, the junior— or the man with the lesser rcput,.ti,,n
—IS apt to expend more muscle, nerve tisstie and time
than he of the bi.t,^ fees; the valid reason for paving the
one ten times more than the other is that the former has
.u/.\7-; h'i:i'()h'TS
399
iilri'ady won a rupntatidii uliicli In imprrils each tiiiu- liis
ju(lj,niK'iit is put tn the ti>t. If hr pla\- rMuml the snh-
ject. j^ivi'S coiiohisioiis in niaj,Miil()(|iuiit hut ainl)it;u.nis
phrases, sliit'ts his respnnsihih'ty to suhnrdiuates. nr in any
way refuses to fult'ill his Iiar-ain— the opinion wiiieli faces
the facts .and aecipts 'lie responsihiiitv for an experi-
enced judirnient — lie is (h'.-.honest. 'I'he statement (pioted
from Mr. Ia'c is jirefaced with t!ie clause "a man who
knows his hnsincss" ; and this [)roviso (interpreted in a
sense Mr. I.ee does not inttnd) anticipates the rei)lv of
those who adopt the methods just criticised: they will
say that tliey know their business well enonj,di to "<;et out
from under" when any rcsponsihilitv oNcrhantjs them;
thev deem it clever to i^et larj^^^e fees for tlu siiniiLn-r,i of
opinions, ami they consider it worKily-wise to "take ci're
of their reputations" hy avoidini,' .-tateinents for which
they can he hroui^ht to hook. lUit such conduct is f(,rei,t,Mi
to the ri^ht spirit of the en^dnetTiuL;- profession: it is not
even sound business ; it is the attitude of a tricky trades-
man.
THE liMtKVAL BETWEEN LEVELS
(Ediliiriai, June n, iui>5 )
Tlic- proper (Ii.>t:uuT lirtunii k\il> i> a iiraciual p'niit
that is (jfii'ii prcMiititl to tlic judj^iiU'iit of iiiiiu' iiiaii;i.i;t.Tb.
Those who avoid tlic fati{;iic oi tliiiikiti.L;. plan iluir niaiii
drills icxj It. apart, htcaiisc a .-i.ntiirv is a mat iminlur
and it rcpn-.-ciit.s an interval uliicli is iioiiorcd by ii>aj,'c,
It li\ iiotliin<,' I'isr. ll,>ufvcr, thiTc arc others who are
not the shivr-, to eiiipirii-i>in ii|" th:> iiiiintelH-eiit kind. In
South Afriea, it lias l.een lound that eeoiioniy, witlioiit
loss of efticieiu-\, i> trained Ia inereasini; the di^taiiee
l>et\\een levels, before the war. 150 ft. was the- interval
.Ljenerally adopted; sinee tiien, this lias heell douMed in
certain instances, such a.s the RoodejKiort I'nited mine,
•nid tin re is now talk of attainin- a ina\iniuin of (xx) ft.,
ineasnred on the dii) of the lode. .\ s.uin- in nuinn- cost
of from one to three .didlm-s per ton ,. anticipated.
1 he di.stance necessary hetween working; l^.veis dei)enils.
in the first instance, upon the ch.iracter of a lode. ( )n the
Rand, the heds of 'hanket' are fairly res;ular in their be-
havior .-ind in their i^dhl content ; therefore, fre(|Uent drifts
are not needed for e.xploratory puri)oses: the i^rnumd be-
tween any two levels, that are 300 ft. apart, can be as-
sumed to ijossess avera-e characteristics to an extent
impossible in m<ist of the variable veins which represent
the ore ileposits of other regions. Levels ()0 ft. apart
are common in mines based upon thin veins of rich t^old-
bcarin- ipv-irt nbject to eccentricity of dip an.l the'sud-
den clian^-es due to short ore-shix.ts. The rati.i. between
the cost of drivin.c a drift in rich ore and the value of the
output to be obtained In inithe slopes overhead, constitutes
a problem ipiite diii'erent from that of lar-e levels in a low-
.Urade mine. .Mthou^di, Ix-fore the eventual exhaustion of
a nunc, it may be necessary to drive intermediate drifts,
it is obvions that, tor exploratory i)urposes in a fairlv
77//. ISriilUWL HLIlfl.l.X I.IAII.S
IIIL
iiintdnn ludo "I \><\\ ijradr, it i> imi iK(.-(,'^>,ir\ ;(. make
liii'sc lcn)j;itii(liii:il ^■l1t^ near li.i^itlKT. 'I ln' iiiniu'V Npeiit
in extciidiiif,' siicli levi 1^ u•Illaill^ unprodiuiivf until stoj)-
m^; lifjj;ins: and, in l)ii,' mines, rn H iini\ i> eapitai thus ex-
jiendi'd tni])riitital)l\ . hut ihc maMitiiianee of dnli> nm in
use represents a ecnslanl liiarqe uiueii it i'. advi>ahli.' to
avnid. At till- Calmnet iS; lleela. ItviN wire iilaenl too
ft. apart, a-. lue.iMired nn the dij) ..f the IimK-. nr ahoiit O5
ft. in vertical interval. In this casf the drift did nnt even
fultll an i-xiiliir.-itdry purpose. luraiiNe it iiuhidid i.iilv a
fraction of the ;otal width of on- TIk- Tamarack hen-
etited h> the error of us hi- neiLjhhor. and the levels were
run cverv 1 So ft.. mea>iired vertically, .t^iviiij,' 300 ft.
alonj; the lode, .\fter\vard. suhdeveLs were e.Ktended at
intervals cif uxj ft. .\t the Hurra Hurra mine, of the
Tennessee Copper t ompans . the main levels are 300 ft.
apart, hut the lode i> crosscut at each 100 ft. of sinkinj^;
and, when actual e.xtniction he;.;ins, ,^ulJdeveIs are ex-
» tended from the crosscuts. '1 he.se initi.al crosscuts and
the le.ss frequent main levels are adecpiate for exploratory
purposes; for stopin,t,^ the >uh-levels are nee<led in order
to afford points of attack and to facilitate transjjort. In a
mine the out|)Ut of which fjoes to a smelter, it is unflc-
sirahle to dro]) the ore down chutes of excessive hei,Lrht,
because a [lowdery product hinders the workin.rr of the
furnace. \\ hen the ore is destined for a stamp-mill, the
<lisintet;rati(jn is not injurious; on the contr.ir\, it [)er-
forms part of the work of the crushiuL:: machinery.
