uch
cases it is desirable in calculating averages to use a period covering
one or more of these cycles, rather than some shorter or longer period.
For many minerals, however, these cycles have been too irregular to
afford a sound basis for future estimates. If the experience of the
property itself is too short to afford a sufficient foundation for
forecasting profits, or if there has been no previous work on the
property, then it is necessary to use averages based on other
properties or other districts; or if there are none strictly
comparable, to build up a hypothetical figure from various estimated
costs of labor, supplies, and transportation, selling prices, etc. In
the estimate of the profit factor, the geologist is not primarily
concerned.

In estimating the total reserves in a mine, geological considerations
nearly always play a large part. An ore body may in some few cases be
completely blocked out by underground work or drilling, eliminating the
necessity for inferring conditions beyond those actually seen; but in
the huge majority of mineral deposits the reserves are not so definitely
known, and it becomes necessary for the geologist, through knowledge of
similar occurrences, through study of the structural features of the
deposit, its origin, and its history, to arrive at some sort of an
estimate of reserves.

In estimating the life of a mineral deposit it is necessary to start
with the figure of total reserves, and from a study of conditions of
mining and of markets to estimate the number of years necessary to
exhaust the deposit. This is a more nearly commercial phase of the
problem, in which the geologist takes only part of the responsibility.
Perhaps more estimates of value have gone wrong because of misjudgment
of this factor than for any other cause. If the physical conditions are
satisfactory, it is easy to assume a rate of extraction and life based
on hope, which experience will not substantiate.

The choice of the interest rate to be used in discounting future
receipts to present worth likewise is a financial and not a geologic
matter. Again, however, the geologist must give consideration to this
factor, in view of the fact that the interest rate must be varied to
cover the different degrees of hazard and doubt in the geologic factors.
For instance, to the extent to which the estimate of ore reserves is
doubtful, it is necessary to use a high rate of interest to allow for
this hazard. In a large,