spective 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 repetition 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 ownership,
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 ownership there
is a demand from owners and stockholders for periodic information
as to the intrinsic condition of their properties.

The