r to such an
extent as to form the "backbone" of the value of the mine, the
value of the subsidiary metals is often deducted from the cost of
the principal metal, in order to indicate more plainly the varying
value of the mine with the fluctuating prices of the predominant
metal. For example, it is usual to state that the cost of copper
production from a given ore will be so many cents per pound, or so
many pounds sterling per ton. Knowing the total metal extractable
from the ore in sight, the profits at given prices of metal can
be readily deduced. The point at which such calculation departs
from the "per-ton-of-ore" unto the per-unit-cost-of-metal basis,
usually lies at the point in ore dressing where it is ready for the
smelter. To take a simple case of a lead ore averaging 20%: this
is to be first concentrated and the lead reduced to a concentrate
averaging 70% and showing a recovery of 75% of the total metal
content. The cost per ton of development, mining, concentration,
management, is to this point say $4 per ton of original crude ore.
The smelter buys the concentrate for 95% of the value of the metal,
less the smelting charge of $15 per ton, or there is a working
cost of a similar sum by home equipment. In this case 4.66 tons of
ore are required to produce one ton of concentrates, and therefore
each ton of concentrates costs $18.64. This amount, added to the
smelting charge, gives a total of $33.64 for the creation of 70%
of one ton of finished lead, or equal to 2.40 cents per pound which
can be compared with the market price less 5%. If the ore were
to contain 20 ounces of silver per ton, of which 15 ounces were
recovered into the leady concentrates, and the smelter price for
the silver were 50 cents per ounce, then the $7.50 thus recovered
would be subtracted from $33.64, making the apparent cost of the
lead 1.86 cents per pound.

CHAPTER V.

Mine Valuation (_Continued_).

REDEMPTION OR AMORTIZATION OF CAPITAL AND INTEREST.

It is desirable to state in some detail the theory of amortization
before consideration of its application in mine valuation.

As every mine has a limited life, the capital invested in it must
be redeemed during the life of the mine. It is not sufficient that
there be a bare profit over working costs. In this particular,
mines differ wholly from many other types of investment, such as
railways. In the latter, if proper appropriation is made for
maintenance, the total income t