i^rainap;c is another factor. In wet .ground, it is ex-
pedient to run the new level at such an interval below
the workint; drift that the block last opened up will be-
come drained while the upper one is Ijein^,"- stoped. Ex-
cessive water binders miiiiiiL,^ and adds to all the costs of
operation ; by adiustint,^ the lifts between levels, the p.uinp-
int:: ran I'e limited and the draiiia|L,'e of the lode r.ui be
rcETulated. In mines where the looap irrnutnl <-,f n fni>1i
Uti
I III: liCONOMfCS ()!■ MIMM;
nllKT iMiiu-idis uith, IT iT..-~i's, tile lf„lc, It uill lie imiiid
that till- i\,it« r U'\il I'olIiiU^ tile iii.iiii >llalt a-- -iiikiii},'
l)rnj;rc.ssis, |''anlt> alsu at'1'iM.t tlu- proMrm iii liaiid 1k-
caiisf. uluii a hn\v \> siilijtrt tn mhI: <1i^1( natii his, it
mcMiius lll^■^^>a|•\ [" ilnl't al sliurt vi-rlKa! iiitrrvaN m
(iriltT til ikti-riniiK- ilic pii>itiiiii nf the \ciii nr (>t i\\v on-
!^li""'- A lilt iif M'viTal luttnlrcd i'< rt is iiiii)rai'tii.-aiilc
uiidiT sttcli I'dtiditidiis. iKcaiisc a i!is])laci.-tiniit c.f ilic IikIc
iiiiudit iliaiim' i'h- \\\v>\v plan nf devclnpnicnt and rtiidi r
Slid) a Irvil it""(rntivi\ In mims nf tin's kind Cand niii-i
metal Indts a. lalilc to siu'h ecc-cntrii-ili(s of licliavinr )
the fiini-tinn of a drift is i-xpl. irat- tv first, and npcrativc-
affrrward ; it serves tlu pnrp.isi- ,,f tisfini; the vein and cf
fnidiiiLT the ore-shr.df lufure it is turned into an tnider-
Krniind artery fi.r the transport ..f material to the shaft.
tf;e cost of mining-ii.
CV W. R. I.NCMLx
(Ji^iy '5. Kjo; J
In my first paper on tliis siil)j.ot, wliicli lias iKtti cnm-
nuiUcd upon by Messrs. I'inlay, .\rj,'all, Tavsainl lirowii,
I (lid not look forward to a disjiissioii of the advisability
of keepinj;- account;, uiiicli ui.iild >li<i\\ 'In i-us' of niiu-
ing, nor did 1 conleiiipiate a cjiscussion of the ..einizatioii
of niiuiufi^ eosts, exce])t inci(kiitall\ . .Mv piirjuisc was
rather to draw out tiir ex[)irirnce. reduced to dollars and
cents, in miuiiii,' under various conditions, and by itemiza-
tion and classification of costs to analyze the difTerences in
conditions. .Mr. I'inlay appreciated this intention, and re-
marked that, even in ca.ses of wide difference of condi-
tions, there would still be found operations in which the
conditions were more or less parallel. It w.is f.ir from my
l)urpose to uphold the desirability c'f att-ntiiii|^r ^ ],,w cost
of mininf^ i)er ton, at expense of the maximum profit; in-
deid, such argument as I presented on that topic was
(juite the reverse; but I aimed to draw out the reasons
why mining costs should vary so much, not only under
obviously dissimilar conditions, but also under conditions
that appear approximately analogous, or at least that may
so appear to those who have not minutely studied them.
In considering the cost of mining from this viewpoint, I
have taken the trouble to compile the following data,
which are mostly from official rejiorts, cither the originals
or the ab-stracts published in Thk Exoi.nei-ring and
.Mining Journai,. They refer only to gold, silver, cop-
per, lead and zinc mines ; coal and iron mines are excluded
from the scope of this inquiry ; and the case of the Lake
Superior copj)er mines is reserved for a separate article.
Few. if any. enr ts being familiar with the funda-
mental conditions \^ iHcll 'determine tlie co-;* r^.f ;-!--r-.-T-!rr ^rt
4<»4
77//;" fiCOMKMICS or MIX ISC,
all of the districts nu'iitioned, explanations from those who
are acquainted with them will surely he welcomed, as will
be also such furth.er data as will throw more li.ijht on the
subject.
Crass WiUcx. California. — .Xorth Star .Mines Company
in i()02 minrd 17.3M') tons of ore, M cost of $15. (/1 per
ton, divided as follows: ( •peratint,'' t'X])enses. $7.7f> ; ^'en-
eral expense, $1.11 : extraor<linary ex])e;;se. $0.57; devel-
opment, $5.04; improvemiiits. Si. 42.
Calaveras County, California. — I'tica Mine. Larye veni
on Mother Lode. In produeinij about ,V» tons of ore per
da_\' there are rei|uired two lodiour shifts, each consi.stint:;
of 12 miners, u helpers, iC) shovelers and (> trammers;
total, 45; in addition to which a crew of 10 timbermen is
employed. Miners are paid $,^ ; timbermen. $3; 'Ipers,
shovelers and carmen, $2.30 per day.'
Sutter Cri\'k. Ca!if<u-nia. — Central F.ureka Mininsr
Company, in ii)(j2, produced 43.545 to. is of ore. at cost of
$1,71)5 f'"" uiinint;, and $0,511; for (levelo])i!i<j.'
Raiul.shiir^. Calif or)iia. — \'ellow Aster .Mining & Mill-
ing Company. Eupene 11. I'.arton ' reported the cost of
mining i4,<>oi tons of ore as follows:
MiljiilR. Cost. T^er Tnn.
Labor $io,(i</i.fK) $0.7.^(10
'I'linhcring ^^o.^.s.s o.o.sscxj
TimlH-r J.frf)! 47 ;«2j8
Powder 580. (>H o.CMy77
Fuse 9.V90 oocxm,?
Caps 44 97 o oo.^oS
Lights ■ ^ofi.dj o (uioo
Biackstnilhing 4')^ ,1- 00,^414
Hfvclnpnicnt 62872 004,^06
Hanl.iyi' 64.V90 c. 04410
lliii-^tmg (*)7 ')i 0.04780
Tdtai $17,656.40 $1 . 10<)20
'J. F. Collier. Jr , Tiinisarli ni.i .\iiiencaii Institute Mining
Engineers. iSfX).
