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CSA mine, which is a deep level copper operation, located 12 km north of Cobar, NSW, currently uses a top down stoping method, utilising cemented hydraulic backfill (CHF) to fill and stabilise the stoping void thus assisting the extraction sequence. The stope sequence then requires development back through the CHF stope so that the necessary infrastructure for the subsequent stoping, such as raise bore pads can be sited. The primary and secondary support installed in the CHF consisted of 100 mm thick fibrecrete from floor to floor with 7 + 2.4 m long resin support tendons installed at 1.5 m ring spacing. This support system relied on the resin achieving a quality bond with the CHF, and also the fibrecrete developing early structural strength due to the use of an accelerator. In addition to the delays in the excavation turn around time, it was felt that a superior support system could be designed. Such a system was designed; risk assessed, tested underground, and trialled in selective CHF digouts, and eventually signed off as the chosen support method in CHF digouts. This paper discusses the change from a passive support system used in CHF digouts to an active support system using Swellex bolts and weld mesh, which has provided an active support system, that is superior, faster to install, reduced the excavation turn around time and is overall a cheaper support system.

Nov 25, 2010

By Nolan Eckroade, Nigel Pereira

Wireless electronic blasting systems are a new technology that enable truly wireless initiation through rock, air and water. This is achieved using low frequency magnetic induction waves to wirelessly send a firing command to groups of in-hole primers. Fully wireless initiation not only removes the limitations imposed by a wired connection to each primer in a blast, but also enables users to alter the paradigm of conventional mining techniques to advance operational productivity and reduce personnel exposure to high-risk activities. While initially deployed in underground applications, wireless electronic blasting is now being used in the open cut environment. To capture the early impacts in surface mining operations, case studies conducted at three surface mines evaluated blasts utilizing a wireless electronic blasting system against baseline blasts using conventional, wired initiation systems. The purpose of this paper is to outline the specific learnings associated with wireless electronic blasting in surface mining to date. The paper will include references to these specific case studies as well as benefits realized and applications for the future.

By Ryan W. Siggelkow

Mines today use various methods of mining to extract ore. Because of the dangerous nature of many of these processes, remotely controlled LHD machines are being used to extract the ore from the draw point. The remote control system, although being made safer all the time, has remained virtually unchanged for many years. The basic functionality is an operator switching the machine to remote control, getting out of the cab, walking up a stand, operating remotely, returning to the cab, switching to manual, driving manually, switching to remote, and switching to manual. It seems repetitive, and time consuming, does it not? Networking, convergence, video, voice, and data infrastructures, and other technologies are growing by leaps and bounds in virtually every industry and region, except for mining. From the comfort of the living room couch, a Canadian can play hockey online with full voice conversations over the Internet with someone in Russia in real time. Yet, a mine superintendent must jump through hoops to have a private conversation with the front line supervisor underground. "Is Joe around anywhere?" If Joe hears the message, he will respond. If not, who knows? Maybe he's hurt. Maybe he's not. Where is Joe? Nobody really knows, and that is scary. Today, surface knows that the workers disappeared into the cage at 7:00 a.m. They also know that the workers will probably and hopefully return at 3:00 p.m. Is there not a better way to handle this? With such a complex industry, it seems as if, for the most part, the introduction of new technology into mining has either been overlooked or has been met with some resistance. It is time to step back, look at the process, and see how it can be improved. Key areas of focus will be safety, productivity, dependability, and cost-effectiveness.

May 1, 2010

By F. Osmond, R. Kelly

"Malcolm Knowles, the famous adult educator once wrote: ""What a challenge we in human resources development face if we are to avoid the obsolescence of our workforce. I can foresee this challenge requiring that we reconceptualize (...) and redefine the role of HRD, away from that of managing the logistics of conducting training activities to that of managing a system of learning resources"".The context in which this was written surrounds the subject of adult education and the need for business and industry to change its approach to the treatment of adults as learners. In explaining what 'managing a system of learning resources' means, Knowles refers to line supervisors and managers as the most ubiquitous resources for day-in and day-out employee development. In many organizations training has been largely a staff rather than line responsibility. Even where trainers reported to line management, it was still seen as a staff function performed by a few specialists.This change referred to by Knowles places a much heavier responsibility on line supervisors and managers for the development of their personnel than has traditionally been the case. Managing that change - handing over the responsibility to the line organization - is the supreme challenge for the HRD function.Just why is this change necessary? Because too often, the learner does not effectively use on the job what he or she learned in the classroom. In fact, learners often discard new methods and revert to the older ways. The reason training does not stick is that the systems for training and work management are most often separate entities and while one may support the other, they need to be a single integrated system in order to ensure the transfer to the job effectiveness of training and some real value for the training dollars.Because much training can be wasted, steps have to be taken to ensure that it fulfills its intended purpose. The effective and continuing application of knowledge and skills that learners acquire can only be realized when line supervisors and managers are at the centre of the training system.This paper describes how such a systemis being developed at the Iron Ore Company of Canada (IOC) as a functional training program is introduced. The following text provides background information on the IOC - who they are and where they are located, a definition of functional training, an evaluation of the suitability of this approach for adults in industry, a description of how the program is being implemented at IOC and some observations that have been made as this change is experienced."

