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By Carl L. Renzoni

INTRODUCTION This paper defines equity as the issuance of a permanent interest in the business on a broadly distributed basis. As such, it excludes the issuance of equity to either a merchant bank or to another corporation. Nearly twenty years ago the equity markets were very simple: The instruments used were primarily common shares, convertible debentures or convertible preferred shares. Another equity-type option often used, especially by junior companies, was the sale of joint venture interests. Issue sizes were generally in the order of $25 - $100 million and issues were syndicated primarily in North America and Europe by one or two investment dealers. Mining corporations today benefit from a market with much more depth. Issues are syndicated by dealers on a truly international basis, and issue sizes now often range up to $300 million. Moreover, dealers are now willing to take significant risk in buying the issues for redistribution. This discussion of trends in equity markets will encompass: 1) common shares 2) warrants to buy common shares 3) convertible debentures 4) commodity backed instruments A review follows of events that affect the mining industry and investment dealers as they have a bearing on the equity markets for the metal producers. FACTORS AFFECTING THE MINING INDUSTRY The current business cycle, up to October 1987, had been characterised by a buoyant stock market and depressed base metal prices. Mining companies entered this period with weak balance sheets and little prospect of cash flows meeting capital needs. The issuance of equity and the sale of assets were used extensively to reduce debt to manageable levels. During this period, the relative high price for gold, and more important, the very high earnings and cash flow multiples afforded to gold producers, caused companies to target gold as the only game in town. The need for capital to acquire and develop gold properties prompted an unprecedented volume of equity issues. (Burns Fry led or co-managed over $1 billion of mining equity issues per year during this period). This high demand for equity capital by the industry prompted an increase in the use of equity instruments, such as commodity backed instruments. In addition, government tax incentive programs in Canada, such as flow-through shares, allowed smaller companies to raise significantly more equity than would otherwise have been possible. Over $1 billion in flow-through equity was raised in 1987 alone. The abundance of flow-through capital in Canada made it easy to form a new company. One flow-through share fund developed a system of providing the working capital required for a company to be eligible to receive flow-through share capital so that an entrepreneur required only a mining property to get started. Many new companies were formed and several flourished in a buoyant stock market environment to the point that market capitalizations grew to $100 million or more. The current period is in stark contrast to that before October 1987. The equity markets are generally available to the resource industry only on a window basis and only for senior companies and for special situations. The industry is benefitting from buoyant metal prices, and bankers are anxious to provide debt capital. Investment dealers previously processing several equity issues

Jan 1, 1990

By Alistair Frame

INTRODUCTION In April 1988 discussions were about to start with BP on the possibility of buying their- mineral interests, and it took a long time to arrange a deal. I will talk about RTZ without BP Minerals, look at the new RTZ with BP Minerals, discuss the outlook for metal prices, and review the problems in South Africa and develop the case against sanctions on that country. RTZAT THE END OF 1988 Late in 1987, after completing a worldwide review of our strategic thrust, we decided: 1. That the business focus would be to remain a major diversified natural resource group with interests in related industries. 2. To divest non-core and low growth businesses. 3. To develop a logical acquisition plan. 4. To emphasise organic growth and, most importantly, to enhance shareholders' wealth by capital increase and a progressive dividend policy. Subsequently, we concluded that we should sell our oil and gas business and dispose of several assets for which we saw little growth potential. The disposal programme raised some U.S.$ 1,600 million, representing a significant capital gain on our various investments. All transactions were carried out by our small Head Office staff in London, without the help of merchant banks and lawyers, and we were able to safeguard the employment of our staff in all these operations. The most interesting disposal was of our oil and gas interests. Before the 1987 strategic review, we had ambitions to develop our oil and gas interests and to become the leader in the second division of European oil companies. Our interests, which were purely in exploration and production of oil and gas, consisted of the 100% owned RTZ Oil and Gas company, and 29% of LASMO, a publicly quoted U.K. oil and gas company with extensive worldwide interests. LASMO, in turn, owned 25% of Enterprise Oil, one of the more successful of the North Sea oil exploration and production companies. Prior to the end of 1987, our intention was to acquire control of both LASMO and Enterprise. However, when we evaluated the net asset value of these two companies based on our oil price assumptions, which were pessimistic for the next five years or so, we concluded that they were both trading in the market at significant premiums. This, taken with the additional premium required for acquisition and the high cost of exploration, led us to conclude that, since funds could undoubtedly be used to better effect, we should sell our interests. Turning to the other major achievements in 1988, we commissioned, and built up to design levels in a very short period of time, the Morro do Ouro gold mine in Brazil. This mine reached its design output of 100,000 ounces of gold per year within three months of start-up, which was on time and under budget. We are now considering a possible expansion of this property. In South America, Utah International, Mitsubishi and RTZ arranged non-recourse finance, with post completion guarantees, for the giant Escondida Project in Northern Chile. Financing came from a group of banks in Japan, Germany and Finland -- the countries to which most of the concentrates will be sold -- and from the LEC. The average output of the mine for the

