Arizona republican., 1913-03-26
HOOVER PLAN
 0F VALUATION
Explanation of It by Mr.. J. Parke Charming to a Con- ference at Hotel Adams, of Mining Men and Senate Finance Committee


 portant mining companies and the the question of mine taxation
 Among these who addressed the committee were J. Parkc Channinc a mining engineer Of New York city, who is the vice president of the Miami Copper company. In sub stance, MT Charming made the fol- lowing remarks. prefacing them by the statement that he had had some ten years experience in the Michi- gan copper and iron mines and that some two years ago he had been called in as the independent engineer to put value upon the Calumet and Hecla mining company and it's twelve subsidiary companies for their pro- posed consolidation. That on the strength of the work that he had carried out at that time. he had been asked by the Michigan state tax com mission to undertake the valua tion of the Michigan mines, but on ac- count of his connection with the pre- vious piece of work he had declined to do so and that Mir Finlay had been finally selected.
 
 the committee were generally in- formed as to the Finlay method of valuing mines, but that perhaps they would not be averse to his explain ing it to them in non-technical lan- guage
 The modern principles of mine valuation were first clarified and brought forward by MT. H. C Hoover a California mining engineer residing in London. England. and of high standing. His method is the one that was adopted by MT. Charming in the Calumet and Hecla valuation and by Mir. Finlay in the general valuation Uf Michigan mines. According to the Hoover method the value of mine is determined. first. by calculating the annual profit which mine may produce, then determining as near as possible the ultimate life of a mine and then. by the ordinary actuary table. calculating the present value of it's annual profit over the number of years represented by the life of the mine The profit. per year, was determined by taking an average sell ing price of copper and deducting from the total income the proper | expenditures for mining and treat mcnt. The life of a mine was i determined by careful examination i of the maps and the undeveloped area 1 of the property. The actuary table | adopted was one in which the in 1 vestor was supposed to receive five 1 Ter cent net upon his investment, 1 the balance of the dividend. If put out at compound four Der cent in i terest being sufficient to exactly re 1 pay the value of the property upon | it's exhaustion. MT. Charming called i particular attention to the fact that 1 both Mr Hoover in all his calcula- tions, and MT Finlay in his work in l Michigan, based all these upon the | mines being completely equipped and | that in determining the value of the 1 mine the value of the equipment was l not added 10 the figures arrived at ] by the above calculations.
 While admitting that in a district l like the Lake Superior copper mines ! this method was practicable. MT. | Charming stated that he did not think that in Arizona, in which state the mines were of radically different 1 classes. that similar method would give results which would be fair be tween the different properties. He l said that in Michigan the copper oc- 1 cured in beds or lodcs of approXim | ately uniform thickness. averaging. 1 say If feet: that these beds dipped 1 very regularly at from 30 degrees to l 60 dgrees and that as at least two | of the Lake Superior mines had beer l wrought to a depth of 1000 feet, it 1 was quite proper to assume tha most of the mines could be made to pay to that depth. That further | after mine had been opened up to l a depth of 1000 feet and the length of the property, one could get d very
 fair idea of the productivity of the lode Der acre and therefore one could predict with reasonable accuracy | from what q mine had produced al
 this first 1000 feet. what it would
 produce for the balance of the 6,00t feet He said that when you came to Arizona, you were confronted witt
 two radically different types ol
 mines. on one. he said, the ore bod,
 lay flat, as d book upon the table
 and it's total tonnage could be readily
 determined by comparatively shallow
 shafts or by drillngs. Of this typo
 was the Ray, Miami. Inspiration an6 some of the mines at Morenci. Tht second type was the more or les! vertical vein. as of book stood ol edge or slightly inclined. and 0 this type were. for examples. the Ol, Dominion. United Verde, Congress the gold mines in the northern par of the state. also somewhat simila to these are the mines in the Bisbe' | district. in which the ore occurs i | disconnected irregular masses. I this second type of mine. because 0 the expense of pumping water an the difficulties of holding the groun open. il is not practicable to expos l large ore reserves and therefore Mr Finlay, or any other engineer 0 l l equal standing. should come int | Arizona he would be up against tn difficulty of trying to harmonize th l. lives of mines with large. easily de ' termned ore reserves, with the live . l of those smaller ore reserves but we
 perhaps, with large prospective valu . and which could not be definitel
 Ha said that Mir Fin