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By Robert F. Calman

OUTLINE FIVE EXAMPLES OF GOLD-LINKED FINANCINGS 1. Financing the Lupin Mine • Sale of Cdn $40.0 million of 12% preferred shares and Cdn $40.0 million of Gold Purchase Warrants @ $595 per ounce. 2. Financing the Copper Range acquisition • Borrowing 100,000 ounces from a Canadian chartered bank @ US$307 for five years. 3. Financing the Round Mountain expansion • Borrowing up to US $80.0 million in dollars, convertible into gold, repayable over five years from a group of North American banks. 4. Financing the Tenneco Precious Metals Division acquisition •Sale of SFr 110.0 million of ten year 3-718% bonds with warrants to buy 132,000 ounces of gold at US $560. 5. On Forward Sales, Puts and Calls • Gold, Silver, Canadian Dollars, Swiss Francs THE FINANCIAL RULES AT ECHO BAY 1. Never bet the company 2. Equity is the primary form of capital for a gold mining company 3. On debt 4. The Yardsticks for Corporate Decisions 5. Financial Community Relationships 6. Dividend Policy No Text Available Tables Follow

Jan 1, 1990

To assist the taxpayer of the oil and gas industry in correctly and expeditiously preparing his Federal tax returns, the Bureau of Internal Revenue has prepared a "Manual for the Oil and Gas Industry Under the Revenue Act of 1918." Although the endeavor has been made to anticipate all questions that may be asked, it is recognized that such a manual is only general and cannot cover all cases that may exist. The Manual is based largely upon information gathered during the fall of the year 1918 by a corps of geologists, technologists, and engineers. The investigation was undertaken primarily to furnish a basis for arriving at valuations, and depletion and depreciation deductions in connection with oil and gas properties. All fields in the United States were canvassed. Records of production of thousands of properties were collected and tabulated. These were carefully classified and studied by the most competent and experienced men in the country and the average future production curves and tables of valuation data were produced as a result of this study. Be American! Work and Save. Buy W. S. S.

Jan 7, 1919

By William Hutton Blauvelt

An official of one of the prominent iron companies of the South recently made the following statement during a discussion of the present conditions of the Southern iron business: " The trouble with us in the South has been that we have been satisfied to buy iron and coal lands, build blast-furnaces, and make pig-iron. We stopped at pig-iron, and as a result we are all poor. The South needs diversified industries, and needs to work up its raw products into articles the Southern market can use. If we had realized this sooner, some of us might now be rich." The South is awakening to this view, and in the Birmingham district alone one basic steel-mill is already in operation, and in a year's time another and much larger one will be turning out rails and shapes, with rod- and wire-mills in prospect. It is to chronicle another metallurgical step forward in the same district that I have prepared the following description of the new by-product retort coke-oven plant recently put in opera-

Jan 1, 1899

By Paul M. Tyler

THE farmer pays the phosphate miner! Phosphorus is used in fireworks; goes to battle in military smoke screens, incendiary shells, and tracer bullets; and, in vermin destroying pastes, does its part in the war against insects. A lemon phosphate can be had for a nickel at most soda fountains, and tens of thousands of tons of phosphate rock are mined annually for use in the food industries, chiefly for making monocaleium phosphate baking powder. Sodium phosphate cleaning, washing, and scouring compounds consume substantial quantities: the iron and steel industries buy a few thousand tons yearly to make ferrophosphorus and to balance foundry-iron furnace charges; and even nonferrous metallurgists use a little for phosphor bronze and other alloys. Phosphoric acid, its salts, and diverse other derivatives of this versatile element have countless applications, and industrial outlets are increasing rapidly, especially in the United States. Nevertheless, in this country nearly 90 per cent and in the whole world fully 95 per cent of the phosphate rock consumed is absorbed ultimately in agriculture.

Jan 1, 1938

One of the engineering proposals in the last Congress which was of interest to engineers was the soldiers' land settlement plan proposed by Secretary Lane, under which returned soldiers, sailors and marines would be employed on construction work in the reclamation of swamp and arid lands and would thereafter be given preference in the selection and settlement of those lands. This bill failed in the fillibuster at the end of the session. It is likely that some sort of a plan for soldiers' settlement will come before the next Congress. A new bill has been written up for introduction at the next session which proposes an "infiltration method" of buying improved farms in established communities for' the soldiers' settlement purpose, under the authority and direction of the Farm Loan Board. The contrast of this bill to the one recommended by Secretary Lane is of vital importance to engineers at this time; first, because of the broad engineering improvement program that the latter bill proposes as against no engineering improvement under the infiltration plan; secondly, the community settlement plan of Secretary Lane means improvement of waste lands requiring much engineering work.