Jan 1, 1990

By D. B. Crouch, D. A. Poulter

The engineering and metallurgical assessment of the McLaughlin Project ore body concluded that an open-pit mine and cyanide leach mill process would be feasible, producing both waste rock and residual mill tailings. As a part of the planning and permitting process, site selection studies were conducted for the tailings and waste rock disposal. The site selection process began with a regional identification of potential disposal sites and proceeded through 1) regional screening, 2) elimination of sites with obvious fatal flaws, 3) qualitative ranking of site evaluation criteria, 4) quantitative ranking of sites, 5) field investigation, 6) evaluations of field data, and 7) selection of preferred sites. Based on this approach of site rankings and field evaluations, tailings and waste rock disposal sites were selected and recommended for the preliminary design phase of the permitting and project development process. The site selection study provided the documentation necessary to justify the use of these sites for waste disposal and enabled Homestake Mining Co. to anticipate and integrate environmental concerns with agency requirements into the planning process.

Jan 1, 1986

By K. Hanumantha Rao, A. Nayak, . K. S. Narasimhan, S. N. Mahapatra

Selective flocculation studies carried out with iron ore tailings generated at Kudremukh iron ore plant indicate that a concentrate containing 63% iron can be obtained from the tailings containing 34% iron with around 60% recovery. This opens up the possibility of recovering most of the iron lost in the tailings generated at 2 kt/h (2200 stph) while processing 22 Mt (24 million st) ore per year. This would mean that the productivity could increase by around 50%. In these studies, it has been established that caustic degraded tapioca starch is a most effective agent for selective flocculation. While potato starch after caustic degradation can also be used, neither the parent starch nor the amylopectin compound is as effective.

Jan 1, 1986

By R. W. Smith, Z. Sadowski

The stabilities of finely divided mineral suspensions were determined as functions of pH and concentrations of polyethylene oxide, sodium ligninsulfonate, sodium dodecybulfate, and sodium oleate. In addition, the electrokinetic potentials of the minerals were determined under identical pH and additive concentration conditions. Flocculation or dispersion of the suspensions is discussed in terms of both the amount and manner of adsorption at the appropriate solid-liquid interface as it is influenced by additive concentration and pH.

Jan 1, 1986

By J. W. Harshbarger, E. L. Montgomery

The region of metallic ore deposits in northern Chile, southern Peru, western Bolivia, and northwestern Argentina occurs in arid zones at altitudes as high as 6 km (19,700 ft). Because surface water supplies are meager, new mines require unexploited sources of water. Prolific ground water aquifers occur in salar basins in this region of the Andean Highlands. Exploration water wells have been constructed and aquifer characteristics have been tested in eight salar basins. Results indicate ground water quality is good. Aquifer transmissivity and storage computed from results of pumping tests indicate maximum capacities of more than 170 L/sec (2700 gpm) for individual production water wells. Results of investigations conducted by the authors demonstrate that ground water reservoirs in the Andean Highlands comprise a source of large quantities of water for the mineral industry.

Jan 1, 1986

By R. E. Ray, J. W. Stevenson, J. A. Berry

Conventional concrete block plastered with a cementitious coating is the most common material used in the construction of permanent stoppings to direct airflow in underground mines in the US. All mines experience various degrees of strata convergence depending on depth of overburden, geological conditions, and type of roof support employed. Strata convergence will cause cracks and joint openings in masonry stoppings, resulting insignificant air leakage losses. Where strata convergence is severe, complete structural failure of the stopping can ultimately occur. Reconstruction of damaged or destroyed stoppings adds expensive overhead to mining operations, and even greater expenses are incurred from the additional fan horsepower required to overcome leakage losses. Ideally, a stopping should maintain high resistance to airflow while yielding to strata convergence. By properly incorporating a polyisocyanurate rigid foam material within the masonry block structure, stopping service life can be increased in mines experiencing strata convergence problems such as floor heave, roof loading, and lateral rib movement.