Jan 1, 1995

By D Frost, G Harbort, T Lipiec, N Deonarain

"The use of flotation columns has remained a contentious issue among mill operators. There are those who consider them an essential part of any mineral processing operation, while others consider them a necessary evil, which should only be installed if there is no alternative. Lastly, there are those who believe they should not be installed, no matter how great the perceived benefit.This paper provides an analysis of over 4000 installed flotation columns, contained in the Amec Foster Wheeler flotation database. Changing trends in column flotation use by type, commodity and geographical region are discussed. The effect of changing commodity prices and the China ‘phenomenon’ are reviewed. Special reference is made to the changing face of column flotation in Australia.Of note is the fact that after falling to a 20 year low in installed flotation column capacity in 2014, flotation columns during 2015 went through a resurgence in popularity. This resurgence was in direct contradiction to depressed metal prices and was driven by brownfield optimisations to reduce off-site costs, particularly in base metals. A case study is presented comparing the benefits of column flotation at high commodity prices with low commodity prices.Citation:Harbort, G, Deonarain, N, Frost, D, Lipiec, T and David, D, 2016. Changing Trends in Column Flotation Use - Their Impact for Australian Mill Operators, in Proceedings 13th AusIMM Mill Operators’ Conference 2016, pp 93–104 (The Australasian Institute of Mining and Metallurgy: Melbourne)."

Oct 10, 2016

By Jim Avraamides

Historically, much of Western Australia's gold production has come from the refractory sulphide-telluride ores located in Kalgoorlie's Golden Mile. Most of the recent gold boom has been associated with low grade, open pit free-milling oxide deposits. Primary sulphides are commonly encountered at depth and in many cases are highly refractory. Different approaches to the problem of recovering go1d from these ores have been adopted subject to local conditions both technical and environmental. The least preferred option is the preparation of a gold- rich flotation concentrate which is shipped to a smelter. Roasting of flotation concentrates can be practised in certain remote locations where sulphur emissions are tolerated. Fine grinding of flotation concentrates followed by direct cyanidation is another popular approach although this often leads to fouling of carbon by flotation reagents in the adsorption section and high soluble gold losses.

Jan 1, 1989

By T. Peter Philip, Erich U. Petersen, William J. Tafuri, Donald M. Hausen, Douglas N. Halbe

Scarcely a month goes by that I or someone else at Newmont Mining or Newmont Gold isn't asked to give a talk on the topic I was asked to discuss today. Investors, financial analysts, geologists, metallurgists, even our government--everybody wants to know what the future holds for gold mining. Well, you're not going to get exactly what you asked for. Today, I'm prepared to focus primarily not on what the future will bring to us, but rather on what the future will demand from us. More than that, I cannot undertake because it isn't within my scope to predict how wise and resourceful everyone in our industry will be in the future. What our future will hold, as I see it, will depend on our--and our colleagues'-- responses to these very real demands. Three critical issues stand out in my mind as to what the future will demand of us in the gold mining industry. And these demands will be for: 1. The very greatest of technical expertise and innovation. 2. The highest order of environmental sensitivity and timely accommodation. 3. Planning, planning and more planning. All of these flow inexorably today from the traditional objective of any mining company--or any company in any business, and that is, to make money. Nothing as I see it, should be undertaken by a geologist, metallurgist or even an environmental department, unless the exercises will enhance profits; and nothing may be ignored which can have consequent damage to the bottom line. Thus, the three issues I've listed for you subordinate themselves to the objective of making money, although at least in the environmental area, it might seem to some that we can only incur additional costs without even a dollar-for-dollar return. I hope to disabuse you today of any such out-of-date notion. Let's tackle the first issue-- Technical Expertise and Innovation. Newmont Gold Company this year is celebrating its 25th anniversary of successful and profitable operations on the Carlin Trend. Carlin in 1961, which is when exploration began on the "Trend" by Newmont, actually may share a lot of similarities with Carlin today. They didn't then know where the gold was and, if they found it, they had one hell of a challenge mining and processing ore at a profit because gold was selling at only $35 an ounce. Today, we know where the current reserves are. But we don't know where our future reserves lie. Furthermore, we don't know exactly how we're going to mine them, and, as everyone here knows too well, we don't know what the optimum metallurgical treatment is, even if we can find and mine them. And all that despite the abundant level of modern experience and skills within the current generation of mining companies, and the fact that, even taking inflation into account, gold sells at a higher price today than in 1965 when Carlin began operations. But, of course, I'm telling you what you already know.