Jan 7, 1919

By R. E. Allen

THERE was once a time when a practical oil man would appraise or buy a producing property on the basis of from $200 to $500 per barrel of average daily settled production. Curtailment-has, for the present at least, caused a virtual abandonment of the "barrel -of settled production" as a yardstick of, oil property value and in its place has come the "barrel of allowable production," which, although an artificial thing, is nevertheless now the principal factor governing the rate of ?pay out? or investment return. The potential production of a well, settled or otherwise, is of less importance in determining the present worth of a well than is the rate at which it may be produced. Speaking only of true potential for the moment, it is obvious that of two similar wells having the same potential, the one having the highest rate of allowable production would be worth proportionately more than the one of lesser allowable. The discount factor for deferred return and risk can easily vary the present values of the two wells by as much as 20 per cent when allowable rates are not greatly different.

Jan 1, 1934

Why should I pay $8.50 an hour for dealer repairs when my own mechanics work for $3.50?" The numbers vary, but that's the argument most contractors use to justify doing their own repairs. They don't realize it, but they're probably losing big money. For instance, it takes nearly a quarter of a million dollars in tools alone to equip a shop comparable to an average equipment dealer's facilities. A contractor must buy a lot of expensive, specialized tools he seldom uses, or else settle for the inefficiency of having repairs done by his mechanics with relatively unsophisticated tools. His building soaks up money in rent, maintenance insurance, taxes. His mechanics demand good wages. It even costs money when mechanics aren't repairing equipment. Mechanics get full wages for slack periods and cleanup time, too. This doesn't count as service manhours, but it's still part of the total repair cost. To help contractors uncover these hidden expenses and find out the true cost of owning a shop, some equipment dealers have devised a do-it-yourself "shop cost analysis form."

Jan 1, 1970

Two Canadian mining companies, Noranda Mines, Ltd., and Wright-Hargreaves Mines, Ltd., have agreed to buy $500,000 worth of shares each in Anglo-American Exploration Ltd., controllers of thousands of acres of possible oil-rich land in southern Saskatchewan and Manitoba. Samuel Clarence Nickle, Sr., reported as possible president of the newly formed exploration company, said that $20 million in assets have been accumulated by the firm, mainly in the Williston basin in parts of the Dakotas and Montana, aid extending into Southern Manitoba and most of Saskatchewan. The M. A. Hanna Co. reported a record profit for the seventh consecutive year with total 1951 profit reaching $14,081. The company handled a record 16.8 million tons of iron ore in 1951, compared with 14.9 million tons in 1950. The company is also preparing to open four iron ore mines in the Lake Superior district which are expected to produce more than 5 million tons annually by 1954. The company built two new iron ore concentrating plants at Mesabi range mines in 1951,a with a third plant going into, operations soon.

Jan 1, 1952

After months of negotiations, the U. S. has agreed to buy between 6000 and 7000 long tons of Bolivian tin now stockpiled at Peruvian and Chilean ports, at $1.175 per lb, f.o.b. South American Ports. Harry A. McDonald of the Reconstruction Finance Corp. signed the contract with Victor Andrade, Bolivian ambassador. The Mercantile Metals and Ore Corp., of New York City, acted as the agent of Bolivia's Banco Minero in negotiating the deal. The contract is a short term one. Throughout the talks, the U. S. refused to make a long term agreement because of the possibility that Bolivia will soon nationalize its mines. The Bolivians desired to sell the U. S. 18,000 tons during a one-year pact. The price agreed upon is roughly the same as with Malayan producers. In the meantime, American Smelting & Refining Co., signed over control of its operations to the Bolivian Government. The formal act of leasing the mines to the Bolivian Government follows the announcement last July by the company that it was closing operations because of high costs. Contract terms were not disclosed.

Jan 1, 1952

By Robert Glass Cleland

IN SPITE of its widely ramified interests in manufacturing, mines, lumber, railroads, and real estate, Phelps, Dodge & Co. remained primarily interested in exporting and importing, in buying and selling, and William E. Dodge, the directing-partner, consistently styled himself a merchant. After 1849 the profits of the company mounted steadily for seven years until they approached the half-million mark, but in 1857 another severe panic ended the long period of national prosperity that had begun some fifteen years before. Extravagance, indebtedness, and inflation again took their costly toll; or, as the New York Herald of June 27,1857, declared: Governmental spoliations, public defaulters, paper bubbles of all descriptions, a general scramble for western lands and town and city sites, millions of dollars, made or borrowed, expended in fine houses and gaudy furniture; hundreds of thousands in the silly rivalries of fashionable parvenues, in silks, laces, diamonds and every variety of costly frippery are.only a few among the many crying evils of the day. The worst of all these evils is the moral pestilence of luxurious exemption from honest labor, which is infecting all classes of society. The country merchant is becoming a city stock-

