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By Keith L. Harris

Recent data indicate a marginal decline in overall growth in world economic output from 3.1% in 1985 to 2.9% in 1986 (table 1),2, 3 Many nations experienced slower economic growth because of the huge trade imbalances existing between the United [ ] States and Japan and the Federal Republic of Germany, the U.S. budget deficit, and the growing Third World debt. Some developing nations, however, experienced booming growth. Declining prices for energy and nonenergy commodities and the fall of the dollar against the currencies of major industrial countries benefited several developing countries--energy importers and exporters of manufactured goods with currencies tied to the U.S. dollar, which were able to expand markets in the industrialized nations. The drop in commodity prices increased demand in industrial countries and depressed it in developing countries. Lower demand in the developing countries contributed to a decline in the real net exports from industrial countries. As a result, output growth in industrial countries declined from 3.0% in 1985 to 2.4% in 1986, despite growing internal demand, Average output growth of developing countries increased from 3.296 to 3.596 during the same period, however, primarily because of the low prices of their products and the strength of demand in industrial countries for those products. Developed country output growth was extremely uneven, however. For example, the economic output of nonfuel exporters grew 5.4% in 1986, while that of fuel exporters dropped 0.7%.

Jan 1, 1987

By A. Philipp, A. S. Middleton, G. A. Harron, A. B. Durham

"Basal till sampling techniques were used to search for gold mineralization in the Timmins, Ontario area. During 1978 and 1979, approximately 90 overburden sampling drill holes were completed in Murphy and Hoyle Townships to test specific geophysically defined target areas. A conventional tricone dual tube drill system, and a unique retractable tricone/rock coring system were used to various advantages.First pass till sampling at 800 to 1200 ft intervals perpendicular to ice transport direction yielded anomalous gold values in till and carbonatized quartz pyrite-rich bedrock chips, and lateritic soil. Subsequent induced polarization-resistivity surveys defined the areal extent of a pyritic carbonate alteration zone. A second pass till sampling/limited rock coring program evaluated the gold mineralization potential of the alteration zone. Diamond drilling has substantiated the till and bedrock gold anomalies. Further evaluation of this mineralization is currently in progress. IntroductionThis paper describes an integrated geochemical/geophysical gold mineralization discovery case history in Hoyle Township. This discovery is on a property jointly owned (I983) by Canamax Resources Inc. and Du Pont of Canada Exploration Limited. Exploration of the property began in 1978 by Rosario Resources Canada Ltd. and in 1979 a joint venture agreement was signed with Du Pont of Canada Exploration Limited. Rosario Resources Canada Ltd. was taken over by Amax Minerals Exploration in 1981, which became Canamax Resources Inc. in 1982.The work described in this paper deals with a gold mineralization discovery located three-quarters of a mile northwest of the gold deposit currently being readied for underground exploration and development. Further drilling is required to investigate the economic potential of the gold mineralization herein described."

