New York Paper - Calculation of Mine-Values

The following is an attempt to form a formula by which a mine can be quickly evaluated, aft,er all pertinent physical data have been collected from observations on the ground by a competent mining engineer. Assumptions. Let Q = price to be paid for the mining property. M = cost of developing the mining property to yield y tons of ore daily. P = cost of suitable plant to treat y tons of ore daily, p = value of said plant when the mine has been exhausted. C = total fixed capital investment. W = working capital investment. Then let C + W = total capital investment. y = required yield of ore daily in tons. Y = yield of ore yearly in tons, d = number of producing days per year, u = average operating profit per ton of ore. R = rate of interest to be earned on total investment of (C + W). r = rate of interest to be earned on sinking fund annuity. v = tons of positive ore available in mine. x = tons of probable ore available in mine, z = tons of possible ore available in mine, m = fractional factor to change probable to positive ore. n = fractional factor to change possible to positive ore. Q = tons of total ore available in mine. t = time in years to exhaust mine at rate Y.