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By B. A. Rogers

THE etching effect which is produced on a piece of polished iron or steel when it is heated in hydrogen or in a vacuum seems to have been observed first by Osmond,1 who believed that he could distinguish four systems of grain boundaries on a piece of steel which had been heated in hydrogen. In a number of other investigations, samples of pure iron were found, after heating, to have complex networks in which two or three systems of grain boundaries could be detected. It was further noticed that samples that had been polished plane before being placed in the furnace were, after treatment, roughened and undulating over their entire surfaces. From a comparison of the temperature of heat treatment with that of the A 3 transformation, it was concluded that the changed appearance of the samples was definitely related to the latter phenomenon. Certain other deductions were made but these are not of importance here and only observations on the appearance of the samples will be reviewed. Ewen2 heated a strip of polished iron in a vacuum in such a way that one end was maintained at a temperature of 1000° C. and the other at 580° C. On the cooler end there was outlined a simple polyhedral network, and at the hotter there appeared the complex system of lines and the undulating surface characteristic of iron which has passed through the A3 transformation. He found that in going from the cooler toward the hotter end the sample maintained much the same character of surface up to the beginning of the transformed area, but that near this region double grain boundaries were of frequent occurrence. Rawdon and Scott' concluded that the simple type of network brought out by heating a sample of pure iron in a vacuum was of the same type as that developed by ordinary etching methods. They also confirmed the observations of

Jan 1, 1929

By C. M. Wayman, M. Miyagi

COMPARED to many of the binary alloys of iron, Fe-Ir alloys have received very little tud.'' Virtually nothing is known about the Fe-Ir equilibrium diagram' except for a few details concerning the liquidus-solidus positions for dilute iron-based alloys. It is reported1 that the y to a transformation temperature in Fe-Ir alloys (up to 40 wt pct Ir) is composition-dependent, varying from -900°C for pure iron to 0" to 100°C for Fe-40 pct Ir in an almost linear manner. The y to a transformation appears to be reversible,' the transformation hysteresis width increasing with increasing iridium content. In a qualitative way, the composition dependence of the y to a (and vice versa) transformations appears similar to those in the widely studied Fe-Ni system. In that the y phase (in Fe-40 pct Ir) can transform at -1000C, it

Jan 1, 1967

By B. N. Webber

During World War II the Pocos de Caldas bauxite deposits of Minas Gerais in Brazil yielded some 60,000 tons. Since then they have maintained a small but almost continuous production. Known for many years, the deposits have been reconnoitered by a number of geologists,1-4 but no dimensional study has been possible because there have not been enough exposures to show clearly the depth, bedrock, and habit of occurrence. The deposits are somewhat unorthodox in their occurrence mainly on steep slopes of mountainous terrain. Although the parent rocks are a sequence of alkalic intrusions that bauxitize readily under the proper conditions, bauxitization has not been the dominant weathering process in the area. It is limited to certain localities where important volumes of bauxite have formed by laterization of several rock types, each yielding a distinctive type of bauxite. Bauxitization may be observed in several stages and in both direct and indirect cycles of formation. The deposits are unique in being of demonstrably recent age, so that the conditions under which the bauxite formed are essentially those of the present time. The bauxitization sequence is postulated in Fig. 1. Pocos de Caldas district is situated at approximately 21" 50' south latitude and 46" 30' west longitude in southwestern Minas Gerais, near its boundary with the state of Sao Paulo. It lies within the Eastern Plateau physiographic province of Brazil, occupying a prominent highland area that rises some 2000 ft above the surrounding country. The central portion of the Pocos de Caldas highland is characterized by gently undulating topography, with generally sluggish drainage, and is surrounded by a rim of hills rising above 1000 ft above it. In cross section the highland resembles a truncated cone with a depressed central area. The rim has been sculptured into a more prominent and abrupt topographic pattern than the central area, and streams that are of low to moderate gradient in the central plateau plunge over the rim in a spectacular series of cascades and falls. GEOLOGIC SETTING The Pocos de Caldas highland owes its physiographic expression mainly to the differential erosion of a complex intrusion of alkalic rocks into gneiss and sandstone. Erosion was guided somewhat by faulting. The highland is almost circular, and its limits, except in one locality, coincide with the periphery of the intrusion. The alkalic intrusions largely control its shape and extent, aided by some subsidence through faulting of the central portion. The mountainous rim of chilled phase, the later intrusions, and the indurated intruded rocks have resisted erosion more effectively than the central portion of the intrusion, which is composed of more coarsely crystalline alkalic rocks that form a central basin in the highland. Gneiss and sandstone are found coincident in elevation with the topographically highest intrusions. BAUXITE TYPES Most of the bauxite, which varies in physical type, is on the top and steep slopes of the northern rim. The only alumina mineral is gibbsite, definitely crystalline but iron-stained unless of secondary origin. Clay particles occurring with the bauxite are kaolinite. Some types of bauxite are an index to their origin. There are four general physical types of bauxite or bauxite laterite: 1) Surface Rubble: This partly nodular and partly fragmented type, usually less than 3 ft thick, results from surface weathering of massive bauxite or may form by superficial enrichment of nodular bauxite with a clay matrix when the interstitial clay is removed by surface runoff.

