The factors involved in the valuation of a mining project are so complex and various that

ideal exactitude is impossible. |The valuation of a mine is the process of estimating future
profits, and here as elsewhere, prophecy is dangerous. However, if the engineering method is
applied with care and intelligence, an approximation may be made that will place the value of
the mine within certain rather wide, but definite, maximum and minimum limits.
A preliminary view of the process of valuation should include:
First, a brief sketch of the theory of valuation; second, a description of the problems
confronting the engineer at the time the need for valuation arises; and, third, an outline of the
commonest factors that must be integrated to produce a logical conclusion as to the value of
the property.
THE THEORY OF VALUATION
The ore in the mine must ultimately pay for the following:
1. Purchase price
2. Development of the deposit
3. Plant and equipment
4. Costs of operation and treatment
5. Interest on the money invested
6. Profit to the organizers and investors
The engineer's problem, briefly, is to decide whether the sale of the ore that he estimates the
mine can produce will, at the time this ore is sold, pay for the expense of mining it and
likewise yield a suitable return for the capital laid out. Since no two mines are exactly alike
and since the circumstances of each sale may differ widely, this problem varies for each
particular mine under valuation.