ction.

The cost of production embraces development, mining, treatment,
management. Further than this, it is often contended that, as the
capital expended in purchase and equipment must be redeemed within
the life of the mine, this item should also be included in production
costs. It is true that mills, smelters, shafts, and all the
paraphernalia of a mine are of virtually negligible value when it
is exhausted; and that all mines are exhausted sometime and every
ton taken out contributes to that exhaustion; and that every ton of
ore must bear its contribution to the return of the investment,
as well as profit upon it. Therefore it may well be said that the
redemption of the capital and its interest should be considered
in costs per ton. The difficulty in dealing with the subject from
the point of view of production cost arises from the fact that,
except possibly in the case of banket gold and some conglomerate
copper mines, the life of a metal mine is unknown beyond the time
required to exhaust the ore reserves. The visible life at the time
of purchase or equipment may be only three or four years, yet the
average equipment has a longer life than this, and the anticipation
for every mine is also for longer duration than the bare ore in sight.
For clarity of conclusions in mine valuation the most advisable
course is to determine the profit in sight irrespective of capital
redemption in the first instance. The questions of capital redemption,
purchase price, or equipment cost can then be weighed against the
margin of profit. One phase of redemption will be further discussed
under "Amortization of Capital" and "Ratio of Output to the Mine."

The cost of production depends upon many things, such as the cost of
labor, supplies, the size of the ore-body, the treatment necessary,
the volume of output, etc.; and to discuss them all would lead
into a wilderness of supposititious cases. If the mine is a going
concern, from which reliable data can be obtained, the problem is
much simplified. If it is virgin, the experience of other mines
in the same region is the next resource; where no such data can be
had, the engineer must fall back upon the experience with mines
still farther afield. Use is sometimes made of the "comparison ton"
in calculating costs upon mines where data of actual experience
are not available. As costs will depend in the main upon items
mentioned above, if the known costs of a going mine elsewhere be
taken a