Jan 1, 1960

By LeRoy Scharon, P. Uhley

TEST gravity surveys were made in the Washington County barite district of Missouri on properly owned by the Baroid Sales Division of the National Lead Co. This property is located just northeast of Richwoods in the northeastern corner of Washington County, Fig. 1. The area to which the surveys were confined comprised approximately 5000 acres, of which some 525 acres were surveyed gravitationally. Gravity observations were made at 2600 points within the area, observations being confined to relatively clear and gently sloping ground. Part of the area was heavily wooded, and the terrain too rugged for either the occurrence of a commercial barite deposit or a feasible gravity survey. The relief along the central drainage, Ditch Creek, was about 140 ft, the maximum difference in elevation being 400 ft in a distance of 3½ miles. The purpose of the test gravity survey was to determine whether the gravity method of geophysical prospecting might be applied in the exploration for barite deposits in the Washington County barite district, since a satisfactory systematic procedure had not been devised to explore and ultimately determine barite ore reserves with desired accuracy. No previous geophysical work with respect to barite is known to have been done in this area. Stratigraphy: The formations over which the barite deposits occur' are Paleozoic in age, representing rocks involving sandstones and dolomites unconformably underlain by pre-Cambrain granites and rhyolite porphyries. The areas covered by the granite survey were directly underlain by almost

Jan 1, 1955

By Severn P. Brown

Search for ore continued at a feverish pace-as can be attested to by anyone who has tried to arrange for extensive diamond drilling. The stakes are high, and so is the cost as was indicated by Selco Exploration Ltd. when they announced discovery of base metal sulfides at Uchi Lake in northwestern Ontario. It was apparently their first commercial find after 15 years of exploration at a cost of more than $10 million. For the first time in many, many years the big exploration news has come from east of the Mississippi River. In January, the New Jersey Zinc Co., in an unusually worded press release, stated that they had made a major zinc discovery of 13-50 million tons of ore averaging 5-10% Zn. New Jersey's holdings are said to embrace 500 sq mi. The ore was discovered in eastern Tennessee in the upper part of the Knox dolomite of early Ordovician age. Reportedly the mineralization is at depths of 900 to 2000 ft. Currently about 20 diamond drills are working the area for New Jersey. At least nine other major companies are prospecting the region, which now includes parts of Kentucky. Five hundred thousand acres are said to be under lease. Greatest activity is clustered around Carthage, Tenn. In Missouri, the St. Joseph Lead Co. announced plans to develop a new mine in the Brushy Creek area of the "New Lead Belt." copper and zinc concentrates will be by-products.