Jan 1, 1990

By Tim O'neil

Attendance exceeded 4,500 minerals professionals from all over the world at SME's March 9-11 Annual Meeting and Exhibit in Orlando, FL. The exhibit, of more than 600 booths, featured 398 of the mining industry's premier suppliers. The keynote session, "Change makers in the industry," opened the meeting. The session featured Jeffrey Clevenger, president of Cyprus Climax Metals; Mark Baker, senior vice president of Modular Mining Systems, a division of Komatsu; and John Correnti, vice chairman, president and chief executive officer of Nucor. The SME meeting also featured four specialty programs: Bulk materials handling by conveyor belt, Latin American perspectives, plant operators' symposium and waste characterization and treatment. Also open to attendees were more than 60 technical sessions encom¬passing coal, the environment, industrial minerals, mining and exploration, minerals and metallurgical processing and minerals resource management. Ed Dowling was the chair of the 1998 SME technical programming committee. And Dowling, director of process management and engineering for Cyprus Minerals, acted as the host of the SME keynote session. Dowling said the mining industry has undergone incredible change over the last decade. And the forces of change continue to accelerate. These changes include globalization, regulatory pressures, technology, labor, competition, pricing and other market influences, he said. With that in mind, the SME program committee selected as the theme of this year's SME Annual Meeting, "The changing world of mining ... our role." Given some of the current commodity prices, Dowling said, the theme is timely. He also noted that a large percentage of the 60 technical sessions spoke to the evolving operational and business aspects of the mining industry as the industry crossed international boundaries. The keynote session mirrored the meeting theme by focusing on the increasing challenges and required changes the minerals industry faces. Dowling reminded keynote attendees that change is not a new idea. He said Benjamin Franklin described three types of people: Those who are immovable, those who can be moved and those who are movers. And so it was appropriate that three of the most forward-thinking movers in the business - Clevenger, Baker and Correnti - address the keynote session, Dowling said. John Callaway moderated the keynote session. He is senior correspondent for WTTW TV, the public broadcast station in Chicago. For the past 13 years, Callaway has served as host of WTTW's award-winning, primetime news analysis program, Chicago Tonight. Callaway said that the keynote changemakers are recognized as industry leaders whose vision has led to significant business transformation and results. Panel speakers, he said, will discuss how shifts in strategy, op-

Jan 1, 1998

By A E. Petts

Record iron ore prices and a renaissance of infrastructure in the Pilbara have Flinders Mines poised to move from explorer/developer to an iron ore producer. The potential of the company’s Pilbara Iron Ore Project was first highlighted by the announcement of Rio Tinto’s Caliwingina North deposit to the north and the Fortescue Metals group’s Serenity deposit in the southeast. The success of Flinders Mines’ exploration has been based on incorporating landscape studies into an existing geological framework, and using this to understand the iron-rich materials that were emplaced during the Tertiary. The development of the Delta and Eagle deposit resource models highlights this process. There are three main mineralisation styles at the project; detrital iron, channel iron and bedded iron deposits. They have textural and mineralogical similarities with comparative deposits in the region. Gaining an insight into the geological processes unique to detrital iron deposits and more distal channel iron deposits has been important to understanding the geometallurgy of the mineralisation. The model sits comfortably with other regional oregenesis models and allows a contextual framework to be developed around the timing of deposition of the Fe-rich detritus and pisolitic nodules that dominate the deposits. The exploration model also allows Flinders to explore more effectively for bedded iron mineralisation developed prior to, and since the development of the Tertiary weathering landscape.