'Idem, June 6, ujo.l. p 8<h)
'The Fncineeking a.nu .Mi.m.ng Jock.v.m.. Jannary 28, 11)04
77//: COST Ol- MIXIXC 405
Ccmral F.xi.ciscs. ('""■ Ter Ton,
Mi^colla.icoiis $i,4('0.;o $0.10000
Assaying "«•<" o.oiioo
Salaries ^50. 87 o.o<,507
Tailing 3l.^33 002140
Incidentals 440.9-' o O-'O^o
Total $3.3^5-83 ?o.J-773
The fjcneral c\]Knsc is to some extent chargeable to the
niillinS.^. Water is obtained trotn wells ().5 tiiiles frotii the
mine, ubeiier it is putnped at a cost of kjc. per 1 ,a>) 'J^'dl..
wliicb comes tu -'J.03C. per ion of ore, no part of this l)e-
infx nicluded in the cost of mininjj. The mttie is etiuipped
to ])ro(ince ^tx) tons of ore ])er day. l~nel-oil costs 4,5c.
per <;al. ; himber, $32.50 per .M. The rate of wattes is as
follows; .Miners, 9 honrs, $3; muckers, <) hours, $2.50;
carmen, i) liours, $3; tinibermen. () hours, $3.50: amal-
gamators, 12 hours. $4: stationary eni;iiieers. 12 b.ours.
$4: bois'mg engineers, 8 hours, $3.30; i)ump-ineti. 12
horns, $3.50,
Black Hills. South DiK-k/u. — 1 loinestake mines. \ein
of mineralized schist, 300 to 500 ft. wide. Worked pa.--
tially open-cast, partially undergrouml. In iStjH mining
cost, $2.17; general expense, $0.14. In the vear ended
June I, i()<.)3, the cost of mining :,27i).o75 tons of ore was
§2.04, not inchiditig general expense; total cost, exclusive
of milling, was $2.^\-. .Mine ojiened to depth of 1,100 ft,
Biitghani. L'/ii/i.— Massive deposits of pyrite (gobl, sil-
ver and copper-bearing) in limestone, dip])iiig moderati'-
Iv. (.)[)erated ciiietiy through adils. Timbering with
S(|u;ire sets.
L'tah Consolidated Mi ling Company; Highland Boy
tiiine, operated through si.. ...lits to 700-ft, level, and bv
.sliaft to 8cK) ft, ( )re transported by aerial tramw;iy 12,700
ft. to liingham station, thence by rail to smelter at Mur-
rav. in \i)02 produced K^J.Ji^ tons of ore at a cost of
$1.45 for mining and tramway, $0.25 for exploration and
development ; in 11*03. produced 11)0.250 tons, at a cost of
4(lti
/•///: liCOXOMICS Ol- MfX/XG
$!.;« for mining and tramway, $0,033 f'^r exploration and
devtlopmcnt ; gcnural expenses not inc.'iuled.
Mercur, 67a/!.- Deposits of gold ore in limestone, lying
ap. roximately flat. Alercur Mining & Milling Company,
in the year ending June 30, 1902, extracted ore at cost
of $1.41 per ton, including general expense; in year end-
ing June 30, 1903, extracted 34*^,359 tons, at cost of $1.30
per ton. Mining done by caving system. Mine operated
through adit, with electric haulage, two locomotives, 10-
h.p. each, capable of hauling 20 tons at six miles per hour.
Frisco, Utali.—Horn Silver Mining Conipanv in 1900
produced 27,411 tons of ore, at cc>t of $4.88 per ton, of
which labor on ore was $2.087 : on dead work, $0,703 ;' on
surface, $0.85'^; supplies, timber, fuel, etc., $1.24.
Cripple Creek, ColoraJo.~Go\d mmiug in veins in igne-
ous rocks (chiefly andesite). Mines operated through
shafts; depths moderate; water variable. Miners receive
$3.40 per day of eight hours (42.5c. per hour). Coal costs
about $4.60 per ton. Considerable timbering required.
Alining costs generally from $2.50 to $3.50 per ton of ore
liuisted, including taxes, insurance and general expense.
Sorting of the ore on the surface materially increases the
cost per ton of ore shipped.*
Siratton's Independence, Ltd., in year ending June 30,
1902, mined 230,099 tons of ore, at cost of $4.18 per ton.
of which $1.27 per ton was on account of development
work. The latter comprised 264 ft. of shaft. 1,521 ft. of
raises, 160 ft. of winzes, and 11,738 ft. of drifts and cross-
cuts. Total depth of main shaft. 1,430 ft. In year ending
June 30, 1903, 229,797 tons were hoisted, at total expense
of $3.70 per ton, of which $0.87 was for development,
which comprised 1,716 ft. of raises and 8,387 ft. of drifts
and cross-cuts.
'J. R. Finlay, Tin: E.\gi.\eeking a.\d .Mini.vg Journal Novc
Ler ..'I, 190J.
THE COST or MIMXC
407
I
Lcadrille, Colorado. — Blanket vein, containing massive
shoots of argentiferous galena, blende and pyrites. Oper-
ated through shafts; de|ths moderate. Rather larger
quantity of water to pump. Timbering with square sets.
Miners receive $3 per day. Mining costs large producers
about $2 per ton, including general expense.
Ouray, Colorado.— C^imp Bird vein, a fissure dipping
about 70' ; average width, 6 to 7 ft. Vein material, quartz,
impregnated with gold, galena, pyrite and ohalcopyrite.
Ore occurs in shoots, wherein the grade is subject to con-
siderable variation. Mine opened by adit 2,200 ft. long.
Timbering is required only in the raises, winzes, chutes
and tloors of stopes. About 40% of the ore broken in
sloping is taken out, the remainder is left in the stopes ;
the percentage of waste trammed out is small. Mine
worked by two 8-hour shifts ; 3.25-in. machine drills most-
ly in favor ; 4u','o d,\ namite ; compressors driven by electric
power, l.arge-machine men receive $4.50 per shift; help-
ers, $4 ; small-machine men, $4 ; smi'hs. $4 : helpers, $3.25 ;
timber-men, $4 to $4.50 ; helpers, ^„ , shovelers, $3 ; tram-
mers, $3 ; enginemen, $45o'
During the year ending April 30, 1903, there were
broken 111,245 tons of ore, wet weight, of which 71.793
tons were delivered to the mill and 39,452 tons were left
in the stopes. The ore milled, less moisture, amounted to
66,825 tons. The cost of mining, not including general
expense, was $367,838, or $5.50 per ton on the ore deliv-
ered to the mill (dry weight), or $3.50 per ton on the ore
broken (wet weight).
Tclluride, Co/orat/o.— Liberty Bell mine, ig02, pro-
duced about 7.500 tons of ore per month, at cost of $2 to
$2.30, not including general expense.
