CHAPTER XIII 
THE VALUATION OF MINES AND OIL PROPERTIES 
General Statement 
Purposes of the Valuation. — Valuations of mines and oil 
properties as in case of other properties are needed for many 
purposes, the most general being, (1) the purchase or sale of such 
properties or portions thereof, (2) the information of owners or 
others interested in the property as a guide to the proper opera- 
tion thereof or to the financial operations connected with such 
operation and (3) the determining of a basis on which taxation 
can be figured. The methods used to accomplish purposes 
(1) and (2) are closely associated and in many cases identi- 
cal, but the proper method or methods for determining what 
the basis for taxation shall be, as shown later, must differ from 
valuations for other purposes. 
Limitations upon Accuracy. — Because of the impossibility of 
fixing definitely the economic value of the mineral deposit, the 
extent of which may be indeterminable, valuations of mining 
and oil properties must be less definite than the valuations of 
industrial and public utility properties, the value of whose 
physical elements, at least, can usually be determined with 
considerable accuracy. 
In underground metal mining, the development is in many 
instances kept just a short distance in advance of productive 
operations. This is sometimes due to the irregular nature of 
the ore bodies, but generally can be explained as a result of 
the method of financing mining properties. This is particu- 
larly true in small operations where the money earned is used 
to carry the expense of the development and the necessity to 
raise additional funds for extensive development is avoided. 
237