Jul 11, 2011

By R C. Morris

The channel iron deposits (CID) (Ramanaidou, Horwitz and Morris, 1991; Morris, Ramanaidou and Horwitz, 1993; Ramanaidou, Morris and Horwitz, 2003; Morris and Ramanaidou, 2007) are one of the two major iron ore types mined in the Hamersley Province. The CID provided around 41 per cent of the total of 268 Mt of iron ore mined from the Hamersley Province in 2006. The current CID resource is around seven billion tonnes. The CID deposits occupy numerous meandering palaeochannels in a mature surface that includes Precambrian rocks and ferruginous palaeogene valley fill. These palaeochannels are generally less than a kilometre but can range to several kilometres in width and from one metre to more than 100 m thick. The two currently mined CID areas are located:in the western Hamersley Province in the Robe palaeochannel, and in the east in the Yandi palaeochannel. These two major CID channels extend over 100 km to 150 km, with the Robe system up to 5 km wide. The granular ore facies typically contains ooids and lesser pisoids with haematite nuclei and goethite cortices, with abundant goethitised wood/charcoal fragments and goethitic peloids, minor clay and generally minimal porous goethitic matrix. Post deposition weathering is common and produced secondary facies.Ooids and pisoids were mostly derived from the stripping of a well- vegetated deep ferruginous surface. The peloids were derived both intraformationally from fragmentation and reworking of desiccated goethite-rich mud. Minute wood/charcoal fragments in the soil that were initially replaced by goethite and then dehydrated to haematite, formed nuclei for many ooids and pisoids. In addition, abundant, generally small (in situ by goethite within the consolidating CID. This profusion of fossil wood, both as ooids and pisoids nuclei and as discrete fragments as well as the local presence of kenomagnetite suggests major episodic wild fires in heavily vegetated catchments. The goethitic matrix was the result of chemically precipitated iron hydroxyoxides, resulting from leaching of iron-rich soils in an organic environment.

Jan 1, 2007

By T Gill, A Faragher, B Scott, V Kakebeeke

In 2000, after six year intensive exploration for high-grade haematite deposits, Rio Tinto included the channel iron deposits (CID) as a specific iron ore target in the Hamersley Province iron ore exploration program. The exploration model was simple and based on the then current understanding of CID genesis. Fundamental to the model was an interpretation that CID deposits after their final accumulation stage could be entirely concealed in their channels. Inversion to mesas and therefore exposure of the CID profile would only occur in areas where the modern drainages follow the ancient and have significantly incised their current bedrock. The model took encouragement from observations at Bungaroo Creek, where large CID accumulations occur in a deep valley incised in the Wittenoom Formation concealed below recent valley fills derived from the surrounding BIFs. Also, in the headwaters of the Yandicoogina system CID occurs below a more recent cover of calcrete and clay. After a number of failed or partially successful attempts, exploratory drilling in 2002 in the Caliwingina valley in the northern Hamersley Range identified significant CID mineralisation. Subsequent drilling programs from 2003 onwards revealed the presence of a large CID system, which stretches from the middle reaches of the Caliwingina Creek to deep under the sediments of the Fortescue Valley, a channel length of more than 30 km. Although the drilling is still somewhat sparse, the geological resource estimation suggests that Caliwingina is presently the third biggest CID system of the Pilbara (after Yandicoogina and Bungaroo Creek) and is of comparable size to the premining Robe River system (1.6 Bt), with comparable Fe-grades to the Yandicoogina global resource grade (57.7 per cent Fe). Large detrital and canga deposits overlie the Caliwingina CID, or interfinger with it, and although the economics of these are presently unfavorable, could ultimately present a low-grade iron resource of slightly smaller size to the CID mineralisation at Caliwingina Creek. Together with the recently discovered Serenity and Solomon deposits, as well as Cabbage Gum Bore and other smaller occurrences, the Caliwingina Creek deposit is part of a major new CID district in the central Hamersley Ranges, approximately halfway between Yandicoogina and Robe River. Although exploration in this new district is still underway, the preliminary indications are that this area will provide a total CID resource well over 3 Bt, and is on a par with the major known CID systems in the Hamersley Province.