Butte, Montana. — Immense veins, dipping steeply, in
granite. Ore, chalcocite, boniite and enargite, with
» Q \V Pnrington, Transactions American Institute Mining En-
gineers, 1902.
408 THE ECOXOM/CS OF MfXfXG
pyrito. in a (jiiartzosc and granitic panijiu-. Wins attain
a width of too ft. and more, lo t<i 20 ft. stnpts being com
mon. The cost of ir- ling at i'.iiiir langis from $3 to $4
]HT Illtl.
The foilouing retnrns were made h\ the I'.utte coi)per
companies to the assessors of Silver l!ow counts, .\h)n-
tana:" C'olusa Parrot. J(>^.\i^ ion>. mining eo^i. S^.jn
per ton: Mntte & Moston. -M.v.^.ii tor.s, $^.2/ ; Parrot.
•253>-''^4 tons, Sj.8i ; I'.oston and .Montana. 907,227 tons.
$2.61 ; Anaconda, i .,^92.835 tons. $3.49: Washoe, 106.58S
tons, $:i~'): Montana Ore Purchasing Company, 293.'^ ^J
tons. $3.54. 'i'hese figures. Mil)mitte(l for taxation i)ur-
pose,-, are of little tecimical value.
Aiiaconda Copper Mining Company; The production
in 18(^7-1898 was f)28,05i tons of ore from the Anaconda
mine, and 813,487 from the Syndicate mine. The cost per
ton was as follows :
''^'"'- Anacon.la. Sviuluntc
':-''P'"^'^-^-^ o. :o5 o M3
Supplies „ ,10 ^, ,08
^f-^^ym ■: o.noj o.oo(.
A>lniinistration .itid nciier.il expenses o 177 o 1^8
I Vrsoiial iiij urio ,-, . o.>8 o oIm
,V.'"''^"'' o,_-„o o:?05
"•"'■'' ■■■•, ,- n "iS 0.014
KLjiairs .and renewals 0(7 o 'K)
.\\w eonMruc■|l,,^^ ^^ j'ly o^uo
■^'^'''' ?J.9l3 ?.i^444
Caiir d Alciic. /</,//;, 1, —Steeply dipping fissure veins
and .shear zoms. containing large an<l uide bodies of .sil-
verdead ore. .Mostly o|)ened by adits ; water power avail-
able and generally used : timber abundant and cheap.
-Miners receive $3.50 per dav. Three methods of mining
employed: (1 ) timbering ( M|uare sets) : (2) filling; , 7,)
"lllK EiVt,l.\EKHlN(, .^^■l) .Ml.Nl.NC JoLKNAL, Jul}' Jj. I904.
Tim COST OP MIX IXC,
409
tiiiilxriiis and rilliii.s,^ Co^t of niiiiiii!;' ami milliner. $-'■5'^
111 $,^.50 per ton ( l-"iiila\ ).
'\'\k- HunkiT Hill & Sullivan Minini; ('onipanx in npJ
rxtractcil jUj.sch) ton> of orv, at co.st of i^J.oc) \wr ton.
Miners receive S,^5o; muckers, S.^ : timbernien, $4. In
n;<),^ the cost of minini,'- ->S<^.713 tons of ore was $i.()33
per ton, not incluiliiiLr L;i.neial e.\|iense. wliich canio to
11.5c. per ton. .\11 the ore was trammed from the mine
liv electric lianla^^' tliroui,di the Kellofjtj tunnel i iJ.fXJoft.
lon^), .it a cij-t of 7c. |)er ton. In addition to the ore,
47,000 tons of waste was trammed. Drifts, cross-cuts,
raises and winzes cost an averatje ^<\ $7.31 pcr loot. 4,043
ft. hein<^ driven.
Doui;Ias L^iciitd. . llashn. —AurUL-nms dike of syenite in
carhonaceons slate. Dike stands at steep angle and attains
width of 4_'o ft. Situated close to the sea, with respect to
which the position of the orebodies has i^re;it influence or.
ihe methods and costs of niiiiiiif;. Mines formerlv worked
cliietlv open-cast ; henceforth the underground mining will
he tlie more important. Miners receive $^.50 ])er day,
with board and lodging.
Alaska-Treadwell, opened by shafts to c^co ft. below
sea-level. Water less than 50 gal. per nun. ; levels opened
1 10 ft. and 150 ft. apart : no timbering required : hoisting
by skips frinu stor.age bins. \ ertical pillars left to support
walls, 2o')'c loss of ore estimated. in sto})ing, one drill
breaks 34.(jf> tons of < ri\ with consumption of 12.53 lb.
of Xo. 2 dynamite, in 10 hours, in addition to which 0.85
lb. of powder per ton of ore is consumed in bulldozing.
In the year ending .M.iy 30. iip3. the Ala.ska-Tieadwell
mined 7S^).(>2^ tons at cost of o.(>022, not including gen-
eral expense. Development work amounted to '),I45 't-
An average of ^^}i machine drills was em[)loyed in the
mine (7 on developiiK-nt, 4 on cuttiiiL'; out. 7.5 in pits, and
14.5 in underground sloping I. The t(Jtal of holes drilled
was 783,300 ft., and of ore broken 906,625 tons, making
4U)
I 111: l:CO.\(>MICS ()/■■ MfXIXG
an averatro of 1.14 tons per foot of hole drilKd. T\h- awr-
atjc work per niacliiiK- per \n hours was ,^4.4 it. of hole
''rilled. .Machine drillers 111 the open pit were paid $3.30
IHT day, with hoard and lodn;-ini,r: iinder<,'round. Sj.30,
with hoard and lod-m^r; the difference hein.i: 'liK' I" the
f.\tra-dani;er in the open-cnts.
Alaska-Mexican, kjckk .Mined i*i'i.44() tons, at cost of
J<i.o8u per ton. not including,' ^^eneral exi)ense. Develop-
ment work, 7,.o<,4 II, I„ M/Ji. mined ijH,<,(m Kjhs, at cost
of$i.l(^j,?. Development work, 5.441 ft. In iijoj, mined
207,455 '""•-• ;'t t^'ost of .i=i.05(;. DeveloiJincnt work. 5,28')
ft. Scale of wa.ires: .Machine drillers. $2.50; heli)ers.
