Mining company

“ The ore as taken from the mine concentrates four tons into one, which has a gross value of one hundred dollars, and with the first concentrator, whose capacity was one hundred and twenty tons daily, returned three thousand dollars per day to the owners. The company employ one hundred and fifty men, and are well equipped for profitable mining. ”

“ And because he alone provides the expenditure of money on the mines, if they yield metal he alone obtains the product from them. But when large and frequent expenditures are necessary in mining, he to whom the Bergmeister first gave the right often admits others to share with him, and they join with him in forming a company, and they each lay out a part of the expense and share with him the profit or loss of the mine. ”

“ Should the prospector discover mineral that increases in amount as the mine is opened, and shows that it is likely to prove a profitable deposit, he will have little difficulty in selling out to some wealthy syndicate. But if his mine is likely to become a big producer he should try rather to organize a company, of which he should be a shareholder—the controlling one if possible—as then the output of the mine will probably make him a rich man. It is rare that a prospector selling outright obtains anything but a fraction of the value of a good mine. ”

“ There is a modern idea that has taken root in the minds of mining men of the last generation to the effect that the mines with rich ore are not necessarily the ones with big profits. There are many men looking for investments in mines whose contents are of low grade but in large bodies readily worked. If a mine with rich ore can be found and the ore abounds in such liberal amounts as to warrant the inauguration of a company with the essential working equipment, such a proposition will naturally not be turned down. ”

“ This chapter will be devoted to Company formation and working, in which mistakes leading to very serious consequences daily occur.
It is not necessary to go deeply into the question why, in the mining industry more than any other, it should be deemed desirable as a general rule to carry on operations by means of public Companies, but, as a matter of fact, few names can be mentioned of men who mine extensively single handed. Yet, risky as it is, mining is hardly more so than, say, pastoral pursuits, in which private individuals risk, and often lose or make, enormous sums of money. ”

“ The latter is a thing apart from the relation of employer and employee, which in all producing occupations is purely local in character. Extraction of coal from the mine is the aim and the completed result of local activities. Commerce in the coal mined is not brought into being by force of these activities, but by negotiations, agreements, and circumstances entirely apart from production. Mining brings the subject matter of commerce into existence. ”

“ No matter how splendid a company's holdings may be naturally, there cannot be expected any profits from the workings of the deposits if there be not a sound business management. H. C. Hoover, the prominent mining engineer and mine manager, says, "Good mine management is based upon three elements: first, sound engineering; second, proper coördination and efficiency of every human unit; third, economy in the purchase and consumption of supplies." ”

“ The output in normal years approaches 800,000 carats. No attempt should be made to obtain a possible concession without thorough investigation and ample capital. The same may well be said of any mining venture. A concession for emerald mining has been secured by an American company. ”

“ One is that contractors who strip off the overburden of soil, gravel, etc., in open pit mines, other contractors who load the ore in such mines into cars, and still others, usually four in a group, who take ore out of underground mines, are not included. But none of these are engaged in mining on their own account. Instead, they are working for those who are so engaged. However important their service, they are not principals in the business, but employees ”

“ Another large company bought a large piece of mining property in Mexico, although its initial operations were in Colorado. Placer mining companies frequently dismantle, move and re-erect dredges. [154]
XVII
MINE EQUIPMENTS.
There is a constant tendency toward the adoption of machinery for the performance of every mining act which, formerly, was done by manual or animal labor. There are good reasons for this tendency. Good, trained labor is scarce; wages are slowly but gradually rising; ores of lower grade must be mined, and the tonnages must be correspondingly greater. ”

“ Later, when we were forced to accept the fact that finding gold was really the primary object of a gold-mining company, we still remained there, excusing our youthful laziness and incertitude by brilliant and effective sarcasms upon the unremunerative attractions of the gulch. ”

“ He did his best, too, to make something of the property, but it is a most difficult thing to make a mine yield when there is no ore in it. The result was nothing but 'Irish dividends' for the stockholders. It was in the old days, before the railway came along.
"One morning, when the overland coach drove into Austin, a gentleman dismounted, asked where the office of the Lucknow Gold and Silver Consolidated Mining and Milling Company was, and being directed, went to the office and without knocking, opened the door and walked in. ”

“ These deposits are naturally the first to fail in productiveness, but the neighboring hills are formed of a gold-bearing quartz which is being crushed, night and day, by hundreds of powerful machines; and the works still pay ten thousand miners fair day-wages, besides giving the organized companies who employ them satisfactory dividends. Thus mining has been largely robbed of its adventurous character in this neighborhood, and perhaps also of most of its alluring charm, having become a sort of regular industry, like coal-mining, or even brick-making. ”

“ All engineers must wish to have the industry under them in high repute. The writer knows of several mines paying 20% on their stocks which yet stand lower in price on account of short ore-reserves than mines paying less annual returns. The speculator, who is an element not to be wholly disregarded, wishes a rise in his mining stock, and if development proceeds at a pace in advance of production, he will gain a legitimate rise through the increase in ore-reserves. ”

“ Due consideration must always be given to the selection of some method of opening up what might be supposed will never amount to a great mine, so that, should subsequent disclosures exceed expectations, enlargement of the scale of operations can be advantageously effected. Always bear in mind that legitimate mining is just as much a commercial enterprise as is any other kind of business. The utmost concern for financial showings must be constantly borne in mind. Select a scale of operations consistent with the known—not the hoped-for—bodies of coal or ore ”