Jan 1, 1987

By Dwane K. Johnson

INTRODUCTION The small mining company faces the dilemma of how to finance the development of its properties because it doesn't have the financial resources to pay for the development costs from its own funds and doesn't have the financial strength which will enable it to borrow the money needed for development. However, with a little imagination and the right set of circumstances, a financing can be arranged for the small mining company. This paper is an attempt to describe the fundamental steps on how such financing can be obtained --in other words--what is required to provide ad- equate capital at a low cost for developing and bringing a mining property into production. Innovative financing follows from this. The basic keys for building and maintaining a successful mining company are "the four M's": Management, Market, Mine, and Money. The writer believes their order of importance is as presented and each is a building block required in order to obtain the type of financing that best suits the borrower and lender. MANAGEMENT Management must be experienced, highly organized, realistic, able to take advantage of opportunities and fulfill promises. Mine financing requires a variety of skills and concentration on the part of management. Management should have a thorough understanding derived from experience in geology, construction, mining and metallurgy and environment, marketing, and financial matters. Management must realistically visualize what will be produced at what cost and truly evaluate the risks associated so the proper security can be correctly designed. Since risk cannot be eliminated, the objective of management is to identify the risk which will be present in a given venture and assess the level of that risk which will be acceptable to the firm. Generally the risk which is present is subject to little or no modification. After management identifies and measures the acceptable risk the firm will proceed in a way that it will be least exposed. Management must determine its long-term objectives and strategies within the context of a constantly changing world. This question must be addressed before examining the sorts of risk which affect the development and operation of a specific property. The compilation and interpretation of "hard data" by competent people is good to a point but the experience and instinct of seasoned individuals are the important factors in management choosing a long-term direction for the corporation. The attitude towards risk greatly affects the goals of the corporation. Major risks in a mining project can be placed in four categories: 1. Market - Price, demand, substitution. 2. Costs - Capital, operating, financial. 3. Regulation. 4. Taxation. The feasibility study for a project is the fundamental tool used in the management of risk. Management should employ an experienced team with an established and well-understood set of ground rules for the preparation and assembly of a feasibility study. The necessary degree of realism is built into all levels of the study and if the project is technically feasible, the company's hurdle rate is then used to discount the base-case project cash flow in order to determine its financial viability. Understanding the geological significance of the mineral deposit is critical. There should be strong interplay among the pure regional geologist, the detailed mine geologist, the mining engineer, and the metallurgical engineer. The collaboration among these different disciplines will yield a feasibility study that is more reliable. The essence of this work must be appreciated and understood by the executives planning the financing. It is vital that they thoroughly understand the risks and make the proper risk assessments to cope with our rapidly changing market environment. Projecting future revenue values is paramount and is subject to much estimation. One way to mitigate fluctuations and the risk of falling prices is by selling production for future delivery. MARKET Since mining is a worldwide industry it is mandatory that bankers be aware of what is occurring in the marketplace, both foreign and domestic. The marketing of the production is a very important facet when considering financing for the small

Jan 1, 1987

By J. M. Pachter

Property sales and acquisition are prominent features of today's coal industry. Before selling or buying a site, a company must know the property's economic net worth. Any evaluation of economic net worth would be inadequate if determinations of a property's environmental liabilities and costs were omitted. Short-and long-term costs can result from liabilities related to reclamation, water treatment, subsidence, and hazardous waste disposal. A structured, interdisciplinary approach can aid in the delineation, summation, and scheduling of these costs and liabilities.

Jan 1, 1987

By Frank C. Stevens

Many changes have taken place in the "World Cement Market" since Joseph Aspdin discovered portland cement in the early 1800's. At the turn of the century, production of cement world wide was a few million tons; today, it is over one billion tons. By 1995, world production is estimated to reach 1.2 billion tons. Cement processing has changed from inefficient, small vertical kilns to large efficient, precalcining kilns, and large automated crushing, blending and grinding systems. Consequently the cost of production has declined in real terms, resulting in significant economic benefits to the general public. In addition, quality and uniformity of cement have increased, strengths have increased, and at least 25% fewer pounds of cement are needed for each cubic yard of concrete. Today, cement moves thousands of miles on the inland rivers and great lakes of the U. S., across Siberia and across the oceans of the world. The volume of cement moving more than a few hundred miles is almost 100 million tons, or 10% of world production. Today, on a per ton basis, it costs no more to move 40,000 tons of cement to the United States from the Western Pacific rim or from Europe than it does to truck cement 200 miles. For example, cement shipped by water from Spain costs $5.00 to $7.00 per ton compared to cement shipped by truck 200 miles at $16.00 per ton. This low cost water transportation has been a major factor for the increased movement of cement between countries. Table 1, Cement Production Summary-World, gives a global picture of production, export and import tonnages in recent years. Figure 1 is a graph showing CEMENT PRODUCTION SUMMARY WORLD WIDE.

Jan 1, 1987

By J. E. Fraley

This report describes the preliminary results of a Bureau program to develop and test an inexpensive grout for full-column support of roof bolts. Various inorganic grouts were tested in both cartridge and slurry form. Tests were also performed on methods of water packaging and on the effect of fillers on the grout strength. Results showed that some grouts had poor early strength and exceptional mid-to long-term strength. Laboratory tests have shown that rapid-setting inorganic grout could be an economical replacement for resin bolts if the short-term strength could be increased. Further development to improve its early strength would need to be tested in the laboratory and underground to prove its potential for the mining industry.