!$2.2~, ; common lahor ( white), $2; .smiths. .S4 ; pht.s hoar.l
and lodi^rm- i„ ^.^,-1, ^..,^^. i„,]j.,,| i.,!,,,^^ <;_,^ without hoard
or lodjrint^r
.\laska I'liited, 1901 : Ready Ihillion iiiine— 171 ,04.'
tons rais-d, chiefly from 450 to 6(50-ft. levels. Co.st per
ton, M.I 788, not including general expense. Develop-
iiieiil work, 2.-,^^-^ ft. -^oo-ft." mine— 89.S40 tons raised,
chielly from 400ft. level. Cost. §1.2281 jier ton. Devel-
opment work. 1.708 feet.
l\ossliiii(l. lintisli r<)/i(»(/)UJ.— Zones of sheared rock,
niinerahzed with .uiriferous pxrrhotite and chalcopyrite
U]) to width of 100 ft. or more, dipping at ahoiit 70'.
\ ein-filling very hard : stopes timhered with .scpiare sets ;
ore stands 10 cu. ft. to the ton. Aixiut 20'; is .sorted out
as low-grade (to second-class dumpi. Timhering costs
ahout 21c. per ton of ore raised. 27c. per ton of ore
shii)[)ed.'
Center Star Mining Company, operating on large vein
01 ain-iferons copper ore. The costs per foot of develop-
ment work and per ton of ore mined during the year end-
1 Septemher 30, 1903. were as indicated in the following
tahle
11. -McDonald. Journal Can'-di.in M
nunc; Institute. Vol. VI.
THE COST ()!■ MIXIXG
411
Drill
1HK
per ft.
-IVx.'l,
l-nR-m.
ft.
f7 31
Di-iflint!.
per ft
$4 5.?
Mil
$0,405
1 liii^tiiiK. uiulfrg'tul. . . 4.71) .... ....
1 liii^tiiifr. main sliaft.. 1.48 o.Hi) o in n.iqo
C'niiiprcssed air 1.74 2 oS t.O/ 0.120
.Mi..e vi-iitilatiiMi o._'.? 0.17 0,13 0.015
riniipiiiK 0.71 i.o<) o..^4 0.0.^5
.\s-ayiiij; 0.55 0.47 014 o o,?o
."^urMyuig 0.20 0.17 o II 0010
(k'lH-ral expense 3.57 2.71 1.51 0.185
Total.s $i>i-77 $29.97 $17. o<; $2,065
The (lcvcI()])iiK'in work dotU', aiul the cost, and tlie aver-
age.> per fool, are shown in the tahle below :
l-\.L-l. .\ituuiilt. IVr ft.
General work $.?-058
Raises ifiS.o 5.577 $^'I07
Winzes 79.0 .3.0C2 38,77
Driiu-.)^ 2.903.5 49.(122 17.09
Totals 3.1(58.5 $()1.3I9 $i'.>-35
Under p^eneral work are incliKk^d stations, re-timber-
ing, macliinery and etiiiipnient, repairs and maintenance.
Tlie total ([uantit)' of ore mined and sold was 88.387
tons, of wliich 3.934 tons came from development work.
The average cost of mining, viz., $2,065, '^ computed oii
the 84,453 t^'^"^ of ore sloped. The development work,
costing $6i.3i(), amounted to about $0,725 per ton on the
ore .sto])e(i.
Ymir ( iold Mines, Ltd., in 1901. minetl 7o,()40 tons of
ore, at average cost per ton of $1,814 for mining, $0,150
4i;
Till- liCOXOMICS OF MIMXG
iir adnimistf.-iiiMii ,in,i c,, j-,j f .^
.i^Tiii ral :in.l rMntiii-riil
t\\
^pcii.sc: tlu' laM luM luiiis sliniiM 1,0 i)rn|M.rti.„u ,1 Ik-
>iii iiiiiiiiii.
ami luilliiii.
IhicktuiKit. 7
cti|)rifcr(Pii,s ]i\ nit
CllllCSSCi
-\\u
,-lii.-t. I
t(
iqo It.
uilh
Lje li iiticiilar (li pi ivit> r ,f
tiiM's var\ frciiii a few feet
;rral Uiunli,
illlipui;.
>tl CMllv
' ii>i ikm a> \it 1.. niil\ ii),„kralf (l(.'i)tli. ( )n- st.
cliamliiTs : iio liiiilnTiiii:.
'1H(1 (Hit in
flllK-SMC CnppiT (■(Ull]
It .S().S4i i, n<.t inc-hidin:
/■/(;/ Kit
cr.
M
j:iiK'ral expense.
ore
K'ili.'ia (lisseiimiate
JirMximately tlat
imci)iiini(iti. Mill
issoiin. — Immense shouts of lead
d in mai^nesian liiiiestdiie: jxisitinn ap
-topes .So ft. liii;l, and (K) ft. ui.K. „i
es operated throntjli sliaft
ft. deep, with efitkient efinipnient. .\n timl
water, joo to j,o(
-shoveltTs, '$i.yz,
XJ 1,^1 1. ]
)er 111111.
.\i
s, 300 to ^(x>
HTiiit,^ re(|nired
iiiers receive Sl.S^
nine liou
III
o.il
inois
costs .S-'.j(- per ton. M
(fr
otn .south'- n
min^r cost, about $1 ])er
ton, inehi.hii- -eiKtal expense aiul dehverv to null, on
basis of ah.nit i.o<.) tons per dav, hut nut inchuhn- devel-
opment work, construction or amortization of plant. These
.statements refer to the conditi.Mis hef(,retlie recent strikes,
a. result of which wa-es have heen incrcase.l, time re-
duced to ei^dit hours, and efticiencv of labor decrca.sed
.somewhat increasin.y: the cost of minin.,r. I'mspectinp in
tins district, both from surface and under-round, is done
ciiietly by diamond drilliiii,'-.