Jan 1, 1986

By R. D. Begley, A. W. Khair

Introduction The technique being investigated here uses a physical mine model which consists of a plexiglass room-and-pillar model 11.4 x 11.4 cm (4.5 x 4.5 in.). It is placed at the bottom of a larger plexiglass box 25.4 x 30.5cm (10 x 12 in.). The box is then filled with a model material representing geologic overburden. Sand has been selected because of its deformability under gravitational forces. The mine model is capable of creating a cavity and induces movement on the surface of the model material. This surface disturbance can be measured using a photographic technique called holographic interferometry. This paper discusses results of an investigation of the possibility of generating subsidence criteria using physical mine models and laser holographic interferometry. Problem Statement Subsidence appears to be widespread in two states - Pennsylvania and Illinois - although serious subsidence is found in localized areas of numerous other states (HRB Singer Inc., 1977). The US Bureau of Mines estimates that more than 1618 km2 (400,000 acres) of urban areas are threatened by subsidence. Pennsylvania and West Virginia contain 57% of these threatened areas, with the remainder being spread out over 16 states (Johnson and Miller, 1979). Events of subsidence have been reported in urban areas, including Pennsylvania (Gray et al., 1977) and Illinois (Mahar and Marino, 1981). One location has observed three episodes of subsidence beginning in 1950 (Bruhn et al., 1981). These subsidence events all occurred over abandoned room-and-pillar mines. Some mines have been abandoned more than 50 years (Bauer and Hunt,1981) . Available research does not offer much on the problem related to time dependent subsidence, especially those associated with the failure of remnant coal pillars. The physical modeling technique developed at West Virginia University is capable of measuring both instantaneous and time delayed subsidence. Laser Holographic Interferometry Laser holographic interferometry, or holometry, uses the interference properties of laser light to measure small movements of objects. The object requires only optical access and no surface instrumentation. This technique is closely related to photoelasticity. Both techniques rely on the uniqueness of the light reflected off or through an object in any given state of stress. The entire measurement process is done remotely without any surface instrumentation and without using a camera. The interferogram is constructed and visual observation will yield fringes on all areas that yielded or moved. The displacement represented by one fringe was determined by Wilson et al. (1977) and is given by the relationship: [d ='1(1) 2 cos 8 where d = displacement of one fringe 6 = incident angle of laser light A = wavelength of light (632.8 x 10-9 meters for Helium-Neon lasers)] In summary, holometry is capable of detecting very small movements of objects under study. It is a very sensitive process that requires laser light and vibration free experiments. Experimental Program Lab Facilities The primary components of the facilities were the laser and the optical table. The light source was 50 milli-watt, Helium-Neon laser. The optical table was a granite slab weighing nearly one ton. All experiments were performed on the optical table. It consists of a large table sitting on air cells similar to car innertubes. Six air cells were placed on top of two layers of wood and Styrofoam. Figure 1 is a schematic diagram of the vibration free table. Even with these precautions, the experiments still had to be performed at night to reduce potential traffic related vibrations. Room-and-pillar mine models consisting of three different pillar sizes were constructed out of plexiglass. The models were designed to represent three different extraction ratios. Figure 2 shows the models. The extraction ratios were determined by the tributary loading concept (Peng, 1978). These models were the primary component of a seam extraction simulator. A schematic of this simulation device is shown in Fig. 3.

Jan 1, 1986

By S. Acar, P. Somasundaran

The results obtained for the selective flocculation of natural ores do not usually agree with the corresponding properties of the constituent minerals when present alone. This is mainly due to the presence of dissolved mineral species which can interact in many ways with other components in the system and alter their behavior. In this paper, the effect of dissolved species on the flocculation and electrokinetic properties of sulfide minerals is discussed. Dissolved iron, copper, and nickel (Fe, Cu, and Ni) species are found to affect the properties of natural chalcopyrite and pentlandite in certain pH range. These effects are interpreted in terms of species adsorption leading to activation or depression of reagents, surface precipitation, and complexation of species

Jan 1, 1986

By G. G. Marino, J. W. Mahar

This paper provides an understanding of the behavior and potential damage of homes resulting from sag-type mine subsidence. This is done with extensive research of numerous case histories in Illinois collected by the authors. The house response to subsidence-induced ground displacements are summarized and evaluated. A damage level criteria, specifically developed for residential structures, is presented based primarily on repair costs. Damage levels and the associated subsidence profile characteristics for each case history are compared.