Jan 1, 1987

By Robert B. Hoekzema

This Bureau of Mines report describes the history, characteristics, distribution, and mineral development potential of 21 lode gold deposits in or near the Chugach National Forest (CNF), AK. It includes findings from a 4-yr (1979 to 1982) mineral evaluation of the CNF conducted by the Bureau and the U.S. Geological Survey (USGS). This evaluation, undertaken to provide the U.S. Forest Service with mineral resource data for use in making decisions on land use, included site-specific mapping and sampling of more than 200-lode gold deposits. The data presented here were compiled from the findings of this 4-yr evaluation and from existing literature. Fourteen of the 21 lode gold deposits described in this report contain a combined identified resource of 117,750 short tons (st) averaging 0.55 oz/st Au and 0.2 oz/st Ag. Two mineralized felsic dikes in the Summit Lake-Palmer Creek area contain a combined identified resource of 18 million st grading 0.02 oz/st Au and 0.16 oz/st Ag. Identified resources were not determined for the remaining five deposits because of a lack of information.

Jan 1, 1987

By R. R. Smith

The meaning of the title, "Blank Piece of Paper," refers to the need for management to take a completely fresh viewpoint to the problems facing our industry. These problems are so severe and some so new that conventional thinking may not be adequate to resolve them. Innovation has to be a part of every company's approach to the solutions, our concept is to start with a "Blank Piece of Paper.' The objective of 'this paper is to outline steps which can be taken to improve the profitability of a mining business. This is not an examination of technical solutions to individual problems, but rather recommendations for overall change in management thinking. This philosophy is based on our actual, hands-on experience in major open pit operations worldwide over the past 25 years.

Jan 1, 1987

By Jean-Marc Simard, Vincent Jourdain, Denis W. Roy

"Seven lithologic units, informally characterized, were recognized in the vicinity of the Montauban orebody. The first five lie in stratigraphic order. From structural bottom to structural top these are: (1) grey composite gneiss; (2) dark grey quartz-biotite gneiss; (3) quartz-biotite-garnet gneiss hosting several calcareous, aluminous and magnesian members and gold mineralization; (4) light grey quartz-muscovite-(sericite)-biotite gneiss; and (5) metabasafts. The last two intrude the sequence: (6) amphibolite dykes and (7) pegmatite veins. The orebody lies on the inverted limb of an overturned synform verging to the west with the metabasafts marking the core of the fold. As the foliation is folded, this fold is attributed to deformation ""D2""; deformation ""DI"" being responsible for the formation of the foliation. A late brittle deformation developed shear zones with probable strike-slip motions. The refined stratigraphy and the identification of the structural position of the orebody provide new tools for regional interpretation and prospecting.RESUMESept unités lithologiques ont été définies informeffement à proximité du gisement de Montauban. Les cinq premieres reposent en ordre stratigraphique; ce sont de la base au sommet structural: (1) le ""gneiss mixte gris""; (2) le gneiss gris forcé à quartz biotite; (3) le gneiss a quartz-biotite-grenat comprenant plusieurs membres calcareux, alumineux et magnésiens ainsi que la minéralisation aurifère; (4) le gneiss gris clair à quartz muscovite- Isericitel-biotite; et (5) les métabasaltes. Les deux autres unites sont intrusives dans la sequence: (6) les dykes d ‘amphibolite et (7) les veines de pegmatite. Le gisement se sitlie sur le flanc inverse d'un synforme déverse vers I' ouest dont les métabasaltes occuperaient le cœur. Comm e la foliation est plissée, ce pli est considère appartenir d la deformation ""D2""; la deformat ion ""DI"" etant responsable de la formation de lafoliation. Une deformation cassante tardive se traduit par des zones de cisaillement, d rejet apparemment directionnel. Cette stratigraphie plus précisé et l'indentification de la position structurale du gisement fournissent de nouveaux omits de prospection et d'interprétation regionalé."