Jvtii", .l/;.v,sv((r;. — IX posits of zinc-blende and galena
>n lenses of chert in limc-tone : also sheet deposits of .sim-
ilar ore. Considerable variati..r. in character ,,f ore as to
hardness, and as to r.u,f, |,„t ,i„ ^u,.,.^ ,i,,p„siis are gener-
ally very hard. The ,leposits lie appro.ximatelv Hat and at
moderate depth, .s.v 150 to J50 ft. Life of the mines is
.short and conditions decree cheapness of plant ratiur than
(iurai)ihtv. (innind is not developed ahea.l. except bv
churn-.lrill.ng from surface. Cost of opeiiin- mi.;,, u^
THE COST Ol- MIMXC
iV.\
j)ro(luoc 75 to io(3 tons of ore in lo liours, inoludinp con-
centrating,' mill, is about $i5,fX)0. Miners are paid $^.^5
and slitivelcr- S^J per day. Ahniit J5 to ,^7.5 tons of ore is
stMped per drill per day. Tlie cost of nuninj^ in f^round
tliat re(|nires no tiniherint; is appro.ximately as follows;
.Miners and lieli)er-., 17c,, trannner^ and shovelers. He.;
drill sliarpeninj,', ilc. 5c.; expk)sives, loc. ; hoisting' ( bi-
l)(ir), (>c. ; su])i)lies, 4c.; fr.el. (>c. : supervision, vc. ; total,
<)8c. ; not inciudiuf^ aiiy punipini: or general expense. The
actual costs in six different ninies operated durins; the
same year were as follows:
Siirf,icf pl.iiit $0 noo $0 (KX1 $n 004 $0 010 $0 017 $0,006
Rep. surface plant 0.007 0.005 O.OOJ 0.011 0017 o (KjS
I'lulcr^rmnul plant ... 0.000 0,000 o.oo-' ooKi 0.033 o.oio
Kep. niiirK'n>niul plant. o.O(X) 0.005 0.001 o ojl 0.040 0.014
lIoistiiiK o.oj,? 0.03J o.oj.^ 0035 o 04-' o.o.u
].-,.(.! o.o-'S o.o.y 0.03*) 0040 o.o<)7 0040
Mining o J48 0.258 o.-'4i o J31 0.JK2 o j5j
i)>velc)pnK'nt o.two 0.041 o'.ojj 0.011 o.o-m o.oig
HIackMiiithinK o oji; 0.033 0,041 0,034 0,035 0.034
Shoveling .and trani'L,'. o.i-M 0.174 0.IJ3 0,148 0.161 0.143
iv^cplosivis 0085 0.073 o.oty> 0.110 0.125 0.098
'IdiiK 0.003 0.003 0.004 o ojo 0015 o.oog
TinilKT aiul track..,. 0,005 0.003 0.004 o.nii o.njS 0,010
Lighting 0,004 0.007 D.oo<) 0,(X)8 0,010 0.007
I.nliriciting o.cxx) 0.000 o.(XX) oooo 0.001 0.000
Pniiiping 0.000 0.000 0.000 0.000 0.020 0.0O4
.Xcciilcnts 0.002 0.000 0.002 0.000 0.000 0.003
Totals $0.56 $o.U() $0.60 $0.71 $0.94 ?o"o
The .sheet-ground of the Joplin di .triot is :i mineralized,
fine-grained chert, averaging about S ft. in thickness, e\-
treinelv hard and re(iuiring the heaviest type of machine-
drills.
INDEX
Accounts (mine), card
system for )*<*
African Metals Co 11!>
Alaska Mexican mine ^.V!
Alaska rriadwill nimc.'SIKJ, .'ilW
Aldrich ticctnc puiiip... '!81
A in f n d i n K Companies
Bill -JM
Anu-ruan Institute of
Mining Engineers HO
Amcini/ation 175, 221, 'J.l")
Area sloped out as con-
tract basis 21
Argall. Philip 14
"Cost of Chlorinating
Cripple Creek Ores", .'iot!
"Cost of Mining" 'M2
As.sociated N o r t h e r n
Blocks mine 'J<^3
Bain, H. F. "Mining Costs
at Cripple Creek" 154
Baltic Copper mine, card
system in use at 80
Baltic mine 96
Bancroft, Geo. J., "Mine
Efliiipment and Ore-
Reserves" 227
Barton, Eugene II.. "Min-
ing and Milling in the
Mojave Desert" l-IT
Basis of value 300
Bathurst. F H 275
"Mine Reserves" 339
"Secret Reserves" 206
Meniamin, F.dward H 15
Bingham. L'tah 405
Birch, Stephen 320
Black Iliils, S. Dak 4o4
Bookkeeping. suggestions
.IS to l.iliur-saving in.... 64
HoiiMer I'crsi'\erance.275. 2>'l
Boulder Perseverance
Commission 338, 339
Broad. Wallace 202
"Mining in Rhodesia". 167
Brown. Nicol 62
Brown. R. G 257
"Cost of Mining" 347
"Cost per Ton as a
Basis of Mine Val-
uation" 56
"Gold Mine .\ccounts". 91
"Mine Equipment and
Ore- Reserves" 283
"Some Pumping
Data" 378
"Treatment Capacity
and Ore-Reserves".. 217
Brunswick mine 378
Bucyrus dredges 3(!!»
Burra Burra mine 4iil
Butte, Mont 407
Calaveras county. Cal .... 404
California, g"ld dredging
in 268
Calumet & Hecla mine. 198, 401
Card sv'-'.^ms for mine ac-
counts 94. 80
416
ixnr.x
Carter, T. Lane 10
"Mini- l.nlwir and Ci>sts
"M the Witwatcrs-
rand" l.V)
Cartcrvillv Webb City dis-
Tict Ifi5
Center Star mine ."ij
Cd'iir .1' \l.iH-, lil.ihd 4{)H
Cole. Will C 8((
Colonial Mines Syndicate. Ill
Cotnmi.ssion, Boulder Per-
severance .(.'IS
Commi-ision. Rciyai L'Sl
Compania Metallurgica,
Mexico (;.}
Companies Acts 125
Companies, no-liability M')
Comstock. TIk'o. B OJ. f) i
"Card Systems for
Mine Accounts". . . 'U
"Mine .Acrount.s" lij
Consolidated .Mini's Selec-
tion Co 1 l;t
Contract basis — area stopcil
out ■_>;
Contract system m mining, i'.'!
Cornish pump system .'Wl
Cornucopia mine I'MO
Cosmopolitan mine. . . .l'I^. .(."iD
Cost of Chlorinating Crip-
ple Creek Ores .'l.")t;
Cost of Mining. .:!■_':!. .'l-Jt.
:i:rt. Ml. 347, :i.-,n. :!Tl'.
384, 387 AifA
Cost of mining and mill-
ing X,:>
Cost per ton as a basis of
mine v.rhi itiou ,',i;
Costs, dredging l'iIK
Costs, engineers' estim.Ttcs. •_'»;}
Costs, grave! mining m
.Maska and Northwest
Canada 317
Costs, mining, ,it Cripple
Creek 103
Cripple Creek 406
costs at 246
leasing at 301
mining costs at. . . .lo;t. 1,14
mining problems at.. . 107
ores, cost of chlori-
nating :v,rt
Cripple Creek and Lake
View costs contrasted... 48
Crown Reef mine 244
Curie, J. H 17, 77, s7, mi
"Ore-Reserves in Gold
Mines" 249
Cyanidation in Rlunle-
s'^i 117. 172
f'.'l-v- 11 J 208
K.irlmginii. John 120
O.iy's work define<l Jfi
Hei-p 'iiining :\<){\
Deep level mines on the
l<-"'d 235
Del.iw.ire & Hudson Co.. 223
I'enny. (^. A 02
"l-'conomic Ratio of
Treatment Capacity
to Ore- Reserves", , , 232
I'mny, II. S , "Ore-hreak-
mg and Sorting on the
Rand" tw
nenton. I" \\' y,(
'■.\ Card System for
.Mine .Vecounts", ., , 80
Diehl ;)ror"„,, 44
i'ouglas Island 40!)