Jan 1, 1970

By George A. Packard

WHEN, in April, 1892, the writer began experimenting with the cyanide-process, it had already proved a success in the treatment of tailings, but had not become an important factor as a primary method of ore-treatment. The Livingston, Colorado, mill was running a few small agitators; the Mercur mill, in Utah, was said to be a success, but was " closed down to increase capacity; " and Mr. A. B. Paul, in Shasta county, California, was running ore'through a stamp-mill into leachingvats, using a weak cyanide solution in the battery. Mills had been, or were being, erected in Arizona; on the Comstock lode; and in South Dakota. Some of these never started, and several were shut down or remodelled for other processes. Altogether, the outlook was anything but favorable. Many of these mills were planned to make use of agits tion, and a cyanide solution containing at least 1 per cent. of potassium cyanide was employed. Since then the improvement of the process, both chemically and mechanically, has placed it among the recognized successful methods of oretreatment. Within the past year I have visited a large number of cyanide-mills, and have collected considerable data, of which I publish enough herewith to give an idea of the development of the process and of the methods followed in the principal mills. I would say, however, that nearly all of these plants are experimenting, most of them employing experienced chemists,

Jan 1, 1897

By T. A. Read, S. W. Kitchen, H. I. Fusfeld

At the present time most artillery cartridge cases are used only a single time. Since the process of reshaping a fired cartridge case so that it may be used again is much simpler and cheaper than the original manufacture of the case, it is clear that important savings could be effected if such re-formed cases were used in place of new cases. Extensive use of reconditioned cases has been hindered in the past, however, by the deterioration of the brass which may occur in the period of time between the first firing and the reconditioning of the cartridge cases. This deterioration sometimes results in a dangerously high incidence of firing splits in groups of reconditioned cartridge cases. It appears that the mechanism of the deterioration is the season cracking of the brass, for season cracks, of varying degrees of severity, may frequently be found in the cartridge cases after their return from the field. There are, of course, severe practical limitations to the extent to which fired cartridge cases can be protected from corrosion under battle conditions, particularly since the powder residue in the case is itself corrosive. The present paper describes a rapid method of testing the sidewalls of artillery cartridge cases for the presence of season cracks. This method has been developed specifically for use in connection with the reconditioning of fired cases, and makes it possible to carry out 100 per cent inspection. This new method of inspecting cartridge

Jan 1, 1945

By A. G. McGregor

DURING the past 5 years, five new copper-smelting plants have been built and put into operation in the State of Arizona. The monthly copper output from these plants averages from 5,000,000 to 18,000,000 lb. Previously, there never was as much activity in copper-smelting plant construction in the same length of time in all the rest of the world. Naturally, in this amount of work, some new problems were met and new features in plant design and. equipment developed. Some of these features are described in this paper. CONCENTRATE HAULING, UNLOADING AND SAMPLING SYSTEM (a) Concentrate Car The International Smelting Co. has provided at its plant at Miami specially designed cars for hauling the concentrates from the mills of the Inspiration Copper Co. and the Miami Copper Co.. The car has a bottom that is readily made tight to hold flotation concentrates and is quickly and cheaply unloaded. Figs. 1, 2 and 3 show views and details of the car. The main feature of this car is the slot in the bottom throughout its length, which is closed by means of short planks that overlap like ship-lap as shown by Fig. 1. At one end of the car an iron gate operated by a screw and hand wheel is provided, which clamps or presses the planks together, making the bottom tight. A removable tapered plug rests vertically over this gate when the loading of the concentrates at the mill commences.

Jan 8, 1916

By George Bain

SOME problems concomitant with commercial exploitation of marble are presented as examples of interesting, useful and profitable fields for application of scientific knowledge. The marble industry is only one such field and is selected because its varying new aspects are familiar to the author. However, what is true for marble is equally so in principle for many industrial minerals. The problems of any stone industry are to maintain markets, create new outlets for stone already in demand, and develop varied uses for varieties that are not so popular. Here the geologist has a different role from most of his colleagues in metal mining. The producing branch may ask about the expectable variation in thickness or size of a deposit as development proceeds. The stock department may call for the available amount of a given type of stone before accepting a large order. The sales force requires data on the use for stone from certain parts of deposits in order to divert grades to the most suitable use. The service depart-ment wants defects rectified and the cause determined to avoid recurrence. The mills want data on durability and cutting quality of abrasives. The geologist occupies no special department; he is on general call, as may be illustrated by a few types of problems that may be classified as: (1) dominantly geological in character, (2) dominantly chemical in character, (3) dominantly physical in character.