Jan 1, 1987

By Joan Weinberg

The real gross national product (GNP) expanded by 2.3% during the second quarter, down from the anomalous 4.4% growth rate in the previous 3 months. If the expansion continues through October, it will have lasted 5 yr and become the second longest in 40 yr.2 As in the first quarter, improvement in U.S. exports played a role in the continuing--albeit slow--growth. More than 2 yr of declines in the dollar relative to currencies of other industrial countries have contributed to a slight reduction in the trade deficit in real (volume) terms, as real net exports of goods and services rose $1.9 billion (table 1). Exports grew a strong 12.1% while imports, which had fallen the previous two quarters, rose 7.4%. Manufactured goods and petroleum products accounted for most of the second quarter import increase. The American Petroleum Institute estimates that the volume of crude oil and refined products imports in the first half of 1987 surpassed those in the same period last year by 7.5%, reflecting falling domestic production and higher than expected demand. Expenditure on durable goods--those that last at least 3 yr-by both consumers and producers also contributed to the second quarter expansion. Personal consumption of durable goods rose 9.0%, after having fallen the two previous quarters. Motor vehicle purchases accounted for most of the second quarter increase and the first quarter decrease. Sales of automobiles surged in the last quarter of 1986, as consumers rushed to capture the sales tax deduction that was eliminated on January 1. Sales fell in the first quarter of 1987, but have now moved closer to the trend line exhibited in the first three quarters of 1986. Automobiles accounted for half the 0.8% July gain in retail sales, and two-thirds of the 1.4% June gain. Producers durable equipment purchases also rose this quarter, accounting for the increase in nonresidential fixed investment.

Jan 1, 1987

By Catharine T. Fogg

The Bureau of Mines investigated the availability of flake and high-crystalline natural graphite from 4 domestic and 25 foreign mines and deposits in 11 market economy countries (MEC's). Demonstrated resources were estimated to be 95 million metric tons (Mmt) containing 5.61 Mmt of recoverable flake and high-crystalline graphite products. Fifty-five percent (3.17 Mmt) of the total recovered product is estimated to comprise plus 100-mesh (150-µm) flake pro-ducts and "lump" and "chip" high-crystalline products, designated as "graphite A" in this study; 45 pct (2.44 Mmt) of the total is minus 100-mesh (150-µm) flake products and "dust" high-crystalline products, designated as "graphite B." Total production costs, including all costs needed over the life of each operation, were determined at a 0-and 15-pct discounted-cash-flow rate of return (DCFROR) for both graphite A and graphite B products. For a 15-pct DCFROR, 1.74 Mmt (54.9 pct) of the graphite A products is available at $600/mt or less and 2.13 Mmt (67.2 pct) is available for $800/mt or less. For the same DCFROR, 1.08 Mmt (44.3 pct) of the graphite B is available at $200/mt or less, and 1.71 Mmt (70 pct) is available at $325/mt or less. No domestic resources were determined to be economic at present prices. A sensitivity analysis of the relative economics of the Alabama graphite deposits under various operational parameters is presented in an appendix. All evaluations are in January 1984 dollars.

Jan 1, 1987

By B. J. Moore

This publication contains analyses arid related source data for 274 natural gas samples from 20 States. Of the total samples, 269 were collected during calendar year 1985; the reminder were collected earlier, but releases granting permission to publish were not received before 1986, All samples were obtained and analyzed as part of Bureau of Mines investigations of the occurrences of helium in natural gases of countries with free market economies. This survey has been conducted since 1917. The analyses published herein were made by mass spectrometer and chromatograph.

Jan 1, 1987

By David K. Ingram

The Bureau of Mines conducted underground mapping and rock strength tests to describe and analyze mine roof conditions surrounding ancient stream channel deposits (paleochannels) in the Pittsburgh Coalbed in southwestern Pennsylvania. Paleochannels in the study mine consist of sandstone and/or siltstone and affect the Pittsburgh Coalbed through erosion and/or differential compaction. Differentially compacted sediments within and adjacent to channel deposits caused slip planes, faults, clay-dike faults, clastic dikes (clay veins), coalbed rolls, and slumped structures. Paleochannels can be predicted by recognizing these features and associated sediments, which allows for modification of long-and short-term mine planning and development. Mine entries located beneath the paleochannel deposits exhibit less stable roof conditions than entries with normal (nonchannel) roof. Paleochannel deposits comprise only one-fourth of the mapped study area; however, they contain one-half of the hazardous roof. This study deter-mined that rock strength evaluations, including rock quality designation (RQD), unconfined uniaxial compressive strength testing, and point-load testing, must be accompanied by underground observations. Suggested remedial support techniques include angled and/or longer tensioned bolts, steel mats or crossbars, steel sets or cribbing, and roof trusses.