Jan 1, 2009

By Jack K. Lemley

This paper will provide an update of the Channel Tunnel Project including a discussion of the overall legal structure and management organisation. It is important to understand the mission that TML, as a design/build contractor, has undertaken and how the various interfaces have evolved between the other entities involved in the project. The paper will describe the evolution of the management organisation and the approach to completion of our contract, recapping the historic events and moving into a projection of how we will manage the completion of this very large transportation system.

Jan 1, 1991

By Philippe Dumont

Presentation of the project Underground civil works to be performed They include two single track running tunnels and a service tunnel of a length of fifty kilometers . Many cross adits (180 adits) : to link the tunnels (53 cross passages), to relieve air super pressure from one tunnel to the other (87 piston ducts), to install technical adits (40 electrical rooms). Two cross-overs located at one third of the whole length, allow trains to shunt from one tunnel to the other so as to ensure one way traffic in case of emergency. Pumping stations allow water to be collected at the lowest point and pumped out. 1 Main features of the tunnels 1.1 The service tunnel This 4.8 m inner diameter gallery allows During civil works - front probing operations of the geological layers encountered (front and vertical probes). - lateral soil grouting that may be necessary to facilitate the boring of the two running tunnels . During operations - Maintenance and safety vehicles traffic - Fresh air supply to running tunnels - Fire protection and drainage system - Electricity supply and control and communication. The service tunnel has been bored with a 5.72 meter external diameter Robbins TBM for the undersea section, and a MITSUBISHI TBM for the land section.

Jan 1, 1991

By W. K. Muwais, R. G. Cuddy

"The Lower Cretaceous McMurray Formation contains the bitumen reserves of the Syncrude Mine in northeastern Alberta. This formation comprises sediments deposited sequentially in fluvial, estuarine and marine depositional environments. The Syncrude Base Mine area consists mostly of estuarine sediments, as much of the original marine sediments have been eroded away. These estuarine deposits consist of channel-fill sediments and interchannel tidal flat sediments with the channel-fills comprising most of the orebody.Channel-fills contain, among other lithologies, interbedded sand, silt and clay rich layers that often occur as sequences of inclined beds with dips up to 25 degrees or more. A detailed knowledge of the distribution of these inclined beds, their lithological characteristics and their continuity is very important in assessing the risk of mine highwall instability . Techniques used to identify and characterize adverse structures are reviewed. INTRODUCTIONGeneralThe Syncrude Canada Ltd. oil sand mine is located within the surface mineable portion of the Athabasca Oil Sands area about 40 kilometres north of Fort McMurray in northeastern Alberta, Canada (Fig. I). The company commenced large-scale strip mining of oil sands in June 1977in the area, referred to as the Base Mine, situated in the southeast corner of the company's two lease areas (Fig. 2).The mining method (Fig. 3) utilizes large electric drag lines operating on a single bench with highwall depths up to 60 metres. Feed grade oil sand (= 6 wt.% bitumen) is mined by draglines and windrowed parallel to the highwall crest. Lower grade oil sand « 6 wt. 0J0 bitumen) occurring as waste bands is selectively mined by the draglines and cast back into the mined out pit or placed on the bench and hauled by truck. The windrowed feed is delivered to the extraction plant by a bucket wheel reclaimer and conveyor system. Stripping of Recent, Pleistocene and Cretaceous overburden units is done outside the conveyor systems by mobile equipment. The 4.5 kilometre long mine is split into four quadrants for planning and scheduling purposes, with each quadrant having an individual dragline-bucketwheel-conveyor system.Surface mining of oil sand at Syncrude requires the removal of vast quantites of material. The design of the open pit mine relies heavily on knowledge of the distribution of ore and waste materials, and on the physical characteristics of these materials.The geology of the oil sand below the dragline bench at the Syncrude Mine is complex. Geological, geotechnical and hydrogeological factors play an important role in the design and operation of the mine. This paper describes aspects of the geology that impact on the design and operation of the mine. Some of the methods and procedures adopted by Syncrude to successfully overcome difficulties that the complex geology creates are discussed."

Jan 1, 1989

By D. A. Barr

High-grade gold-silver mineralization associated with electrum and argentite was discovered in a quartz vein at the Chappelle property, 273 km north of Smithers, B.C., in 1969 following a regional geochemical reconnaissance program in the Cassiar-Omineca Mountains. Subsequent exploration resulted in the discovery of numerous quartz veins with associated precious-metal values in a belt 17 by 3 km in area centrally located within Toodoggone Group volcanic and sedimentary rocks of Lower to Middle Jurassic age and a window of Takla Group volcanic rocks of Upper Triassic age. More detailed investigations, consisting principally of 5677 m of surface drilling in 57 holes and crosscutting, drifting and raising on Chapelle Vein A, has outlined a high-grade gold-silver-bearing shoot with a strike length of 200 m, an average width of about 3 m and extending to an average depth of about 40 m below surface.