Jan 1, 1940

By Walter Kauenhowen

The production of crude oil in Germany during 1933 totaled about 1,669,521 bbl., a slight increase over the 1,608,558 bbl. produced in 1932. This is an extension of a yearly increase which has continued uninterruptedly since 1928. The 1933 increase in production is due chiefly to developments in the Nienhagen field. The production of the Wietze and Oberg fields remained rather stable, while the Oelheim-Eddesse and Volkenroda fields showed decreases. Nienhagen Field.—This field furnished about 61 per cent of the total German oil production in 1933. Most of the drilling activity centered the north district near the village of Nienhagen, where the trend of

Jan 1, 1934

By S. W. Hazen

The use of operations research and computer techniques continued to expand during 1967. A number of mining companies either obtained computers or were experimenting with their use through service bureaus. This trend was also evident in the Canadian mining industry. Although the annual Symposium and Short Course on Computers and Operations Research in Mineral Industries was not held in 1967, technical periodicals like MINING ENGINEERING, Mining Congress Journal and Engineering and Mining Journal stepped up their coverage on the subject. The annual AIME meeting had eight papers in two sessions and one session on Operations Research was held at the SME Fall Meeting in Las Vegas.

Jan 2, 1968

By J. D. Price, W. M. Bertholf

A. C. RICHARDSON*—First of all, [ think that the paper represents a lot more work, study, and correlation than has been indicated by the brief talk by Mr. Price. I like the way he started out and described the areas from which the samples were obtained, the locations of the washing plants, the available tonnages, and other background information with which to evaluate the data he submitted later on. Then I like the way in which he described the various types of washing plants, the tonnages handled and the difficulties of the washing problems; showing the amount of material that lies close to the specific gravity at which the washing separation is made. Later he gave figures from washing plant operations showing recoveries and cleaning efficiencies. He then discussed his own plant at Pueblo. It is the same old plant, I think, that I worked around a good many years ago. It is unusual to find a plant treating nearly 5000 tons of coal a day on tables. But this table plant is, I believe, more efficient than is indicated by the figures that Mr. Price gave. To determine the efficiency of a cleaning operation or to compare it with another it is necessary to consider the quantity and character of the material close to the specific gravity at which the separation is made. It is not fair, I believe, to penalize the table operation by something like 4 pct of out-of-place-material as he has done here. The variety and difficulty of the coals that he has to wash, the continuous shift and change in their composition make a very difficult cleaning problem and the table performance is excellent. I believe that the information in this paper will be of interest and value to anyone operating or planning to build a coal cleaning plant in this or other areas; particularly where the cleaning of fine coal is a problem. The data may be used for comparative purposes in determining the relative efficiencies of other cleaning plant separations. E. D. HAIGLER*—What is a Baum jig? J. D. PRICE (authors' reply)—A Baum-type jig is one in which the pulsations of the water is secured by means of a pulsating air current applied on top of the water. I imagine you are all familiar with the old plunger-type jig which is in effect a U tube in which a plunger on one side of the U, moving up and down, causes a corresponding pulsation on the far side of the jig. In the Baum jig, the pulsating air current is applied on the surface of the water on one side of the U tube of the jig and gives a corresponding pulsation on the other. It is also commonly known as a pneumatic jig. The control of the rise and fall of the water in the jig body proper is under much better control than it is in any of the other type jigs. Mr. Richardson could enlarge on that feature, for I know that he has had considerable experience with these jigs. A. C. RICHARDSON—You have asked how to control a Baum-type jig. The pulsations in a Baum jig can be modified and regulated to a marked degree by the amount of water admitted to the jig and by the adjustments of the valve which regulates the manner in which air is admitted. The number of pulsations per minute is controlled by the number of cycles of the air valve. Thirty to forty cycles per minute is a good speed for large jigs treating coarse sizes of cod. With an air valve it is possible to modify the time-velocity curve of the pulsating water to some extent which in turn determines the action in a jig bed. Within limits the following parts of the air valve cycle may be regulated: (1) the rate and period of air admission, (2) the period of air expansion, (3) the rate and period of air exhaust, and (4) the period of air compression. The rate and period of air admission determines the acceleration of the water at the beginning of the pulsion stroke and the amplitude of the stroke. The period of air expansion, after inlet port is closed, is one in which the water has reached the desired velocity, positive acceleration reduced, and the bed held in a mobile condition. The rate and period of the air exhaust can be adjusted to modify the degree of suction and so modify the manner in which the particles in the bed stratify. The compression period, alter the exhaust port closes and before the intake port opens may be used to advantage in retarding the downward velocity of water during the suction stroke. An ideal jig stroke is one in which during the up stroke the bed is lifted slowly in a mass and opens up like an accordian with the bottom layers dropping away first. With the bed open and mobile the particles adjust themselves according to their hindered settling rates. During the down stroke, while the bed is still open the particles of high specific gravity are accelerated toward the bottom layers. It is possible to approach this stroke with all types of jigs but it is less difficult to approximate it with a Baum jig.