Dredges, Bucyrus lifli)
Dredging at Oroville 'Mu
Dredging costs 269
Duckti.nvn, Tenn 412
I'A-onoinie nilio of trc.-it-
inint capacity to ore-
reserves 232
INDEX
417
El Oro mine llii
El Oro Mk. & Ry. Co. H'. llti
FnninctTs' estimate of
costs -1)4
E<iuation, personal '.'53
E<|ui|)incnt and orc-re-
servcs..lK't, 18-_'. IH.',, •J44.
278 302
Exploration Co.. Ltd ll'i
Extensions of mining
plant, payment of Hs
Finance, mining, another
aspect of 1!'"
Finance, mining, some a's-
pccts of. liO, ll"i. IPi
\\i2 125
Finlay. J. R 1'.4, 1%
"Cost of Mining". .ti:!
"Leasing at Cripple
Creek" '■i'>\
"Mining Costs at Crip-
ple Crock" li':t
Flnt R)vir, Mo 412
FriiluT^ iiiiiiitig 185
Frisco. Utah 4oO
Futures, appraismg of.... 98
Gardiur. Frank 40
Garth waite. !■:. II 170
Gold drtdginR in Califor-
nia 2r>8
Gold Un.dgnig at Oroville. 2W
Gold-mine accounts. 34. "in, 91
Gold mining as an in-
vestment IT
Gold niiiiinK in Rlnuk'sia l'i."p
Gold mines, ore-reserves
in 24!)
Gold mines. valuation
of 211. Sih
Golden Cloud mine 2.'iO
Grant. R. J., "Cost of
Mining and Milling".... ^.S!)
Grass Vallev. Cal 404
Great Boulder Persever-
ance mine 4o, 47
Great lioulder Proprie-
tary 281
Great Fingall Con. Mg. Co. 40
Guggenheim Exploration
Co , .li:t, 115, 110, 117. lis
Hall. R. N 202
Hamilton. Richard 281
ll.aiitnond. John Hays.... 170
lUr/.ig. C. S., "No-Liability
Cnmp.iiiies" 260
H'li.irt. I",. .\morti/ation. 221
ll.ihl, I,. J. "Urcdging at
Oroville" .'!t!7
Hoist l>y his own petard.. .'t(;4
Homestake mine 3u3
Hoover. II. C, 5n. .J3, G2
f»l. ISl. 182. 1S7. 1S9. 194.
19.".. 197, 1119, 217. 221, 227
"[•".cimfiiiic Ratio of
Trcitiiu'iil Capacity
to (.)re Reserves". .. 173
"Gold M 1 n e .\c-
counts" 37
"Ore- Reserves" 2.').5
"Ore Treatnitnt at
Kalgoorlie" 44
"Valuation of Gol
Mines" 211
Hutchinson, \V. S,. "Co>t
of Mining Zinc Ore in
the Joplin District" !tj0
Humes. James, "Cost of
Mining" 3S4
Iiiga.l-, W R IH',. ■_'.•,-
"Cost of Mining". 324. 4ii3
"Economic Ratio of
Treatnunt Capacity
to l.)re-Reserves". , . 194
"Engineers' Estimate
of Costs" 2*'i4
"Mining in Missouri". 271
•llt<
IXDEX
Ingersoll-Scrgcant rock-
(IrilN , , .,
:>ti
Institute of M
iiimi; ami
Met
:illurKy
Institution nf Mmmj^ 1-ji-
gincirs
IM>
111)
Interval Intwien K\el-,.._ i*»'\
nvestment ni iiinics
Inwoot''^' tables 'HI. .'(15
Ivanhoe mine. . . . : i&l
Jenki
Chn
Miir.ng Accoiint-
Johaniuslnirg,
methuils at.
Joplin, Mo. . .
n; I n 1 n g
Joplin, enst.s at '-.'71
Joplin district, cost of
nulling zinc ore in ItiO
Joplin zinc ores, co^t dia-
gram for 111;!
KatTir.s as sorters 1_'
Kalgoorlie, ore treatuieii;
at -l-l
Kalgurii mine I'S.'f
Kolar di-tnct, India J 11
Lake View consols. ... I'Jl'. 2oS
Lake View and Cripple
Creek costs e.mtrasted. 48
Lake \'iew mill, Kalgoor-
lie. trealment costs .it. . . ■} 1
Lassen Mining Co l.">
Lawrence, Benj. B. . . . lIi), 'J."!."!
"Mine Equipment and
Ore. Reserves" isn
Loadville. Col loT
Leasing at Cripple Creek, :iiil
Lee, Chester I"., "N'otes on
Mine Reports" .'!!i'_'
I.e Rni mine IJJ
Levels, intervals between.. Im)
M.iin Reef Leader mine. . L'4r)
Mason & H.-rry 4'i
Matabeleland. inimng in Ifi?
McDermott, Walter IJO
Mereur. L'tah 406
Milling m Rhodesja 17'2
Mine accounts (J2
Mine, appraising the value
of 101
Mine equipment and ore-
rcserve.s. . .l.'^T. L-l), l'l'7, 285
.Mine labor and costs on
the Witwatersrand 1.50
Mine reports .398
Mine reports, notes on.... 39'J
-Mine reserves .3;!9
Mine valuation .311, 313
Mine valuation by Govern-
ment ,',3
Mines Company, Ltd 12()
Mines Development Co... 112
Mines, investment in 87
Mines, in\estigation and
management of 2
Mines, operation of 3
Mines Selection Co 120
.Mines, valuation of 5
-Mining, causes of failure
111 1
Mining, co.st of. ...'iJG, 324,
:U:!. 342, 347, 3.-i0. .372.
.■W4, 3S7 403
-Mining costs at Crijiple
Creek 1,54
.Mining costs, gravel, in
.Maska and N'orthwest
Canada 317
.Milling, deep ,390
Mining finance 129
•Mining finance, another as-
pect of 190
Mining and Financial
Trust 112, 120
Mining investment 77
1
IXDBX
41l»
1
Mining methods at Johan-
nesburg 22
Mining and nulling, cost
of :r.9
Mining and milling in the
Mojave desert !•""
Mining in Missouri '.'Ti
Mining in Rhodesia ..Itl", Jiid
Mining risks 'JH
Minmg, secrecy in ■ill!)