Jan 1, 1978

By Karl J. C. Harries

"1.1. WHAT ARE AGREEMENTS AND HOW ARE THEY FORMED?In order to have an agreement, at common law, there must be an offer, acceptance of that offer, and consideration passing between the parties. In addition, the material terms (i.e. the basics or substance) of the agreement must be discernible, preferably by means of documentation. Although these concepts may appear simple and straightforward, the law relating to them is voluminous and complex. Some brief comments are worthwhile.• Offer/acceptance: Both offer and acceptance should be in writing, but they need not be. The actions, conversations, and/or correspondence of the parties may constitute either or both of them. Notwithstanding, the local law or practice of a jurisdiction will impose some specific requirements for certain types of agreements. If these requirements are not met, the agreement may be unenforceable. For example, Ontario’s Mining Act requires transfers of unpatented mining claims to be evidenced in writing and recorded.1• Consideration: Consideration is usually thought of as being money, but it can be virtually anything, even “the premises” (i.e. the mutual covenants or promises contained in the agreement itself). In addition, if one party, relying upon the offer of another, does something to his detriment, then the doing of the act can be considered to be an acceptance of the offer and, under the legal concept of “detrimental reliance”, can also be consideration. Whether or not detrimental reliance exists will depend upon the circumstances of each case.2• Material terms: The requirement that the material terms of an agreement must be discernible does not mean that all of the terms of an agreement must be documented or even have been considered, just the basic or material ones. In addition, it will be up to a judge to decide what is material – not necessarily the parties. In order to establish the material terms, a Court may look at all relevant documentation and may hear oral evidence. It will resist “writing the agreement”"

Jan 1, 2003

By Karl J. C. Harries

"10.1. INTRODUCTIONDefinitions are a necessary part of every agreement. Their purposes are to assist the reader in reading and understanding an agreement and to attempt to avert potential confusion and, therefore, disputes. In some circumstances, they may be critical in deciding a dispute. As they are often substantive, they should not be treated lightly.It is far easier and less confusing for a reader to read “the Company” or “the Recipient” than to be faced with “the party of the First Part”, or to see the “Jones Property” than “that part of the property hereinbefore described in paragraph 1.01 hereof”. It is also advisable not to use “-ee” and “- or”, as in payee and payor.One thing must always be remembered: once a word has been defined in an agreement, it will always have the defined meaning unless the contrary is clearly indicated or is required to make sense of a provision.2 It can be confusing for a reader if commonly used words are defined in other than ordinary terms. Unique words that will stand out in the text are more likely to be recognized as having special meaning. It is also good practice to identify defined terms by capitalizing them in the text of the agreement. Boldfacing of definitions is also sometimes used for this purpose but, as boldfacing is not easily identified in handwritten revisions, it can be missed in the press of negotiations, especially when several typists are involved. Lack of consistency in identifying defined terms is not a fatal mistake, but it can create confusion, especially if the reader is new to the agreement or is reading it in a highly technical manner, such as when there is a dispute.If definitions used in the main text also apply to a schedule, they need not be included in both. Omitting them from the schedule makes the agreement look shorter, which to some people is a benefit. If definitions are not repeated, make certain that the schedule clearly indicates that words defined in the main text have the same defined meanings in the schedule3 and are clearly identified as defined words. In considering whether or not to repeat in a royalty schedule definitions appearing in the agreement proper, think of definitions as an aid and a reminder to the reader. Repeating them will help a reader, if only by saving the nuisance of remembering where to find them in the main text and constantly turning to it. All the definitions needed to read the schedule will be right there, so that the schedule is a self-contained document. Just make certain that, if you do repeat a definition, you repeat it in identical terms. If you have to change any defined term to make it fit the royalty provisions, use a different word or phrase as the defined term to warn the reader that he is dealing with a different concept.4"

