Part 1 (1/2)
Principles of Mining.
by Herbert C. Hoover.
PREFACE.
This volume is a condensation of a series of lectures delivered in part at Stanford and in part at Columbia Universities. It is intended neither for those wholly ignorant of mining, nor for those long experienced in the profession.
The bulk of the material presented is the common heritage of the profession, and if any one may think there is insufficient reference to previous writers, let him endeavor to find to whom the origin of our methods should be credited. The science has grown by small contributions of experience since, or before, those unnamed Egyptian engineers, whose works prove their knowledge of many fundamentals of mine engineering six thousand eight hundred years ago. If I have contributed one sentence to the acc.u.mulated knowledge of a thousand generations of engineers, or have thrown one new ray of light on the work, I shall have done my share.
I therefore must acknowledge my obligations to all those who have gone before, to all that has been written that I have read, to those engineers with whom I have been a.s.sociated for many years, and in particular to many friends for kindly reply to inquiry upon points herein discussed.
PRINCIPLES OF MINING.
CHAPTER I.
Valuation of Copper, Gold, Lead, Silver, Tin, and Zinc Lode Mines.
DETERMINATION OF AVERAGE METAL CONTENT; SAMPLING, a.s.sAY PLANS, CALCULATIONS OF AVERAGES, PERCENTAGE OF ERRORS IN ESTIMATE FROM SAMPLING.
The following discussion is limited to _in situ_ deposits of copper, gold, lead, silver, tin, and zinc. The valuation of alluvial deposits, iron, coal, and other mines is each a special science to itself and cannot be adequately discussed in common with the type of deposits mentioned above.
The value of a metal mine of the order under discussion depends upon:--
_a_. The profit that may be won from ore exposed; _b_. The prospective profit to be derived from extension of the ore beyond exposures; _c_. The effect of a higher or lower price of metal (except in gold mines); _d_. The efficiency of the management during realization.
The first may be termed the positive value, and can be approximately determined by sampling or test-treatment runs. The second and the third may be termed the speculative values, and are largely a matter of judgment based on geological evidence and the industrial outlook.
The fourth is a question of development, equipment, and engineering method adapted to the prospects of the enterprise, together with capable executive control of these works.
It should be stated at the outset that it is utterly impossible to accurately value any mine, owing to the many speculative factors involved. The best that can be done is to state that the value lies between certain limits, and that various stages above the minimum given represent various degrees of risk. Further, it would be but stating truisms to those engaged in valuing mines to repeat that, because of the limited life of every mine, valuation of such investments cannot be based upon the principle of simple interest; nor that any investment is justified without a consideration of the management to ensue. Yet the ignorance of these essentials is so prevalent among the public that they warrant repet.i.tion on every available occasion.
To such an extent is the realization of profits indicated from the other factors dependent upon the subsequent management of the enterprise that the author considers a review of underground engineering and administration from an economic point of view an essential to any essay upon the subject. While the metallurgical treatment of ores is an essential factor in mine economics, it is considered that a detailed discussion of the myriad of processes under hypothetic conditions would lead too far afield. Therefore the discussion is largely limited to underground and administrative matters.
The valuation of mines arises not only from their change of owners.h.i.+p, but from the necessity in sound administration for a knowledge of some of the fundamentals of valuation, such as ore reserves and average values, that managerial and financial policy may be guided aright. Also with the growth of corporate owners.h.i.+p there is a demand from owners and stockholders for periodic information as to the intrinsic condition of their properties.
The growth of a body of speculators and investors in mining stocks and securities who desire professional guidance which cannot be based upon first-hand data is creating further demand on the engineer.
Opinions in these cases must be formed on casual visits or second-hand information, and a knowledge of men and things generally. Despite the feeling of some engineers that the latter employment is not properly based professionally, it is an expanding phase of engineers'
work, and must be taken seriously. Although it lacks satisfactory foundation for accurate judgment, yet the engineer can, and should, give his experience to it when the call comes, out of interest to the industry as a whole. Not only can he in a measure protect the lamb, by insistence on no investment without the provision of properly organized data and sound administration for his client, but he can do much to direct the industry from gambling into industrial lines.
An examination of the factors which arise on the valuation of mines involves a wide range of subjects. For purposes of this discussion they may be divided into the following heads:--
1. _Determination of Average Metal Contents of the Ore._ 2. _Determination of Quant.i.ties of Ore._ 3. _Prospective Value._ 4. _Recoverable Percentage of Gross Value._ 5. _Price of Metals._ 6. _Cost of Production._ 7. _Redemption or Amortization of Capital and Interest._ 8. _Valuation of Mines without Ore in Sight._ 9. _General Conduct of Examination and Reports._
DETERMINATION OF AVERAGE METAL CONTENTS OF THE ORE.
Three means of determination of the average metal content of standing ore are in use--Previous Yield, Test-treatment Runs, and Sampling.
PREVIOUS YIELD.--There are certain types of ore where the previous yield from known s.p.a.ce becomes the essential basis of determination of quant.i.ty and metal contents of ore standing and of the future probabilities. Where metals occur like plums in a pudding, sampling becomes difficult and unreliable, and where experience has proved a sort of regularity of recurrence of these plums, dependence must necessarily be placed on past records, for if their reliability is to be questioned, resort must be had to extensive test-treatment runs. The Lake Superior copper mines and the Missouri lead and zinc mines are of this type of deposit. On the other sorts of deposits the previous yield is often put forward as of important bearing on the value of the ore standing, but such yield, unless it can be _authentically_ connected with blocks of ore remaining, is not necessarily a criterion of their contents. Except in the cases mentioned, and as a check on other methods of determination, it has little place in final conclusions.
TEST PARCELS.--Treatment on a considerable scale of sufficiently regulated parcels, although theoretically the ideal method, is, however, not often within the realm of things practical. In examination on behalf of intending purchasers, the time, expense, or opportunity to fraud are usually prohibitive, even where the plant and facilities for such work exist. Even in cases where the engineer in management of producing mines is desirous of determining the value of standing ore, with the exception of deposits of the type mentioned above, it is ordinarily done by actual sampling, because separate mining and treatment of test lots is generally inconvenient and expensive.
As a result, the determination of the value of standing ore is, in the great majority of cases, done by sampling and a.s.saying.
SAMPLING.--The whole theory of sampling is based on the distribution of metals through the ore-body with more or less regularity, so that if small portions, that is samples, be taken from a sufficient number of points, their average will represent fairly closely the unit value of the ore. If the ore is of the extreme type of irregular metal distribution mentioned under ”previous yield,” then sampling has no place.