Discussion - Limestone mining: Reserves and valuation by B. C. Lewis and R. P. Moran, Technical Papers, Mining Engineering, Vol. 42, No. 1 January 1990, p. 112 - 116.

Your interesting and well-written paper brings up the issue of the purpose or use of a mineral property appraisal, specifically the value of these evaluations when the quality and quantity of the mineral resource to be exploited have not been thoroughly investigated. I am not a practicing professional in regards to valuation of limestone investment opportunities. I simply wish to make a few generic observations about the appraisal process in order to stimulate meaningful thinking by appraisal professionals whose reports may be reviewed by professional investors and "laypersons" alike. It is my contention that the analysis given in your paper is very thorough, considering the data that was made available to you. But I would not like to be the person responsible for investment decision making without having a feel for the risk involved. Therefore, the reviewer must classify this type of analysis as relatively "subjective" because they have not received an indication of the inherent risk involved in exploiting a mineral resource. This risk can best be quantified by using probabilistic methods in conjunction with the quality and quantity of the mineral to be produced. Most appraisals passively ignore this problem. Specifically, you have accurately identified the various costs and values entering the economic appraisal process. These can usually be quantified with a great deal more certainty than the capability of the resource to provide 25 years of quality material. Also, in Cases A (West Virginia)and B (Alabama), you are fortunate enough to have previous operations data. What if there had never been production from these properties? How does a potential mineral property investor evaluate the resource capability to meet various projected financial outcomes without spending a good deal of up-front capital to drill and delineate enough quality resources for a 20-plus year operation. These questions pose a substantial risk to any potential mineral investor. Only probabilistic methods should be used to quantify this type of problem, short of drilling and metallurgical testing. I might be considered a "layperson," not being familiar