(16) 1915 Mine Productivity Determination

I conducted an historical review on a small local Gold Mine and during the research I found an actual evaluation of the production of the mine completed in April 1915 by a local geologist. I have developed two slides that show the production values of the mine.

The first table below discussed the Mine Assay Values. Four samples were taken from various locations in the mine and assayed for gold and copper, the prevalent ores in the mine. Each sample was analyzed and they came up with a dollar value per ton. Today we use ounces of the ore instead of dollar value since metal prices fluctuate quite a bit. As noted on the table the 1915 gold and copper values were $21 per ounce for gold and $0.08 a pound for copper. I made up a second column for the gold and copper prices in 2012 with gold being at about $1,700 per ounce and copper being approximately $3.55 per pound. You can see that the average per ton was $27 and at today’s prices it would be $1,500 per ton. The results were that the mine had some good ore values.

He went on to determine if the mine operation could continue on the ore values that were found. This is where the second table below for Mine Production was used. This takes into consideration all of the individual operating costs. It is interesting to see how much each component would cost in 1915. To find out what the comparable prices would be today I used the Consumer Price Index (CPI) for today as compared to 1915. The factor was $1 in 1915 which would be worth $23 today. I developed a second column and used the price of each item times 23 to get the cost today.  The engineer totaled each of the individual cost of mine operations. Once he had those figures the mining mechanism, a 10-stamp mill, was factored in to determine how much ore could be processed. It was determined that the mill could process 30 tons per day. The profit was determined by subtracting the mine operating cost per ton from the mine production per ton and multiplying that number by 30. The geologist determined that the values obtained were adequate for the mine to stay in business. The actual operating cost today will be more, in that, there are other costs that are included such as reclamation costs that were not in place in 1915 and would make the final cost of operations much more and the total profit less.