Jan 1, 1986

By M. J. Humenick, K. Garwacka

A laboratory experimental research project was conducted to evaluate the use of chlorine for the oxidative destruction of residual ammonia that may remain in ground water after in-situ uranium solution mining operations. The work tested the idea of injecting high strength calcium hypochlorite solution into the mining zone to convert ammonia to nitrogen gas as a final cleanup process for ammonia removal from the ground water system. This paper details ammonia removal efficiency as a function of chlorine dose, reactant, and product material balances, and how the concept may be used as a final ground water restoration process.

Jan 1, 1985

By P. K. Currie, J. V. Walters

Solution mining of magnesium salts (Carnallite and Bischofite) is taking place near Veendam, in the northeast Netherlands. The magnesium salts are used for the production of magnesia sinter, used as a base material for the manufacture of refractory bricks for furnaces. This paper gives, first, an introduction to the operational procedure followed in Veendam, with the emphasis on some of the unique aspects, and then discusses rock-mechanical aspects of the cavity behaviour. The creep behaviour of magnesium salts is described, and Finite Element calculations on cavity stability and potential surface subsidence are discussed.

Jan 1, 1985

By Stanley J. LeFond

Jan 1, 1985

By E. Tulcanaza

The practical significance of the in situ grade variability is usually neglected. Although recognized, often times it is either ignored or just considered as a vague guideline in many of the decisions dealing with exploration, reserve estimation, and mine planning. This paper stresses the significance of grade variability for exploration and mining, and illustrates its liaison to the structural features of the ore deposits, as well as to the mining parameters used for mine extraction. Some geostatistical results obtained from a silver mine, tungsten mine, and copper mine in South America are discussed.

Jan 1, 1985

By I. Iwasaki, K. Adam

During wet grinding the electrochemical interactions between grinding media and pyrrhotite not only accelerate media wear but also adversely affect the suede mineral's flotation response. A possible remedy of the adverse effects on floatability by applying electric potentials to grinding media was examined. Flotation tests, Auger electron spectroscopy, and X-ray photoelectron spectroscopy were used to study pyrrhotite surface properties. Although anodic polarization of the steels increased metal loss by corrosion, pyrrhotite flotation recovery was increased. In the case of cathodic polarization, flotation recovery improved somewhat in a narrow range of overpotentials. At higher cathodic overpotentials, however, mineral floatability was progressively lowered although the corrosive wear of grinding media might be reduced.

Jan 1, 1985

By E. L. Affleck, W. G. Stevenson

In both Canada and the United States, a company making a public offering of securities must comply with regulations which have been passed by Federal, State and/or Provincial Legislatures. These regulations usually require the distribution of an acceptable prospectus which provides essential background information about the issuer, the project and the share offering. when the public offering has been accepted, the unlisted company may then seek a listing of its shares for trading on a Stock Exchange. Once listed, the company will be subject to rules of the Stock Exchange. This paper will deal with the specific information required for inclusion into a prospectus being submitted for a resource company and particularly those parts of concern to mining engineers and geologists.

Jan 1, 1985

By John E. Hagni, Richard D. Hagni

ORE.ID, a microcomputer program, rapidly searches a database of the principal properties for 573 ore minerals. Searches may be performed on any or all of the following properties: mean Vickers hardness, Talmage hardness, mean reflectance, strength of anisotropism, and colors and tints of the mineral and its internal reflections. Data from the International Mineralogical Association - Commission on Ore Microscopy data card file have been used when available. The program displays the number and type of data matches for each mineral found, displays their chemical components, and allows the range to be narrowed or widened for each of the identification properties for repeated searches, if desired. ORE.ID is much more rapid, allows for the use of more identification properties, and involves more ore minerals than any previous identification system.

