238 VALUATION, DEPRECIATION AND THE RATE-BASE
This is not always true of extensive mining properties representing
large investments. The Utah Copper Company in the
United States and the Braden and Chicaquamata copper properties
in Chile have ore bodies blocked out sufficient for 45 to
70 years of operation. This extensive development facilitates
the valuation of these ore bodies. It should be noted, however,
that two mines having equal ore reserves might be valued at
very different figures because one may promise a future beyond
its reserves while for the other there may be no hope of further
production when the reserves in sight are exhausted.
The difficulty that is met in estimating the value of the
mineral deposit is apparent also at oil properties when only a
number of wells sufficient to develop enough oil to supply the
existing market and to provide for a limited period in advance
are drilled. Because of the usual great depth of oil wells, the
sinking of new bores becomes an item of large expense and the
development to a considerable extent of the holdings of an oil
producing company might financially embarrass an otherwise
profitable concern.
Placer gold deposits (hydraulic and dredging) in most cases
are thoroughly prospected by pits or drill-holes and the value
ascertained before mining operations are commenced. The drift
placer mines of the Western United States form an exception
and it is in most cases extremely difficult if not impossible to
determine the value of such deposits.
Methods Commonly Employed in Valuation
Enumeration of Methods of Valuation. — Numerous methods
of valuation have been employed and these have been modified
by such variations as have suited the views of the valuating
engineer or valuating body. That this has resulted in confusion
is shown by recent court decisions. The engineer or
valuer who does not definitely state the methods used by him
in obtaining his valuation of the property seems to be the most
likely to have his estimate supported by the findings of the
court when appeal has been taken.