Jan 1, 1950

By Philip Wilson

Tun mines of the Calumet & Arizona Mining Co. are situated in the Warren Mining District, Cochise County, Arizona, between Bisbee and Warren and adjoin those of the Copper Queen Consolidated Mining Co. and the Shattuck Arizona Copper Co. Paleozoic limestones of considerable thickness have been intruded by granite porphyry. A great stock of the intrusive outcrops boldly near the city of Bisbee and is known as Sacramento Hill. From this central core the porphyry has tongued out into the limestone for many thousands of feet as dikes and sills of irregular shape and variable dimensions. Churn drilling has recently developed a large tonnage of secondarily enriched copper ore in the main porphyry mass of Sacramento Hill. While some ore has been found in porphyry in other parts of the district it is relatively unimportant compared with that which occurs in the Paleozoic limestone as irregular lenses replacing favorable beds near porphyry contacts or associated with well-marked fracture zones often many hundreds of feet away from the intrusive. In a zone extending from Sacramento Hill for a distance of from 1,500 to 3,000 ft. the limestone has been extensively metamorphosed and in this contact metamorphic zone the ore occurs through a known vertical thickness of upward of 900 ft. and individual orebodies often show extension in a vertical direction of over 200 ft. At a greater distance from the intrusive stock the ore occurs as lenses of greater horizontal than vertical dimensions with an average thickness of approximately 30 ft. An exception to this rule is found in the occasional steeply dipping mineralized fractures, almost true tabular veins, which are found long distances away from the zone of contact metamorphism.

Jan 7, 1916

By Bennett R. Bates

Nowhere in the world has cone classification in closed-circuit grinding with tube mills reached as high a state of development as on the Wit-watersrand. In the development of the Far East section the necessity of fine grinding to obtain satisfactory residues gave rise to a situation with which the cone could cope only at a great sacrifice in efficiency of tube-mill grinding. H. A. White1 recognized the limitation of the cone in his study of the theory of tube milling as early as 1915, but it was not until Ewing, Davis and Willey2 carried out their tests at Springs Mines during 1920 that the advantages of mechanical classifiers were demonstrated. During the fall of 1924 the writer supervised a series of tests with Dorr classifiers undertaken by Mr. White, Consulting Metallurgist, at the mill of the Geduld Proprietary Mines, Ltd., Dersley, Transvaal (Far East Rand). The importance of classification to obtain efficient tube-mill grinding was thoroughly demonstrated. The installation of classifiers of the above type that followed the test confirmed the results of the experimental work. Tests with Cones, Straight Type and Bowl Classifiers The test at the Geduld mill was made to determine the relative grinding efficiency of a tube mill when grinding in closed circuit with cones, straight type Dorr classifier and Dorr bowl classifier. The efficiency of a tube mill, as expressed in this article, is based on the tons of minus 200-mesh material produced by the mill. The efficiency is also expressed in terms of tons of minus 90-mesh material produced by the mills to correspond to the standard practice on the Witwatersrand. The results given for the performance of the tube mills grinding in closed circuit with cones (Fig. 1) were taken from previous tests carried