Jan 1, 1985

By M. Tanaka, S. Kita, Y. Jinnouchi, Y. Sawada

This paper generalizes the results of the recent theoretical and experimental investigations on the air-pulsated jigs in Japan. The pulsating mechanism is analyzed as a special vibratory system, and the jigging mechanism as a mass system subjected to the law of hindered settling. The results of investigations on the following items are reviewed: dynamics of the pulsating mechanism; pulsation in a practical TACUB jig development of a new type of air valve; uniform pulsation in a large Baum jig; motion and mobility of bed particles; separating speed in hindered conditions; and standard deviation in practical jigs.

Jan 1, 1985

By Grover R. Castle

INTRODUCTION "Project Financing" or "Project Loans" have become increasingly popular in recent years, and commercial banks are being asked to consider more and more of such financing. However, the analysis of this type of loan is quite different from the analysis of a loan to a financially sound corporation based on the company's balance sheet. For this reason Chemical Bank did a study of project loans in an attempt to be more sophisticated in our approach to them. As part of this study, we examined 29 project financings for which information was available. In this article I shall describe project loans and set forth the guidelines we developed, as an aid to credit officers who might have occasion to analyse this type of financing. DEFINITION OF "PROJECT FINANCING" OR "PROJECT LOAN" The terms "project financing" and "project loan" commonly describe the various methods that banks and institutional lenders use to finance the construction of new projects on a basis whereby payout is anticipated from the revenue stream generated by the project. A project financing often involves a loan to a new entity formed specifically to own the project. The analysis of a project loan proposal is quite different from the analysis of other term-loan proposals since it involves a credit decision based on the review of a projection or forecast rather than of historical earnings and/or it involves the reliance on contractual obligations of third parties. Lenders are asked to assume the added risks associated with project loans because: 1. Project financing may permit a company to obtain additional leverage. It is possible for companies to arrange financing on a project basis that could not be arranged as a direct borrowing. For example, a company may not be permitted to borrow more money directly, due to a limitation in a bond indenture. However, a project financing can sometimes be negotiated on a basis not prohibited by the indenture. 2. Often the sponsors of, or the stockholders in, the project are seeking an off-balance-sheet financing. For example, 11 of the 29 projects in our study were arranged on an off-balance-sheet basis and one showed on the balance sheet as a deferred income item. An off-balance-sheet financing, for the purpose of this article, is a financing which does not show as a direct liability on the balance sheet of the sponsors of or stockholders in a project. 3. Projects are often located in a foreign country. The financing is arranged so that the lenders assume the political risk on the loan because many companies rightly believe that this arrangement affords a degree of insulation from political risk not otherwise obtainable. 4. Many projects are jointly owned by several sponsors. This form of financing lends itself well to a situation where a new entity is formed to own a project and do the borrowing. Project loans can be used to finance a variety of activities including development of iron-ore deposits and associated pelletizing plants; development of coal reserves; construction of pipelines, alumina plants, fertilizer plants and refineries; etc. The specific areas of analysis can be quite different, depending upon the type of project being financed. It is important, therefore, to classify the proposal according to the type of project, and also by the nature of the financing - nonrecourse financing, financing covered by a guarantee of completion and financing supported by an undertaking lasting for the life of the financing. I will discuss each of these types in more detail later, but first, I should like to make some

Jan 1, 1985

By J. L. Huiatt, D. G. Foot

The Bureau of Mines, U.S. Department of the Interior, investigated methods of recovering potash values from process and waste brines. Laboratory pan evaporation of four chloride brines produced crude salts containing predominantly sylvite, halite and carnallite. Six sulfate- chloride brines produced crude salts containing primarily schoenite, kainite, leonite, sylvite, carnallite, and halite. Potash grades ranged from 7.2% to 22.2% K20, and recoveries by crystallization ranged from 85% to 99%. Sylvite flotation from chloride evaporites with amine collector, recovered 90% to 97% of the potash in a concentrate containing 54.3% to 60.3% K20. Fatty acid flotation of the high sulfate evaporite recovered 78% of the sulfate minerals in a 28%-K20 concentrate. Flotation of the remaining chloride minerals with amine collector recovered 80% of the potash in a 59.7%-K20 concentrate. Solar evaporation of 37 854 L (10,000 gal.) of brine recovered 99% of the potash in a crude evaporite containing 24.5% schoenite and 20% sylvite. Flotation in a 45-kglh (100-lblh) continuous flotation unit recovered over 95% of the potash in schoenite and sylvite concentrates, containing 28% and 62.3% K20, respectively. An economic evaluation is included.

Jan 1, 1985