Jan 1, 1952

By Lyman H. Hart

Some of the significant facts that will affect the supply and demand for metals during the next few decades are given in this presentation. This is important because the only hope for intelligent guidance of the national destiny depends upon presenting a consistent and accurate picture of basic problems. The metals problems now fomenting are only slightly less important than those precipitating the energy crisis. Admittedly, it is difficult to generate serious thinking on this subject when the world is enjoying easy access to all metals at modest prices. This is possible because of the current world capacity to overproduce, and United States credit standing, at least up to now, has permitted buying freely on world markets. Although both these vital conditions are subject to change, there is little doubt that if the U.S. financial house is kept in order, we can muddle along for a while on a generally expanding, metalbased economy. But should our credit standing be permitted to collapse, or should there be a tightening of world supplies of metals, the nation would immediately find itself in trouble. Unfortunately, clear signals indicate that both of these conditions are threatening.

Jan 4, 1973

By AIME AIME

HOWARD H. PRESTON, professor of economics and business at the University of Washington, presented a paper before the North Pacific Section, A.I.M.E., on Jan. 23, on the "Economic Aspects of Gold and Silver." He carefully reviewed recent governmental actions that have affected those metals and gave an interpretation of their effects. A brief excerpt from his address; follows: Including the proclamation of March 6, 1933, the principal steps of the present Administration which have carried the United States off the gold standard and led up to the present program have been: (1) The Presidential proclamation of March 6 controlling gold. (2) The monetary sections of the Emergency Banking Act of March 9. (3) Mobilization of gold under Executive orders issued March 10 and April 5. (4) The gold embargo by Executive order, April 20. (5) The controlled inflation bill, May 12. (6) The joint resolution abrogating the gold clauses, June 5. (7) The Executive orders on newly mined gold, Aug. 28. (8) The President's radio address of Oct. 22 and the R.F.C. gold-buying program. (9) New anti-hoarding order calling in small holdings of gold, Dec. 28, 1933 and Jan. 15, 1934. (10) Nationalization and revaluation of gold' (Message to Congress, Jan. 15).

Jan 1, 1934

By Arthur Notman

THE raw material men in all industries, and copper is no exception, are accustomed to think of them- selves as the whole show, and not without justice, for if there were no copper mines the world would have no copper. Nevertheless, many different things costing money and resulting in profits must be done to their product before it is ready for the world's use. In other words, they are making the frequent mistake of Chinking in terms of partial costs. Nobody really uses electrolytic copper. Possibly that is why nobody seems willing to pay anything for it. The manufacturers, being canny, do not buy any more electrolytic than they feel that they can work up and sell profitably, although they like to make the raw material men Chink that they will take all that can be produced. This is a state of affairs that has aroused my sympathy and curiosity, and has induced me to study the financial history of the copper wire and brass industry of the country or such portion of it as publishes any records readily available to the curious minded. About 60 per cent of the electrolytic copper used in this country is drawn into wire and consumed by the electrical industries. The remaining 40 per cent is

Jan 1, 1926

• Phelps-Dodge Corp. signed an agreement with the Defense Materials Procurement Agency to increase copper production from the east ore deposit of the company's Copper Queen branch at Bisbee, Ariz. The company agreed to undertake a $25 million expansion program, including construction of a concentrating and leaching plant at the Bisbee mine and enlargement of the Douglas smelter. The Government agreed to buy the first 112,500 tons of the first 150,000 tons produced at 22e per lb if the company could not sell at a higher price. The new facilities will have a yearly capacity of 38,000 tons and should be in production by late 1954 or early 1955. • American Smelting & Refining Co. has started construction of a new building to house the Central Research laboratory at South Plainfield, N. J. It will have approximately 75 individual laboratories and an equal number of offices and shops. Modern apparatus to be installed will include electron microscopes, electric and fuelfired furnaces, miniature copper refineries and zinc plants, wire drawing machinery, and large pilot plant laboratory. In the new building scientists study the base metals, and the development of new uses for a number of Asarco by-products, arsenic, and little

Jan 11, 1951

By Emory J. Douglass

Mining companies are unique in that they extract mineral resources and must therefore deal with ecological disturbances and other special problems. Like most enterprises, however, their primary motive must be to make money. The problem of mining investment starts with the question of what "make money" means. This article proposes an answer consistent with what economists call the theory of the firm and then applies it to two of the common, and perhaps unrecognized, problems connected with min¬ing investment. In essence, the concepts presented here call for thinking to terms of the income change associated with a given change it outlays or operating procedures To illustrate. ABC Distributing Co. has just discovered the power of advertising. It has raised its annual advertising budget from $25,000 to $50,000, and sales have, zoomed from 250.000 to 350,000 units. The company buy, for 50e per unit and sells at $l. This move has produced $50,000 of operating income for $25.000 in additional advertising expense. This looks great, so the next year the advertising budget goes up to $100,000. Sales go to 440,000 units. With 90,000 more units at 50[c] per unit, ABC sales are up by $45.000. Its advertising costs, however, went up $50,000.