Jan 1, 1987

By K. Fountain

In Novemeber of last year I visited a mica mine in Hunan Province, China. For nine months , we had been trying to sell Chinese mica to a customer in Belgium. Talking to the customer was like negotitating with a stone wall. The buyer refused to communicate any -thing other than his steadfast refusal to consider Chinese mica. He would not advise us what he wanted, what specifications or grades. He would give no indication if our price at market, or reasonable, or totally out to lunch. He would not even accept samples. It took no genius to guess that the mica buyer had at some time in the past bought a shipment of Chinese mica and had received a disaster. I invited the mica mine in Hunan in order to see for myself what could be done - without massive investment in equipment and instruments - to upgrade the quality of the mica for export. We had seen this type of customer reaction before. One disgruntled customer who had pur¬chased pigment grade barites direct from China ranted and raved about unreliable and inconsistent quality. It did no good to explain to him that China is a big country, with hundreds of mines scattered throughout many areas, each producing a different product. Our further explanation that Chinese export organizations also varied in degree and efficiency of customer service fell on deaf ears. Samples had no effect on his perception. Eventually we showed him photoraphs of two mountains of pigment grade barites. One lot was our sales of pigment barites to a major European minerals processor. Our Chinese barites stood proudly white and beautiful next to a hill of other material which now appeared at best mediocre and dull by comparison, and which the buyer had decided to reject after he received our Chinese barites. Finally the customer was sufficiently impressed to look seriously at our guaranteed specification and the outturn analysis performed by our other customer.

Jan 1, 1987

By Richard A. Allwes

This Bureau of Mines report presents a procedure for the design of an arch canopy for use in rehabilitating a high-roof-fall area. Only dy-namic line loading of an unbackfilled arch canopy at its crown is considered, and the procedure does not account for an asymmetrical loading condition. The evaluation of whether an arch canopy is suitable for a particular installation depends on many variables, including in-mine conditions and the engineering properties of the structure. However, a general evaluation can be based on a comparison of the arch's maximum crown deflection and a prescribed allowable crown deflection. The design procedure is based on the concept that when an arch canopy is sub-jected to impact loading at its crown and deflects from its unloaded state to maximum crown deflection, the structure absorbs strain energy, both elastic and plastic. As a result, this strain energy can be calculated from a static load-displacement diagram for the structure. The significance of this design procedure is that it gives mine personnel an analytical tool to select an arch canopy to meet the dimensional and functional requirements of a mine entry and a prescribed allowable crown deflection.

Jan 1, 1987

By J. H. Fowler

Canada's gypsum industry began over two hundred years ago in the Maritime Provinces when farmers attempted to supplement their incomes by selling "land plaster" to traders bound for the United States. Rising from such humble beginnings, gypsum now contributes significantly to the economies of nine of Canada's ten provinces. Thirteen open-pit and three underground mines produced a total of 8.38 million tonnes of crude gypsum and seventeen processing plants manufactured 2.49 million tonnes of finished products in 1985. Recent economic growth in North America has resulted in steady increases in gypsum production, however, competition from foreign producers and by-product gypsum poses a growing threat to Canada's gypsum mining industry.

Jan 1, 1987

Demonstrate the technical feasibility of using nontraditional, low-rank, coal-based fuels and new coal-based technologies for mineral and metallurgical applications. Approach A cooperative research effort was initiated between the Bureau of Mines, U.S. Department of Energy and the minerals industry to extend the application of the fixed-bed gasification process to low-rank Western coals. The research effort enabled cooperators to gain operating experience in the use of hot, raw producer gas for iron ore pellet induration and other high-temperature mineral processes. Researchers were able to gather data regarding the fundamental engineering aspects of the fixed-bed process and gas cleanup for a wide range of solid fuel properties. Applying Fixed-Bed Gasification As a prerequisite to gathering the data needed for the study, the Bureau of Mines designed and installed, at one of its laboratories, a 6.5-ft-diam. single stage, fixed-bed, air-blown atmospheric pressure gasifier. The gasifier was coupled with a hot, raw gas combustion system and iron ore pellet in. duration kiln. The gasifier is rated at 1.5 ton/h capacity of bituminous coal.