Jan 1, 2003

By Karl J. C. Harries

"11.1. INTRODUCTIONA royalty is the most common form of interest retained by an owner who is disposing of his property or by a joint venturer who ceases, voluntarily or otherwise, to participate in the joint venture.1 Rarely does a non-participating party have a direct interest in the property and/or assets of a project, except during the period when a non-participating joint venturer may be having his interest diluted.2 In fact, it is most unwise to permit a non-participating party to have such an interest. It may give rise to significant problems that could prevent or substantially delay the development of an orebody and require a considerable amount of time, effort, and money to correct.3In negotiating a royalty, it is important to be aware that there is no law or convention that says, “You just don’t do that in a royalty agreement.” As with any agreement, inventiveness and flexibility on the part of the negotiator are not just assets, but virtual necessities. It is also for this reason that it is essential to read the royalty provisions, particularly the definitions, fully and carefully, especially if you are the recipient. On the other hand, if your inventiveness and flexibility cause your accountant to question the advisability of one of your ideas, pay close attention to him.4 He will, no doubt, have had experience with many royalties, and no competent professional adviser disparages a client’s ideas without good reason. Besides, he will probably be the person who will be determining the royalty or certifying the determination of it. At the very least, he will be auditing your general financial statements, which must, of course, reflect the royalty determination. Heeding his advice not only may make the determination easier but also will probably save you money in professional fees later on. Nevertheless, do not simply accept his comments or recommendations without understanding what they mean, why they have been made with respect to your royalty agreement (sometimes professionals have comments that they make as a matter of course and, even though they may be valid, you should require them to be justified to you), and how they will affect your royalty determination.It is surprising how many corporate payors insist that their standard royalty provisions5 be used as a matter of policy, thereby effectively tying the negotiator’s hands. It is even more surprising, and to professional advisers frightening, how many of the senior employees who insist that such a policy be adhered to, virtually without variation, do not know what is in the standard provisions and would be hard-pressed to explain them to a property owner. If standard provisions are appropriate, by all means use them, but do allow experienced and sensible negotiators some flexibility and make sure that everyone within the corporation who may have to use such provisions – negotiator and supervisor alike – knows what they contain and why they are as they are. For example, there are often good and convincing reasons to describe a deduction in a certain way or to include a certain specific type of deduction. On the other hand, quite often the answer to the question “why?” is that “it has always been there”; this is, or should be, an unacceptable answer. In any event, if you, as the negotiator, appear to know what you are talking about, are familiar and comfortable with your royalty provisions, and are backed up by your boss with the same words or reasoning, a property owner cannot help but be satisfied that you are knowledgeable, even if he still does not agree with your provisions. Finally, if you do use standard provisions, make sure that they are reviewed and updated regularly."

Jan 1, 2003

By Karl J. C. Harries

"12.1. NO DEPRECIATION/GAAPAll calculations and computations relating to the Royalty shall be carried out in accordance with generally accepted accounting principles consistently applied to the extent that such principles are not inconsistent with the provisions of this Schedule and the agreement attached hereto, it being specifically agreed that nothing herein contained shall permit, or be construed to permit, the Operator to deduct any amount for depletion, depreciation, amortization or any deduction that represents a non-cash outlay.Comment: In cases like net profit royalties where recoupment of prior expenditures is permitted, care should be taken to avoid any implication that depreciation may also be taken. It is only logical and equitable that Property Owners should not be permitted an apparent ability to “double dip” with respect to deductions. A provision like this example should accomplish the task. It will be noted that the example specifically contemplates that the negotiated arrangements will prevail over any requirements of GAAP. Accordingly, if the parties agree to an unusual formula for recoupment, it will not be set aside to accommodate GAAP requirements. Under GAAP, revenues and expenditures are accounted for on an accrual basis. In addition, it specifically prohibits the taking of non-cash deductions, which is in keeping with the concept of recoupment.Although in some ways the example states the obvious and could be considered redundant, its presence, especially in provisions contemplating recoupment, makes it clear to the financial people that there may well be some variations from normal practices dictated by GAAP, while at the same time confirming the availability of GAAP to fill any voids.The accounting profession often makes the caveat that application of GAAP is an “art”, not a “science”. GAAP do not provide a cure-all and can create problems that will have to be addressed. For example, GAAP contemplate that asset costs are to be reduced by investment tax credits, which can cause a problem for a payor with more than one mine."

Jan 1, 2003

By Karl J. C. Harries

13.1. RIGHT TO RECEIVE ROYALTY CONTRACTUAL ONLY1

Jan 1, 2003