ce the ore-body must
extend 1,160 feet deeper to justify the price. Mines are seldom so
simple a proposition as this example. There are usually probabilities
of other ore; and in the case of base metal, then variability of price
and other elements must be counted. However, once the extension
in depth which is necessary is determined for various assumptions
of metal value, there is something tangible to consider and to
weigh with the five geological weights set out in Chapter III.

The example given can be expanded to indicate not only the importance
of interest and redemption in the long extension in depth required,
but a matter discussed from another point of view under "Ratio of
Output." If the plant on this mine were doubled and the earnings
increased to 20% ($400,000 per annum) (disregarding the reduction
in working expenses that must follow expansion of equipment), it
will be found that the life required to repay the purchase
money,--$2,000,000,--and 7% interest upon it, is about 6.8 years.

As at this increased rate of production there is in the ore in
sight a life of five years, the extension in depth must be depended
upon for 1.8 years, or only 360,000 tons,--that is, 360 feet of
extension. Similarly, the present value of the ore in sight is
$268,000 greater if the mine be given double the equipment, for
thus the idle money locked in the ore is brought into the interest
market at an earlier date. Against this increased profit must be
weighed the increased cost of equipment. The value of low grade
mines, especially, is very much a factor of the volume of output
contemplated.

CHAPTER VI.

Mine Valuation (_Concluded_).

VALUATION OF MINES WITH LITTLE OR NO ORE IN SIGHT; VALUATIONS ON
SECOND-HAND DATA; GENERAL CONDUCT OF EXAMINATIONS; REPORTS.

A large number of examinations arise upon prospecting ventures
or partially developed mines where the value is almost wholly
prospective. The risks in such enterprises amount to the possible loss
of the whole investment, and the possible returns must consequently
be commensurate. Such business is therefore necessarily highly
speculative, but not unjustifiable, as the whole history of the
industry attests; but this makes the matter no easier for the mine
valuer. Many devices of financial procedure assist in the limitation
of the sum risked, and offer a middle course to the investor between
purchase of a wholly prospective value and the loss of a possible
opport