Jan 1, 1971

By O. G. Lellep

Modern shaft kilns in Europe are fully mechanized and burn cement of acceptable quality at 700,000 Btu per bbl and lime at 3.2 million Btu per net ton. Rotary kilns for cement have increased in thermal efficiency by using exit gas heat for preheating incoming raw material and by recovering heat from outgoing clinker in air-quench coolers. The dry process Lepol or ACL kiln has the lowest fuel consumption, 580,000 to 630,000 Btu per bbl, and very low dust loss, about 1 pct weight of clinker. The Holdebank-Gygi system reaches 720,000 Btu per bbl. The calcinator kiln for the wet process consumes 1.1 million Btu per bbl. IN every country economic circumstances prescribe the method used to produce a commodity at lowest cost. In Pennsvlvania a man's wages for working 4 hr buys a ton of coal wholesale; in Germany a laborer must work 40 hr, or ten times as long. In western Europe, therefore, conservation of fuel is of primary importance, and recent practices of burning lime and cement differ from those employed in the United States. 'This Paper presents data collected during a trip through western Europe in 1953. Considered uneconomical, shaft kilns for burning

Jan 1, 1955

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 AIME AIME

This volume, an octavo of 626 pages, is now ready for delivery. By its aid, any subject treated or alluded to in the Transactions can be instantly tracked. The names of persons, mines, works, towns, etc., have been included; and abundant cross-references and classified sub-headings have been added to facilitate rapid consultation. Thus, the student remembering the name but not the locality, or the locality but not the name, or neither the name nor the precise locality of a gold-mine, can find it under ?Gold-mines," or under either of the other heads. For a more extended statement of the nature and use of this Index, which is intended specially for the benefit of those who do not possess complete sets of the Transactions, and who consult the Library by correspondence, see the Bi-Monthly Bulletin for September, 1907. The price of the Index bound in cloth is $5, delivery charges prepaid. Half-morocco binding costs $1 extra. Buy at once a copy of this Index, and also as many back-volumes of the Transactions as you can afford. Every such purchase from the stock on hand is so much added to the income of the Institute. As far as possible, the money thus received will be devoted to maintaining and perfecting the Library, and making it useful to members in all parts of the world.

Jan 11, 1907

By ALFRED KAUFFMAN

NO matter what position we hold, workman, foreman, superintendent, manager, president, or what not, let us fail to give or to make good products, then see how quickly we'll be called to account for- our work by the buying public. The waves of progress taught us that millions were wasted in unnecessary strikes-we also learned that many losses were due to neglect on the part of manufacturers to give the same consideration and attention to the human element of their factory as they gave to their machinery. The employees learned also that the employer was their agent who found purchasers for the product of their labor. So between the two we learned that many years of labor were needed in order for a worker to recover his wasted savings, or for the manu¬facturer to replenish his loss. Treat 'em rough, and tell 'em nothing, was not very far from the true relationship between management and employees in manufacturing plants in the early days. Today just exactly the opposite views are held by executives whose function is the handling of employees. Men today want to know what it is all about. They are intelligent enough to comprehend the facts, and to use them constructively, and it is good business to give them the information.

Jan 1, 1929

The four papers making up this symposum have been prepared especially for those who have no knowledge of seismograph prospecting. To many people mathematics is a formidable subject, and many are discouraged from studying seismograph prospecting under the mistaken assumption that the mathematical requirements are severe. In the papers presented here there is not a single mathematical equation. We believe that considerable competence in dealing with some of the most important problems of this work can be attained without any mathematical training whatever. At the present time, there is a real need for interpretation of results by persons thoroughly competent to bring geologic experience and imagination to bear on data that are subject to multiple interpretation from a strictly physical viewpoint. Likewise, those charged with the responsibility of planning seismograph exploration campaigns would do well to become familiar with as much as possible of the technical aspests of the work. They would then be in better position to judge of its success in individual cases. It has often been said that the seismograph is a new structure-finding tool for the geologists to use. Using a tool and using its product are two different things. One does not use an automatic screw-threading machine when he buys a box of screws at the hardware store. Neither does the geologist

Jan 1, 1940