“ Large areas, although so popular in England, do not compensate for large bodies of payable ore; the most remunerative mine is generally one of comparatively small area, but containing a large lode formation of payable, but often low grade, ore.
It is worse still, of course, to buy a practically worked out mine, though this too is sometimes done. It must be remembered that mining, though often so profitable, is nevertheless a destructive industry, thus differing from agriculture, which is productive, and manufactures, which are constructive. ”

“ Given that the project has been determined upon, and that the enterprise has entered upon the second stage, that of determination of method of attack, the immediate commercial result limits the mining engineer's every plan and design to a greater degree than it does the other engineering specialists. The question of capital and profit dogs his every footstep, for all mines are ephemeral; the life of any given mine is short. Page 189 Metal mines have indeed the shortest lives of any. ”

“ Under ordinary working conditions, it should be considered just as essential for a mine to take an occasional inventory as it is for a mercantile establishment. In truth, there is far more need in mining operations of the knowledge thus derived than in any other business. In mining, as already suggested, the business is one of selling off the stock in trade without replenishing it. The opening of more reserves of ore is not bringing more goods into the stock, but it may be likened to simply unpacking more goods in the storehouse. ”

“ Every ton of stone broken and treated from even the best gold mine in the world makes that mine the poorer by one ton of valuable material; thus, to buy a mining property on its past reputation for productiveness is, as a rule, questionable policy, unless you know there is sufficient good ore in sight to cover the purchase cost and leave a profit. ”

“ It is to the public interest that deposits of mineral should not be permitted to remain idle and undeveloped. This has been recognized from the earliest times, and laws have been framed in all countries for the encouragement of mining enterprise. In many cases the state or the ruler has sought to obtain a share in the profits of mining, or even to work mines for the individual profit of the ruler or of the state. ”

“ There is, therefore, plenty of time for intending prospectors and miners to inform themselves thoroughly regarding everything necessary to know about the mines, routes of travel, outfit, etc., and for investors, who are not going to the mines, to satisfy themselves regarding the reliability of the mining companies that are and will be advertising their alluring and seductive money-making schemes. ”

“ It may be taken as a safe axiom that to make gold-mining in the mine as distinct from mining on the Stock Exchange really profitable the same system of economy, of practical supervision, and scientific knowledge which is now adopted in all other businesses must be applied to the raising and extraction of the metal. Then, and not till then, will genuine mining take the place to which it is entitled amongst our industries. ”

“ Mining business, from an investment view, is of two sorts,—prospecting ventures and developed mines; that is, mines where little or no ore is exposed, and mines where a definite quantity of ore is measurable or can be reasonably anticipated. The great hazards and likewise the Aladdin caves of mining are mainly confined to the first class. Although all mines must pass through the prospecting stage, the great industry of metal production is based on developed mines, and it is these which should come into the purview of the non-professional investor. ”

“ The success which has been met in the operation of the great mining companies of the world can, in the majority of cases, be traced to the common sense which was exercised in the business management. The business of mining is legitimate. If mining is one of the basic industries of the world, how could the operation of a real mine be anything but a legitimate business? ”

“ My father knows nothing about mining himself, and he has not even had an expert's opinion upon it. He goes entirely upon the Count's word, and what the Count chooses to show him. Why, the mine isn't being worked—hasn't been worked for thirty years."
"Perhaps," I suggested, "the Count hasn't the capital to work it. Labour out here's mighty cheap, but up-to-date mining takes a lot of money." ”

“ Many gold mines have been abandoned as unprofitable that could have been mined at a profit had their owners been wealthy and enterprising enough to do a great deal of expensive prospecting by diamond drill, cross cuts, drifts and rises. In one instance that came to the writer's knowledge a clever mining engineer cleared nearly $200,000 profit by leasing for a term of years a gold mine that was supposed to be exhausted. A drill hole sunk less than 50 feet below the old workings revealed a pocket of ore in the vein, and paying quartz was found for many hundred feet below. ”

“ Mining, altogether, is an extraordinary industry. But almost more extraordinary than the ignorance of London Boards, and the recklessness of British investors, is the haphazard way in which engineers and managers are selected. ”

“ The system has produced an increasing class of mining speculators and investors who are finding and supplying the enormous sums required to work our mines,—sums beyond the reach of the old-class single-handed mining men. Every year the mining investors of the new order are coming more and more to the engineer for advice, and they should be encouraged, because such counsel can be given within limits, and these limits tend to place the industry upon a sounder footing of ownership. ”

“ Mines are very seldom priced at a sum so moderate as that represented by the profit to be won from the ore in sight, and what value should be assigned to this unknown portion of the deposit admits of no certainty. No engineer can approach the prospective value of a mine with optimism, yet the mining industry would be non-existent to-day were it approached with pessimism. ”

“ In many instances, indeed, profits are more or less uncertain during the whole life of the mine, and it is evident that the value of the mining property must be more or less speculative. In the case of a developed mine its life may be predicted in many cases with absolute certainty—as when the extent of the mineral deposit and the volume of mineral can be measured. In other cases the life of the mine, like the value of the mineral, is more or less uncertain. Further, both time and money are required for the development of the mining property before any profit can be realized. ”