Jan 1, 1926

By James F. McDivitt

The mineral industry of today is faced with a number of dilemmas, not the least of which grows out of the series of related facts-world mineral consumption is growing, and is expected to continue to grow; maintaining adequate capacity to meet needs will require very great capital investment over the next decades, investment which must be measured in billions of dollars; much of the new production must come from remote and relatively underdeveloped countries; many of the areas in which such development must take place are not areas in which private capital enters without some trepidation. There are real problems in financing new mineral development-problems which have occupied the thoughts of many in the industry. One group which is currently providing part of the answer, and perhaps pointing the way to further progress in the future, is the World Bank. Loans from the World Bank are arranged usually for countries which are attempting to develop their economies through expanded industrial production. More often than not they are for the development of electric power projects or transportation facilities. Although we consider the mineral industries to be basic factors in industrial development and very important factors in the early stages of development of a country, few of these loans are for mineral development-no more than a half dozen out of a total of well over 300 loans which have been granted to date. Yet the World Bank has played a far more important part in world mineral development than these figures would indicate. The few loans for mineral development which it has made are important, but of considerably greater importance are the secondary effects of many of the non-mineral development loans and some of the special services which the Bank also offers.

Jan 5, 1963

By T. S. Fuller

The tensile properties of steels at elevated temperatures have been studied by numerous investigatorsll primarily for the purpose of determining their suitability for structural uses. Tests with this objective have been confined largely to the temperature range of approximately 20" to 500' C., because of the rapidly decreasing tensile strength at the latter temperature. Tests have also been extended to higher temperatures2 for the purpose of determining the most suitable forging range. This temperature range is also of theoretical interest. The phenomenon if increased tensile strength and decreased ductility .in the so-called "blue-heat" range, approximately 200" to 300" C., is well known. It was suggested to the Bureau early in 1926 that a study of the properties of rail steels in this temperature range might prove of interest in relation to the studies of transverse-fissure failures in rails. There were available from another investigation3 several new rails from several different heats made to approximately the same specification requirements, the complete manufacturing histories of which were known. It was decided to determine, at least in the preliminary series of tests, only the ultimate tensile strength, elongation and reduction of area, because of the difficulty, time and cost involved in determining the proportional limit and yield point at elevated temperatures.

Jan 1, 1930

By Sinha D. K.

As the main source of indigineous energy, coal has a big role to play in the development of national economy of India. Nationalization of the coal mining has brought the entire industry under the unit control of the Central Government following which an ambitious plan for increasing the coal production in the next few five year plans has been undertaken. In order to achieve best all round results, economy-mathematical models of Planning the total system, right from the highest to lowest hierarchial levels of decision making, have been proposed through a Global Model which is detailed in Local Models in stages right up to a mine. Optimum obtained by computer solution of the models would provide basis for objective decision making in the fields of selection of optimum plan for developing the industry, the coal fields and the mines with construction and/or reconstruction of mines, capacity optimization of enterprises and mines therein. Different types of Models and the optimization processes are presented.

Jan 1, 1977

By Adrian Brown

INTRODUCTION The primary tool which is available to improve the stability of an open pit mine at a given slope angle is control of groundwater pressure. This paper sets out the methods by which water pressure control can be achieved in large mines in different materials. The emphasis of this paper is on large mine slopes because. these slopes exhibit the greatest need for groundwater control, the greatest economic benefit from groundwater control, and the greatest technical challenge in achieving groundwater control. STABILIZATION USING MTER PRESSURE CONTROL Groundwater pressures reduce the stability of slopes in two fundamental ways, as shown schematically in Figure 1. In the example, a horizontal failure surface intersects a vertical joint or weak zone. Water pressure acts: o On the base plane to reduce the normal force on the sliding surface and hence reduce frictional resistance to sliding, and o On the vertical back plane, to create a driving force for the system.

