Professional Documents
Culture Documents
Given a deposit of ore of quantity and quality that can be exploited at a profit, capital
and labour must be added in order to place the property on producing basis. The returns
from the property must be sufficient not only to redeem the purchase price of the land
with interest commensurate with the risk involved, but also to return all capital required
to put the property on a producing basis together with a fair rate of interest.
PLANT AND EQUIPMENT The plant
potential and actual power sites and water supplies, not so much for their cash values as
for their possible economic advantage in making the business more self-sufficient. The
actual cash worth of these various items is usually added to the mineral valuation of the
property to obtain the purchase price, except when these out side asset are
disproportionately high with respect to the mineral worth.
Water is essential for milling by gravity and flotation methods. Whether or not any
substantial value is assigned to this asset in the case of a mine and mill, it must be
recognized that the adequacy of the water supply may well be critical to the business.
Whereas the removal of water from mine openings is a cost item and may, at times,
become difficult to handle, a good supply of water on surface for milling is distinctly an
asset. Thorough investigation of the water supply is an important part of the examination
whenever the ore is to be milled at the property. If water has to be brought from any
distance, pipeline (or flume) construction and transmission may called for heavy capital
expense. The alternative may be a transportation charge of similar magnitude for hauling
the mine ore to the mill.
Timber holdings, likewise, may be an important asset to a mining property,
particularly in sparsely timbered areas where freight from the nearest lumbering center is
a considerable cost item. With selective logging, a moderate area of forest can yield a
continuing supply of timber sufficient for all underground support and other construction
about the mine.
In remote localities water power, when available and developed, is an advantage to
mine operation and to community facilities; in more populated areas water-power
development for a mine may well expand in to a stable subsidiary business selling power
to nearby communities. Power development, usually at considerable capital outlay and
not often critical to mine operation in view of the availability of fuels, is an asset in
appraisal.
Other less tangible assets of a mine will include its labour force and community. An
established community, with housing, schools, sanitary and other public facilities, is
important to the welfare of a mining business, though difficult to assess in money value.
For a new property more than a few miles from towns or other settlements, the
assembling of a labour force and the provision of housing and community facilities will
be a cost of the operation. For an established property under examination for transfer or
consolidation, these adjuncts must likewise be given consideration.