The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1913-06-05

come from the extraction of Vahiabl,
metal 10 be exploited at profit When
rock can not be proftably mined. it is
waste, Thus to apnraise mine it is
necessary To ascertain
J. The amount Of ore in the mine
= The average value of the ore
3. The cost of turning the ore into
money.
And then comes another factor of
vital Importance, namely, what are the
prospects of finding more pre- when the
ore now available has been exhausted?
Estimation Of Reserves
In practice. the estimation of ore re-
serves is approached by reserving the
order of enquiry. It is obvious that the
amount and the value of the ore
signify nothing until we know the cost
of mining. 10 dwt gold ore in one 10
cality means loss; in another. dwt
ore ensures a handsome profit There
fore definition is required Ore is
metal-bearng rock. which at given
place and time, can be mined at a
profit. Ore that is Improbable today
may yield dividends at a later period
by reason. for example, of a higher
price for its metal contents or some
in the mctallurgcal
treatment The contrary may also
happen, ore previously profit
able becoming Improbable, as. for
Instance, by the closing Of custom
the influx of excessive water
into the NINE or a rise in the scale Of
wages. Industrial conditions vary;
we do not deal with fixed factors.
The profit is the margin over cost.
The cost is the total expenditure In
volved in the processes by which ore
in the mine Is turned into money in
the bank, This simple truth is not
fully recognized Ny attention has
been called recently to the custom
among South African mines of an
nouncing monthly and annual profits,
which exhibit n weird Discrepancy
With the dividends distributed ON
adding the dividends paid by all the
# the Rand as announced for three
years In succession, | find that the
otal represents only sixty eight per
cent of the so called profits. The
difference went in expenditures for
lew plant. for taxes, and debenturc
interest. In the case of some of the
Rhodesian mining companies, I have
'oupd that the so-called working cost
vas only fifty per cent Of all th'
,ctual expenditure incurred Such
TENS as taxes, depreciation, admins
ration. and other London expenses
lis well as those extraordinary ex-
,enses that may not repeat themselves
rom year to year but are replaced by
'thcrs equally unuslial~-all these arc
ID by the manager at the mine. But
hey are an essential part Of the bust
Tess as conducted under the system !.
# joint stock finance. American
mining companies are better in this ,
aspect. the operating cost will como !
within five or ten per cent Of the total /
expenditure; they have fewer over, +
'ead ex penses and a more economical ,
But everywhere 3
discrepancy will be found. 1t is apt tr
onstitute a vital error lwarn you /
gainst it. If YOU examine a mine i
or British syndicate or company
nd you find for example. that the orr
vcrages SIS per ton. and the opcrat'
ne cost $40 per ton. YOU must 70
1ember that the profit will not he IS
er ton. Other deductions must ~
,ade before the dividends can be cal
ulate1 You know tell YOU $"
ow, and you can confirm the fact
or yourself later on--that from ten t"
hirty per cent must be added 10 TIC
perating cost in order to cover the
thcr expenses inevitable in tie cor
uct of the enterprise. Companies
ftcn fail to fulfil the expectations Of
prospectus. despite reports by ex
crinced engineers. simply because the
asis IF their capitalization is quick
and Of the make believe. That quick