Maximum Total Recovery Through Mining High-Grade and Low-Grade Ore Together is Economically Sound

"IntroductionTHE OPINION is held by many persons outside the mining industry, and by some within it, that mine •operators customarily find it advantageous to mine •only the richer parts of orebodies and to leave behind, perhaps permanently, leaner material which could be mined only at a lesser profit. This opinion and the inference which might be drawn from it that 'gutting' of mineral resources is a common feruture• of the mining industry are prejudicial to the intertsts of the industry and deserve careful scrutiny. Oddly enough, a theory of mine economics which gives much support for the opinion was advanced first by members of the mining profession itself, has been repeated •several times in mining literature, and to my knowledge has never been adequately refoted.According to the theory, selective mining of the rich ore first on a large scale will yield substantial gains and these gains do not merely reflect the desire of 'money minded investors' for a quick return but derive from the logical application of compound interest rates and the concept of ;present value. W. O. Hotchkiss and R. D. Parks (1) illustrate the reasoning with a hypothetical example in which an orebody of 4,000,000 tons may be mined either in its entirety in forty years at $1.00 per ton profit or selectively with the recovery of only the richest half in twenty years at $1.50 per ton profit. They show that, with Hoskold rates of 4 and 8 per cent, the present value of profits from mining only the richer 2,000,000 tons exceeds the present value of profits :from mining the whole orebody by about 20 per cent."