Jan 1, 1987

This paper is directed at the problems flowing from Australia's capital gains tax (CGT) on the disposal of exploration and mining tenements both in Australia and overseas. It will seek to identify the issues and give some idea of the dollar consequences of decisions lacking forethought. The paper should not only be seen in the context of Australian tenements. CGT applies to the disposal of any assets by an Australian resident anywhere in the world. Offshore incorporated companies are not necessarily free from CGT risk where it can be shown that control management and control of the relevant company is in Australia. Also the disposal by non residents of Australian tenements are potentially caught by CGT. Some will ask what has taxation got to do with a valuer who merely determines the value of assets. These days no determination can be blind to the consequences. Whether the consequences can encourage a movement in value is another thing dependent upon the circumstances; but? A role of an experienced taxation consultant is to point out parameters within which associated professionals can work. The parameters will vary from case to case, but these when clearly indicated may be of help to persons such as valuers. When one comes down to it real estate salesmen are never wrong. They have a feel for the market and almost through self fulfilling prophesies achieve sales at their guestimates. Whether they could have achieved higher considerations become virtually academic in the process. Of course I am not suggesting that tenement valuers can be compared to real estate salesmen, or am I? What is the value of a tenement? Is it the DCF/NPV type of generated value based on a large number of variable factors (ie what one may call the fundamental value)? Or is it what another may pay to purchase that tenement if it were on the market at an instant point in time? How big is the market, the quality of the bidders, the size of their purses, the needs of the buyer for comfortable fit, the premiums for foreigners, the standard of the marketing, the industry intelligence level of the bidders, the obligation to farm/sell down? The list goes on endlessly. One question must be.asked-"Is a range of values acceptable for tax purposes". ie Would any tax consultant ever provide a valuation to the Australian Taxation Office that indicates three or more possible values ie

Jan 1, 1987

By Keith L. Harris

Real2 gross national product (GNP) grew at a seasonally adjusted annual rate of 1.3% in the fourth quarter and at 2.5% for all of 1986, according to the most recent Department of Commerce estimates table 1). The 1986 GNP growth was the lowest since the recession in 1982, and was slightly below the estimate published in the last issue of Minerals and Materials. Barriers to greater economic growth in 1986 included the Federal budget deficit, the trade deficit, reduced energy-sector investment because of low oil prices, and uncertainty over changes in the Federal tax code.3 Major sectors of the economy responsible for the fourth-quarter growth included real Government purchases of goods and services, up $19.9 billion from the third-quarter level; real net exports, up $12.2 billion; real residential investment, up $3.0 billion; and nonresidential fixed investment, up $1.5 billion. The increase in Government purchases of goods and services was attributed to the S25.1 billion rise in net purchases of farm products by the Commodity Credit Corp-oration. Real personal consumption expenditures and inventory investment declined, however. Personal consumption expenditures declined primarily because of reduced motor vehicle purchases. Despite only modest growth during the fourth quarter, the economy improved significantly because of the narrowing of the trade deficit and growing employment (table 2) while maintaining low unemployment and inflation rates. Business sounded an optimistic note, with planned increases in current-dollar capital spending of 0.9% for 1987 compared with a 1.7% decrease in 1986. While it is primarily the nonmanufacturing industries that expect to increase investment from 1986 levels, some manufacturing industries are increasing investment by significant percentages as well, notably the steelmaking and nonferrous metals industries (table 3).

Jan 1, 1987

By B. J. Timmons

An initial point that I would like to make very emphatically?and as our title might erroneously suggest for those of you old enough to remember . . . Peter Harben and myself do not intend to shoot ourselves in the foot. We derive our livelihood from a number of aggregate, industrial and other minerals producers, both here in the United States and outside. This paper, therefore, is a fence-straddler or for information purposes (we hope) only, rather than any "fur or agin" stances. In essence, some of you may consider it a U.S.G.S. publication! In fact, we hope that it serves to inspire aggregates producers to do some radical thinking, to promote introspection, and to that end it would benefit both domestic and foreign producers. The title could be shortened into a brief question of "Aggregates Travel?" with an emphatic no for the answer. In the past, the success of a construction materials venture depended upon your ability, through siting, to provide the customer f.o.b. the job site, a product at the lowest possible cost.

Jan 1, 1987