Jan 1, 1983

By Hisahiro Kinoshita, Derek Temple, Yoshio Higashitsuji

The zinc-lead blast furnace process has been installed by two smelters in Japan. In 1966 a unit was commissioned at Harima in Hyogo prefecture by Sumitomo Metal Mining Co. Ltd. and in 1969 a consortium of other Japanese zinc and lead smelters completed their unit at Hachinohe in Aomori prefecture, managed by Mitsui Mining & Smelting Go. Ltd. , the major shareholders. The special characteristics of these two plants are described with particular emphasis on their location and operation. Reference is also made to the processing of a wide range of raw materials, including residues from other processes. Both plants pay scrupulous attention to plant and environmental hygiene to meet the high standards set by the local prefectural governments; the ways in which this has been achieved are discussed. General performance data on each furnace is included, showing that this pyrometallurgical process is supplying 16% of Japan's zinc and refined lead consumption. Note - All tonnes (t) are metric of 2204 lbs.

Jan 1, 1976

By Anna H. Connard

SUMMARY The discussion focusses on developments in the debt/equity swap market since the Marte project was negotiated in early 1988. It emphasises carrying forward the recent market trends to anticipate the breadth and scope of debt/equity conversions for mine development in the 1990s. Secondary market prices of LDC paper, conversion values and political influences in the host countries and the use of near debt and commodity-based instruments as components of mine financing in debt/equity deals will be placed in the perspective of recent trends and expectations for the future. THE MARTE PROJECT The Marte mine is a gold porphyry deposit in Chile's high Atacama, for which financing was put together at the beginning of 1988. The Marte project was financed by a combination of common equity and loans. It was unusual that the equity infusions were made under different programs. Some of the international equity was infused with fresh funds via DL 600. Other common foreign equity was provided through the conversion of Chilean bank debt under Chapter XIX. On the loan side,. export credits for the import component of machinery and equipment were sought. Local bank financing was negotiated for the remainder of ' the project's anticipated cost. The debt conversion market in Chile was at its apex in terms of interest, activity and government support when the mine financing was arranged. The price of Chilean paper in the secondary market hovered about 62 to 66 cents per U.S. dollar of face value. Meanwhile, the Chilean government was negotiating conversion redemptions significantly closer to full face value. The government differentiated between debt paper exchanged for corporate investors who had sourced that paper in the secondary market, and debt paper held by bank investors who would incur a transaction loss in the conversion. The use of a combined DL 600lChapter XIX equity financing created different yield calculation bases for the various investors. Chapter XIX prevents remittance of profits before year 5 and capital repatriation before year 11. Investors choosing this vehicle have either for a corporate policy in the target project not to declare dividends until repatriation is allowed, or they have to seek uses for the peso liquidity that would be generated through dividend declarations in the early years. However, DL 600 investors face no such waiting period on dividends, nor do they have restrictions imposed on cashing out of the investment before the 11th year. Therefore, any equity structure with components of both investment mechanisms will have inherent differences in cost basis and future income flows for the various participants. This equity imbalance is defensible if the investment motivations of the parties are analyzed: a mining investor using fresh funds looks for a hurdle return on equity calculated at conservative commodity prices, with as much flexibility to reap upside benefits as possible; a mining investor choosing to invest through a debt conversion mechanism will realize a modest short term gain on the conversion, reducing his effective cost basis, but sacrificing some return because of the waiting period on repatriation of dividends. INVESTMENT OBJECTIVES A bank investor exchanging his own paper for an equity participation in a mining project realizes a conversion loss on the transaction. He seeks a risk adjusted acceptable hurdle rate of return to recoup that loss over time. Motivation for the bank investor to take that loss may be derived partly from a strategy to diversify its existing portfolio by internal policy and externally regulated guidelines. The bank will compare yields on its loan portfolio to that country with anticipated dividend flows discounted back at a risk adjusted rate. It will analyze the project with return objectives of yield enhancement over time and with

Jan 1, 1990