244 VALUATION, DEPRECIATION AND THE RATE-BASE
“ What rate of excess return the mine must yield is a matter of
the risks in the venture and the demand of the investor. Mining
 business is one where 7 per cent above provision for capital
return is an absolute minimum demanded by the risks inherent
in mines, even where the profit in sight gives warranty to the
return of capital.”
Mr. G. A. Denny, an English engineer, says:
“ A normal mining risk stated in terms of interest may be
taken at 10 per cent per annum on the capital expended plus a
rate for the redemption of capital.”
John Hays Hammond { expressed his views on this question as
follows:
“ In many mines persistency of the ore deposits and, therefore,
the reliability of the mines as dividend payers, justified the investment
 upon a basis in some instances as low as 8 per cent,
dividends to which, of course, must be added a certain percentage
 to provide for the amortization of the capital. Generally
 speaking, however, investments in mining securities are not
to be regarded as attractive unless they return from ro per cent
to 15 per cent in dividends, in addition to the profits to be set
aside for amortization.”
Price of the Mineral Product. — Because of wide fluctuations
in the prices that minerals bring in the market, the use of the
current market price of such a product in measuring the value
of a mineral deposit is not proper for valuation purposes in
general. No hardship would be forced on the owner or operator
if, for taxation purposes, valuations were made annually based
on the current price of the mineral produced. This method,
however, results in a valuation fluctuating in amount from year
to year and because of the constant changes required, does not
seem to be practical.
The “normal” price of a mineral may be defined as the average
 market price over a certain definite period of years. Periods
of time five or ten years in length are in general use. The
* G. A. Denny, Mexican Mining Journal, July, 1910.
t John Hays Hammond, Engineering and Mining Journal, Jan. 1, 1910.