J'issouri. mining in -'71
Xiontreal & Boston 311
Moreing, C. Algernon W
Moss, Frank A -'S:i
Mountain CoppiT Co 4'J
Mysore Gold Mining Co. . .'i'J
Nicholson, R. B -'S2
No-liability companies... I'tiii
Notes on mine reports... .31)2
Ore-breaking and sorting
on the Rand 08
Cre-drcssing. assay results
as a guide in 'il
Ore-reserves '2'>^
economic limit of l'^
economic ratio of
treatment capacity
to I'.Ti
in gold mines '240
and mine cquiprrent.. 285
and treatment capa-
city 17:!, 194
Ore sorting 8
Ore treatment at Kal-
goorlie 44
Oroville, dredging .307
Oroville, dredging cost. . . . 201)
Oro\ille, gold dredging at. 28(1
Oroya-Brownhill mine. 4", 27t)
Ouray, Colo 4n7
Palmer. C. S., "Etiuipment
and Ore-Reserves" 3(12
IVrsonal cfiitatinn, the.... 2ij.'t
I'lttsburg Coal Co 22-'!
Portland Gold Mining Co. 2.'i0
Portland mine XV.i
Promoters, swindling 12t)
Pump, Aldrich electric... 381
Cornish system 381
Pumping data, some ,378
Puringtnn, C. W'.. "Gravel
Mining Costs in Alaska
and Xcirthwest Canada". .317
Rand. ore-breaking and
sorting on OS
Rand, unemployed labor on 1."j2
Rand, value of mines on. . 2''
Randsburg, Cal 4ii4
Reading Co 223
Ready Bullion mine 33.")
Red Mountain, Colo.,
mines 12ii, 124
Reserves, mine 3311
Reserves, secre*.2i'.j, 2o0.
27.-) 281
Resuing, explained !)
Resiling in underground
work 131
Rhodesia. ancient mine
workings in 109
gold mining in 13.'i
gold production in.... 149
mining m Iti7. 2(iO
mining, working ex-
penses 145
Rickard, T. A 2,30
".Xppraising Fntun^". 9><
"Basis of Value" 3oo
"Cost of Mining" .323. .387
"Dcep Mining" 390
Equipment and Ore-
Reserves" . .180. 182.
185, 187, 189. '244.
248 278
:ick;ir.!. T. A., ■Col,! Mi
ing ris an Iin f.t;iii'ii!'
•II
(li^t bv 111
C)v
Fotard"
/\
.!i;i
'lute
ik bet
H-'VClS llHI
" I n V (• s t 111 cut I n
Mines" ,s7
"Mine Reports" Hits
"Mine Valuation" :U 1
"Mine Valuatuin by
Government" ."ri
"Mining In\ estnient". . 77
"Mining Ri^k>" 'JO
"Ore Sorting" M
"Sicnt Reserves" :2'>'i,
l!7-') -y^l
"Secrecy in Minnig".. 3n|l
"Some A-jHCts of Min-
ing Fniance". .110,
11". ll:», iL'J iL'.-i
"Tlie iV'rsnnal Equa-
tion" L':,;i
"\'aluati'in of Mine.-". 'i
R'.x. E. A :rs
RolHTt.S. F. C Ih7
"Cost of MiniiiL;" .1.'.
"Gold Mir.irt; in ]\lio-
desia" i:i.-,
"Mir.ing in Rlio.lesia". l^'O
"Resiling ii rnder
ground Work" 1:!1
Roberts. G. M i^:!
R-.(k-dri!Is. 1 nge rsoll-
Sergeant ;W(;
Rock-drilling on the Rand. l.">_>
Roodefort L'niied iiiinc.. Inn
Rossland. n. C tl'i
Royal Commission 281
Secret reserves. . .■_'7.j, 281. -JSi!
Secrecy in mining Unit
Shaft sinl;uiu by hand. . . . l."i
DUX
Sloss-Shcffield Co 22;!
Sinnli, llanniton 112, 117
Smith. Howard 1)., and 1£.
W. Steblmis. "Gold
Dredging at Oroville".. 2.-'i»
Sonnig at Jolianne.-burg. . M
South Reef mine 21.")
SjiiNhnry. F., G 1!)4, 2.Vi
"Mine rj|nipnient and
Ore-Re-erves" 187
St. Frangoi.- county, Mo..
costs ■J72
Stamp-niil!s in Rliodcsia. . 1-10
Stebbins & Smith. "Dredg-
ing Costs" 200
Stevenson. R(;liert. 'A'al-
uation of Gold Mines".. 225
Stratton. \V. S. estate.... 22!'
Sinter Creek. Cal In}
'1 asniania g .Id mine 110
'l'a>;or. .b.lni. & Sons, /-i'.l 112
T.iy-. K. .\. 11., "Cost of
Mining" 372
Telluride, Col 4ii7
Tomboy Gold Mines. Ltd. 40
Treatment capacity and
ore-reserves 172, 217
TweUetrees. W, 11 98
I'nion iron Co 224
I'niteil Slates Mineral
Code 1.39
X'.ilnation of gr)ld mines. .
211. 225
X'.i'uation of mine .'il 1. .'113
\'aliiation of mines Iiy the
cost per ton h6
X'aluation of mines by
Government TiS
X'alue, ba-is of 300
INDI-X
IJI
\'ictonan Companies Act
■JiiT, :!Hi
W.. F,. H.. "Mine Valua-
tion" 311!
Walker, Edward, "The
Paynient of F,xtensions
of Mining Plant out of
Revenue" 'ii^
Wanderer mine. Khoik-
sia 11-!
Wankie coal-field l-'t!
War Eagle mine W
Waring & Son '''t)
Warin;'. W. Geo., "Notes
(^n Zinc Mininc;" ''>*
West Australian mine-
owners, coum il of . . . , "i-i
Western Australia, costs.. 2-iC<
Witwatersrand 1'^
Witwalersand. costs at.... l"i'>
Witwatersrand nnnes ti'J
Williams. Percy. "The Val-
uation of Mines" 1
Work (day's) defined '26
Vale. C. G., "Gold Dredg-
ing in California" 26S
Vellow Aster Mining &
Milling Co 157
Zinc concen'.r.ite. weight
and volume of '29
Zinc minerals. specific
fjravity and composi-
tion of 31
Zinc mining notes '28
Zinc ore in the Joplin dis-
trict, cost of inining !t'>'^
Zinc ores, valuation of.... 28